JPF SEPARATE ACCOUNT C OF JEFFERSON PILOT FINANCIAL INS CO, 485BPOS, 1999-04-28

JPF SEPARATE ACCOUNT C OF JEFFERSON PILOT FINANCIAL INS CO
485BPOS, 1999-04-28

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As filed with the Securities and Exchange Commission on April 28, 1999
FILE NO. 333-01781
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2

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

A. Exact name of trust:
JPF SEPARATE ACCOUNT C
B. Name of depositor:
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
C. Complete address of depositor's principal executive offices:
One Granite Place
Concord, NH 03301
D. Name and complete address of agent for service:
Ronald R. Angarella, President
Jefferson Pilot Securities Corporation
One Granite Place
Concord, NH 03301

Copies to:

<TABLE>
<S> <C>
Charlene Grant, Esq. Joan E. Boros, Esq.
Jefferson Pilot Financial Insurance Company Jorden, Burt, Boros, Cicchetti,
Berenson & Johnson LLP
One Granite Place 1025 Thomas Jefferson Street, N.W.
Concord, NH 03301 Suite 400 East
Washington, D.C. 20007-0805
</TABLE>

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

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

E. Title and amount of securities being registered:
Units of Interest in the Separate Account under Individual Survivorship
Flexible Premium Variable Life Insurance Policies.

<PAGE>

F. Approximate date of proposed public offering:
as soon as practicable after the effective date.

Registrant hereby amends this Registration Statement under the Securities Act of
1933 on such date or dates as may be necessary to delay its effective date until
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.

Registrant is registering an indefinite number of securities, by reason of
Section 24(f) of the Investment Company Act of 1940.

G. Amount of filing Fee:

An indefinite amount of the Registrant's securities has been registered
pursuant to a declaration, under Rule 24f-2 under the Investment Company Act
of 1940, set out in the Form S-6 Registration Statement contained in File No.
2-94478. Registrant filed a Rule 24f-2 Notice for the fiscal year ending
December 31, 1998 on February 26, 1999.

H. Approximate date of proposed public offering:

As soon as practicable after the effective date.

Registrant elects to be governed by Rule 6e3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940, with respect to the policy described in the
Prospectus.

================================================================================

<PAGE>

Prospectus: May 1, 1999

Ensemble SL

JPF Separate Account C

Flexible Premium Variable Survivorship Life Insurance Policy
On The Lives Of Two Insureds
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
One Granite Place Concord, New Hampshire 03301 800-258-3648
- --------------------------------------------------------------------------------

This Prospectus describes the Ensemble Survivorship Life Insurance Policy
("Ensemble SL" or "the Policy"), a flexible premium variable life insurance
policy on the lives of two Insureds, issued and underwritten by Jefferson Pilot
Financial Insurance Company ("We" or "JP Financial" or "the Company"). The
Policy provides life insurance and pays a benefit, as described in this
Prospectus, upon surrender or Second Death. The Policy allows flexible premium
payments, Policy Loans, Withdrawals, and a choice of two Death Benefit Options.
Your account values may be invested on either a fixed or variable or combination
of fixed and variable basis. You may allocate Your Net Premiums to JPF Separate
Account C ("Separate Account C"), and/or the General Account, or both Accounts.
The Divisions of Separate Account C support the benefits provided by the
variable portion of the Policy. The Accumulation Value allocated to each
Division is not guaranteed and will vary with the investment performance of the
associated Fund. Net Premiums allocated to the General Account will accumulate
at rates of interest We determine; such rates will not be less than 4% per year.
Your Policy may lapse if the Cash Value is insufficient to pay a Monthly
Deduction. For the first five Policy Years, however, if you pay the Minimum
Annual Premium, Your Policy will not lapse, regardless of changes in the
Accumulation Value. We will send premium reminder notices for Planned Premiums
and for premiums required to continue the Policy in force. If the Policy lapses,
You may reinstate it.

The Policy has a free look period during which You may return the Policy. We
will refund Your Premium (See "Right of Policy Examination").

This Prospectus also describes the Divisions used to fund the Policy through
Separate Account C. Each Division invests exclusively in one of the following
Portfolios:

JPVF International Equity Portfolio
JPVF World Growth Stock Portfolio

JPVF Global Hard Assets Portfolio

JPVF Emerging Growth Portfolio

JPVF Capital Growth Portfolio
JPVF Small Company Portfolio

JPVF Growth Portfolio

JPVF Growth and Income Portfolio
JPVF Balanced Portfolio

JPVF High Yield Bond Portfolio
JPVF Money Market Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP Equity Income Portfolio
Fidelity VIP II Contrafund Portfolio
Fidelity VIP II Index 500 Portfolio
MFS Research Series
MFS Utilities Series

Oppenheimer Strategic Bond Fund/VA
Oppenheimer Bond Fund/VA

Templeton International Fund

Not all Divisions may be available under all Policies or in all jurisdictions.
You may obtain the current Prospectus and Statement of Additional Information
("SAI") for any of the Portfolios by calling (800) 258-3648 x7719.

Replacing existing insurance or supplementing an existing flexible premium
variable life insurance policy with the Policy may not be to your advantage.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR
THE FUNDS. BOTH THIS PROSPECTUS AND THE UNDERLYING FUND PROSPECTUSES SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

Ensemble SL insurance policies and shares of the funds are not deposits or
obligations of or guaranteed by any bank. They are not federally insured by the
FDIC or any other government agency. Investing in the contracts involves certain
investment risks, including possible loss of principal invested.

THIS PROSPECTUS AND OTHER INFORMATION ABOUT JPF SEPARATE ACCOUNT C REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S
WEB SITE AT http://www.sec.gov.
<PAGE>

table of contents
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<TABLE>
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<S> <C>
DEFINITIONS ................................... 3
POLICY SUMMARY ................................ 4
THE SEPARATE ACCOUNT .......................... 5
CHARGES & FEES ................................ 6
Charges & Fees Assessed Against Premium....... 6
Charges & Fees Assessed Against the
Accumulation Value .......................... 6
Charges & Fees Assessed Against the
Separate Account ............................ 7
Charges Assessed Against the Underlying
Funds ....................................... 8
Charges Deducted Upon Surrender .............. 9
ALLOCATION OF PREMIUMS ........................ 10
The Portfolios ............................... 10
Investment Advisers for each of the Funds .... 11
Mixed and Shared Funding; Conflicts of
Interest .................................... 12
Fund Additions, Deletions or
Substitutions ............................... 12
General Account .............................. 13
POLICY CHOICES ................................ 13
General ...................................... 13
Premium Payments ............................. 13
Modified Endowment ........................... 14
Compliance with the Internal Revenue
Code ........................................ 14
Death Benefit Options ........................ 15
Transfers and Allocations to Funding
Options ..................................... 15
Telephone Transfers, Loans and
Reallocations ............................... 16
Automated Transfers (Dollar Cost
Averaging and Portfolio Rebalancing) ........ 16
POLICY VALUES ................................. 17
Accumulation Value ........................... 17
Unit Values .................................. 18
Net Investment Factor ........................ 18
Surrender Value .............................. 18
POLICY RIGHTS ................................. 19
Surrenders ................................... 19
Withdrawals .................................. 19
Grace Period ................................. 19
Reinstatement of a Lapsed or Terminated
Policy ...................................... 19
Coverage Beyond Younger Insured's
Attained Age 100 ............................ 20
</TABLE>

<TABLE>
<CAPTION>
Page
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<S> <C>
Right to Defer Payment ....................... 20
Policy Loans ................................. 20
Policy Changes ............................... 21
Right of Policy Examination .................. 22
Supplemental Benefits ........................ 22
DEATH BENEFIT ................................. 22
POLICY SETTLEMENT ............................. 22
Settlement Options ........................... 23
THE COMPANY ................................... 23
DIRECTORS & OFFICERS .......................... 25
ADDITIONAL INFORMATION ........................ 26
Reports to Policyowners ...................... 26
Right to Instruct Voting of Fund Shares ...... 26
Disregard of Voting Instructions ............. 26
State Regulation ............................. 27
Legal Matters ................................ 27
The Registration Statement ................... 27
Financial Statements ......................... 27
Employement Benefit Plans .................... 27
Distribution of the Policy ................... 27
Independent Auditors ......................... 28
Year 2000 .................................... 28
Group or Sponsored Arrangements .............. 29
TAX MATTERS ................................... 29
General ...................................... 29
Federal Tax Status of the Company ............ 29
Life Insurance Qualification ................. 29
Charges for JP Financial Income Taxes. ....... 32
MISCELLANEOUS POLICY PROVISIONS ............... 33
The Policy ................................... 33
Payment of Benefits .......................... 33
Suicide and Incontestability ................. 33
Protection of Proceeds ....................... 33
Nonparticipation ............................. 33
Changes in Owner and Beneficiary;
Assignment .................................. 33
Misstatements ................................ 33
ILLUSTRATIONS OF ACCUMULATION VALUES,
CASH VALUES AND DEATH BENEFITS ............... A-1
FINANCIAL STATEMENTS OF THE
COMPANY ...................................... F-1
FINANCIAL STATEMENTS OF THE
SEPARATE ACCOUNT ............................. F-19
</TABLE>

This prospectus does not constitute an offer in any jurisdiction in which such
offering may not be lawfully made. No dealer, salesman or other person is
authorized to give any information or make any representations in connection
with this offering other than those contained in this prospectus, and, if given
or made, such other information or representations must not be relied upon. The
purpose of this variable life insurance policy is to provide insurance
protection. Life insurance is a long-term investment. Policyowners should
consider their need for insurance coverage and the policy's long-term
investment potential. No claim is made that the policy is any way similar or
comparable to an investment in a mutual fund.

2
<PAGE>

definitions
- --------------------------------------------------------------------------------

Accumulation Value: The total amount that a Policy provides for investment plus
the amount held as collateral for Policy Debt.

Age: The Insureds' ages at their nearest birthdays.

Allocation Date: The date when the initial Net Premium is placed in the
Divisions and the General Account as instructed by the Policyowner in the
application. The Allocation Date is 25 days from the date the Company mails the
Policy to the agent for delivery to the Policyowner. However, if either insured
is in a substandard risk class, and if after the 25th day the Allocation Date
will be the date the Company receives from You all administrative items needed
to activate the Policy.

Attained Age: The respective ages of the Insureds at the last Policy
Anniversary.

Beneficiary: The person You designate in the application to receive the Death
Benefit proceeds. If changed, the Beneficiary is as shown in the latest change
filed with the Company. If no Beneficiary survives either Insured, You or Your
estate will be the Beneficiary. The Beneficiary's interest may be subject to
that of any assignee.

Cash Value: The Accumulation Value less any Surrender Charge. This amount less
any Policy Debt is payable to the Policyowner on surrender of the Policy.

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

Company: Jefferson Pilot Financial Insurance Company.

Cost of Insurance: A charge related to the Company's expected mortality cost for
Your basic insurance coverage under the Policy, not including any supplemental
benefit provision that You may elect through a Policy rider.

Cumulative Minimum Premium: An amount equal to the Minimum Annual Premium
divided by 12 and multiplied by the number of completed policy months.

Date of Receipt: Any Company business day, prior to 4:00 p.m. Eastern time, on
which a notice or premium payment is received at the Company's home office.

Death Benefit: The amount which is payable on the Second Death, adjusted as
provided in the Policy.

Death Benefit Options: Either of the two methods for determining the Death
Benefit.

Division: A separate division of Separate Account C which invests only in the
shares of a specified Portfolio of a Fund.

Fund: An open-end management investment company whose shares are purchased by
the Separate Account to fund the benefits provided by the Policy.

General Account: A non-variable funding option available in the Policy that
guarantees a minimum interest rate of 4% per year.

Grace Period: The 61-day period beginning on the Monthly Anniversary Day on
which the Policy's Cash Value less any Policy Debt is insufficient to cover the
current Monthly Deduction, unless the cumulative minimum premium requirement has
been met. The Policy will lapse without value at the end of the 61-day period
unless a sufficient payment is received by the Company.

Home Office: The Company's principal executive offices at One Granite Place,
Concord, New Hampshire 03301.

Insureds: The two persons on whose lives the Policy is issued.

Issue Age(s): The Age of each Insured on the Policy's Issue Date.

Issue Date: The effective date on which coverage begins under the Policy.

Load Basis Amount: A rate per $1,000 of Specified Amount to which the
Acquisition Charge applies and which varies by sex, Issue Ages, rating class of
the Insureds and Specified Amount.

Loan Value: Generally, 90% of the Policy's Cash Value on the date of a loan.

Minimum Annual Premium: The amount of premium to assure that the Policy remains
in force for at least 5 Policy Years from the Issue Date even if the Surrender
Value is insufficient to satisfy the current Monthly Deduction.

3
<PAGE>

Monthly Anniversary Date: The same day in each month as the Policy Date.

Net Premium: The gross premium less a 2.5% State Premium Tax Charge and a 1.25%
Federal DAC Tax Charge.

Policy: The life insurance contract described in this Prospectus.

Policy Date: The date set forth in the Policy and from which policy years,
policy months and policy anniversaries will be determined. If the Policy Date
should fall on the 29th, 30th or 31st of a month, the Policy Date will be the
28th of such month. You may request the Policy Date. If You do not request a
date, it is the date the Policy is issued.

Policy Debt: The sum of all unpaid policy loans and accrued interest thereon.

Portfolio: A separate investment series of one of the Funds.

Proof of Death: One or more of: a) a copy of a certified death certificate; b)
a copy of a certified decree of a court of competent jurisdiction as to the
finding of death; c) a written statement by a medical doctor who attended the
Insured; or d) any other proof satisfactory to the Company.

Second Death: Death of the Surviving Insured.

SEC: Securities and Exchange Commission.

Separate Account C: JPF Separate Account C, a separate investment account
established by the Company for the purpose of funding the Policy.

Specified Amount: The amount chosen by the Policyowner at application, which
may subsequently be decreased, and used in determining the Death Benefit.

State: Any State of the United States, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands or any other possession of the United States.

Surrender Charge: An amount retained by the Company upon the Surrender of the
Policy, a Withdrawal or a decrease in Specified Amount.

Surrender Value: Cash Value less any Policy Debt.

Surviving Insured: The Insured living after one of the Insureds dies.

Target Premium: The premium from which first year commissions will be determined
and which varies by sex, Issue Ages, rating class of the Insureds and Specified
Amount.

Valuation Date: The date and time at which the Accumulation Value of a variable
investment option is calculated. Currently, this calculation occurs after the
close of business of the New York Stock Exchange on any normal business day,
Monday through Friday, that the New York Stock Exchange and the Company are
open. In addition to being closed on all federal holidays, the Company will also
be closed on Good Friday, the Friday following Thanksgiving and the day before
or following Christmas.

Valuation Period: The period of time from between two successive Valuation
Dates, beginning at the close of regular trading on the New York Stock Exchange
on each Valuation Date, and ending at the close of regular trading on the New
York Stock Exchange on the next succeeding Valuation Date.

We, Our, Us, Company: Jefferson Pilot Financial Insurance Company, its
successors or assigns.

You, Your: Policyowner.

Younger Insured's Attained Age 100: The Policy anniversary on which the younger
insured would be Attained Age 100, regardless of whether he or she is still
alive.

policy summary
- --------------------------------------------------------------------------------

This Prospectus describes a flexible premium variable life insurance policy
issued on the lives of two Insureds. The Policy provides life insurance and pays
a benefit (subject to adjustment under the Policy's Age and/or Sex, Suicide and
Incontestability, and Grace Period provisions) upon surrender or Second Death.
The Policy allows flexible premium payments, Policy Loans, Withdrawals and a
choice of two Death Benefit Options. Account values may be either fixed or
variable or a combination of fixed and variable.

4
<PAGE>

Charges and fees will be assessed against premium payments, Accumulation Value,
the Separate Account, the underlying Funds and upon surrender or decrease in
Specified Amount.

You must purchase Your variable life insurance policy from a registered
representative. The Policy, the initial application on the Insureds, any
subsequent applications and any riders constitute the entire contract.

At the time of application, You must choose a Death Benefit Option, decide on
the amount of premium and determine how to allocate Net Premiums. You may elect
to supplement the benefits afforded by the Policy through the addition of riders
We make available.

The proceeds payable upon the Second Death depend on the Death Benefit Option
chosen. Under Option 1 the Death Benefit equals the current Specified Amount.
Under Option 2, the Death Benefit equals the current Specified Amount plus the
Accumulation Value on the date of death. The Death Benefit proceeds will be
reduced by repayment of any outstanding Policy Debt.

Although the Policy is designed to allow flexible premiums, You must pay
sufficient premiums to continue the Policy in force. An initial premium, based
on Issue Age(s), underwriting class(es) and Specified Amount must be paid at
issue. No premium payment may be less than $250 ($50 for electronic fund
transfers). Premium reminder notices will be sent for Planned Premiums and for
premiums required to continue the Policy in force. Should Your Policy lapse, You
may reinstate it.

You may allocate Your Net Premiums to the Separate Account, the General Account
or both Accounts. Net Premiums allocated to the Separate Account must be
allocated to one or more of the Divisions of the Separate Account and
allocations must be in whole percentages. The variable portion of the Policy is
supported by the Divisions You choose and will vary with the investment
performance of the associated Portfolios. Net Premiums allocated to the General
Account will accumulate at rates of interest We determine. The effective rate of
interest will not be less than 4% per year.

the separate account
- --------------------------------------------------------------------------------

The Separate Account underlying the Policy is JPF Separate Account C. Amounts
allocated to the Separate Account are invested in the Portfolios. Each Portfolio
is a series of an open-end management investment company (mutual fund) whose
shares are purchased by the Separate Account to fund the benefits provided by
the Policy. The Portfolios, including their investment objectives and their
investment advisers, are described in this Prospectus. Complete descriptions of
the Portfolios' investment objectives and restrictions and other material
information relating to the Portfolios are contained in the Portfolios'
prospectuses, which are delivered with this Prospectus.

Separate Account C was established under New Hampshire law on August 4, 1993.
Under New Hampshire Insurance Law, the income, gains or losses of the Separate
Account are credited without regard to the other income, gains or losses of the
Company. These assets are held for the Company's variable life insurance
policies. Any and all distributions made by the Portfolios with respect to
shares held by the Separate Account will be reinvested in additional shares at
net asset value. The assets maintained in the Separate Account will not be
charged with any liabilities arising out of any other business conducted by the
Company. The Company is, however, responsible for meeting the obligations of the
Policy to the Policyowner.

No stock certificates are issued to the Separate Account for shares of the
Portfolios held in the Separate Account. Ownership of Portfolio shares is
documented on the books and records of the Portfolios and of the Company for the
Separate Account.

The Separate Account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940 and meets the definition of separate account
under the federal securities laws. Such registration does not involve any
approval or disapproval by the Commission of the Separate Account or Our
management or investment practices or policies. We do not guarantee the Separate
Account's investment performance.

5
<PAGE>

Divisions. The Policies presently offer twenty Divisions but may add or delete
Divisions. You may invest in a total of 17 Divisions over the life of the
Policy. Each Division will invest exclusively in shares of a single Portfolio.

charges & fees
- --------------------------------------------------------------------------------

[arrow right] CHARGES & FEES ASSESSED AGAINST PREMIUM

Premium Charges

Before a premium is allocated to any of the Divisions of Separate Account C and
the General Account, We will deduct a state premium tax charge of 2.5% (which
represents an average of actual premium taxes imposed) unless otherwise required
by state law (2.35% in California). We may impose the premium tax charge in
states which do not themselves impose a premium tax. The state premium tax
charge reimburses Us for taxes We pay to states and municipalities in which the
Policy is sold. The amount of tax assessed by a state or municipality may be
more or less than the charge. We will also deduct a federal income tax charge of
1.25% ("Federal DAC Tax Charge") which reimburses the Company for its increased
federal tax liability under the federal tax laws. The Company has determined
that these state and federal tax charges are reasonable in relation to its tax
liability, but subject to state law, reserves the right to increase these tax
charges due to changes in the state or federal tax laws that increase the
Company's tax liability.

[arrow right] CHARGES & FEES ASSESSED AGAINST ACCUMULATION VALUE

Charges and fees assessed against the Policy's Accumulation Value can be
deducted from any one of the Divisions, the General Account, or pro rata from
each of the Divisions and the General Account. If You do not designate one
Division, the charges will be deducted pro rata from each of the Divisions and
the General Account.

Monthly Deduction

On each Monthly Anniversary Date and on the Policy Date, We will deduct from the
Policy's Accumulation Value an amount to cover certain expenses associated with
start-up and maintenance of the Policy, administrative expenses, the cost of
insurance for the Policy and any optional benefits added by rider.

The Monthly Deduction equals:

i) the Cost of Insurance for the Policy (as described below), plus

ii) a Monthly Administrative Fee of $10, plus

iii) a monthly Unit Expense Charge of .05 per $1,000 of Specified Amount in
Policy Years 1 through 10 (not less than $15 per month), and .02 per $1,000 of
Specified Amount in Policy Years 11 and thereafter (not to exceed $50 per month
or go below $15 per month), plus

iv) a monthly Acquisition Charge during the first two Policy Years equal to 2%
of Load Basis Amount per month in Policy Year 1 and 1% of Load Basis Amount per
month in Policy Year 2, plus

v) the cost of optional benefits provided by rider.

Cost of Insurance. The Cost of Insurance charge is related to the Company's
expected mortality cost for Your basic insurance coverage under the Policy, not
including any supplemental benefit provisions that You may elect through a
Policy rider.

The Cost of Insurance charge equals (i) multiplied by the result of (ii) minus
(iii) where:

i) is the current Cost of Insurance Rate as described in the Policy;

ii) is the death benefit at the beginning of the policy month divided by
1.0032737 (to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4%; and

iii) is the Accumulation Value at the beginning of the policy month.

The current Cost of Insurance Rate is variable and is based on both Insureds'
issue ages, sex (where permitted by law), Policy Year, rating class of the
Insureds and Specified Amount. Because the Accumulation Value and the Death
Benefit of the Policy may vary from month to month, the Cost of Insurance charge
may also vary on each day a Monthly Deduction is taken. In addition, You should
note that the Cost of Insurance charge is related to the difference between the
Death Benefit payable under

6
<PAGE>

the Policy and the Accumulation Value of the Policy. An increase in the
Accumulation Value or a decrease in the Death Benefit may result in a smaller
Cost of Insurance charge while a decrease in the Accumulation Value or an
increase in the Death Benefit may result in a larger cost of insurance charge.

The Cost of Insurance rate for standard risks will not exceed those based on the
1980 Commissioners Standard Ordinary Mortality Tables Male or Female (1980
Tables). Substandard risks will have monthly deductions based on Cost of
Insurance rates which may be higher than those set forth in the 1980 Tables. A
table of guaranteed maximum Cost of Insurance rates per $1,000 of the Amount at
Risk will be included in each Policy. We may adjust the Monthly Cost of
Insurance rates from time to time. Adjustments will be on a class basis and will
be based on Our estimates for future factors such as mortality, investment
income, expenses, reinsurance costs and the length of time Policies stay in
force. Any adjustments will be made on a nondiscriminatory basis. The current
Cost of Insurance rate will not exceed the applicable maximum Cost of Insurance
rate shown in Your Policy.

Monthly Administrative Expense Charge. The Monthly Deduction amount also
includes a monthly administration fee of $10.00. This fee may not be increased.

Unit Expense Charge. The Monthly Deduction amount also includes a current
administrative expense charge of $0.05 per month per $1,000 of Specified Amount
for Policy Years 1 through 10 (not less than $15 per month) and $0.02 a month
per $1,000 of Specified Amount for Policy Years 11 and thereafter (not less than
$15 per month nor more than $50 per month). These charges are for items such as
underwriting and issuance, premium billing and collection, policy value
calculation, confirmations and periodic reports.

Acquisition Charge. We will deduct from the Accumulation Value a monthly
acquisition charge of 2% of the Load Basis Amount in the first Policy Year and
1% of the Load Basis Amount in the second Policy Year. This charge does not vary
with the amount of premium paid. We reserve the right to increase or decrease
this charge for policies not yet issued in order to correspond with changes in
distribution costs of the Policy. The charge compensates Us for the cost of
selling the Policy, including, among other things, agents' commissions,
advertising and printing of prospectuses and sales literature. Normally this
charge plus the Surrender Charge, discussed below, compensate Us for total sales
expenses for the year. To the extent sales expenses in any policy year are not
recovered by this Acquisition Charge and the Surrender Charge, the sales
expenses may be recovered from other sources which may include profits from the
Mortality Risk and Expense Risk Charges.

Charges for Optional Benefits. If You elect any optional benefits by adding
riders to the Policy, an optional benefits charge will be included in the
Monthly Deduction amount. The amount of the charge will vary depending upon the
actual optional benefits selected and is described on each applicable Policy
rider.

[arrow right] CHARGES & FEES ASSESSED AGAINST THE SEPARATE ACCOUNT

Mortality and Expense Risk Charge

We will assess a charge on a daily basis against each Division at a current
annual rate of 1.00% in Policy Years 1 through 10 (1.25% guaranteed) and .60% in
Policy Years 11 and thereafter (.85% guaranteed) of the value of the Divisions
to compensate Us for mortality and expense risks We assume in connection with
the Policy. The mortality risk assumed by the Company is that Insureds, as a
group, may live for a shorter period of time than estimated and that the Company
will, therefore, pay a Death Benefit before collecting a sufficient Cost of
Insurance charge. The expense risk assumed is that expenses incurred in issuing
and administering the Policies and operating the Separate Account will be
greater than the administrative charges assessed for such expenses.

The Separate Account is not subject to any taxes. However, if taxes are assessed
against the Separate Account, We reserve the right to assess taxes against the
Separate Account Value.

7
<PAGE>

Administrative Charge for Transfers or Withdrawal

We will impose an Administrative Fee of $50 for each transfer among the
Divisions of the Separate Account or the General Account, after the first 12
transfers in a Policy Year (up to a maximum of 20). An Administrative Fee of $50
will also be charged for withdrawals.

[arrow right] CHARGES ASSESSED AGAINST THE UNDERLYING FUNDS

Following are the investment advisory and sub-investment management fees, paid
by each of the Funds as a percentage of average net assets.

Jefferson Pilot Variable Fund

<TABLE>
<CAPTION>
World Growth Stock,
Global Hard Assets,
Small Company,
Average Daily Money Growth and Income, Capital
Net Assets Market and Balanced Growth
- -------------------- -------- -------------------- ----------
<S> <C> <C> <C>
First $200 million .50% .75% 1.00%
Next $1.1 billion .45% .70% .95%
Over $1.3 billion .40% .65% .90%
</TABLE>

<TABLE>
<CAPTION>
Average Daily Emerging High Yield International
Net Assets Growth Bond and Growth Equity
- -------------------- ---------- ----------------- --------------
<S> <C> <C> <C>
First $200 million .80% .75% 1.00%
Next $1.1 billion .75% .75% 1.00%
Over $1.3 billion .70% .75% 1.00%
</TABLE>

The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of JP Investment Advisory and is set forth in the
table below as an annual percentage of the average daily net assets of the
Portfolio managed:

<TABLE>
<CAPTION>
Sub-Investment Manager Fees
-------------------------------------------------
Templeton Van Eck
Janus World Global Lord Abbett
Average Daily Capital Growth Hard Small
Net Assets Growth Stock Assets Company
- -------------------- --------- ----------- -------- ------------
<S> <C> <C> <C> <C>
First $200 million .70% .50% .50% .50%
Next $1.1 billion .65% .45% .45% .45%
Over $1.3 billion .60% .40% .40% .40%
</TABLE>

<TABLE>
<CAPTION>
Warburg MFS MFS MFS
Growth Emerging Money High Janus
Net Assets & Income Growth Market Yield Balanced
- -------------------- ---------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
First $100 Million .50% .40% .30% .40% .55%
Next $100 million .50% .40% .30% .40% .50%
Next $200 million .50% .40% .25% .40% .50%
Over $400 million .50% .40% .25% .40% .50%
</TABLE>

<TABLE>
<CAPTION>
Lombard Odier
Strong International
Net Assets Growth Equity
- ---------------------- -------- --------------
<S> <C> <C>
First $25 million .60% .50%
Next $75 million .50% .50%
Next $50 million .40% .50%
Over $150 million .30% .50%
</TABLE>

Templeton International Fund: Class 2.

<TABLE>
<CAPTION>
Average Daily Net Assets
- -------------------------
<S> <C>
First $200 million .75%
Next $1.1 billion .675%
Over $1.3 billion .60%
</TABLE>

Class 2 of the Templeton International Fund has a distribution plan or "Rule
12b-1 Plan" under which it pays the Company 0.25% per year of average net assets
invested in the fund's Class 2 shares.

Fidelity VIP and VIP II

<TABLE>
<CAPTION>
Total
Management Other Annual
Fee Expenses Expenses
------------ ---------- ---------
<S> <C> <C> <C>
Fidelity VIP
Equity Income .49% .08% .57%
Growth .59% .07% .66%
Fidelity VIP II
Contrafund .59% .07% .66%
Index 500 .24% .04% .28%
</TABLE>

MFS Research Series and MFS Utilities Series: 0.75% of average daily net
assets.

Oppenheimer Strategic Bond Fund/VA: 0.74% of average daily net assets.

Oppenheimer Bond Fund/VA: 0.80% of average daily net assets.

Certain of the unaffiliated Portfolio advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Policy (MFS--0.15%, Oppenheimer--0.10% for
the Bond Fund and 0.15% for the Strategic Bond Fund; all reimbursements are
expressed as a percentage of average daily net assets under management). These
reimbursements are paid by the advisers and are not charged to the Portfolios.

For further details on each Portfolio's expenses please refer to that
Portfolio's prospectus. Additional copies of each Portfolio's prospectus and the
Statement of Additional Information for each Portfolio may be obtained free of
charge by calling (800)-258-3648 x7719.

8
<PAGE>

[arrow right] CHARGES DEDUCTED UPON SURRENDER

If You surrender the Policy, reduce the Specified Amount, or the Policy lapses
during the first nine Policy Years, We will assess a contingent deferred sales
charge, which will be deducted from the Policy's Accumulation Value. This charge
is imposed in part to recover distribution expenses and in part to recover
certain first year administrative costs. The initial Surrender Charges will be
specified in Your Policy and will be in compliance with each state's
nonforfeiture law.

When We issue Your Policy, We determine the initial Surrender Charge. To
determine the initial Surrender Charge, We multiply the initial Specified Amount
of Your Policy by a rate per thousand dollars of Specified Amount. The
applicable rate depends on the sex, Issue Ages, and rating class of the
Insureds. For the following examples of Insureds, the applicable rates per 1000
are:

<TABLE>
<CAPTION>
<S> <C>
Male Standard Non-Smoker Age 35, Female Standard Non-Smoker Age 30 $2.72
Male Standard Non-Smoker Age 45, Female Standard Non-Smoker Age 40 $4.87
Male Standard Non-Smoker Age 55, Female Standard Non-Smoker Age 50 $9.36
Male Standard Smoker Age 55, Female Standard Non-Smoker Age 50 $10.60
Male Non-Smoker Age 55 Rated Table H, Female Standard Non-Smoker Age 50 $11.29
Male Standard Non-Smoker Age 65, Female Standard Non-Smoker Age 60 $17.80
Male Standard Non-Smoker Age 75, Female Standard Non-Smoker Age 70 $33.19
</TABLE>

Accordingly, if the Insureds were a male standard non-smoker age 55, and a
female standard non-smoker age 50, and the Policy's Specified Amount was
$500,000, the initial Surrender Charge would be $4,680 (9.36 x 500).

The maximum rate per 1000 of Specified Amount, considering all possible
combinations of sex, Issue Ages, and rating class of the Insureds, is $43.32.

The Surrender Charge in any given Policy Year will equal a percentage of the
initial Surrender Charge as follows:

<TABLE>
<CAPTION>
Surrender Charge as
Policy Year Percentage of Initial Surrender Charge*
- ------------- ----------------------------------------
<S> <C>
0-5 100%
6 80%
7 60%
8 40%
9 20%
10+ 0%
</TABLE>

- ------------------------------
* May be lower at some ages

We will not assess a Surrender Charge after the ninth Policy Year. A pro rata
portion of any Surrender Charge will be assessed upon withdrawal or reduction in
the Specified Amount. The Policy's Accumulation Value will be reduced by the
amount of any withdrawal or reduction in Specified Amount plus any applicable
pro rata Surrender Charge.

Surrender Charges on Surrenders and Withdrawals

All applicable Surrender Charges are imposed on Surrenders.

We will impose a pro rata Surrender Charge on Withdrawals. The pro rata
Surrender Charge is the amount of the Withdrawal divided by the Cash Value. We
will reduce any applicable remaining Surrender Charges by the same proportion. A
transaction charge of $50 will be deducted from the amount of each Withdrawal.
(See "Withdrawals") The Surrender Charge dose not apply to Policy loans.

We will also impose a pro rata Surrender Charge on Decreases in Specified
Amount. The pro rata portion will equal the amount of the Specified Amount
reduction divided by the Specified Amount before the reduction.

Other Charges

We reserve the right to charge the assets of each Division to provide for any
income taxes or other taxes payable by Us on the assets attributable to that
Division. Although We currently make no charge, we reserve the right to charge
You an administrative fee, not to exceed $50, to cover the cost of preparing any
additional illustrations of current Cash Values and current mortality
assumptions which you may request after the Policy Date.

9
<PAGE>

allocation of premiums
- --------------------------------------------------------------------

You may allocate all or a part of Your Net Premiums to the Divisions currently
available under Your Policy or You may allocate all or a part of Your Net
Premiums to the General Account.

[arrow right] THE PORTFOLIOS

The Separate Account currently invests in shares of the Portfolios listed below.
Net Premiums applied to the Separate Account will be invested in the Portfolios
in accordance with Your selection. Portfolios may be added or withdrawn as
permitted by applicable law. We reserve the right to limit the total number of
Portfolios You may elect to 17 over the lifetime of the Policy or to increase
the total number of Portfolios You may elect. Shares of the Portfolios are not
sold directly to the general public. Each of the Portfolios is available only
through the purchase of variable annuities or variable life insurance policies.
(See Mixed and Shared Funding)

The investment results of the Portfolios, whose investment objectives are
described below, are likely to differ significantly. There is no assurance that
any of the Portfolios will achieve their respective investment objectives.
Investment in some of the Portfolios involves special risks, which are described
in their respective prospectuses. You should read the prospectuses for the
Portfolios and consider carefully, and on a continuing basis, which Portfolio or
combination of Portfolios is best suited to Your long-term investment
objectives. Except where otherwise noted, all of the Portfolios are diversified,
as defined in the Investment Company Act of 1940.

[diamond] JPVF International Equity Portfolio seeks long-term capital
appreciation through investments in securities whose primary trading
markets are outside the United States.

[diamond] JPVF World Growth Stock Portfolio seeks to achieve long-term capital
growth through a policy of investing primarily in stocks of
companies organized in the United States or in any foreign nation. A
portion of the Portfolio may also be invested in debt obligations of
companies and governments of any nation. Any income realized will be
incidental.

[diamond] JPVF Global Hard Assets Portfolio seeks long-term capital
appreciation by investing globally, primarily in "Hard Asset
Securities". Hard Asset Securities include equity and debt
securities of "Hard Asset Companies", that are directly or
indirectly engaged in the exploration, development, production or
distribution of one or more of the following: precious metals;
ferrous and non-ferrous metals; oil and gas, petroleum,
petrochemicals or other hydrocarbons; forest productions; real
estate; and other basic non-agricultural commodities. Income is a
secondary consideration.

[diamond] JPVF Emerging Growth Portfolio seeks to provide long-term growth of
capital. Dividend and interest income from portfolio securities, if
any, is incidental to the Portfolio's investment objective of
long-term growth.

[diamond] JPVF Capital Growth Portfolio seeks capital growth. Realization of
income is not a significant investment consideration and any income
realized will be incidental.

[diamond] JPVF Small Company Portfolio seeks to achieve growth of capital. The
Portfolio pursues its objective by investing primarily in a
diversified portfolio of equity securities issued by small
companies, which are defined as companies with market
capitalizations equal to or less than the largest company in the
Russell 2000(R) Index.

[diamond] JPVF Growth Portfolio seeks capital growth by investing primarily in
equity securities that the Sub-Investment Manager believes have
above- average growth prospects.

[diamond] JPVF Growth and Income Portfolio seeks long-term growth of capital
by investing primarily in a wide range of equity issues that may
offer capital appreciation and, secondarily, seeks a reasonable
level of current income.

[diamond] JPVF Balanced Portfolio seeks reasonable current income and
long-term capital growth, consistent with conservation of capital,
by investing primarily in common stocks and fixed income securities.

[diamond] JPVF High Yield Bond Portfolio seeks a high level of current income
by investing primarily in corporate obligations with emphasis on
higher yielding, higher risk, lower-rated or unrated securities.
These securities may be considered speculative and involve greater
risks, including risk of default, than higher rated securities.

10
<PAGE>

[diamond] JPVF Money Market Portfolio seeks to achieve as high a level of
current income as is consistent with preservation of capital and
liquidity. An investment in the Money Market Portfolio is neither
insured nor guaranteed by the U.S. Government.

[diamond] Fidelity Variable Insurance Products Fund-- Growth Portfolio seeks
capital appreciation by investing primarily in common stocks.

[diamond] Fidelity Variable Insurance Products Fund-- Equity-Income Portfolio
seeks reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Fund will also
consider the potential for capital appreciation.

[diamond] Fidelity Investments' Variable Insurance Products Fund
II--Contrafund Portfolio seeks maximum total return over the long
term by investing its assets mainly in equity securities of
companies that are undervalued or out-of-favor.

[diamond] Fidelity Variable Insurance Products Fund II--Index 500 Portfolio
seeks investment results that correspond to the total return of
common stocks publicly traded in the United States, as represented
by the S&P 500.

[diamond] MFS Variable Insurance Trust--Research Series seeks to provide
long-term growth of capital and future income by investing a
substantial proportion of its assets in equity securities of
companies believed to possess better-than-average prospects for
long-term growth.

[diamond] MFS Variable Insurance Trust--Utilities Series seeks capital growth
and current income (incomes above that available from a portfolio
invested entirely in equity securities) by investing, under normal
circumstances, at least 65% (but up to 100% at the discretion of the
Adviser) of its assets in equity and debt securities of both
domestic and foreign companies in the utilities industry.

[diamond] Oppenheimer Variable Account Funds-- Strategic Bond Fund/VA seeks a
high level of current income principally derived from interest on
debt securities and seeks to enhance such income by writing covered
call options on debt securities. The Portfolio intends to invest
principally in: (i) foreign government and corporate debt
securities, (ii) U.S. Government securities, and (iii) lower-rated
high yield domestic debt securities, commonly known as "junk bonds",
which are subject to a greater risk of loss of principal and
nonpayment of interest than higher-rated securities. These
securities may be considered to be speculative.

[diamond] Oppenheimer Variable Account Funds-- Bond Fund/VA primarily seeks a
high level of current income from investment in high yield,
fixed-income securities rated "Baa" or better by Moody's or "BBB" or
better by Standard & Poor's. Secondarily, this Portfolio seeks
capital growth when consistent with its primary objective.

[diamond] Templeton Variable Product Series Fund-- Templeton International
Fund: Class 2 seeks long-term capital growth through a flexible
policy of investing in stocks and debt obligations of companies and
governments outside the United States. Any income realized will be
incidental. Although the Templeton International Fund generally
invests in common stock, it may also invest in preferred stocks and
certain debt securities such as convertible bonds which are rated in
any category by Standard & Poor's Corporation or Moody's Investors
Service, Inc. or which are unrated by any rating agency.

Some of the above Portfolios may use instruments known as derivatives as part of
their investment strategies, as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal on debt
instruments may involve higher risk of volatility to a Portfolio. The use of
leverage in connection with derivatives can also increase risk of losses. See
the prospectus for the Portfolio for a discussion of the risks associated with
an investment in those Portfolios. You should refer to the accompanying
prospectuses of the Portfolios for more complete information about their
investment policies and restrictions.

[arrow right] INVESTMENT ADVISERS FOR EACH OF THE FUNDS:

[diamond] JPVF International Equity Portfolio: Lombard Odier International
Portfolio Management Limited ("Lombard Odier")

[diamond] JPVF World Growth Stock Portfolio: Templeton Global Advisors Limited
("Templeton")

[diamond] JPVF Global Hard Assets Portfolio: Van Eck Associates Corporation
("Van Eck")

[diamond] JPVF Emerging Growth Portfolio: Massachusetts Financial Services
Company ("MFS")

11
<PAGE>

[diamond] JPVF Capital Growth Portfolio: Janus Capital Corporation ("Janus")

[diamond] JPVF Small Company Portfolio: Lord, Abbett & Co. ("Lord Abbett")

[diamond] JPVF Growth Portfolio: Strong Capital Management, Inc. ("Strong")

[diamond] JPVF Growth and Income Portfolio: Warburg Pincus Assets Management,
Inc. ("Warburg")
[diamond] JPVF Balanced Portfolio: Janus

[diamond] JPVF High Yield Bond: MFS

[diamond] JPVF Money Market Portfolio: MFS

Fidelity Variable Insurance Products Fund - Fidelity Management & Research
Company ("FMR")

Fidelity Variable Insurance Products Fund II - FMR

MFS Variable Insurance Trust - Massachusetts Financial Services Company ("MFS")

Oppenheimer Variable Account Funds - OppenheimerFunds, Inc. ("Oppenheimer")

Templeton Variable Products Series Fund -
Templeton Investment Counsel, Inc. ("TICI")

[arrow right] MIXED AND SHARED FUNDING; CONFLICTS OF INTEREST

Shares of the Funds are available to insurance company separate accounts which
fund variable annuity contracts and variable life insurance policies, including
the Policy described in this Prospectus. Because Fund shares are offered to
separate accounts of both affiliated and unaffiliated insurance companies, it is
conceivable that, in the future, it may not be advantageous for variable life
insurance separate accounts and variable annuity separate accounts to invest in
these Funds simultaneously, since the interests of such Policyowners or
contractholders may differ. Although neither the Company nor the Funds currently
foresees any such disadvantages either to variable life insurance or to variable
annuity Policyowners, each Fund's Board of Trustees/ Directors has agreed to
monitor events in order to identify any material irreconcilable conflicts which
may possibly arise and to determine what action, if any, should be taken in
response thereto. If such a conflict were to occur, one of the separate accounts
might withdraw its investment in a Fund. This might force that Fund to sell
portfolio securities at disadvantageous prices.

[arrow right] FUND ADDITIONS, DELETIONS OR SUBSTITUTIONS

The Company reserves the right, subject to compliance with appropriate state and
federal laws, to add, delete or substitute shares of another Portfolio or Fund
for Portfolio shares already purchased or to be purchased in the future for the
Division in connection with the Policy. The Company may substitute shares of one
Portfolio for shares of another Portfolio if, among other things, (a) it is
determined that a Portfolio no longer suits the purpose of the Policy due to a
change in its investment objectives or restrictions; (b) the shares of a
Portfolio are no longer available for investment; or (c) in the Company's view,
it has become inappropriate to continue investing in the shares of the
Portfolio. Substitution may be made with respect to both existing investments
and the investment of any future premium payments. However, no substitution of
securities will be made without prior notice to Policyowners, and without prior
approval of the SEC or such other regulatory authorities as may be necessary,
all to the extent required and permitted by the Investment Company Act of 1940
or other applicable law.

We also reserve the right to make the following changes in the operation of the
Separate Account and the Divisions;

(a) to operate the Separate Account in any form permitted by law;

(b) to take any action necessary to comply with applicable law or obtain and
continue any exemption from applicable laws;

(d) to add, combine, or remove Divisions in the Separate Account;

(e) to assess a charge for taxes attributable to the operation of the Separate
Account or for other taxes, described in "Charges and Fees--Other Charges" on
page 10 above; and

(f) to change the way We assess other charges, as long as the total other
charges do not exceed the amount currently charged the Separate Account and the
Portfolios in connection with the Policies.

Portfolio shares are subject to certain investment restrictions which may not
be changed without

12
<PAGE>

the approval of the majority of the Portfolios' shareholders. See accompanying
Prospectus for the Portfolios.

[arrow right] GENERAL ACCOUNT

Interests in the General Account have not been registered with the SEC in
reliance upon exemptions under the Securities Act of 1933, as amended and the
General Account has not been registered as an investment company under the 1940
Act. However, disclosure in this Prospectus regarding the General Account may be
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of the statements. Disclosure in
this Prospectus relating to the Fixed Account has not been reviewed by the SEC.

The General Account is a fixed funding option available under the Policy. The
Company guarantees a minimum interest rate of 4.0% on amounts in the General
Account and assumes the risk of investment gain or loss. The investment gain or
loss of the Separate Account or any of the Portfolios does not affect the
General Account Value.

The General Account is secured by the general assets of the Company. The general
assets of the Company include all assets of the Company other than those held in
separate accounts sponsored by the Company or its affiliates. The Company will
invest the assets of the General Account in those assets chosen by the Company,
as allowed by applicable law. Investment income of such General Account assets
will be allocated by the Company between itself and those policies participating
in the General Account.

The Company guarantees that, at any time, the General Account Value of Your
Policy will not be less than the amount of the Net Premiums allocated to the
General Account, plus any monthly accumulation value adjustment, plus interest
at an annual rate of not less than 4.0%, less the amount of any Withdrawals,
Policy Loans or Monthly Deductions.

If You do not accept the Policy issued as applied for or you exercise Your "free
look" option, no interest will be credited and We will retain any interest
earned on the Initial Net Premium.

policy choices
- --------------------------------------------------------------------------------

[arrow right] GENERAL

The Policy is designed to provide the Insureds with lifetime insurance
protection and to provide the Policyowner with flexibility in amount and
frequency of premium payments and level of life insurance proceeds payable under
the Policy. It provides life insurance coverage on two Insureds with a Death
Benefit payable only on Second Death. You are not required to pay scheduled
premiums to keep the Policy in force and You may, subject to certain
limitations, vary the frequency and amount of premium payments.

To purchase a Policy, You must complete an application and submit it to Us
through the agent selling the Policy. You must furnish satisfactory evidence of
insurability. The Insureds under the Policy must generally be under age 85,
although one Insured may be over age 85. For ages 15 and over, each Insured's
smoking status is reflected in the current cost of insurance rates. Policies
issued in certain States will not directly reflect the Insured's sex in either
the premium rates or the charges or values under the Policy. We may reject an
application for any good reason.

The minimum Specified Amount at issue is $100,000. We reserve the right to
revise Our rules to specify different minimum Specified Amounts at issue. We
may reinsure all or a portion of the Policy.

[arrow right] PREMIUM PAYMENTS

The Policy is a flexible premium life insurance policy. This means that You may
decide when to make premium payments and in what amounts. You must pay your
premiums to Us at our home office or through one of Our authorized agents for
forwarding to Us. There is no fixed schedule of premium payment on the Policy
either as to amount or frequency. You may determine, within certain limits, Your
own premium payment schedule. No payment may be less than $250 ($50 for
electronic fund transfers). The Policy has a minimum premium period of 5 years.
If You pay the Minimum Annual Premium, We guarantee that the Policy will stay in
force throughout the minimum premium period, even if the Surrender Value is
insufficient to pay a

13
<PAGE>

Monthly Deduction. The minimum initial premium will equal the Minimum Annual
Premium, divided by 4. In order to help You get the insurance benefits You
desire, We will state a Planned Periodic Premium and Premium Frequency in the
Policy. This premium will generally be based on Your insurance needs and
financial abilities, the current financial climate, the Specified Amount of the
Policy and the Insureds' ages, sex and risk classes. You are not required to pay
such premiums and failure to make any premium payment will not necessarily
result in lapse of the Policy, so long as the Policy's Surrender Value is
sufficient to pay the Monthly Deduction. Payment of the Planned Periodic
Premiums will not guarantee that Your Policy will remain in force. (See "Grace
Period")

[arrow right] MODIFIED ENDOWMENT

The Policy will be allowed to become a Modified Endowment contract under the
Internal Revenue Code only with Your consent. Otherwise, if at any time the
premiums paid under the Policy exceed the limit for avoiding modified contract
status, We will refund the excess premium to You with interest within 60 days
after the end of the Policy Year in which the premium was received. If, for any
reason, We do not refund the excess premium within that 60-day period, We will
hold the excess premium in a separate deposit fund and credit it with interest
until refunded to You. The interest rate used on any refund, or credited to the
separate deposit fund created by this provision, will be the excess premium's
pro rata rate of return on the contract until the date We notify You that the
excess premium and the earnings on such excess premium have been removed from
the Policy. After the date of such notice, the interest rate paid on the
separate deposit fund will be such rate as We may declare from time to time on
advance premium deposit funds. We may also notify You of other options available
to You to keep Your policy in compliance.

[arrow right] COMPLIANCE WITH THE INTERNAL REVENUE CODE

The Policy is intended to qualify as life insurance under the Internal Revenue
Code. The Death Benefit provided by the Policy is intended to qualify for the
federal income tax exclusion. If at any time the premium paid under the Policy
exceeds the amount allowable for such qualification, We will refund of the
excess premium to You with interest within 60 days after the end of the Policy
Year in which it was received. If, for any reason, We do not refund the excess
premium within the 60-day period, such amount will be held in a separate deposit
fund and will be credited with interest until refunded to You. The interest rate
used on any refund, or credited to the separate deposit fund created by this
provision, will be the excess premium's pro rata rate of return on the contract
until the date We notify You that the excess premium and the earnings on such
excess premium have been removed from the Policy. After the date of such notice,
the interest rate paid on the separate deposit fund will be such rate as We may
declare from time to time on advance premium deposit funds.

We also reserve the right to refuse to make any change in the Specified Amount
or the Death Benefit Option or any other change if such change would cause the
policy to fail to qualify as life insurance under the Code.

Under limited circumstances, We may backdate a Policy, upon request, by
assigning an Issue Date earlier than the date the application is signed but no
earlier than six months prior to state approval of the Policy. Backdating may be
desirable, for example, so that You can purchase a particular Policy Specified
Amount for lower Cost of Insurance Rate based on a younger insurance age. For a
backdated Policy, You must pay the premium for the period between the Issue Date
and the date the application is received at the Home Office. Backdating of Your
Policy will not affect the date on which Your premium payments are credited to
the Separate Account.

We will allocate premium payments, net of the premium tax charge and Federal DAC
tax, plus interest earned prior to the Allocation Date, among the General
Account and the divisions of the Separate Account in accordance with Your
directions to Us. The minimum percentage of any net premium payment allocated to
any division or the General Account is 5% and allocation percentages must be in
whole numbers only. Your initial premium (including any interest) will be
allocated, as You instructed, on the Allocation Date. Your subsequent premiums
will be allocated as of the date they are received in Our Home Office. Prior to
the Allocation Date, the initial net premium, and any other premiums received,
will be allocated to the General Account. (See "Right of Policy Examination")

14
<PAGE>

You may change Your premium allocation instructions at any time. Your request
may be written or by telephone, so long as the proper telephone authorization
is on file with Us. Allocations must be changed in whole percentages. The
change will be effective as of the date of the next premium payment after You
notify Us. We will send You confirmation of the change. (See "Transfers and
Allocations to Funding Options")

[arrow right] DEATH BENEFIT OPTIONS

At the time of purchase, You must choose between the two available Death Benefit
Options. The amount payable upon the Second Death depends upon which Death
Benefit Option You choose.

Under Option 1 the Death Benefit will be the greater of the current Specified
Amount or the Accumulation Value on the Second Death multiplied by the corridor
percentage, as described below.

Under Option 2 the Death Benefit will be the greater of the current Specified
Amount plus the Accumulation Value on the Second Death or the Accumulation Value
on the Second Death multiplied by the corridor percentage, as described below.

The corridor percentage is used to determine a minimum ratio of Death Benefit to
Accumulation Value. This is required to qualify the Policy as life insurance
under the federal tax laws. Following is a complete list of corridor
percentages.

Corridor Percentages (Attained as of the Younger Insured at the Beginning of
the Contract Year)

Under both Option 1 and Option 2, the Death Benefit will be reduced by a
Withdrawal. (See "Withdrawals") The Death Benefit payable under either Option
will also be reduced by the amount necessary to repay the Policy Debt in full
and, if the Policy is within the Grace Period, any payment required to keep the
Policy in force.

The Death Benefit will be set at 101% of the cash value on the Policy
Anniversary Date nearest the Younger Insured's Attained Age 100.

After We issue the Policy, You may, subject to certain restrictions, change the
Death Benefit selection from Option 1 to Option 2, or vice versa, by sending Us
a request in writing. If you change the Death Benefit option from Option 2 to
Option 1, the Specified Amount will be increased by the Policy's Accumulation
Value on the effective date of the change. If you change the Death Benefit
option from Option 1 to Option 2, the Specified Amount will be decreased by the
Policy's Accumulation Value on the effective date of the change. We will require
evidence of insurability on a request for a change from Option 1 to Option 2.

[arrow right] TRANSFERS AND ALLOCATIONS TO FUNDING OPTIONS

You may transfer all or part of the Accumulation Value to any other Portfolio or
to the General Account at any time. Funds may be transferred between the
Portfolios or from the Portfolios to the General Account. We currently permit 12
transfers per year without imposing any transfer charge. For transfers over 12
in any Policy Year, We will impose a transfer charge of $50, which We will
deduct on a pro rata basis from the Division or Divisions or the General Account
into which the amount is transferred, unless You specify otherwise. We will not
impose a Transfer Charge on the transfer of any Net Premium payments received
prior to the Allocation Date, plus interest earned, from the General Account to
the Divisions on the Allocation Date, or on loan repayments. We will not impose
a Transfer Charge for transfers under the Dollar Cost Averaging or Portfolio
Rebalancing features. You

15
<PAGE>

may currently make up to 20 transfers per Policy Year. We reserve the right to
modify transfer privileges and charges.

You may at any time transfer 100% of the Policy's Accumulation Value to the
General Account and choose to have all future premium payments allocated to the
General Account. While You are doing this, the minimum period the Policy will be
in force will be fixed and guaranteed. The minimum period will depend on the
amount of Accumulation Value, the Specified Amount, the sex, Attained Age and
rating classes of the Insureds at the time of transfer. The minimum period will
decrease if You choose to surrender the Policy or make a withdrawal. The minimum
period will increase if You choose to decrease the Specified Amount, make
additional premium payments, or We credit a higher interest rate or charge a
lower cost of insurance rate than those guaranteed for the General Account.

Except for transfers in connection with Dollar Cost Averaging, Automatic
Portfolio Rebalancing and loan repayments, We allow transfers out of the General
Account to the Divisions only once in every 180 days and limit their amount to
the lesser of (a) 25% of the Accumulation Value in the General Account not being
held as loan collateral, or (b) $100,000. Any other transfer rules, including
minimum transfer amounts, also apply. We reserve the right to modify these
restrictions.

We will not impose a transfer charge for a transfer of all Accumulation Value in
the Separate Account to the General Account. A transfer from the General Account
to the Divisions of the Separate Account will be subject to the transfer charge
unless it is one of the first 12 transfers in a Policy Year and except for the
transfer of any Net Premium payments received prior to the Allocation Date, plus
interest earned, from the General Account and loan repayments.

We reserve the right to refuse or restrict transfers made by third-party agents
on behalf of Policyowners or pursuant to market timing services when We
determine that such transfers will be detrimental to the Portfolios,
Policyowners or You.

[arrow right] TELEPHONE TRANSFERS, LOANS AND REALLOCATIONS

You, your authorized representative, or a member of his/her administrative staff
may request a transfer of Accumulation Value or reallocation of premiums
(including allocation changes relating to existing Dollar Cost Averaging and
Automatic Portfolio Rebalancing programs) either in writing or by telephone. In
order to make telephone transfers, You must complete a written telephone
transfer authorization form and return it to Us at our Home Office. All
transfers must be in accordance with the terms of the Policy. If the transfer
instructions are not in good order, the Company will not execute the transfer
and You will be notified.

We may also permit loans to be made by telephone, provided that Your
authorization form is one file with Us. Only You may request loans by telephone.

We will use reasonable procedures, such as requiring identifying information
from callers, recording telephone instructions, and providing written
confirmation of transactions, in order to confirm that telephone instructions
are genuine. Any telephone instructions which We reasonably believe to be
genuine will be Your responsibility, including losses arising from any errors in
the communication of instructions. As a result of this procedure, You will bear
the risk of loss. If the Company does not use reasonable procedures, as
described above, it may be liable for losses due to unauthorized instructions.

[arrow right] AUTOMATED TRANSFERS (DOLLAR COST AVERAGING AND PORTFOLIO
REBALANCING)

Dollar Cost Averaging describes a system of investing a uniform sum of money at
regular intervals over an extended period of time. Dollar Cost Averaging is
based on the economic fact that buying a security with a constant sum of money
at fixed intervals results in acquiring more of the item when prices are low and
less of it when prices are high.

You may establish automated transfers of a specific dollar amount (the "Periodic
Transfer Amount") on a monthly, quarterly or semi-annual basis from the Money
Market Division or the General Account to any other Portfolio or to the General
Account. You must have a minimum of $3,000 allocated to either the Money Market
Division or the General Account in order to enroll in the Dollar Cost Averaging
program. The minimum Periodic Transfer Amount is $250. A minimum of 5% of the
Periodic Transfer Amount must be transferred to any specified Division. There is
no additional charge for the program. You may start or stop participation in the

16
<PAGE>

Dollar Cost Averaging program at any time, but You must give the Company at
least 30 days' notice to change any automated transfer instructions that are
currently in place. The Company reserves the right to suspend or modify
automated transfer privileges at any time.

You may elect an Automatic Portfolio Rebalancing feature which provides a method
for reestablishing fixed proportions between various types of investments on a
systematic basis. Under this feature, We will automatically readjust the
allocation between the Divisions and the General Account to the desired
allocation, subject to a minimum of 5% per Division or General Account, on a
quarterly, semi-annual or annual basis. There is no additional charge for the
program.

You may not elect Dollar Cost Averaging and Automatic Portfolio Rebalancing at
the same time. We will make transfers and adjustments pursuant to these features
on the Policy's Monthly Anniversary Date in the month when the transaction is to
take place, or the next succeeding business day if the Monthly Anniversary Date
falls on a holiday or weekend. We must have an authorization form on file before
either feature may begin. Transfers under these features are not subject to the
transfer fee and do not count toward the 12 free transfers or the 20 transfer
maximum currently allowed per year.

Before participating in the Dollar Cost Averaging or Automatic Portfolio
Rebalancing programs, You should consider the risks involved in switching
between investments available under the Policy. Dollar Cost Averaging requires
regular investments regardless of fluctuating price levels, and does not
guarantee profits or prevent losses. Automatic Portfolio Rebalancing is
consistent with maintaining your allocation of investments among market
segments, although it is accomplished by reducing your Accumulation Value
allocated to the better performing segments. Therefore, You should carefully
consider market conditions and each Fund's investment policies and related risks
before electing to participate in the Dollar Cost Averaging or Automatic
Portfolio Rebalancing programs.

policy values
- --------------------------------------------------------------------------------

[arrow right] ACCUMULATION VALUE

The Accumulation Value of Your Policy is determined on a daily basis.
Accumulation Value is the sum of the values in the Divisions plus the value in
the General Account. We calculate Your Policy's Accumulation Value in the
Divisions by units and unit values under the Policies. Your Policy's
Accumulation Value will reflect the investment experience of the Divisions
investing in the Portfolios, any additional net premiums paid, any withdrawals,
any policy loans, and any charges assessed in connection with the Policy. We do
not guarantee Accumulation Values in the Separate Account as to dollar amount.

On the Allocation Date, the Accumulation Value in the Separate Account (the
"Separate Account Value") equals the initial premium payments, less the State
Premium Tax and Federal DAC Tax Charges, plus interest earned prior to the
Allocation Date, and less the Monthly Deduction for the first policy month. We
will establish the initial number of units credited to the Separate Account for
Your Policy on the Allocation Date. At the end of each Valuation Period
thereafter, the Accumulation Value in a Division is

(i) the Accumulation Value in the Division on the preceding Valuation Date
multiplied by the net investment factor, described below, for the current
Valuation Period, plus

(ii) any Net Premium We receive during the current Valuation Period which is
allocated to the Division, plus

(iii) all Accumulation Value transferred to the Division from another Division
or the General Account during the current Valuation Period, minus

(iv) the Accumulation Value transferred from the Division to another Division or
the General Account and Accumulation Value transferred to secure a Policy Debt
during the current Valuation Period, minus

(v) all withdrawals from the Division during the current Valuation Period.

Whenever a Valuation Period includes the Monthly Anniversary Date, the Separate
Account Value at the end of such period is reduced by the portion of the monthly
deduction and increased by any Accumulation Value Adjustment allocated to the
Divisions.

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<PAGE>

We will calculate a guaranteed monthly Accumulation Value Adjustment at the
beginning of the second Policy Year and every Policy Year thereafter. The
adjustment will be allocated among the General Account and the Divisions in the
same proportion as premium payments. The adjustment is calculated as (i)
multiplied by the total of (ii) plus (iii) minus (iv), but not less than zero,
where:

(i) is .0003333 in Policy Years 2 through 10 and .00025 in Policy Years 11 and
thereafter;

(ii) is the amount allocated to the Divisions at the beginning of the Policy
Year;

(iii) is the Type B loan balance at the beginning of the Policy Year; and

(iv) is the Guideline Single Premium at issue under Section 7702 of the Code.

See "Policy Loans" for a description of Type B loans.

[arrow right] UNIT VALUES

We credit Units to You upon allocation of Net Premiums to a Division. Each Net
Premium payment you allocate to a Division will increase the number of units in
that Division. We credit both full and fractional units. We determine the number
of units and fractional units by dividing the Net Premium payment by the unit
value of the Division to which You have allocated the payment. We determine each
Division's unit value on each Valuation Date. The number of units credited to
Your Policy will not change because of subsequent changes in unit value. The
number is increased by subsequent contributions or transfers allocated to a
Division, and decreased by charges and withdrawals from that Division. The
dollar value of each Division's units will vary depending on the investment
performance of the corresponding Portfolio, as well as any expenses charged
directly to the Separate Account.

The initial Unit Value of each Division's units was $10.00. Thereafter, the Unit
Value of a Division on any Valuation Date is calculated by multiplying the
Division's Unit Value on the previous Valuation Date by the Net Investment
Factor for the Valuation Period then ended.

[arrow right] NET INVESTMENT FACTOR

The Net Investment Factor measures each Division's investment experience and is
used to determine changes in Unit Value from one Valuation Period to the next.
We calculate the Net Investment Factor by dividing (1) by (2) and subtracting
(3) from the result, where:

(1) is the sum of:

(a) the Net Asset Value of a Fund share held in the Separate Account for
that Division determined at the end of the current Valuation Period; plus

(b) the per share amount of any dividend or capital gain distributions made
for shares held in the Separate Account for that Division if the
ex-dividend date occurs during the Valuation Period;

(2) is the Net Asset Value of a Fund share held in the Separate Account for that
Division determined as of the end of the preceding Valuation Period; and

(3) is the daily charge representing the Mortality & Expense Risk Charge. This
charge is equal, on an annual basis, to a percentage of the daily Net Asset
Value of Fund shares held in the Separate Account for that Division.

Because the Net Investment Factor may be greater than, less than or equal to 1,
values in a Division may increase or decrease from Valuation Period to Valuation
Period.

The General Account Value reflects amounts allocated to the General Account
through payment of premiums or transfers from the Separate Account, plus
interest credited to those amounts. Amounts allocated to the General Account,
and interest thereon, are guaranteed; however there is no assurance that the
Separate Account Value of the Policy will equal or exceed the Net Premiums paid
and allocated to the Separate Account.

You will be advised at least annually as to the number of Units which remain
credited to the Policy, the current Unit Values, the Separate Account Value, the
General Account Value, and the Accumulation Value.

[arrow right] SURRENDER VALUE

The Surrender Value of the Policy is the amount You can receive in cash by
surrendering the Policy. The Surrender Value will equal (a) the Accumulation
Value on the date of surrender; less (b) the Surrender Charge; less (c) the
Loan Value plus any accrued interest. (See Charges Deducted Upon Surrender)

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<PAGE>

policy rights
- --------------------------------------------------------------------

[arrow right] SURRENDERS

By Written Request, You may surrender the Policy for its Surrender Value at any
time while one or both Insureds is alive. All insurance coverage under the
Policy will end on the date of the Surrender. All or part of the Surrender Value
may be applied to one or more of the Settlement Options described in this
Prospectus or in any manner to which We agree and that We make available. (See
Right to Defer Payment, Policy Settlement and Payment of Benefits)

[arrow right] WITHDRAWALS

By Written Request, You may, at any time after the expiration of the Free Look
Period, make withdrawals from the Policy. A $50 Charge will be deducted from the
amount of the Cash Value which You withdraw. We will also deduct a pro rata
Surrender Charge. The minimum amount of any withdrawal after the $50 charge is
applied is $500. The amount You withdraw cannot exceed the Surrender Value.

Withdrawals will generally affect the Policy's Accumulation Value, Cash Value
and the life insurance proceeds payable under the Policy as follows.

[diamond] The Policy's Cash Value will be reduced by the amount of the
withdrawal;

[diamond] The Policy's Accumulation Value will be reduced by the amount of the
withdrawal plus any applicable pro rata Surrender Charge;

[diamond] Life insurance proceeds payable under the Policy will generally be
reduced by the amount of the withdrawal plus any applicable pro rata
Surrender Charge, unless the withdrawal is combined with a request
to maintain the Specified Amount.

The withdrawal will reduce the Policy's values as described in the "Charges
Deducted Upon Surrender" section.

If the Death Benefit Option for the Policy is Option 1, a withdrawal will reduce
the Specified Amount. However, We will not allow a withdrawal if the Specified
Amount will be reduced below the $100,000.

If the Death Benefit Option for the Policy is Option 2, a withdrawal will reduce
the Accumulation Value, usually resulting in a dollar-per-dollar reduction in
the life insurance proceeds payable under the Policy.

You may allocate a withdrawal among the Divisions and the General Account. If
you do not make such an allocation, We will allocate the withdrawal among the
Divisions and the General Account in the same proportion that the Accumulation
Value in each Division and the General Account Value, less any Policy Debt,
bears to the total Accumulation Value of the Policy, less any Policy Debt. (See
Right to Defer Payment, Policy Changes and Payment of Benefits)

[arrow right] GRACE PERIOD

If Your Policy's Surrender Value is insufficient to satisfy the Monthly
Deduction and You have not met Cumulative Minimum Premium requirements during
the minimum premium period, we will allow you 61 days of grace for payment of an
amount sufficient to continue coverage. Your Policy will go into "lapse pending
status".

Written notice will be mailed to Your last known address, according to Our
records, not less than 61 days before termination of the Policy. This notice
will also be mailed to the last known address of any assignee of record.

The Policy will stay in force during the Grace Period. If the last surviving
Insured dies during the Grace Period, we will reduce the Death Benefit by the
amount of any Monthly Deduction due and the amount of any outstanding Policy
Debt.

If payment is not made within 61 days after the Monthly Anniversary Day, the
Policy will terminate without value at the end of the Grace Period.

[arrow right] REINSTATEMENT OF A LAPSED OR TERMINATED POLICY

If the Policy terminates as provided in its Grace Period benefit, it may be
reinstated. To reinstate the Policy, the following conditions must be met:

[diamond] The Policy has not been fully surrendered.

[diamond] You must apply for reinstatement within 5 years after the date of
termination and before the Younger Insured's Attained Age 100.

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<PAGE>

[diamond] We must receive evidence of insurability satisfactory to Us.

[diamond] We must receive a premium payment sufficient to keep the Policy in
force for the current month plus two additional months.

[diamond] If a loan was outstanding at the time of lapse, We will require that
either You repay or reinstate the loan before We reinstate the
Policy.

[diamond] Supplemental Benefits will be reinstated only with Our consent. (See
Grace Period and Premium Payments)

[arrow right] COVERAGE BEYOND YOUNGER INSURED'S ATTAINED AGE 100

At the younger Insured's Attained Age 100, We will make several changes to Your
Policy. At that point and thereafter, the Specified Amount will equal the
current Accumulation Value. The Death Benefit will be set to Option 1 and will
equal 101% of the Specified Amount less Policy Debt. We will no longer deduct
any Cost of Insurance charges or Unit Expense Charge, the Monthly Accumulation
Value Adjustment will cease and no new premiums will be accepted.

[arrow right] RIGHT TO DEFER PAYMENT

Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (1) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets; or (4) during any
other period when the SEC, by order, so permits for the protection of security
holders. For payment from the Separate Account in such instances, We may defer
payment of Full Surrender and Withdrawal Values, any Death Benefit in excess of
the current Specified Amount, transfers and any portion of the Loan Value.

Payment of any General Account Value may be deferred for up to six months,
except when used to pay amounts due Us.

[arrow right] POLICY LOANS

We will grant loans at any time after the expiration of the Right of Policy
Examination. The amount of the loan will not be more than the Loan Value. Unless
otherwise required by state law, the Loan Value for this Policy is 90% of Cash
Value at the end of the Valuation Period during which the loan request is
received. The maximum amount You can borrow at any time is the Loan Value
reduced by any outstanding Policy Debt.

We will usually disburse loan proceeds within seven days from the Date of
Receipt of a loan request, although we reserve the right to postpone payments
under certain circumstances. See "OTHER MATTERS--Postponement of Payments". We
may, in our sole discretion, allow You to make loans by telephone if You have
filed a proper telephone authorization form with Us. So long as your Policy is
in force and an Insured is living, You may repay your loan in whole or in part
at any time without penalty.

Accumulation Value equal to the loan amount will be maintained in the General
Account to secure the loan. You may allocate a policy loan among the Divisions
of the Separate Account and the existing General Account value that is not
already allocated to secure a Policy Loan, and We will transfer Separate Account
Value as You have indicated. If you do not make this allocation, the loan will
be allocated among the Divisions and the General Account in the same proportion
that the Accumulation Value in each Division and the Accumulation Value in the
General Account less Policy Debt bears to the total Accumulation Value of the
Policy, less Policy Debt, on the date of the loan. We will make a similar
allocation for unpaid loan interest due. A policy loan removes Accumulation
Value from the investment experience of the Separate Account, which will have a
permanent effect on the Accumulation Value and Death Benefit even if the loan is
repaid. General Account Value equal to Policy Debt will accrue interest daily at
an annual rate of 4%.

We will charge interest on any outstanding Policy Debt with the interest
compounded annually. There are two types of loans available. A Type A loan is
charged the same interest rate as the interest credited to the amount of the
Accumulation Value held in the General Account to secure loans, which is an
effective annual rate of 4%. The amount available at any time for a Type A loan
is the maximum loan amount, less the Guideline Single Premium at issue, as set
forth in the Code, less any outstanding Type A loans. Any other loans are Type

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<PAGE>

B loans. A Type B loan is charged an effective annual interest rate of 6%. One
loan request can result in both a Type A and a Type B loan. A loan request will
first be granted as a Type A loan, to the extent available, and then as a Type B
loan. Once a loan is granted, it remains a Type A or Type B loan until it is
repaid. Interest is due and payable at the end of each Policy Year and any
unpaid interest due becomes loan principal.

If Policy Debt exceeds Cash Value, We will notify You and any assignee of
record. You must make a payment within 61 days from the date Policy Debt exceeds
Cash Value or the Policy will lapse and terminate without value (See "Grace
Period"). If this happens, You may be taxed on the total appreciation under the
Policy. However, You may reinstate the Policy, subject to proof of insurability
and payment of a reinstatement premium. See "Reinstatement of a Lapsed Policy".

You may repay the Policy Debt, in whole or in part, at any time during either
Insured's life, so long as the Policy is in force. The amount necessary to repay
all Policy Debt in full will include any accrued interest. If there is any
Policy Debt, We will apply payments received from you as follows: We will apply
payments as premium in the amount of the Planned Periodic Premium, received at
the Premium Frequency, unless You specifically designate the payment as a loan
repayment. We will apply payments in excess of the Planned Periodic Premium or
payments received other than at the Premium Frequency, first as policy loan
repayments, then as premium when you have repaid the Policy Debt. If You have
both a Type A and a Type B loan, we will apply repayments first to the Type B
loan and then to the Type A loan. Upon repayment of all or part of the Policy
Debt, We will transfer the Policy's Accumulation Value securing the repaid
portion of the debt in the General Account to the Divisions and the General
Account in the same proportion in which the loan was taken.

An outstanding loan amount will decrease the Surrender Value available under the
Policy. For example, if a Policy has a Surrender Value of $10,000, You may take
a loan of 90% or $9,000, leaving a new Surrender Value of $1,000. If a loan is
not repaid, the decrease in the Surrender Value could cause the Policy to lapse.
In addition, the Death Benefit will be decreased because of an outstanding
Policy Loan. Furthermore, even if You repay the loan, the amount of the Death
Benefit and the Policy's Surrender Value may be permanently affected since the
Loan Value is not credited with the investment experience of the Funds.

[arrow right] POLICY CHANGES

You may make changes to Your Policy, as described below, by submitting a Written
Request to Our Home Office. Supplemental Policy Specification pages and/or a
notice confirming the change will be sent to You once the change is completed.

Decrease in Specified Amount

You may decrease the Specified Amount of this Policy after the 1st Policy Year
by sending a written request and the Policy to Our home office. However:

[diamond] Any decrease must be at least $25,000 R Any decrease will affect
Your cost of insurance charge

[diamond] Any decrease may affect the monthly Accumulation Value Adjustment
but will not affect the amount available for a Type A loan

[diamond] Any decrease will be effective on the Monthly Anniversary Date after
the Date of Receipt of the request

[diamond] A pro rata Surrender Charge will be assessed

[diamond] Any decrease may result in federal tax implications (See "Federal
Tax Matters")

[diamond] No decrease may decrease the Specified Amount below $100,000.

Change in Death Benefit Option

Any change in the Death Benefit Option is subject to the following conditions:

[diamond] The change will take effect on the Monthly Deduction Day on or next
following the date on which Your Written Request is received.

[diamond] There will be no change in the Surrender Charge. R Evidence of
insurability may be required.

[diamond] Changes from Option 1 to 2 will be allowed at any time while this
Policy is in force, subject to evidence of insurability satisfactory
to Us. The Specified Amount will be reduced to equal the Specified
Amount less the Accumulation Value at the time of the change.

[diamond] If the change decreases the Specified Amount below the minimum of
$100,000, We will increase the Specified Amount to $100,000.

21
<PAGE>

[diamond] Changes from Option 2 to 1 will be allowed at any time while this
Policy is in force. The new Specified Amount will be increased to
equal the Specified Amount plus the Accumulation Value as of the
date of the change. (See Surrender Charge and Right of Policy
Examination)

[arrow right] RIGHT OF POLICY EXAMINATION ("FREE LOOK PERIOD")

The Policy has a free look period during which You may examine the Policy. If
for any reason You are dissatisfied, You may return the Policy to Us at Our Home
Office or to Our representative within 10 days of delivery of the Policy to You
(or within a different period if required by State law). Return the Policy to
Jefferson Pilot Financial Insurance Company at One Granite Place, Concord, New
Hampshire 03301. Upon its return, the Policy will be deemed void from its
beginning. We will return to You within seven days all payments We received on
the Policy. Prior to the Allocation Date, We will hold the initial Net Premium,
and any other premiums we receive, in Our General Account. We will retain any
interest earned if the Free Look right is exercised, unless otherwise required
by State law.

[arrow right] SUPPLEMENTAL BENEFITS

The supplemental benefits currently available as riders to the Policy include
the following:

[diamond] Guaranteed Death Benefit Rider--guarantees that the Policy will stay
in force during the guarantee period specified in the rider with a
Death Benefit equal to the Specified Amount, subject to the terms of
the rider.

[diamond] Automatic Increase Rider--allows for scheduled annual increases in
Specified Amount, subject to the terms of the rider.

[diamond] Policy Split Option Rider--allows You, upon election, to exchange
the Policy for two individual policies one on each Insured named in
the Policy, subject to the terms of the rider.

[diamond] Estate Protection Rider--provides for an increase in Specified
Amount in Policy Years 1 through 4, subject to the terms of the
rider.

These riders may not be available in all states.

Other riders for supplemental benefits may become available under the Policy
from time to time. The charges for each of these riders are described in Your
Policy.

death benefit
- --------------------------------------------------------------------------------

The Death Benefit under the Policy will be paid

in a lump sum unless You or the beneficiary have elected that they be paid under
one or more of the available Settlement Options.

Payment of the Death Benefit may be delayed if the Policy is being contested.
You may elect a Settlement Option for the beneficiary and deem it irrevocable.
You may revoke or change a prior election. The beneficiary may make or change an
election within 90 days of the Second Death, unless You have made an irrevocable
election.

All or part of the Death Benefit may be applied under one of the Settlement
Options, or such options as We may choose to make available in the future.

If the Policy is assigned as collateral security, We will pay any amount due the
assignee in a lump sum. Any excess Death Benefit due will be paid as elected.

(See "Right to Defer Payment" and "Policy Settlement")

policy settlement
- --------------------------------------------------------------------------------

We will pay proceeds in whole or in part in the form of a lump sum or the
Settlement Options available under the Policy upon the death of the Surviving
Insured or upon Surrender or upon maturity.

A Written Request may be made to elect, change or revoke a Settlement Option
before payments begin under any Settlement Option. This request will take effect
upon its filing at our Home Office. If no Settlement Option has been elected by
You when the Death Benefit becomes payable to the beneficiary, that beneficiary
may make the election.

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<PAGE>

[arrow right] SETTLEMENT OPTIONS

The following Settlement Options are available under the Policy:

Option A--Installments of a specified amount. Payments of an agreed amount to be
made monthly until the proceeds and interest are exhausted.

Option B--Installments for a specified period. Payments to be made monthly for
an agreed number of years.

Option C--Life Income. Payments to be made each month for the lifetime of the
payee. We guarantee that payments will be made for a minimum of 10, 15 or 20
years, as agreed upon.

Option D--Interest. We will pay interest on the proceeds We hold, calculated at
the compound rate of 3% per year. We will make interest payments at 12, 6, 3 or
1 month intervals.

Option E--Interest: Retained Asset Account (Performance Plus Account). We will
pay interest on the proceeds We hold, based on the floating 13-week U.S.
Treasury Bill rate fixed quarterly. The payee can write checks against such
account at any time and in any amount up to the total in the account. The checks
must be for a minimum of $250.

The interest rate for Options A, B and D will not be less than 3% per year. The
interest rate for Option C will not be less than 2.5% per year. The interest
rate for Option E will not be less than 2% per year.

Unless otherwise stated in the election of any option, the payee of the policy
benefits shall have the right to receive the withdrawal value under that option.
For Options A, D and E, the withdrawal value shall be any unpaid balance of
proceeds plus accrued interest. For Option B, the withdrawal value shall be the
commuted value of the remaining payments. We will calculate this withdrawal
value on the same basis as the original payments. For Option C, the withdrawal
value will be the commuted value of any remaining guaranteed payments. If the
payee is alive at the end of the guarantee period, We will resume the payment on
that date. The payment will then continue for the lifetime of the payee.

If the payee of policy benefits dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the estate
of the last surviving payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision of the
Policy.

At least $25,000 of Policy proceeds must be applied to each settlement option
chosen. We reserve the right to change payment intervals to increase payments to
$250 each.

Calculation of Settlement Option Values

The value of the Settlement Options will be calculated as set forth in the
Policy.

the company
- --------------------------------------------------------------------------------

Jefferson Pilot Financial Insurance Company ("JP Financial" or "the Company") is
a stock life insurance company chartered in 1903 in Tennessee. Prior to May 1,
1998, JP Financial was known as Chubb Life Insurance Company of America. In 1991
Chubb Life redomesticated from the State of Tennessee to the State of New
Hampshire and is now a New Hampshire life insurance company. Effective April 30,
1997, Chubb Life, formerly a wholly-owned subsidiary of The Chubb Corporation,
became a wholly-owned subsidiary of Jefferson-Pilot Corporation, a North
Carolina corporation. The principal offices of Jefferson-Pilot Corporation are
located at 100 North Greene Street, Greensboro, North Carolina 27401; its
telephone number is 336-691-3000. Chubb Life changed its name to Jefferson Pilot
Financial Insurance Company effective May 1, 1998. JP Financial's home office
and service center are located at One Granite Place, Concord, New Hampshire
03301; its telephone number is 800-258-3648.

The Company is licensed to do life insurance business in forty-nine states of
the United States, Puerto Rico, the U.S. Virgin Islands, Guam and in the
District of Columbia.

At December 31, 1998 the Company and its subsidiaries had total assets of
approximately $5.5 billion and had over $68 billion of insurance in force, while
total assets of Jefferson-Pilot Corporation and its

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<PAGE>

subsidiaries (including the Company) were approximately $24 billion.

The Company writes individual life insurance and annuities. It is subject to New
Hampshire law governing insurance.

The Company is currently rated AAA (Superior) by Duff & Phelps, AAA (Superior)
by Standard & Poor's Corporation and A+ (Superior) by A.M. Best and Company.
These ratings do not apply to JPF Separate Account C, but reflect the opinion of
the rating companies as to the Company's relative financial strength and ability
to meet its contractual obligations to its policyowners.

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<PAGE>

directors and officers
- --------------------------------------------------------------------------------
MANAGEMENT OF JP FINANCIAL

Executive Officers and Directors of JP Financial
Directors

<TABLE>
<CAPTION>
Principal Occupation and
Name Business Address
- -------------------------------------------------------------------------------------------
<S> <C>
Dennis R. Glass .............. Executive Vice President
(also serves as Executive Vice President, Chief Financial
Officer and Treasurer of Jefferson-Pilot Corporation and
Jefferson-Pilot Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401

Kenneth C. Mlekush ........... President
(also serves as Executive Vice President of Jefferson-Pilot
Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401

David A. Stonecipher ......... Chairman and Chief Executive Officer
(also serves as President and Chief Executive Officer of
Jefferson-Pilot Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401

E. Jay Yelton ................ Executive Vice President
Also serves as Executive Vice President of Jefferson-Pilot
Life Insurance Company
100 North Greene Street
Greensboro, North Carolina 27401
</TABLE>

Executive Officers (Other Than Directors)

<TABLE>
<CAPTION>
Name Position
- -------------------------------------------------------------------------------------------
<S> <C>
Charles C. Cornelio .......... Executive Vice President
Leslie L. Durland ............ Executive Vice President
John D. Hopkins .............. Executive Vice President, General Counsel
Reggie D. Adamson ............ Senior Vice President
Ronald R. Angarella .......... Senior Vice President
John C. Ingram ............... Senior Vice President
Hal B. Phillips, Jr. ......... Senior Vice President, Chief Life Actuary
Richard T. Strange ........... Senior Vice President, Deputy General Counsel
Paul J. Strong ............... Senior Vice President
John W. Wells ................ Senior Vice President
James R. Abernathy ........... Vice President
Margaret O. Cain ............. Vice President
Rebecca M. Clark ............. Vice President
Kenneth S. Dwyer ............. Vice President
Richard C. Dielensnyder ...... Vice President
Ronald H. Emery .............. Vice President
Donald M. Kane ............... Vice President
Patrick A. Lang .............. Vice President
Shari J. Lease ............... Vice President
Donna L. Metcalf ............. Vice President
Thomas E. Murphy, Jr. M.D. ... Vice President and Medical Director
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
Name Position
- -------------------------------------------------------------------------------------------
<S> <C>
Robert A. Reed ............... Vice President
James M. Sandelli ............ Vice President
Russell C. Simpson ........... Vice President and Treasurer
William A. Spencer ........... Vice President
Francis A. Sutherland, Jr. ... Vice President
John A. Thomas ............... Vice President
John A. Weston ............... Vice President
</TABLE>

The officers and employees of JP Financial who have access to the assets of
Separate Account C are covered by a fidelity bond issued by American
International Group in the amount of $20,000,000.

additional information
- --------------------------------------------------------------------------------

[arrow right] REPORTS TO POLICYOWNERS

We will maintain all records relating to the Separate Account. At least once in
each Policy Year, We will send You an Annual Summary containing the following
information:

1. A statement of the current Accumulation Value and Cash Value since the prior
report or since the Issue Date, if there has been no prior report;

2. A statement of all premiums paid and all charges incurred;

3. The balance of outstanding Policy Loans for the previous calendar year;

4. Any reports required by the 1940 Act.

We will promptly mail confirmation notices at the time of the following
transactions:

1. policy issue;

2. receipt of premium payments;

3. initial allocation among Divisions on the Allocation Date;

4. transfers among Divisions;

5. change of premium allocation;

6. change between Death Benefit Option 1 and Option 2;

7. decreases in Specified Amount;

8. withdrawals, surrenders or loans;

9. receipt of loan repayments;

10. reinstatements; and

11. redemptions due to insufficient funds.

[arrow right] RIGHT TO INSTRUCT VOTING OF FUND SHARES

In accordance with our view of present applicable law, We will vote the shares
of the Funds held in the Separate Account in accordance with instructions
received from Policyowners having a voting interest in the Funds. Policyowners
having such an interest will receive periodic reports relating to the Fund,
proxy material and a form for giving voting instructions. The number of shares
You have a right to vote will be determined as of a record date established by
the Fund. The number of votes that You are entitled to direct with respect to a
Fund will be determined by dividing Your Policy's Accumulation Value in a
Division by the net asset value per share of the corresponding Portfolio in
which the Division invests. We will solicit Your voting instructions by mail at
least 14 days before any shareholders meeting.

We will cast the votes at meetings of the shareholders of the Fund and will be
based on instructions received from Policyowners. However, if the Investment
Company Act of 1940 or any regulations thereunder should be amended or if the
present interpretation should change, and as a result We determine that We are
permitted to vote the shares of the Fund in our right, We may elect to do so.

We will vote Fund shares for which We do not receive timely instructions and
Fund shares which are not otherwise attributable to Policyowners in the same
proportion as the voting instruction which We receive for all Policies
participating in each Fund through the Separate Account.

[arrow right] DISREGARD OF VOTING INSTRUCTIONS

When required by state insurance regulatory authorities, We may disregard
voting instructions if

26
<PAGE>

the instructions require that the shares be voted so as to cause a change in the
sub-classification or investment objectives of a Fund or to approve or
disapprove an investment advisory contract for a Fund. We may also disregard
voting instructions initiated by a Policyowner in favor of changes in the
investment policy or the investment adviser of the Fund if We reasonably
disapprove of such changes.

We only disapprove a change if the proposed change is contrary to state law or
prohibited by state regulatory authorities or if We determine that the change
would have an adverse effect on the Separate Account if the proposed investment
policy for a fund would result in overly speculative or unsound investments. In
the event that We do disregard voting instructions, a summary of that action and
the reasons for such action will be included in the next annual report to
Policyowners.

[arrow right] STATE REGULATION

The Policy will be offered for sale in all jurisdictions where the Company is
authorized to do business and where the Policy has been approved by the
appropriate Insurance Department or regulatory authorities.

[arrow right] LEGAL MATTERS

We know of no pending material legal proceedings pending to which either the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The legal validity of the securities described in the
prospectus has been passed on by Our Counsel. The law firm of Jorden Burt Boros
Cicchetti Berenson & Johnson, 1025 Thomas Jefferson Street, Suite 400, East
Lobby, Washington, DC 20007-5201, serve as Our Special Counsel with regard to
the federal securities laws.

[arrow right] THE REGISTRATION STATEMENT

We have filed a Registration Statement under the Securities Act of 1933 relating
to the offering described in this Prospectus. This Prospectus does not include
all of the information set forth in the Registration Statement, certain portions
of which have been omitted pursuant to SEC rules and regulations. You should
refer to the instrument as filed to obtain any omitted information.

[arrow right] FINANCIAL STATEMENTS

Our financial statements which are included in the Prospectus should be
considered only as bearing on Our ability to meet Our obligations under the
Policy. They should not be considered as bearing on the investment experience of
the assets held in the Separate Account. Our most current audited financial
statements are those as of the end of the most recent fiscal year. The Company
does not prepare financial statements more often than annually and believes that
any incremental benefit to prospective Policyowners that may result from
preparing and delivering more current financial statements, though unaudited,
does not justify the additional cost that would be incurred. In addition, the
Company represents that there has been no material adverse change in Our
financial position or operations since the dates of the audited financial
statements.

[arrow right] EMPLOYMENT BENEFIT PLANS

Employers and employee organizations should consider, in connection with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase
of policy in connection with an employment-related insurance or benefit plan.
The U.S. Supreme Court held, in a 1983 decision, that, under Title VII, optional
annuity benefits under a deferred compensation plan could not vary on the basis
of sex.

[arrow right] DISTRIBUTION OF THE POLICY

Jefferson Pilot Variable Corporation (JPVC), a North Carolina Corporation
incorporated on January 13, 1970, will serve as principal underwriter of the
securities offered under the Policy as defined by the federal securities laws.
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for Us, are also registered representatives of
broker-dealers who have entered into written sales agreements with JPVC. Any
such broker-dealers will be registered with the SEC and will be members of the
National Association of Securities Dealers, Inc. We may also offer and sell
policies directly.

We will pay commissions under various schedules and accordingly commissions will
vary with the form of schedule selected. In any event, commissions to registered
representatives are not expected to exceed 90% of first year target premium and
5% of first year excess premium, and 5% of target premium for the second through
fifteenth policy years for both renewals and excess premium. Compensation
arrangements vary among broker-dealers. Override payments, expense allowances

27
<PAGE>

and bonuses based on specific production levels may be paid. Alternative
Commission Schedules will reflect differences in up-front commissions versus
ongoing compensation. Except as previously described in this prospectus, no
separate deductions from premiums are made to pay sales commissions or sales
expenses.

[arrow right] INDEPENDENT AUDITORS

Ernst & Young LLP, 200 Clarendon Street, Boston, Massachusetts, are the
independent auditors for the Separate Account and Ernst & Young LLP, 100 North
Greene Street, Greensboro, North Carolina, are the independent auditors for the
Company. The services provided to the Separate Account include primarily the
audits of the Separate Account's financial statements.

[arrow right] YEAR 2000

Like most registered investment companies, the Fund faces certain risks
associated with the coming of the year 2000. The year 2000 issue relates to the
way computer systems and programs define calendar dates. By using only two digit
dates, they could fail or make miscalculations due to the inability to
distinguish between dates in the 1900's and in the 2000's. Also, many systems
and equipment that are not typically thought of as "computer-related" (referred
to as "non-IT") contain imbedded hardware or software that must handle dates and
may not properly perform with dates after 1999.

Jefferson-Pilot Corporation (the "Corporation") began work on the Year 2000
compliance issue in 1995. The scope of the project includes: ensuring the
compliance of all applications, operating systems and hardware on mainframe, PC
and LAN platforms; addressing issues related to non-IT embedded software and
equipment; addressing the compliance of key vendors and service providers to the
Fund (business partners). The project has four phases: assessment of systems and
equipment affected by the Year 2000 issue; definition of strategies to address
affected systems and equipment; remediation of affected systems and equipment;
and testing of affected systems and equipment for compliance. Testing is
performed using standard testing methodology.

The target for completion of all phases and categories is September 30, 1999.
The Corporation has completed the assessment and strategy phases for mainframe
applications operating systems and hardware. The Company's new business and
policy holder administration systems and the general ledger are on the
mainframe. Currently, approximately 62% of all mainframe systems are compliant.
With respect to significant policyholder systems, the majority of these have
been completed, with testing continuing on some of the closed block systems.
Testing is expected to be completed 1st quarter 1999. For other mainframe
systems the project is on schedule. For PC and LAN systems, the Corporation has
begun the assessment phase and intends to complete remediation and testing
during the third quarter 1999. For the majority of the Corporation's non-IT
related systems and equipment, the Corporation has been advised by vendors that
the systems and equipment are currently Year 2000 compliant. Written
documentation regarding compliance is being obtained. Completion for non-IT
systems and equipment is scheduled for September 1999.

The most significant category of key business partners is financial
institutions. Their critical functions include safeguarding and managing
investment portfolios, processing of the Fund's operating bank accounts, and
sales/distribution. Other partner categories include insurance agents and
marketing organizations, suppliers of communication services, utilities,
materials and supplies. Critical business partners have been identified and
surveys initiated. Results of these surveys will be analyzed in 1st quarter 1999
and appropriate testing or other due diligence conducted in 2nd and 3rd quarter
1999.

Although the Corporation expects its critical policyholder systems to be
compliant by 1st quarter 1999, there is no guarantee that these results will be
achieved. Specific factors that give rise to this uncertainty include a possible
loss of technical resources to perform the work (not yet encountered), failure
to identity all susceptible systems, non-compliance by third parties whose
systems and operations impact the Fund, and other similar uncertainties.

Specifically, from Year 2000 problems, the Fund could experience an interruption
in its ability to process purchases and sales, calculate net asset values,
safeguard and manage its invested assets and operating cash accounts, accurately
maintain policyholder information, accurately maintain

28
<PAGE>

accounting records, issue new policies and/or perform adequate customer service.
Should the worst case scenario occur, it could, depending on its duration, have
a material impact on the Fund's operations.

Although the Corporation plans completion of certification of all internal
system and non-IT equipment well in advance of 2000, the Corporation recognizes
the need to plan for unanticipated problems resulting from failure of internal
systems or equipment or from failures of the Fund's business partners,
providers, suppliers or other critical third parties. The Corporation will begin
work on contingency plans for all mission critical functions in the 1st quarter
1999.

Group or Sponsored Arrangements

Policies may be purchased under group or sponsored arrangements. A group
arrangement includes a program under which a trustee, employer or similar entity
purchases individual Policies covering a group of individuals on a group basis.
A sponsored arrangement includes a program under which an employer permits group
solicitation of its employees or an association permits group solicitation of
its members for the purchase of Policies on an individual basis.

We may reduce the following types of charges for Policies issued in connection
with group or sponsored arrangement: the cost of insurance charge, surrender or
withdrawal charges, administrative charges, charges for withdrawal or transfer
and charges for optional rider benefits. We may also issue Policies in
connection with group or sponsored arrangements on a "non- medical" or
guaranteed issue basis; actual monthly cost of insurance charges may be higher
than the current cost of insurance charges under otherwise identical Policies
that are medically underwritten. We may also specify different minimum Specified
Amounts at issue for Policies issued in connection with group or sponsored
arrangements.

We may also reduce or eliminate certain charges or underwriting requirements for
Policies issued in connection with an exchange of another JP Financial policy or
a policy of any JP Financial affiliate.

The amounts of any reduction, the charges to be reduced, the elimination or
modification of underwriting requirements and the criteria for applying a
reduction or modification will generally reflect the reduced sales and
administrative effort, costs and differing mortality experience appropriate to
the circumstances giving rise to the reduction or modification. Reductions and
modifications will not be made where prohibited by law and will not be unfairly
discriminatory.

tax matters
- --------------------------------------------------------------------------------

[arrow right] GENERAL

Following is a discussion of the federal income tax considerations relating to
the Policy. This discussion is based on Our understanding of federal income tax
laws as they now exist and are currently interpreted by the Internal Revenue
Service. These laws are complex and tax results may vary among individuals.
Anyone contemplating the purchase of or the exercise of elections under the
Policy should seek competent tax advice.

[arrow right] FEDERAL TAX STATUS OF THE COMPANY

We are taxed as a life insurance company in accordance with the Internal Revenue
Code of 1986 as amended ("Code"). For federal income tax purposes, the
operations of each Separate Account form a part of the Company's total
operations and are not taxed separately, although operations of each Separate
Account are treated separately for accounting and financial statement purposes.

Both investment income and realized capital gains of the Separate Account are
reinvested without tax since the Code does not impose a tax on the Separate
Account for these amounts. However, we reserve the right to make a deduction for
such tax should it be imposed in the future.

[arrow right] LIFE INSURANCE QUALIFICATION

The Policy contains provisions not found in traditional life insurance policies.
Moreover, the Code does not directly address how it applies to survivorship
policies. In the absence of final regulations or other guidance under the Code
regarding this form of Contract, there is necessarily some uncertainty as to
whether a survivorship policy will meet the code's definition of life

29
<PAGE>

insurance contract. However, we believe that it should qualify under the Code as
a life insurance contract for federal income tax purposes, with the result that
all Death Benefits paid under the Policy will generally be excludable from the
gross income of the Policy's Beneficiary.

Section 7702 of the Code includes a definition of life insurance for tax
purposes. The definition provides limitations on the relationship between the
death benefit and the account value. If necessary, we will increase your death
benefit to maintain compliance with Section 7702.

The Policy is intended to qualify as life insurance under the Code. The Death
Benefit provided by the Policy is intended to qualify for the federal income tax
exclusion. If at any time the premium paid under the Policy exceeds the amount
allowable for such qualification, We will refund the premium to You with
interest within 60 days after the end of the Policy Year in which the premium
was received. If, for any reason, We do not refund the excess premium within
such 60-day period, the excess premium will be held in a separate deposit fund
and credited with interest until refunded to You. The interest rate used on any
refund, or credited to the separate deposit fund created by this provision will
be the excess premium's. We may notify You of other options available to You to
keep Your policy in compliance. You may also choose to have the Policy become a
modified endowment contract.

A modified endowment contract is a life insurance policy which fails to meet a
"seven-pay" test. In general, a policy will fail the seven-pay test if the
cumulative amount of premiums paid under the policy at any time during the first
seven policy years exceeds a calculated premium level. The calculated seven-pay
premium level is based on a hypothetical policy issued on the same insured
persons and for the same initial death benefit which, under specified conditions
(which include the absence of expense and administrative charges), would be
fully paid for after seven years. Your policy will be treated as a modified
endowment unless the cumulative premiums paid under Your policy, at all times
during the first seven policy years, are less than or equal to the cumulative
seven-pay premiums which would have been paid under the hypothetical policy on
or before such times.

Whenever there is a "material change" under a Policy, it will generally be
treated as a new contract for purposes of determining whether the Policy is a
modified endowment contract, and subject to a new seven-pay premium period and a
new seven-pay limit. The new seven-pay limit would be determined taking into
account, under a prospective adjustment formula, the Policy Account Value of the
policy at the time of such change. A materially changed Policy would be
considered a modified endowment if it failed to satisfy the new seven-pay limit.
A material change could occur as a result of a change in death benefit option,
the selection of additional benefits, the restoration of a terminated policy and
certain other changes.

If the benefits under your Policy are reduced, for example, by requesting a
decrease in Face Amount, or in some cases by making partial withdrawals,
terminating additional benefits under a rider, changing the death benefit
option, or as a result of policy termination, the calculated seven-pay premium
level will be redetermined based on the reduced level of benefits and applied
retroactively for purposes of the seven-pay test. If the premiums previously
paid are greater than the recalculated seven-pay premium level limit, the policy
will become a modified endowment unless You request a refund of the excess
premium, as outlined above. Generally, a life insurance policy which is received
in exchange for a modified endowment or a modified endowment which terminates
and is restored, will also be considered a modified endowment.

If a Policy is deemed to be a modified endowment contract, any distribution from
the Policy will be taxed in a manner comparable to distributions from annuities
(i.e., on an "income first") basis; distributions for this purpose include a
loan, pledge, assignment or partial withdrawal. Any such distributions will be
considered taxable income to the extent Accumulation Value under the Policy
exceeds investment in the Policy.

A 10% penalty tax will apply to the taxable portion of such a distribution. No
penalty will apply to distributions (i) to taxpayers 591/2 years of age or
older, (ii) in the case of a disability which can be expected to result in death
or to be of indefinite duration or (iii) received as part of a series of
substantially equal periodic annuity payment for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer
and his beneficiary.

To the extent a Policy becomes a modified endowment contract, any distribution,
as defined above, which occurs in the policy year it becomes a

30
<PAGE>

modified endowment contract and in any year thereafter, will be taxable income
to You. Also, any distributions within two years before a Policy becomes a
modified endowment contract will also be income taxable to You to the extent
that accumulation value exceeds investment in the Policy, as described above.
The Secretary of the Treasury has been authorized to prescribe rules which would
similarly treat other distributions made in anticipation of a policy becoming a
modified endowment contract. For purposes of determining the amount of any
distribution includible in income, all modified endowment contract policies that
fail the above-described tests which are issued by the same insurer, or its
affiliates, to the same policyowner during any calendar year are treated as one
contract. The Secretary of the Treasury is also authorized to issue regulations
in this connection.

In addition to the distribution rules for modified endowment contracts, the Code
and proposed regulations thereunder require that reasonable mortality and other
charges be used in satisfying the definition of life insurance. The death
benefit under a policy which meets this definition will continue to be excluded
from the beneficiary's gross income. We believe that the Policies meet this
definition. As long as a policy does not violate the tests described above, it
will not fail to meet the tests of the Code and the general tax provisions
described herein still apply.

The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In addition to the provisions discussed
above, the United States Congress may consider other legislation which, if
enacted, could adversely affect the tax treatment of life insurance policies.
Also, the Treasury Department may amend current regulations or adopt new
regulations with respect to this and other Code provisions. Therefore, You are
advised to consult a tax adviser or attorney for more complete tax information,
specifically regarding the applicability of the Code provisions to Your
situation.

Under normal circumstances, if the Policy is not a modified endowment contract,
loans received under the Policy will be construed as Your indebtedness. You are
advised to consult a tax adviser or attorney regarding the deduction of interest
paid on loans.

Even if the Policy is not a modified endowment contract, a partial withdrawal
together with a reduction in death benefits during the first 15 Policy Years may
create taxable income for You. The amount of that taxable income is determined
under a complex formula and it may be equal to part or all of, but not greater
than, the income on the contract. A partial withdrawal made after the first 15
Policy Years will be taxed on a recovery of premium-first basis, and will only
be subject to federal income tax to the extent such proceeds exceed the total
amount of premiums You have paid that have not been previously withdrawn.

If You make a partial withdrawal, surrender, loan or exchange of the Policy, We
may be required to withhold federal income tax from the portion of the money You
receive that is includible in Your federal gross income. A Policyowner who is
not a corporation may elect not to have such tax withheld; however, such
election must be made before We make the payment. In addition, if You fail to
provide us with a correct taxpayer identification number (usually a social
security number) or if the Treasury notifies Us that the taxpayer identification
number which has been provided is not correct, the election not to have such
taxes withheld will not be effective. In any case, You are liable for payment of
the federal income tax on the taxable portion of money received, whether or not
an election to have federal income tax withheld is made. If You elect not to
have federal income tax withheld, or if the amount withheld is insufficient,
then You may be responsible for payment of estimated tax. You may also incur
penalties under the estimated tax rules if the withholding and estimated tax
payments are insufficient. We suggest that You consult with a tax adviser or
attorney as to the tax implications of these matters.

In the event that a Policy is owned by the trustee under a pension or profit
sharing plan, or similar deferred compensation arrangement, tax consequences of
ownership or receipt of proceeds under the Policy could differ from those stated
herein. However, if ownership of such a Policy is transferred from the plan to a
plan participant (upon termination of employment, for example), the Policy will
be subject to all of the federal tax rules described above. A Policy owned by a
trustee under such a plan may be subject to restrictions under ERISA and a tax
adviser should be consulted regarding any applicable ERISA requirements.

31
<PAGE>

The Policy may also be used in various arrangements, including nonqualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans and others, where the tax consequences may vary
depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.

Federal estate and local estate, inheritance and other tax consequences of
ownership or receipt of policy proceeds depend upon the circumstances of each
Policyowner and Beneficiary. If the Policyowner is the last surviving Insured,
the Death Benefit proceeds will generally be includible in the Policyowner's
estate on his or her death for purposes of the federal estate tax. If the
Policyowner dies and was not the last surviving Insured, the fair market value
of the Policy may be included in the Policyowner's estate. In general, Death
Benefit proceeds are not included 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.

Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. We believe We presently are and intend
to remain in compliance with the diversification requirements as set forth in
the regulations. If the diversification requirements are not satisfied, the
Policy would not be treated as a life insurance contract. As a consequence to
You, income earned on a Policy would be taxable to You in the calendar quarter
in which the diversification requirements were not satisfied, and for all
subsequent calendar quarters.

The Secretary of the Treasury may issue a regulation or a ruling which will
prescribe the circumstances in which a Policyowner's control of the investments
of a segregated account may cause the Policyowner, rather than the insurance
company, to be treated as the owner of the assets of the account. The regulation
or ruling could impose requirements that are not reflected in the Policy,
relating, for example, to such elements of Policyowner control as premium
allocation, investment selection, transfer privileges and investment in a
division focusing on a particular investment sector. Failure to comply with any
such regulation or ruling presumably would cause earnings on a Policyowner's
interest in Separate Account C to be includible in the Policyowner's gross
income in the year earned. However, We have reserved certain rights to alter the
Policy and investment alternatives so as to comply with such regulation or
ruling. We believe that any such regulation or ruling would apply prospectively.
Since the regulation or ruling has not been issued, there can be no assurance as
to the content of such regulation or ruling or even whether application of the
regulation or ruling will be prospective. For these reasons, Policyowners are
urged to consult with their own tax advisers.

The foregoing summary does not purport to be complete or to cover all
situations, including the possible tax consequences of changes in ownership.
Counsel and other competent advisers should be consulted for more complete
information.

[arrow right] CHARGES FOR JP FINANCIAL INCOME TAXES

We are presently taxed as a life insurance company under the provisions of the
Code. The Code specifically provides for adjustments in reserves for variable
policies, and We will include flexible premium life insurance operations in our
tax return in accordance with these rules.

Currently no charge is made against the Separate Account for Our federal income
taxes, or provisions for such taxes, that may be attributable to the Separate
Account. We may charge each Division for its portion of any income tax charged
to Us on the Division or its assets. Under present laws, We may incur state and
local taxes (in addition to premium taxes) in several states. At present these
taxes are not significant. However, if they increase, We may decide to make
charges for such taxes or provisions for such taxes against the Separate
Account. We would retain any investment earnings on any tax charges accumulated
in a Division. Any such charges against the Separate Account or its Divisions
could have an adverse effect on the investment experience of such Division.

32
<PAGE>

miscellaneous policy provisions
- --------------------------------------------------------------------------------

[arrow right] THE POLICY

The Policy which You receive, the application You make when You purchase the
Policy, any applications for any changes approved by Us and any riders
constitute the whole contract. Copies of all applications are attached to and
made a part of the Policy.

Application forms are completed by the applicants and forwarded to Us for
acceptance. Upon acceptance, the Policy is prepared, executed by duly authorized
officers of the Company and forwarded to You.

We reserve the right to make a change in the Policy; however, we will not change
any terms of the Policy beneficial to You.

[arrow right] PAYMENT OF BENEFITS

All benefits are payable at Our Home Office. We may require submission of the
Policy before We grant Policy Loans, make changes or pay benefits.

[arrow right] SUICIDE AND INCONTESTABILITY

Suicide Exclusion--In most states, if one or both Insureds die by suicide, while
sane or insane, within 2 years from the Issue Date of this Policy, this Policy
will end and We will refund premiums paid, without interest, less any Policy
Debt and less any withdrawal.

Incontestability--We will not contest or revoke the insurance coverage provided
under the Policy after the Policy has been in force during the lifetime of each
Insured for two years from the date of issue or reinstatement.

[arrow right] PROTECTION OF PROCEEDS

To the extent provided by law, the proceeds of the Policy are not subject to
claims by a Beneficiary's creditors or to any legal process against any
Beneficiary.

[arrow right] NONPARTICIPATION

The Policy is not entitled to share in the divisible surplus of the Company. No
dividends are payable.

[arrow right] CHANGES IN OWNER AND BENEFICIARY; ASSIGNMENT

Unless otherwise stated in the Policy, You may change the Policyowner and the
Beneficiary, or both, at any time while the Policy is in force. A request for
such change must be made in writing and sent to Us at Our Home Office. After We
have agreed, in writing, to the change, it will take effect as of the date on
which Your Written Request was signed.

The Policy may also be assigned. No assignment of Policy will be binding on Us
unless made in writing and sent to Us at Our Home Office. We will use reasonable
procedures to confirm that the assignment is authentic. Otherwise, we are not
responsible for the validity of any assignment. Your rights and the
Beneficiary's interest will be subject to the rights of any assignee of record.

[arrow right] MISSTATEMENTS

If the age or sex of either Insured has been misstated in an application,
including a reinstatement application, We will adjust the benefits payable to
reflect the correct age or sex.

33
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

Appendix A

Illustrations of Accumulation Values, Cash Values and Death Benefits

Following are a series of tables that illustrate how the Accumulation Values,
Cash Values and Death Benefits of a Policy change with the investment
performance of the Portfolios. The tables show how the Accumulation Values, Cash
Values and Death Benefits of a Policy issued to Insureds of a given age and
given premium would vary over time if the return on the assets held in each
Portfolio of the Funds were a constant gross annual rate of 0%, 6%, and 12%. The
tables on pages A-3 through A-10 illustrate a Survivorship Policy issued to a
male, age 55, under a standard rate non-smoker underwriting risk classification
and a female, age 50, under a standard rate non-smoker underwriting risk
classification. The Accumulation Values, Cash Values and Death Benefits would be
different from those shown if the returns averaged 0%, 6%, and 12% over a period
of years, but fluctuated above and below those averages for individual policy
years.

The amount of the Accumulation Value exceeds the Cash Value during the first
nine policy years due to the Surrender Charge. For policy years ten and after,
the Accumulation Value and Cash Value are equal, since the Surrender Charge has
been reduced to zero.

The second column shows the Accumulation Value of the premiums paid at the
stated interest rate. The third and sixth columns illustrate the Accumulation
Values and the fourth and seventh columns illustrate the Cash Values of the
Policy over the designated period. The Accumulation Values shown in the third
column and the Cash Values shown in the fourth column assume the monthly charge
for cost of insurance is based upon the current cost of insurance rates and
assume a monthly accumulation value adjustment. The current cost of insurance
rates, which may be modified at any time, are based on the sex, issue ages,
policy year, and rating class of the Insured(s). The Accumulation values shown
in the sixth column and the Cash Values shown in the seventh column assume the
monthly charge for cost of insurance is based upon the maximum cost of insurance
rates allowable, which are based on the Commissioner's 1980 Standard Ordinary
Mortality Table Male and Female. The fifth and eighth columns illustrate the
death benefit of a Policy over the designated period. The illustrations of Death
Benefits reflect the same assumptions as the Accumulation Values and Cash
Values. The Death Benefit values also vary between tables, depending upon
whether Option I or Option II death benefits are illustrated.

The amounts shown for the Death Benefit, Accumulation Values, and Cash values
reflect the fact that the net investment return of the Divisions of Separate
Account C is lower than the gross rates of return on the assets in the
Portfolios, as a result of expenses paid by the Portfolios and charges levied
against the Divisions of Separate Account C.

The policy values shown take into account a daily investment advisory fee
equivalent to the maximum annual rate of .71% of the aggregate average daily net
assets of the Portfolios plus an assumed charge of .14% of the aggregate average
daily net assets to cover expenses incurred by the Portfolios for the twelve
months ended December 31, 1998. The .71% investment advisory fee is an average
of the individual investment advisory fees of the twenty Portfolios. The .14%
expense figure is based on a weighted average utilizing average net assets for
the Jefferson Pilot Variable Fund Portfolios, the Templeton International Fund,
the Fidelity VIP and VIP II Portfolios, the Oppenheimer Portfolios and the MFS
Portfolios. Expenses for the Templeton International Fund: Class 2, the Fidelity
Equity Income, Growth, Contrafund and Index 500 Portfolios, the MFS Research and
Utilities Series, and the Oppenheimer Bond and Strategic Bond Portfolios were
provided by the investment managers for these portfolios and JP Financial has
not independently verified such information. The policy values also take into
account a daily charge to each Division of Separate Account C for the Mortality
and Expense Risk Charge, which is equivalent to a charge at a current annual
rate of 1.00% of the average net assets of the Divisions of Separate Account C
in Policy Years 1 through 10 and .60% in Policy Years 11 and thereafter. After
deduction of these amounts, the illustrated gross investment rates of 0%, 6%,
and 12% correspond to approximate current net annual rates of -1.85%, 4.15%, and
10.15%, respectively, and approximate guaranteed net annual rates of -2.10%,
3.90% and 9.90%, respectively.

A-1
<PAGE>

The hypothetical values shown in the tables do not reflect any charges for
Federal income taxes or other taxes other than the DAC tax and the consideration
of premium tax (at 2.5% of premium). However, if, in the future, any additional
charges are made, the gross annual investment rate of return would have to
exceed the stated investment rates by a sufficient amount to cover the tax
charges in order to produce the Accumulation Values, Cash Values and Death
Benefits illustrated.

The tables illustrate the policy values that would result based on hypothetical
investment rates of return if premiums are paid in full at the beginning of each
year, if all net premiums are allocated to Separate Account C, and if no policy
loans have been made. The values would vary from those shown if the assumed
annual premium payments were paid in installments during a year. The values
would also vary if the Policyowner varied the amount or frequency of premium
payments. The tables also assume that the Policyowner has not requested an
increase or decrease in Specified Amount, that no withdrawals have been made and
no Surrender Charges imposed, and that no transfers have been made and no
Transfer Charges imposed.

Upon request, JP Financial will provide, without charge, a comparable
illustration based upon the proposed Insured's age, sex and rating class, the
Specified Amount requested, the proposed frequency and amount of premium
payments and any available riders requested. Existing Policyowners may request
illustrations based on existing Cash Value at the time of request. JP Financial
has reserved the right to charge an administrative fee of up to $50 for such
illustrations.

A-2
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION I; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 12% (10.15% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed) 12% (9.90 net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------------------- -----------------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ------------ ------------------ -------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 7,421 0 1,000,000 7.401 0 1,000,000
2 21,525 16,656 7,296 1,000,000 16,594 7,234 1,000,000
3 33,101 27,865 18,505 1,000,000 27,732 18,372 1,000,000
4 45,256 40,037 30,677 1,000,000 39,799 30,439 1,000,000
5 58,019 53,241 43,881 1,000,000 52,857 43,497 1,000,000
6 71,420 67,548 60,058 1,000,000 66,970 59,480 1,000,000
7 85,491 83,038 77,418 1,000,000 82,212 76,592 1,000,000
8 100,266 99,796 96,056 1,000,000 98,657 94,917 1,000,000
9 115,779 117,915 116,045 1,000,000 116,391 114,521 1,000,000
10 132,068 137,712 137,712 1,000,000 135,500 135,500 1,000,000
11 149,171 160,563 160,563 1,000,000 157,031 157,031 1,000,000
12 167,130 185,879 185,879 1,000,000 180,307 180,307 1,000,000
13 185,986 213,900 213,900 1,000,000 205,447 205,447 1,000,000
14 205,786 244,967 244,967 1,000,000 232,625 232,625 1,000,000
15 226,575 279,417 279,417 1,000,000 262,021 262,021 1,000,000
16 248,404 317,595 317,595 1,000,000 293,817 293,817 1,000,000
17 271,324 359,895 359,895 1,000,000 328,233 328,233 1,000,000
18 295,390 406,760 406,760 1,000,000 365,536 365,536 1,000,000
19 320,660 458,687 458,687 1,000,000 406,061 406,061 1,000,000
20 347,193 516,230 516,230 1,000,000 450,202 450,202 1,000,000
25 501,135 914,141 914,141 1,000,000 746,118 746,118 1,000,000
30 697,608 1,586,056 1,586,056 1,665,359(4) 1,266,503 1,266,503 1,329,828(4)
35 948,363 2,697,215 2,697,215 2,832,075(4) 2,113,232 2,113,232 2,218,894(4)
40 1,268,398 4,514,443 4,514,443 4,740,165(4) 3,435,106 3,435,106 3,606,861(4)
45 1,676,852 7,528,594 7,528,594 7,603,880(4) 5,575,142 5,575,142 5,630,894(4)
50 2,198,154 12,610,499 12,610,499 12,736,604(4) 9,114,186 9,114,186 9,205,328(4)
</TABLE>

- -------
(1) For policy years 11 and thereafter, the illustrated net annual rate of
return equals 10.55% on the current basis and 10.30% on the guaranteed
basis.
(2) Assumes a $10,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY JP
FINANCIAL SEPARATE ACCOUNT C, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

A-3
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION I; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 6% (4.15% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed) 6% (3.90% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------- --------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 6,939 0 1,000,000 6,919 0 1,000,000
2 21,525 15,195 5,835 1,000,000 15,136 5,776 1,000,000
3 33,101 24,799 15,439 1,000,000 24,677 15,317 1,000,000
4 45,256 34,630 25,270 1,000,000 34,419 25,059 1,000,000
5 58,019 44,669 35,309 1,000,000 44,340 34,980 1,000,000
6 71,420 54,890 47,400 1,000,000 54,414 46,924 1,000,000
7 85,491 65,265 59,645 1,000,000 64,611 58,991 1,000,000
8 100,266 75,760 72,020 1,000,000 74,895 71,155 1,000,000
9 115,779 86,340 84,470 1,000,000 85,229 83,359 1,000,000
10 132,068 97,178 97,178 1,000,000 95,565 95,565 1,000,000
11 149,171 109,313 109,313 1,000,000 106,628 106,628 1,000,000
12 167,130 122,027 122,027 1,000,000 117,636 117,636 1,000,000
13 185,986 135,321 135,321 1,000,000 128,502 128,502 1,000,000
14 205,786 149,191 149,191 1,000,000 139,105 139,105 1,000,000
15 226,575 163,644 163,644 1,000,000 149,314 149,314 1,000,000
16 248,404 178,670 178,670 1,000,000 158,979 158,979 1,000,000
17 271,324 194,260 194,260 1,000,000 167,933 167,933 1,000,000
18 295,390 210,419 210,419 1,000,000 175,996 175,996 1,000,000
19 320,660 227,168 227,168 1,000,000 182,973 182,973 1,000,000
20 347,193 244,476 244,476 1,000,000 188,625 188,625 1,000,000
25 501,135 337,924 337,924 1,000,000 183,536 183,536 1,000,000
30 697,608 432,642 432,642 1,000,000 53,301 53,301 1,000,000
35 948,363 509,702 509,702 1,000,000 0 0 0
40 1,268,398 541,754 541,754 1,000,000 0 0 0
45 1,676,852 476,381 476,381 1,000,000 0 0 0
50 2,198,154 142,954 142,954 1,000,000 0 0 0
</TABLE>

- -------
(1) For policy years 11 and thereafter, the illustrated net annual rate of
return equals 4.55% on the current basis and 4.30% on the guaranteed basis.
(2) Assumes a $10,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY JP
FINANCIAL SEPARATE ACCOUNT C, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

A-4
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION I; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 0% (-1.85% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed 0% (-2.10% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------- --------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 6,459 0 1,000,000 6,440 0 1,000,000
2 21,525 13,796 4,436 1,000,000 13,739 4,379 1,000,000
3 33,101 21,969 12,609 1,000,000 21,856 12,496 1,000,000
4 45,256 29,824 20,464 1,000,000 29,636 20,276 1,000,000
5 58,019 37,337 27,977 1,000,000 37,056 27,696 1,000,000
6 71,420 44,480 36,990 1,000,000 44,090 36,600 1,000,000
7 85,491 51,222 45,602 1,000,000 50,707 45,087 1,000,000
8 100,266 57,530 53,790 1,000,000 56,875 53,135 1,000,000
9 115,779 63,366 61,496 1,000,000 62,559 60,689 1,000,000
10 132,068 68,903 68,903 1,000,000 67,714 67,714 1,000,000
11 149,171 75,047 75,047 1,000,000 72,946 72,946 1,000,000
12 167,130 81,115 81,115 1,000,000 77,536 77,536 1,000,000
13 185,986 87,079 87,079 1,000,000 81,394 81,394 1,000,000
14 205,786 92,909 92,909 1,000,000 84,406 84,406 1,000,000
15 226,575 98,583 98,583 1,000,000 86,441 86,441 1,000,000
16 248,404 104,062 104,062 1,000,000 87,357 87,357 1,000,000
17 271,324 109,305 109,305 1,000,000 86,993 86,993 1,000,000
18 295,390 114,272 114,272 1,000,000 85,177 85,177 1,000,000
19 320,660 118,913 118,913 1,000,000 81,728 81,728 1,000,000
20 347,193 123,154 123,154 1,000,000 76,414 76,414 1,000,000
25 501,135 135,036 135,036 1,000,000 8,628 8,628 1,000,000
30 697,608 112,334 112,334 1,000,000 0 0 0
35 948,363 9,599 9,599 1,000,000 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
</TABLE>

- -------
(1) For policy years 11 and thereafter, the illustrated net annual rate of
return equals -1.45% on the current basis and -1.70% on the guaranteed
basis.
(2) Assumes a $10,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY JP
FINANCIAL SEPARATE ACCOUNT C, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

A-5
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION II; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 12% (10.15% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed) 1 2% (9.90% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------------- --------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ------------ ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 7,420 0 1,007,420 7,400 0 1,007,400
2 21,525 16,652 7,292 1,016,652 16,590 7,230 1,016,590
3 33,101 27,852 18,492 1,027,852 27,720 18,360 1,027,720
4 45,256 40,003 30,643 1,040,003 39,765 30,405 1,039,765
5 58,019 53,165 43,805 1,053,165 52,782 43,422 1,052,782
6 71,420 67,400 59,910 1,067,400 66,823 59,333 1,066,823
7 85,491 82,770 77,150 1,082,770 81,946 76,326 1,081,946
8 100,266 99,340 95,600 1,099,340 98,207 94,467 1,098,207
9 115,779 117,177 115,307 1,117,177 115,663 113,793 1,115,663
10 132,068 136,592 136,592 1,136,592 134,366 134,366 1,134,366
11 149,171 158,974 158,974 1,158,974 155,309 155,309 1,155,309
12 167,130 183,717 183,717 1,183,717 177,752 177,752 1,177,752
13 185,986 211,036 211,036 1,211,036 201,730 201,730 1,201,730
14 205,786 241,235 241,235 1,241,235 227,287 227,287 1,227,287
15 226,575 274,616 274,616 1,274,616 254,461 254,461 1,254,461
16 248,404 311,475 311,475 1,311,475 283,236 283,236 1,283,236
17 271,324 352,136 352,136 1,352,136 313,583 313,583 1,313,583
18 295,390 396,959 396,959 1,396,959 345,456 345,456 1,345,456
19 320,660 446,328 446,328 1,446,328 378,802 378,802 1,378,802
20 347,193 500,640 500,640 1,500,640 413,516 413,516 1,413,516
25 501,135 862,437 862,437 1,862,437 598,555 598,555 1,598,555
30 697,608 1,418,163 1,418,163 2,418,163 750,380 750,380 1,750,380
35 948,363 2,240,028 2,240,028 3,240,028 738,634 738,634 1,738,634
40 1,268,398 3,431,376 3,431,376 4,431,376 306,190 306,190 1,306,190
45 1,676,852 5,181,320 5,181,320 6,181,320 0 0 0
50 2,198,154 7,843,968 7,843,968 8,843,968 0 0 0
</TABLE>

A-6
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION II; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 6% (4.15% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed) 6% (3.90% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------- --------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 6,939 0 1,006,939 6,919 0 1,006,919
2 21,525 15,192 5,832 1,015,192 15,133 5,773 1,015,133
3 33,101 24,788 15,428 1,024,788 24,665 15,305 1,024,665
4 45,256 34,601 25,241 1,034,601 34,390 25,030 1,034,390
5 58,019 44,607 35,247 1,044,607 44,278 34,918 1,044,278
6 71,420 54,772 47,282 1,054,772 54,297 46,807 1,054,297
7 85,491 65,059 59,439 1,065,059 64,408 58,788 1,064,408
8 100,266 75,424 71,684 1,075,424 74,563 70,823 1,074,563
9 115,779 85,816 83,946 1,085,816 84,713 82,843 1,084,713
10 132,068 96,415 96,415 1,096,415 94,792 94,792 1,094,792
11 149,171 108,276 108,276 1,108,276 105,499 105,499 1,105,499
12 167,130 120,676 120,676 1,120,676 116,030 116,030 1,116,030
13 185,986 133,607 133,607 1,133,607 126,259 126,259 1,126,259
14 205,786 147,058 147,058 1,147,058 136,027 136,027 1,136,027
15 226,575 161,025 161,025 1,161,025 145,151 145,151 1,145,151
16 248,404 175,481 175,481 1,175,481 153,421 153,421 1,153,421
17 271,324 190,397 190,397 1,190,397 160,608 160,608 1,160,608
18 295,390 205,746 205,746 1,205,746 166,457 166,457 1,166,457
19 320,660 221,525 221,525 1,221,525 170,702 170,702 1,170,702
20 347,193 237,661 237,661 1,237,661 173,021 173,021 1,173,021
25 501,135 319,822 319,822 1,319,882 139,188 139,188 1,139,188
30 697,608 379,686 379,686 1,379,686 0 0 0
35 948,363 359,733 359,733 1,359,733 0 0 0
40 1,268,398 171,762 171,762 1,171,762 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
</TABLE>

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY JP
FINANCIAL SEPARATE ACCOUNT C, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

A-7
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE SURVIVORSHIP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY

DEATH BENEFIT OPTION II; ASSUMED HYPOTHETICAL GROSS ANNUAL
MALE NON-SMOKER ISSUE AGE 55 RATE OF RETURN:(1) (Current) 0% (-1.85% net)
FEMALE NON-SMOKER ISSUE AGE 50 (Guaranteed) 0% (-2.10% net)
$1,000,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $10,000

<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------------- --------------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
- ------ ---------------- -------------- ---------- ------------ -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 6,459 0 1,006,459 6,439 0 1,006,439
2 21,525 13,793 4,433 1,013,793 13,736 4,376 1,013,736
3 33,101 21,959 12,599 1,021,959 21,846 12,486 1,021,846
4 45,256 29,799 20,439 1,029,799 29,611 20,251 1,029,611
5 58,019 37,286 27,926 1,037,286 37,006 27,646 1,037,006
6 71,420 44,387 36,897 1,044,387 43,997 36,507 1,043,997
7 85,491 51,066 45,446 1,051,066 50,552 44,932 1,050,552
8 100,266 57,283 53,543 1,057,283 56,632 52,892 1,056,632
9 115,779 62,996 61,126 1,062,996 62,194 60,324 1,062,194
10 132,068 68,385 68,385 1,068,385 67,188 67,188 1,067,188
11 149,171 74,371 74,371 1,074,371 72,207 72,207 1,072,207
12 167,130 80,270 80,270 1,080,270 76,523 76,523 1,076,523
13 185,986 86,052 86,052 1,086,052 80,037 80,037 1,080,037
14 205,786 91,682 91,682 1,091,682 82,617 82,617 1,082,617
15 226,575 97,139 97,139 1,097,139 84,122 84,122 1,084,122
16 248,404 102,375 102,375 1,102,375 84,395 84,395 1,084,395
17 271,324 107,343 107,343 1,107,343 83,269 83,269 1,083,269
18 295,390 111,998 111,998 1,111,998 80,568 80,568 1,080,568
19 320,660 116,280 116,280 1,116,280 76,114 76,114 1,076,114
20 347,193 120,103 120,103 1,120,103 69,693 69,693 1,069,693
25 501,135 128,438 128,438 1,128,438 0 0 0
30 697,608 97,493 97,493 1,097,493 0 0 0
35 0 0 0 0 0 0 0
40 0 0 0 0 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
</TABLE>

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS. THE ACCUMULATION VALUE, CASH VALUE AND DEATH BENEFIT
FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES
OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY JP
FINANCIAL SEPARATE ACCOUNT C, OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

A-8
<PAGE>

Jefferson Pilot Financial Insurance Company and Subsidiaries
Audited Consolidated Financial Statements
As of December 31, 1998 and for the year then ended

Contents

<TABLE>
<S> <C>
Report of Independent Auditors .......................... F-1
Consolidated Balance Sheet .............................. F-2
Consolidated Statement of Income ........................ F-3
Consolidated Statement of Stockholder's Equity .......... F-4
Consolidated Statement of Cash Flows .................... F-5
Notes to Consolidated Financial Statements .............. F-6
</TABLE>

<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Jefferson Pilot Financial Insurance Company and Subsidiaries

We have audited the accompanying consolidated balance sheet of Jefferson Pilot
Financial Insurance Company (a wholly-owned subsidiary of Jefferson Pilot
Corporation and formerly known as Chubb Life Insurance Company of America) and
subsidiaries as of December 31, 1998, and the related consolidated statements of
income, stockholder's equity, and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Jefferson Pilot
Financial Insurance Company and subsidiaries at December 31, 1998, and the
consolidated results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP
---------------------

Greensboro, North Carolina
February 8, 1999

F-1
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY AND SUBSIDIARIES

Consolidated Balance Sheet

December 31, 1998
(In Thousands, except for Share Amounts)

<TABLE>
<S> <C>
Assets
Invested assets
Debt securities available-for-sale, at fair value (amortized cost--$2,962,335) .......... $3,099,405
Equity securities available-for-sale, at fair value (cost--$8,350) ...................... 10,668
Policy loans ............................................................................ 246,290
Mortgage loans on real estate ........................................................... 282,355
----------
Total investments ........................................................................ 3,638,718

Cash and cash equivalents ................................................................ 6,514
Accrued investment income ................................................................ 53,626
Due from reinsurers ...................................................................... 245,759
Deferred policy acquisition costs ........................................................ 112,959
Value of business acquired ............................................................... 402,176
Cost in excess of net assets acquired, net of accumulated amortization of $7,490 ......... 155,293
Property and equipment, net of accumulated depreciation of $11,629 ....................... 15,560
Assets held in separate accounts ......................................................... 833,239
Deferred income taxes .................................................................... 2,814
Other assets ............................................................................. 17,128
----------
$5,483,786
==========
Liabilities
Policy liabilities
Policyholder contract deposits .......................................................... $2,721,645
Future policy benefits .................................................................. 632,672
Policy and contract claims .............................................................. 51,089
Premiums paid in advance ................................................................ 2,851
Other policyholders' funds .............................................................. 96,711
----------
Total policy liabilities ................................................................. 3,504,968

Payable to affiliates .................................................................... 57,585
Liabilities related to separate accounts ................................................. 833,239
Securities sold under repurchase agreements .............................................. 102,130
Accrued expenses and other liabilities ................................................... 50,688
----------
4,548,610
Commitments and contingent liabilities ................................................... --

Stockholder's equity
Common stock, par value $5 per share, 600,000 shares authorized, issued and outstanding . 3,000
Paid in capital ......................................................................... 756,066
Retained earnings ....................................................................... 134,007
Accumulated other comprehensive income--net unrealized gains on securities .............. 42,103
----------
935,176
----------
$5,483,786
==========
</TABLE>

See notes to consolidated financial statements.

F-2
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY AND SUBSIDIARIES

Consolidated Statement of Income

Year Ended December 31, 1998
(In Thousands)

<TABLE>
<S> <C>
Revenues
Premiums and policy charges .................................. $315,937
Net investment income ........................................ 246,306
Realized investment gains .................................... 1,276
Other income ................................................. 508
--------
Total revenues ............................................... 564,027
--------
Benefits and expenses
Policy benefits and claims ................................... 293,709
Commissions and operating expenses, net of deferrals ......... 63,172
Amortization of intangibles .................................. 61,971
Taxes, licenses, and fees .................................... 19,799
--------
Total benefits and expenses .................................. 438,651
--------
Income before federal income tax ............................. 125,376
--------
Federal income tax
Current ..................................................... 35,260
Deferred .................................................... 9,826
--------
45,086
--------
Net income ................................................... $ 80,290
========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY AND SUBSIDIARIES

Consolidated Statement of Stockholder's Equity

(In Thousands)

<TABLE>
<CAPTION>
Accumulated Other
Comprehensive Income-- Total
Common Paid in Retained Net Unrealized Gains Stockholder's
Stock Capital Earnings on Securities Equity
-------- ----------- ---------- ------------------------ --------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 ......... $3,000 $ 782,500 $ 53,717 $33,932 $873,149
Net income ......................... -- -- 80,290 -- 80,290
Other comprehensive income ......... -- -- -- 8,171 8,171
--------
Comprehensive income .............. 88,461
Purchase price adjustment .......... -- (26,434) -- -- (26,434)
--------------------------------------------------------------------------
Balance, December 31, 1998 ......... $3,000 $ 756,066 $134,007 $42,103 $935,176
==========================================================================
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE>

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY AND SUBSIDIARIES

Consolidated Statement of Cash Flows

Year Ended December 31, 1998
(In Thousands)

<TABLE>
<S> <C>
Operating activities
Net income ............................................................................... $ 80,290
Adjustments to reconcile net income to net cash used in operating activities:
Decrease in future policy benefits, policy and contract claims and premiums paid in (109,284)
advance, net
Credits to policyholder accounts, net ................................................... (111,916)
Policy acquisition costs deferred, net of amortization .................................. (74,759)
Net amortization of value of business acquired .......................................... 18,335
Increase in accrued investment income ................................................... (2,902)
Realized investment gains ............................................................... (1,276)
Amortization of investment premiums ..................................................... 6,131
Provision for depreciation .............................................................. 10,737
Provision for deferred income tax ....................................................... 9,826
Change in receivables and asset accruals ................................................ (47,170)
Change in payables and expense accruals ................................................. 62,357
Other operating activities, net ......................................................... (7,817)
---------
Net cash used in operating activities .................................................... (167,448)

Investing activities
Proceeds from sales of debt securities ................................................... 91,131
Proceeds from maturities of debt securities .............................................. 313,234
Proceeds from sales of equity securities ................................................. 11,294
Purchases of debt securities ............................................................. (491,995)
Purchases of equity securities ........................................................... (2,738)
Repayment of mortgage loans .............................................................. 6,101
Mortgage loans originated ................................................................ (166,989)
Policy loans issued, net of repayments ................................................... (9,561)
Other investing activities, net .......................................................... 179
---------
Net cash used in investing activities .................................................... (249,344)

Financing activities
Deposits credited to policyholders' funds ................................................ 523,980
Withdrawals from policyholders' funds .................................................... (230,256)
Short term borrowings, net of repayments ................................................. 221
Proceeds from securities sold under repurchase agreements ................................ 102,130
Decrease in loans payable ................................................................ (1,057)
---------
Net cash provided by financing activities ................................................ 395,018
---------
Net decrease in cash and cash equivalents ................................................ (21,774)
Cash and cash equivalents, beginning of period ........................................... 28,288
---------
Cash and cash equivalents, end of period ................................................. $ 6,514
=========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

1. Basis of Presentation
Nature of Operations

Jefferson Pilot Financial Insurance Company (formerly known as Chubb Life
Insurance Company of America) is a wholly-owned subsidiary of Jefferson-Pilot
Corporation (Jefferson-Pilot) and is principally engaged in the sale of
individual life insurance and investment products. These products are marketed
primarily through personal producing general agents throughout the United
States.

Acquisition

Jefferson-Pilot acquired the Company from The Chubb Corporation on May 13, 1997,
with an effective date of April 30, 1997. The acquisition was accounted for as a
purchase, utilizing "pushdown" accounting, and the assets and liabilities were
recorded at fair value as of April 30, 1997. The initial cost of the acquisition
by Jefferson-Pilot in 1997 was $785.5 million. This initial purchase price was
adjusted by $26.4 million in the first quarter of 1998 by mutual agreement
between Jefferson-Pilot and the seller, primarily to reflect tax strategies not
anticipated at the original acquisition date. Accordingly, adjustments to
certain assets and liabilities assigned values at the original acquisition date
were made in 1998 to reflect the difference in the final purchase price. The
cost in excess of net assets acquired was increased by $13.0 million in 1998 as
a result of this adjustment. Amortization expense relating to the cost in excess
of net assets acquired amounted to $4.6 million in 1998.

2. Summary of Significant Accounting Policies
Principles of Consolidation

The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP) and include the
accounts of Jefferson Pilot Financial Insurance Company (the Company) and its
subsidiaries. Principal subsidiaries include Jefferson Pilot LifeAmerica
Insurance Company and Jefferson Pilot Service Corporation. Significant
intercompany transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements requires management to make estimates
and assumptions affecting the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities as of the date of the financial
statements, and the reported amounts of revenues and expenses for the reporting
period. Those estimates are inherently subject to change and actual results
could differ from those estimates. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates are asset valuation allowances, policy liabilities, deferred policy
acquisition costs, value of business acquired and the potential effects of
resolving litigated matters.

Cash and Cash Equivalents

The Company includes with cash and cash equivalents its holdings of short-term
investments which are highly liquid investments that mature within three months
of the date of acquisition.

Invested Assets

Debt and equity securities are classified as securities available-for-sale,
stated at fair value with net unrealized gains and losses included in
accumulated other comprehensive income, net of deferred income taxes and
adjustments to deferred policy acquisition costs and value of business acquired.

Policy loans are carried at the unpaid balances.

Mortgage loans on real estate are stated at the unpaid balances, net of
allowances for unrecoverable amounts. The Company's mortgage loan portfolio is
comprised primarily of conventional real estate mortgages collateralized by
retail (28%), apartment (21%), industrial (12%), hotel (26%) and office (13%)
properties.

F-6
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

2. Summary of Significant Accounting Policies--Continued

Mortgage loan underwriting standards emphasize the credit status of a
prospective borrower, quality of the underlying collateral and conservative
loan-to-value relationships. Of stated mortgage loan balances as of December 31,
1998, 25% are due from borrowers in West South Central states, 24% are due from
borrowers in South Atlantic states, 14% are due from borrowers in West North
Central states, 12% are due from borrowers in Mountain states and 11% are due
from borrowers in Pacific states. No other geographic region represents as much
as 10% of December 31, 1998 mortgage loans.

Amortization of premiums and accrual of discounts on investments in debt
securities are reflected in earnings over the contractual terms of the
investments in a manner that produces a constant effective yield. Realized gains
and losses on dispositions of securities are determined by the specific
identification method.

Recognition of Revenues, Benefits, Claims and Expenses:
Universal Life Products

Universal life products include universal life insurance, variable universal
life insurance and other interest-sensitive life insurance policies. Revenues
for universal life products consist of policy charges for the cost of insurance,
policy administration and surrenders that have been assessed against policy
account balances during the period.

Policy fund liabilities for universal life and other interest-sensitive life
insurance policies are computed in accordance with the retrospective deposit
method and represent policy account balances before surrender charges. Policy
fund assets and liabilities for variable universal life insurance are segregated
and recorded as separate account assets and liabilities. Separate account assets
are carried at market values as of the balance sheet date and are invested by
the Company at the direction of the policyholder. Investments are made in
different portfolios in a series fund. Each of the portfolios has specific
investment objectives and the investment income and investment gains and losses
accrue directly to, and investment risk is borne by, the policyholders.
Accordingly, operating results of the separate account are not included in the
consolidated statement of income.

Policy claims that are charged to expense include claims incurred in the period
in excess of related policy account balances. Other policy benefits include
interest credited to universal life and other interest-sensitive life insurance
policies. Interest crediting rates ranged from 4.2% to 6.85% in 1998.

Investment Products

Investment products include flexible premium annuities, structured settlement
annuities and other supplementary contracts without life contingencies. Revenues
for investment products consist of policy charges for the cost of insurance,
policy administration and surrenders that have been assessed against policy
account balances during the period. Deposits for these products are recorded as
policy fund liabilities, which are increased by interest credited to the
liabilities and decreased by withdrawals and policy charges assessed against the
contract holders. Interest crediting rates ranged from 4% to 8.15% in 1998.

Traditional Life Insurance Products

Traditional life insurance products include those products with fixed and
guaranteed premiums and benefits. Premium revenues for traditional life
insurance are recognized as revenues when due. The liabilities for future policy
benefits are computed by the net level premium method based on estimated future
investment yield, mortality and withdrawal experience. Interest rate assumptions
ranged from 2% to 6% at December 31, 1998. Mortality is calculated principally
on an experience multiple applied to select and ultimate tables in common usage
in the industry. Estimated withdrawals are determined principally based on
industry tables. Policy benefits and claims are charged to expense as incurred.

F-7
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

2. Summary of Significant Accounting Policies--Continued

Policy and Contract Claims

The liability for policy and contract claims consists of the estimated amount
payable for claims reported but not yet settled, and an estimate of claims
incurred but not reported, which is based on historical experience, adjusted for
trends and circumstances. Management believes that the recorded liability is
sufficient to provide for the associated claims adjustment expenses.

Reinsurance

Reinsurance receivables include amounts recoverable from reinsurers related to
paid benefits and estimated amounts related to unpaid policy and contract
claims, future policy benefits and policyholder contract deposits. The cost of
reinsurance is accounted for over the terms of the underlying reinsured policies
using assumptions consistent with those used to account for the policies.

Deferred Policy Acquisition Costs

Costs related to obtaining new business, including commissions, certain costs of
underwriting and issuing policies and certain agency office expenses, all of
which vary with and are primarily related to the production of new business,
have been deferred.

Deferred policy acquisition costs for traditional life insurance polices are
amortized over the premium paying periods of the related contracts using the
same assumptions for anticipated premium revenue that are used to compute
liabilities for future policy benefits. For universal life and investment
products, these costs are amortized at a constant rate based on the present
value of the estimated future gross profits to be realized over the terms of the
contracts, not to exceed 25 years.

The carrying amount of deferred policy acquisition costs is adjusted for the
effect of realized gains and losses and the effects of unrealized gains or
losses on debt securities classified as available-for-sale. Deferred policy
acquisition costs are reviewed periodically to determine that the unamortized
portion does not exceed expected recoverable amounts. No impairment adjustments
have been reflected in earnings for any period presented.

Value of Business Acquired

Value of business acquired represents the actuarially determined present value
of anticipated profits to be realized from life insurance and annuity business
purchased, using the same assumptions used to value the related liabilities.
Amortization of the value of business acquired occurs over the related contract
periods, using current crediting rates to accrete interest and a constant
amortization rate based on the present value of expected future profits.

Value of business acquired related to universal life and investment contracts
also is adjusted to reflect the effects that the unrealized gains or losses on
investments classified as available-for-sale would have had on the present value
of estimated gross profits had such gains or losses actually been realized. This
adjustment is excluded from income and charged or credited directly to
accumulated other comprehensive income, net of applicable deferred income tax.

Cost in Excess of Assets Acquired

The excess of Jefferson-Pilot's purchase price over the fair value of assets
acquired, which has been "pushed down" to the Company level for financial
reporting purposes, is being amortized on a straight-line basis over 35 years.

Property and Equipment

Property and equipment used in operations are carried at cost, less accumulated
depreciation. Depreciation is calculated using the straight-line method over the
estimated remaining useful lives of the assets.

F-8
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

2. Summary of Significant Accounting Policies--Continued

Federal Income Taxes

The Company is not included in Jefferson-Pilot's consolidated tax return, but
instead files its own return with its wholly-owned subsidiaries.

Deferred income tax assets and liabilities are recorded on the differences
between the tax bases of assets and liabilities and the amounts at which they
are reported in the financial statements. Recorded amounts are adjusted to
reflect changes in income tax rates and other tax law provisions as they become
enacted.

New Accounting Pronouncement

As of January 1, 1998, the Company adopted SFAS 130, "Reporting Comprehensive
Income", which sets standards for the reporting and display of comprehensive
income and its components in financial statements. Adoption had no impact on the
Company's net income or stockholder's equity. Comprehensive income consists of
net income plus other comprehensive income.

During 1998, the Company adopted SOP 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use", which requires capitalization
of certain costs incurred in connection with developing or obtaining internal
use software. The impact of adoption was not material.

In June 1998, the FASB issued SFAS 133, "Accounting for Derivative Instruments
and for Hedging Activities". This pronouncement is effective for annual periods
beginning after June 15, 1999. SFAS 133 requires all derivatives to be recorded
on the balance sheet and establishes accounting rules for hedging activities.
The effect of the hedge accounting rules is to offset changes in value or cash
flows of both the hedge and hedged item in earnings in the same period. Changes
in the fair value of derivatives that do not qualify for hedge accounting are
reported in earnings in the period of the change. Based on the limited nature of
the Company's use of derivatives and hedging activities, adoption of this
pronouncement is not expected to have a material impact on the Company's
financial position or results of operations.

3. Derivatives
Use of Derivatives

The Company's investment policy permits the use of derivative financial
instruments such as interest rate swaps in certain circumstances. At December
31, 1998, such interest rate swaps are held to modify specific floating-rate
direct investments. The notional amount is $60 million, with the Company
receiving an average fixed rate of 7.45% and paying an average floating rate of
5.32% based primarily on the 3 month and 6 month LIBOR rates.

The interest rate swaps are used to reduce the impact of interest rate
fluctuations on specific floating-rate direct investments. Interest is exchanged
periodically on the notional value, with the Company receiving a fixed rate and
paying a short-term LIBOR rate on a net exchange basis. The net amount received
or paid under swaps is reflected as an adjustment to investment income. All of
the hedges are of investments classified as available-for-sale, and net
unrealized gains and losses, net of the effects of income taxes and the impact
on deferred policy acquisition costs and the value of business acquired, are not
significant and are included in accumulated other comprehensive income in
stockholder's equity as of December 31, 1998.

Credit and Market Risk

The Company is exposed to credit risk in the event of non-performance by
counterparties to swap agreements. The Company limits this exposure by entering
into swap agreements with counterparties having high credit ratings and by
regularly monitoring the ratings.

The Company's credit exposure on swaps is limited to the fair value of swap
agreements that are favorable to the Company. The Company does not expect any
counterparty to fail to meet its obligation; however, non-performance would not
have a material adverse effect on the Company's financial position or results of
operations.

F-9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

3. Derivatives--Continued

The Company's exposure to market risk is mitigated by the offsetting effects of
changes in the value of swap agreements and the related direct investments. The
Company routinely monitors correlation between hedged items and hedging
instruments. In the event a hedge relationship is terminated or loses
correlation, any related hedging instrument that remained would be
marked-to-market through income. If the hedging instrument is terminated, any
gain or loss is deferred and amortized over the remaining life of the hedged
asset.

4. Invested Assets

Aggregate amortized cost, aggregate fair value and gross unrealized gains and
losses of debt securities available-for-sale at December 31, 1998 were as
follows (in thousands):

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
U.S. Treasury obligations and direct obligations
of U.S. government agencies ............................. $ 107,222 $ 5,675 $ -- $ 112,897
Corporate bonds .......................................... 1,885,666 116,685 13,787 1,988,564
Obligations of states and political subdivisions ......... 9,451 43 62 9,432
Mortgage-backed securities ............................... 958,472 33,684 5,226 986,930
Redeemable preferred stocks .............................. 1,524 58 -- 1,582
---------- -------- ------- ----------
Total debt securities .................................... $2,962,335 $156,145 $19,075 $3,099,405
========== ======== ======= ==========
</TABLE>

Aggregate amortized cost and aggregate fair value of debt securities at December
31, 1998 by contractual maturity were as follows (in thousands):

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
------------- ------------
<S> <C> <C>
Due in one year or less ........................... $ 65,922 $ 66,107
Due after one year through five years ............. 248,065 257,652
Due after five years through ten years ............ 660,347 701,474
Due after ten years ............................... 517,531 559,019
Amounts not due at a single maturity date ......... 1,470,470 1,515,153
---------- ----------
$2,962,335 $3,099,405
========== ==========
</TABLE>

Actual future maturities will differ from the contractual maturities shown
because the issuers of certain debt securities have the right to call or prepay
the amounts due to the Company, with or without penalty.

The sources of net investment income for the year ended December 31, 1998 were
as follows (in thousands):

<TABLE>
<S> <C>
Debt securities ................. $220,435
Equity securities ............... 863
Policy loans .................... 17,369
Mortgage loans .................. 14,354
Other ........................... 3,544
--------
Gross investment income ......... 256,565
Investment expenses ............. 10,259
--------
Net investment income ........... $246,306
========
</TABLE>

F-10
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

4. Invested Assets--Continued

Realized investment gains and (losses) for the year ended December 31, 1998 were
as follows (in thousands):

<TABLE>
<S> <C>
Debt securities ....................................... $ 1,897
Equity securities ..................................... 2,893
Real estate ........................................... 984
Increase in mortgage loan valuation allowance ......... (3,600)
Amortization of value of business acquired ............ (898)
-------
$ 1,276
=======
</TABLE>

Gross realized gains and losses on available-for-sale securities were $5.9
million and $1.1 million, respectively, for the year ended December 31, 1998.

The changes in amounts affecting net unrealized gains included in other
comprehensive income, reduced by deferred income taxes, for the year ended
December 31, 1998 are as follows (in thousands):

<TABLE>
<S> <C>
Decrease in unrealized appreciation of equity securities ......... $(1,593)
Increase in unrealized appreciation of debt securities ........... 22,682
Decrease in value of business acquired ........................... (8,519)
-------
12,570
Decrease in deferred income taxes ................................ (4,399)
-------
Increase in net unrealized gains on securities ................... $ 8,171
=======
</TABLE>

The allowance for credit losses on mortgage loans increased from $0 at December
31, 1997 to $3.6 million at December 31, 1998.

Securities Lending

The Company participates in a securities lending program. The Company generally
receives cash collateral in an amount that is in excess of the market value of
the securities loaned. Market values of securities loaned and collateral are
monitored daily, and additional collateral is obtained as necessary. At December
31, 1998, the market value of securities loaned and collateral received amounted
to $56.9 million and $58.8 million, respectively.

5. Deferred Policy Acquisition Costs and Value of Business Acquired

Policy acquisition costs deferred and the related amortization charged to income
for the year ended December 31, 1998 were as follows (in thousands):

<TABLE>
<S> <C>
Beginning balance ......... $ 38,200
Deferral:
Commissions .............. 58,374
Other .................... 21,766
--------
80,140
Amortization .............. (5,381)
--------
Ending balance ............ $112,959
========
</TABLE>

F-11
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

5. Deferred Policy Acquisition Costs and Value of Business Acquired--Continued

Changes in the value of business acquired for the year ended December 31, 1998
were as follows (in thousands):

<TABLE>
<S> <C>
Beginning balance ........................................................... $418,665
Deferral of commissions and accretion of interest ........................... 33,617
Amortization ................................................................ (51,952)
--------
Net amortization reflected in expenses ...................................... (18,335)
--------
Adjustment related to purchase accounting ................................... 11,263
Adjustment related to realized gains on debt securities ..................... (898)
Adjustment related to unrealized gains on debt securities available-for-sale (8,519)
--------
Ending balance .............................................................. $402,176
========
</TABLE>

Expected approximate amortization percentages of the value of business acquired
as of December 31, 1998 over the next five years were as follows:

<TABLE>
<S> <C>
Year Ending December 31:
1999 ...................... 9.7%
2000 ...................... 8.5%
2001 ...................... 7.4%
2002 ...................... 6.7%
2003 ...................... 6.2%
</TABLE>

6. Federal Income Taxes

The tax effects of temporary differences that gave rise to deferred income tax
liabilities and assets at December 31, 1998 were as follows (in thousands):

<TABLE>
<S> <C>
Deferred income tax liabilities:
Value of business acquired .............................. $141,847
Net unrealized gains on securities ...................... 22,671
Other ................................................... 24,205
--------
Total .................................................... 188,723
Deferred income tax assets:
Future policy benefits and policy fund balances ......... 138,869
Deferred policy acquisition costs ....................... 26,771
Other ................................................... 25,897
--------
Total .................................................... 191,537
--------
Net deferred income tax asset ............................ $ 2,814
========
</TABLE>

Under prior federal income tax law, one-half of the excess of a life insurance
company's income from operations over its taxable investment income was not
taxed, but was set aside in a special tax account designated as "Policyholders'
Surplus". The Company has approximately $13.5 million of untaxed "Policyholders'
Surplus" on which no payment of federal income taxes will be required unless it
is distributed as a dividend, or under other specified conditions. The current
administration has proposed to tax, as part of its 1999 budget initiative, the
"Policyholders' Surplus" over a ten year period. No related deferred tax
liability has been recognized for the potential tax which would approximate $4.7
million under current proposed rates.

Federal income taxes paid in 1998 were $29 million.

F-12
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

7. Pensions

The Company's employees participate in the Jefferson-Pilot defined benefit
pension plans covering substantially all employees. The plans are
noncontributory and are funded through group annuity contracts issued by
Jefferson-Pilot Life Insurance Company, an affiliate. The assets of the plan are
those of the related contracts, primarily held in the separate accounts of
Jefferson-Pilot Life Insurance Company. The plans provide benefits based on
annual compensation and years of service. The funding policy is to contribute
annually no more than the maximum amount deductible for federal income tax
purposes. The plans are administered by Jefferson-Pilot.

Pension costs allocated to the Company for the year ended December 31, 1998,
were $2,152,000.

8. Other Postretirement Benefits

The Company provides certain other postretirement benefits, principally health
care and life insurance, to retired employees and their beneficiaries and
covered dependents. Postretirement costs of the Company that were allocated from
Jefferson-Pilot amounted to approximately $200,000 for the year ended December
31, 1998.

9. Commitments and Contingent Liabilities

The Company leases electronic data processing equipment and field office space
under noncancelable operating lease agreements. The lease terms generally range
from three to five years. Neither annual rent nor future rental commitments are
significant.

The Company routinely enters into commitments to extend credit in the form of
mortgage loans and to purchase certain debt securities for its investment
portfolio in private placement transactions. The fair value of outstanding
commitments to fund mortgage loans and to acquire debt securities in private
placement transactions, which are not reflected in the consolidated balance
sheet, approximates $52.8 million as of December 31, 1998.

In the normal course of business, the Company and its subsidiaries are parties
to various lawsuits. Because of the considerable uncertainties that exist, the
Company cannot predict the outcome of pending or future litigation. However,
management believes that the resolution of pending legal proceedings will not
have a material adverse effect on the Company's financial position or results of
operations.

10. Reinsurance

The Company attempts to reduce its exposure to significant individual claims by
reinsuring portions of certain life insurance contracts written. The maximum
amount of individual life insurance retained on any one life, including
accidental death benefits, is $1.5 million.

The effect of reinsurance on the premiums and policy charges in the consolidated
statement of income for the year ended December 31, 1998 was as follows (in
thousands):

<TABLE>
<CAPTION>
Ceded to Assumed
Direct Other from Other Net
Amount Companies Companies Amount
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total premiums and policy charges ......... $372,244 $86,575 $30,268 $315,937
======== ======= ======= ========
</TABLE>

Reinsurance recoveries which have been deducted from benefits, claims and
expenses in the consolidated statement of income for the Company were $105.6
million.

Reinsurance contracts do not relieve the Company from its primary obligation to
policyholders. Therefore, the failure of a reinsurer to discharge its
reinsurance obligations could result in a loss to the Company. The Company
regularly evaluates the financial condition of its reinsurers and monitors
concentrations of credit risk related to reinsurance activities. No significant
credit losses resulted from the Company's reinsurance activities during the year
ended December 31, 1998.

F-13
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

10. Reinsurance--Continued

As of December 31, 1998, the Company had a reinsurance recoverable of $95
million from a single reinsurer, pursuant to a 50% coinsurance agreement. The
Company and the reinsurer are joint and equal owners in $191 million of
securities and short-term investments as of December 31, 1998, 50% of which is
included in investments in the accompanying consolidated balance sheet.

11. Statutory Financial Information

The Company prepares financial statements on the basis of statutory accounting
practices (SAP) prescribed or permitted by the New Hampshire Department of
Insurance. Prescribed SAP include a variety of publications of the National
Association of Insurance Commissioners (NAIC) as well as state laws, regulations
and administrative rules. Permitted SAP encompass all accounting practices not
so prescribed. The impact of permitted accounting practices on statutory capital
and surplus is not significant for the Company.

The principal differences between SAP and generally accepted accounting
principles (GAAP) as they relate to the financial statements of the Company are
(1) policy acquisition costs are expensed as incurred under SAP, whereas they
are deferred and amortized under GAAP, (2) amounts collected from holders of
universal life-type and investment products are recognized as premiums when
collected under SAP, but are initially recorded as contract deposits under GAAP,
with cost of insurance recognized as revenue when assessed and other contract
charges recognized over the periods for which services are provided, (3) the
classification and carrying amounts of investments in certain securities are
different under SAP than under GAAP, (4) the criteria for providing asset
valuation allowances, and the methodologies used to determine the amounts
thereof, are different under SAP than under GAAP, (5) the timing of establishing
certain reserves, and the methodologies used to determine the amounts thereof,
are different under SAP than under GAAP, (6) no provision is made for deferred
income taxes under SAP, and (7) certain assets are not admitted for purposes of
determining surplus under SAP.

Reported capital and surplus on a statutory basis at December 31, 1998 was
$350.9 million. Reported statutory net income for the year ended December 31,
1998 was $90.7 million. Purchase accounting adjustments are not made for
statutory accounting purposes.

The amount of GAAP equity in excess of statutory surplus is unavailable for
distribution. In addition, various state insurance laws restrict the Company and
its insurance subsidiaries as to the amount of dividends from statutory surplus
they may pay without the prior approval of regulatory authorities. The
restrictions generally are based on net gains from operations and on certain
levels of surplus as determined in accordance with statutory accounting
practices. Dividends in excess of such thresholds are considered "extraordinary"
and require prior regulatory approval.

Risk-Based Capital ("RBC") requirements promulgated by the NAIC require life
insurers to maintain minimum capitalization levels that are determined based on
formulas incorporating credit risk pertaining to its investments, insurance
risk, interest rate risk and general business risk. As of December 31, 1998, the
Company's adjusted capital and surplus exceeded its authorized control level
RBC.

The NAIC Codification of Statutory Accounting Principles (Codification) has been
completed. The purpose of Codification is to create uniformity in statutory
financial reporting across states. Codification must be adopted by individual
states before it will have any bearing on the statutory reporting requirements
of companies domiciled in a particular state. The NAIC is encouraging the states
to adopt Codification as soon as possible, with an implementation date of
January 1, 2001. The Company does not expect implementation to have a material
impact on its statutory surplus; however, implementation is expected to result
in a net reduction of statutory surplus and RBC throughout the insurance
industry.

F-14
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

12. Transactions with Affiliated Companies+

During 1998, the Company entered into service agreements with Jefferson-Pilot
and other subsidiaries of Jefferson-Pilot for personnel and facilities usage,
general management services and investment management services. The Company
expensed $69.9 million for general management and investment services provided
by Jefferson-Pilot Life Insurance Company, another wholly-owned subsidiary of
Jefferson-Pilot. At December 31, 1998, $55.6 million remained payable to
Jefferson-Pilot Life Insurance Company related to these service contracts. The
remainder of the payable at year end was to other affiliates.

13. Fair Values of Financial Instruments

Fair values of financial instruments are based on quoted market prices where
available. Fair values of financial instruments for which quoted market prices
are not available are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions used,
including the discount rates and the estimates of future cash flows. Certain
financial instruments, particularly insurance contracts, are excluded from fair
value disclosure requirements.

The methods and assumptions used to estimate the fair value of financial
instruments are as follows:

[diamond] Fair values of debt securities with active markets are based on
quoted market prices. For debt securities that trade in less active
markets, fair values are obtained from independent pricing services.
Fair values of debt securities are principally a function of current
interest rates.

[diamond] Fair values of equity securities are based on quoted market prices.

[diamond] The carrying value of cash and cash equivalents approximates fair
value due to the short maturities of these assets.

[diamond] Fair values of policy loans and mortgage loans are estimated using
discounted cash flow analyses and approximate carrying values.

[diamond] Fair values of separate account assets and liabilities are reflected
in the consolidated balance sheet.

[diamond] Fair values of securities sold under repurchase agreements
approximate carrying values, which include accrued interest.

The carrying value and fair value of financial instruments at December 31, 1998
were as follows
(in thousands):

<TABLE>
<CAPTION>
Carrying Fair
Value Value
------------- -------------
<S> <C> <C>
Financial Assets
Debt securities available-for-sale .................. $3,099,405 $3,099,405
Equity securities available-for-sale ................ 10,668 10,668
Cash and cash equivalents ........................... 6,514 6,514
Policy loans ........................................ 246,290 290,024
Mortgage loans on real estate ....................... 282,355 293,597
Financial Liabilities
Securities sold under repurchase agreements ......... 102,130 102,130
</TABLE>

F-15
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

14. Other Comprehensive Income

Comprehensive income and its components are displayed in the accompanying
statement of stockholder's equity. Currently, the only element of other
comprehensive income applicable to the Company is changes in unrealized gains
and losses on securities classified as available-for-sale, which are displayed
in the following table, along with related tax effects. See Note 4 for further
detail of changes in unrealized gains on securities available-for-sale for the
year ended December 31, 1998 (in thousands):

<TABLE>
<S> <C>
Unrealized holding gains arising during period, before taxes ......... $16,463
Income taxes ......................................................... (5,762)
-------
Unrealized holding gains arising during period, net of taxes ......... 10,701
-------
Less reclassification adjustment:
Gains realized in net income, before taxes .......................... 3,892
Income taxes ........................................................ (1,362)
-------
Reclassification adjustment for gains realized in net income ......... 2,530
-------
Other comprehensive income--net unrealized gains ..................... $ 8,171
=======
</TABLE>

15. Year 2000 Conversion Costs (Unaudited)

The Company's administrative and financial reporting systems are shared among
numerous insurance affiliates within the consolidated Jefferson-Pilot
Corporation group (JP).

Like most if not all companies, JP faces certain risks associated with the
coming of the year 2000. The Year 2000 issue relates to the way computer systems
and programs define calendar dates. By using only two digit dates, they could
fail or make miscalculations due to the inability to distinguish between dates
in the 1900's and in the 2000's. Also, many systems and equipment that are not
typically thought of as "computer-related" (referred to as "non-IT") contain
embedded hardware or software that must handle dates and may not properly
perform with dates after 1999.

JP began work on the Year 2000 compliance issue in 1995. The scope of the
project includes: ensuring the compliance of all applications, operating systems
and hardware on mainframe, PC and LAN platforms; addressing issues related to
non-IT embedded software and equipment; and addressing the compliance of key
vendors and service providers to JP (business partners).

The project has four phases: assessment of systems and equipment affected by the
Year 2000 issue; definition of strategies to address affected systems and
equipment; remediation of affected systems and equipment; and certification that
each is Year 2000 compliant. To certify that all IT systems (internally
developed or purchased) are Year 2000 compliant, each system is tested using a
standard testing methodology which includes regression testing, millennium
testing, millennium leap year testing and cross over year testing. Certification
testing is performed on each system as soon as remediation is completed.

The target for completion of all phases and categories is September 30, 1999. JP
has completed the assessment and strategy phases for mainframe applications,
operating systems and hardware and is executing the remediation and
certification phases. JP's new business and policyholder administration systems
and the general ledger are on the mainframe. JP has determined that
approximately 62% of all mainframe systems are compliant. JP does not deem a
system to be compliant until the completion of remediation and certification to
confirm that its performance will not be affected by dates extending after 1999.
With respect to significant policyholder systems, all required remediation has
been completed on all systems. The majority of these systems, including all
systems which support products JP is currently marketing, have been certified as
Year 2000 compliant. Completion of certification of remaining systems for some
closed blocks of business is expected by April 1999. Other non-policyholder
mainframe systems have either been certified or are on schedule. For PC

F-16
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

15. Year 2000 Conversion Costs (Unaudited)--Continued

and LAN systems, JP has completed the strategy phases and is executing the
assessment, remediation and certification phases concurrently and intends to
complete these phases during the third quarter of 1999.

For the majority of JP's non-IT related systems and equipment, JP has been
advised by vendors that the systems and equipment are currently Year 2000
compliant. Written documentation regarding compliance is being obtained. Where
feasible, certification testing will be conducted for systems and equipment that
are material to operations. Some systems and equipment, such as electrical power
supply, are not feasible for JP to certify. Completion for non-IT systems and
equipment is scheduled for September 1999.

The most significant category of key business partners is financial
institutions. Their critical functions include safeguarding and managing
investment portfolios, processing of JP's operating bank accounts, and sales/
distribution. All of JP's business partner financial institutions that have
responded to JP's inquiries have indicated they are on schedule for Year 2000
compliance. JP continues to follow up with business partner financial
institutions that have not yet responded. Other partner categories include
insurance agents and marketing organizations, and suppliers of communication
services, utilities, materials and supplies. JP has conducted surveys of all its
software and hardware vendors, and certification is underway. In addition to
financial institutions, other critical business partners have been identified
and surveys initiated. Results of these surveys are being analyzed in the first
quarter of 1999 and appropriate testing or other due diligence will be conducted
in the second and third quarters of 1999.

JP has not had an independent review of its Year 2000 risks or estimates.
However, experts have been engaged to assist in developing estimates and to
complete remediation work on specific portions of the project.

Since inception of the project, JP has incurred external costs of $7 million and
internal costs of $7 million. The current estimate, based on actual experience
to date, of total project expense is $24 million, with remaining external costs
of $5 million and internal costs of $5 million. Costs are included in various
budgets and expensed as incurred. Expected total costs are less than earlier
estimates due in part to refinements in estimates as more projects near
completion. In addition, remediation/certification costs on projects completed
to date have been lower than originally estimated. Total 1998 costs were $8
million. There has not been a material adverse impact on JP's operations as a
result of IT projects being deferred due to resource constraints caused by the
Year 2000 project.

JP has investments in publicly and privately placed securities and loans. JP may
be exposed to credit risk to the extent that related borrowers are materially
adversely impacted by the Year 2000 issue. Portfolio diversification reduces the
overall risk. JP is in compliance with the NAIC Securities Valuation Office's
Due Diligence Guidelines for analyzing these risks.

Although JP expects to certify that its critical policyholder systems are
compliant by the end of April 1999, there is no guarantee that these results
will be achieved. Specific factors that give rise to this uncertainty include a
possible loss of technical resources to perform the work (not yet encountered),
failure to identify all susceptible systems, non-compliance by third parties
whose systems and operations impact JP, and other similar uncertainties.

Specifically, from Year 2000 problems, JP could experience an interruption in
its ability to collect and process premiums, process claim payments, safeguard
and manage its invested assets and operating cash accounts, accurately maintain
policyholder information, accurately maintain accounting records, issue new
policies and/or perform adequate customer service.

F-17
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--Continued

Jefferson Pilot Financial Insurance Company and Subsidiaries
December 31, 1998

15. Year 2000 Conversion Costs (Unaudited)--Continued

While JP believes the occurrence of such a situation is unlikely, a possible
worst case scenario might include one or more of JP's significant policyholder
systems being non-compliant. Such an event could result in a material disruption
to JP's operations. Should the worst case scenario occur, it could, depending on
its duration, have a material impact on JP's results of operations and liquidity
and ultimately on its financial position. Although JP is on schedule to complete
certification of all internal systems and non-IT equipment well in advance of
January 1, 2000, JP recognizes the need to plan for unanticipated problems
resulting from failure of internal systems or equipment or from failures by JP's
business partners, providers, suppliers or other critical third parties. JP has
begun work on contingency plans for all mission critical functions.

16. Subsequent Event

On January 1, 1999, Jefferson-Pilot Service Corporation was sold to
Jefferson-Pilot Life Insurance Company for $9.4 million. No gain was recognized
on the sale.

F-18
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Contractholders of JPF Separate Account C
JPF Separate Account C
The Board of Directors, JPF Separate Account C

We have audited the accompanying statement of assets and liabilities of JPF
Separate Account C as of December 31, 1998, and the related statements of
operations and the statements of changes in net assets for each of the three
years in the period then ended. 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 in accordance with generally accepted auditing
standards. Those standards 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. Our procedures included
confirmation of securities owned as of December 31, 1998, by correspondence with
the fund managers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of JPF Separate Account C at
December 31, 1998, and the results of its operations and the changes in its net
assets for each of the three years in the period then ended, in conformity with
generally accepted accounting principles.

/s/ Ernst & Young LLP
---------------------

Boston, Massachusetts
April 9, 1999

F-19
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES

JPF SEPARATE ACCOUNT C
December 31, 1998

<TABLE>
<CAPTION>
JPM JPM
Treasury JPM JPM JPM International
Money Market Bond Equity Small Company Equity
Division Division Division Division Division
-------------- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in JPM Series Trust II at cost ........ $948,444 $6,047,643 $10,412,735 $4,660,873 $7,090,043
======== ========== =========== ========== ==========
Investments in JPM Series Trust II at market value $890,873 $6,554,969 $11,963,669 $4,496,461 $6,703,775
Expenses payable .................................. (63) (467) (852) (320) (477)
-------- ---------- ----------- ---------- ----------
TOTAL NET ASSETS .............................. $890,810 $6,554,502 $11,962,817 $4,496,141 $6,703,298
======== ========== =========== ========== ==========
UNITS OUTSTANDING ................................. 75,941 476,962 481,253 246,280 489,705
NET ASSET VALUE PER UNIT .......................... $ 11.730 $ 13.742 $ 24.858 $ 18.256 $ 13.688
</TABLE>

See notes to financial statements.

F-20
<PAGE>

STATEMENTS OF OPERATIONS

JPF SEPARATE ACCOUNT C

<TABLE>
<CAPTION>
JPM
Treasury JPM
Money Market Bond
Division Division
----------------------------------- ----------------------------------
Year Ended December 31, Year Ended December 31,
----------------------------------- ----------------------------------
1998 1997 1996 1998 1997 1996
------------ ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ............................... $ 92,675 $ 135 $14,528 $211,172 $140,731 $72,416
Distributions of realized gains ............... -- 1 16 70,719 41,158 531
-------- ------- ------- -------- -------- -------
92,675 136 14,544 281,891 181,889 72,947
Expenses:
Mortality and expense risk charge ............. 4,113 2,578 1,603 41,128 34,460 6,172
-------- ------- ------- -------- -------- -------
Net Investment Income ....................... 88,562 (2,442) 12,941 240,763 147,429 66,775
Gain (loss) on investments
Net realized gain (loss) on investments ....... (374) (1,080) (1,817) 16,946 4,420 (870)
Net unrealized gain (loss) on investments ..... (67,368) 18,936 (1,756) 185,534 322,800 (4,624)
-------- ------- ------- -------- -------- -------
Net gain (loss) on investments ................ (67,742) 17,856 (3,573) 202,480 327,220 (5,494)
-------- ------- ------- -------- -------- -------
Increase in Net Assets
from Operations ............................ $ 20,820 $15,414 $ 9,368 $443,243 $474,649 $61,281
======== ======= ======= ======== ======== =======

<CAPTION>
JPM
Equity
Division
------------------------------------
Year Ended December 31,
------------------------------------
1998 1997 1996
------------ ------------ ----------
<S> <C> <C> <C>
Investment Income:
Dividend income ............................... $ 59,408 $ 56,988 $ 55,925
Distributions of realized gains ............... 1,122,918 1,467,366 392,202
---------- ---------- --------
1,182,326 1,524,354 448,127
Expenses:
Mortality and expense risk charge ............. 66,882 53,370 24,143
---------- ---------- --------
Net Investment Income ....................... 1,115,444 1,470,984 423,984
Gain (loss) on investments
Net realized gain (loss) on investments ....... 23,096 20,069 67,265
Net unrealized gain (loss) on investments ..... 975,719 204,260 176,276
---------- ---------- --------
Net gain (loss) on investments ................ 998,815 224,329 243,541
---------- ---------- --------
Increase in Net Assets
from Operations ............................ $2,114,259 $1,695,313 $667,525
========== ========== ========
</TABLE>

See notes to financial statements.

F-21
<PAGE>

STATEMENTS OF OPERATIONS

JPF SEPARATE ACCOUNT C

<TABLE>
<CAPTION>
JPM
JPM International
Small Company Equity
Division Division
------------------------------------- -------------------------------------
Year Ended December 31, Year Ended December 31,
1998 1997 1996 1998 1997 1996
-------------- ---------- ----------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income .................................. $ 6,349 $ 11,006 $ 9,360 $ 94,927 $ 217,676 $ 29,908
Distributions of realized gains .................. 183,024 579,516 211,193 271,211 685,191 152,279
--------- -------- -------- -------- --------- --------
189,373 590,522 220,553 366,138 902,867 182,187
Expenses:
Mortality and expense risk charge ................ 29,939 26,511 6,703 43,148 42,648 18,798
--------- -------- -------- -------- --------- --------
Net Investment Income .......................... 159,434 564,011 213,850 322,990 860,219 163,389
Gain (loss) on investments
Net realized gain (loss) on investments .......... (51,808) 4,007 3,521 (34,242) 42,615 15,389
Net unrealized gain on investments ............... (471,622) 221,164 82,854 (53,048) (613,175) 206,175
--------- -------- -------- -------- --------- --------
Net gain on investments .......................... (523,430) 225,171 86,375 (87,290) (570,560) 221,564
--------- -------- -------- -------- --------- --------
Increase in Net Assets from Operations ......... $(363,996) $789,182 $300,225 $235,700 $ 289,659 $384,953
========= ======== ======== ======== ========= ========
</TABLE>

See notes to financial statements.

F-22
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS

JPF SEPARATE ACCOUNT C

<TABLE>
<CAPTION>
JPM
Treasury
Market Money
Division
---------------------------------------
Year Ended December 31,
---------------------------------------
1998 1997 1996
------------ ------------ -------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ................. $ 88,562 $ (2,442) $ 12,941
Net realized gain (loss) on
investments ................................. (374) (1,080) (1,817)
Net unrealized gain (loss) on
investments ................................. (67,368) 18,936 (1,756)
-------- -------- ---------
Increase in net assets from operations ......... 20,820 15,414 9,368
Contractholder transactions--Note D:
Transfers of net premiums .................... 4,032 171,335 277,045
Transfers from/to General Account
and within Separate Account, net ............ 404,670 (64,645) (208,924)
Transfers of cost of insurance ............... (6,130) (2,632) (1,590)
Transfers on account of other
terminations ................................ 899 26 (7,323)
-------- -------- ---------
Net increase in net assets derived from
contractholder transactions ................... 403,471 104,084 59,208
-------- -------- ---------
Net increase in net assets ..................... 424,291 119,498 68,576
Balance at beginning of period ................. 466,519 347,021 278,445
-------- -------- ---------
Balance at end of period ....................... $890,810 $466,519 $ 347,021
======== ======== =========

<CAPTION>
JPM JPM
Bond Equity
Division Division
----------------------------------------- -----------------------------
Year Ended December 31, Year Ended December 31,
----------------------------------------- -----------------------------
1998 1997 1996 1998 1997
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ................. $ 240,763 $ 147,429 $ 66,775 $ 1,115,444 $1,470,984
Net realized gain (loss) on
investments ................................. 16,946 4,420 (870) 23,096 20,069
Net unrealized gain (loss) on
investments ................................. 185,534 322,800 (4,624) 975,719 204,260
---------- ---------- ---------- ----------- ----------
Increase in net assets from operations ......... 443,243 474,649 61,281 2,114,259 1,695,313
Contractholder transactions--Note D:
Transfers of net premiums .................... 237,096 354,690 251,428 955,232 765,854
Transfers from/to General Account
and within Separate Account, net ............ (51,582) 3,566,167 1,057,013 114,046 2,227,022
Transfers of cost of insurance ............... (101,923) (78,877) (9,537) (85,488) (57,566)
Transfers on account of other
terminations ................................ (190) (745) 2,425 (24,822) (4,631)
---------- ---------- ---------- ----------- ----------
Net increase in net assets derived from
contractholder transactions ................... 83,401 3,841,235 1,301,329 958,968 2,930,679
---------- ---------- ---------- ----------- ----------
Net increase in net assets ..................... 526,644 4,315,884 1,362,610 3,073,227 4,625,992
Balance at beginning of period ................. 6,027,858 1,711,974 349,364 8,889,590 4,263,598
---------- ---------- ---------- ----------- ----------
Balance at end of period ....................... $6,554,502 $6,027,858 $1,711,974 $11,962,817 $8,889,590
========== ========== ========== =========== ==========

<CAPTION>
JPM
Equity
Division
-------------
Year Ended
December 31,
-------------
1996
-------------
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ................. $ 423,984
Net realized gain (loss) on
investments ................................. 67,265
Net unrealized gain (loss) on
investments ................................. 176,276
----------
Increase in net assets from operations ......... 667,525
Contractholder transactions--Note D:
Transfers of net premiums .................... 387,274
Transfers from/to General Account
and within Separate Account, net ............ 172,368
Transfers of cost of insurance ............... (13,001)
Transfers on account of other
terminations ................................ (834)
----------
Net increase in net assets derived from
contractholder transactions ................... 545,807
----------
Net increase in net assets ..................... 1,213,332
Balance at beginning of period ................. 3,050,266
----------
Balance at end of period ....................... $4,263,598
==========
</TABLE>

See notes to financial statements.

F-23
<PAGE>

STATEMENT OF CHANGES IN NET ASSETS--(Continued)

JPF SEPARATE ACCOUNT C

<TABLE>
<CAPTION>
JPM
Small Company
Division
-----------------------------------------
Year Ended December 31,
-----------------------------------------
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income .............................. $ 159,434 $ 564,011 $ 213,850
Net realized gain (loss) on investments ............ (51,808) 4,007 3,521
Net unrealized gain (loss) on investments .......... (471,622) 221,164 82,854
---------- ---------- ----------
Increase in net assets from operations ............... (363,996) 789,182 300,225
Contractholder transactions--Note D:
Transfers of net premiums .......................... 457,027 463,334 193,946
Transfers from/to General Account
and within Separate Account, net .................. (116,427) 1,237,752 1,403,000
Transfers of cost of insurance ..................... (34,671) (27,349) (5,933)
Transfers on account of other terminations ......... 836 2,389 6,464
---------- ---------- ----------
Net increase in net assets derived from
contractholder transactions ......................... 306,765 1,676,126 1,597,477
---------- ---------- ----------
Net increase in net assets ........................... (57,231) 2,465,308 1,897,702
Balance at beginning of period ....................... 4,553,372 2,088,064 190,362
---------- ---------- ----------
Balance at end of period ............................. $4,496,141 $4,553,372 $2,088,064
========== ========== ==========

<CAPTION>
JPM
International
Equity
Division
-----------------------------------------
Year Ended December 31,
-----------------------------------------
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income .............................. $ 322,990 $ 860,219 $ 163,389
Net realized gain (loss) on investments ............ (34,242) 42,615 15,389
Net unrealized gain (loss) on investments .......... (53,048) (613,175) 206,175
---------- ---------- ----------
Increase in net assets from operations ............... 235,700 289,659 384,953
Contractholder transactions--Note D:
Transfers of net premiums .......................... 375,553 509,514 365,133
Transfers from/to General Account
and within Separate Account, net .................. (190,570) 1,597,555 1,380,915
Transfers of cost of insurance ..................... (61,094) (54,916) (11,500)
Transfers on account of other terminations ......... 2,269 (5,439) 2,685
---------- ---------- ----------
Net increase in net assets derived from
contractholder transactions ......................... 126,158 2,046,714 1,737,233
---------- ---------- ----------
Net increase in net assets ........................... 361,858 2,336,373 2,122,186
Balance at beginning of period ....................... 6,341,440 4,005,067 1,882,881
---------- ---------- ----------
Balance at end of period ............................. $6,703,298 $6,341,440 $4,005,067
========== ========== ==========
</TABLE>

See notes to financial statements.

F-24
<PAGE>

NOTES TO FINANCIAL STATEMENTS

JPF Separate Account C
December 31, 1998

NOTE A--ORGANIZATION OF ACCOUNT

JPF Separate Account C (the "Separate Account") is a separate account of
Jefferson Pilot Financial Financial Insurance Company ("JP Financial"). The
Separate Account is organized as a unit investment trust registered under the
Investment Company Act of 1940 as amended. It was established for the purpose of
funding flexible premium variable life insurance policies issued by JP Financial
and is presently comprised of five divisions each of which invests exclusively
in the corresponding portfolio of the JPM Series Trust II (the "Trust") an
open-end diversified Series Management Investment Company.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

Valuation of Investments: Investments in shares of the Trust are valued at the
net asset value per share which is calculated each day the New York Stock
Exchange is open for trading.

Investment Income: Dividend income and distributions of realized gains are
recorded on the ex-dividend date.

Investment Transactions: Purchases and sales of shares of the Trust are
recorded as of the trade date, the date the transaction is executed.

Federal Income Taxes: The operations of the Separate Account are included in the
federal income tax return of JP Financial which is taxed as a life insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the Separate Account.

Expenses: A mortality and expense risk charge is accrued daily which will not
exceed .65% of the average net asset value of each division of the Separate
Account on an annual basis.

Use of Estimates: The accompanying financial statements of the Account have been
prepared in accordance with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates that
affect amounts reported in the financial statements and accompanying notes. Such
estimates could change in the future as more information becomes known, which
could impact the amounts reported and disclosed herein.

NOTE C--AFFILIATED COMPANY TRANSACTIONS

Administrative services necessary for the operation of the Separate Account are
provided by Jefferson Pilot Service Corporation, an affiliate of JP Financial.
JP Financial is the principal underwriter of the variable insurance insurance
contracts that utilize the Separate Account. Jefferson Pilot Securities
Corporation, an affiliate of the Company is the distributor.

NOTE D--DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Internal Revenue Code, a variable
life insurance contract will be subject to federal income taxes on the income
earned on the contract for any period for which the investments of the
segregated assets account, on which the contract is based, are not adequately
diversified. The code provides that the "adequately diversified" requirement may
be met if the underlying investments satisfy either a statutory safe harbor test
or diversification requirements set forth in regulations issued by the Secretary
of Treasury.

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

F-25
<PAGE>

NOTES TO FINANCIAL STATEMENTS--(Continued)

JPF Separate Account C
December 31, 1998

NOTE E--INVESTMENTS

In determining the net realized gain or loss on sales of shares of the Trust,
the cost of shares sold has been determined on an average cost basis. For
federal income tax purposes, the cost of shares owned at December 31, 1998 is
the same as for financial reporting purposes.

Following is a summary of shares of each portfolio of the Trust owned by the
respective divisions of the Separate Account and the related net asset values at
December 31, 1998.

<TABLE>
<CAPTION>
Net Asset
Value
Shares Per Share
---------- --------------
<S> <C> <C>
JPM Treasury Money Market Portfolio 96,834 $ 9.200000
JPM Bond Portfolio 561,694 11.670000
JPM Equity Portfolio 755,282 15.840000
JPM Small Company Portfolio 379,128 11.860000
JPM International Equity Portfolio 637,241 10.520000
</TABLE>

NOTE F--CONTRACTHOLDER TRANSACTIONS

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------------
1998 1997 1996
------------------------ ------------------------- -------------------------
Units Amount Units Amount Units Amount
-------- ------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
JPM Treasury Money Market Division
Issuance of units 35,828 $ 416,040 16,293 $ 180,290 231,052 $2,480,672
Redemptions of units 1,132 12,569 6,950 76,206 225,769 2,421,464
------ ---------- ------- ---------- ------- ----------
Net Increase 34,696 $ 403,471 9,343 $ 104,084 5,283 $ 59,208
====== ========== ======= ========== ======= ==========
JPM Bond Division
Issuance of units 20,177 $ 267,002 333,164 $3,936,415 170,414 $1,931,269
Redemptions of units 13,892 183,601 7,769 95,180 55,202 629,940
------ ---------- ------- ---------- ------- ----------
Net Increase 6,285 $ 83,401 325,395 $3,841,235 115,212 $1,301,329
====== ========== ======= ========== ======= ==========
JPM Equity Division
Issuance of units 57,919 $1,262,450 248,888 $4,443,329 182,200 $2,590,095
Redemptions of units 14,721 303,482 76,883 1,512,650 145,517 2,044,287
------ ---------- ------- ---------- ------- ----------
Net Increase 43,198 $ 958,968 172,005 $2,930,679 36,683 $ 545,808
====== ========== ======= ========== ======= ==========
JPM Small Company Division
Issuance of units 32,795 $ 639,061 169,487 $2,966,326 158,843 $2,217,721
Redemptions of units 20,659 332,296 65,988 1,290,200 42,603 620,244
------ ---------- ------- ---------- ------- ----------
Net Increase 12,136 $ 306,765 103,499 $1,676,126 116,240 $1,597,477
====== ========== ======= ========== ======= ==========
JPM International Equity Division
Issuance of units 31,575 $ 434,702 233,614 $2,947,905 251,694 $2,918,223
Redemptions of units 23,925 308,544 70,489 901,191 101,276 1,180,990
------ ---------- ------- ---------- ------- ----------
Net Increase 7,650 $ 126,158 163,125 $2,046,714 150,418 $1,737,233
====== ========== ======= ========== ======= ==========
</TABLE>

F-26
<PAGE>

NOTES TO FINANCIAL STATEMENTS--(Continued)

JPF Separate Account C
December 31, 1998

NOTE G --YEAR 2000 CONVERSION (UNAUDITED)

The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 systems failures. Year 2000 issues arise because
some computer software and hardware (systems) were designed to handle only a two
digit year, not a four digit year. By using two digits, they could fail or make
miscalculations due to the inability to distinguish between dates in the 1900's
and in the 2000's.

In order to minimize the impact of the year 2000 on the Company, Jefferson-Pilot
Corporation developed a centralized oversight and project management process to
facilitate the planning and conversion of all information systems on behalf of
the Company and its affiliates. The scope of the project includes an assessment
of the Company's material systems currently in place, modification, testing and
implementation of such systems as required, inquiry to third-party providers
with whom the Company has material business relationships as to the state of
their readiness, and the development of a contingency plan in the event that
material Year 2000 issues arise.

The target for completing all phases is September 30, 1999. The Company has
completed its assessment and modification phases of its plan and is actively
testing its systems and communicating with its business partners to assess these
companies' readiness. Although management does not anticipate a material effect
on its business operation as a result of the Year 2000 computer systems issues,
the Company is in the process of developing a contingency plan in the event that
material Year 2000 issues arise in the Company or third-party computer systems.

F-27
<PAGE>

PART II

UNDERTAKING TO FILE REPORTS

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

UNDERTAKING REGARDING INDEMNIFICATION

Pursuant to Rule 484(b)(1) of the Securities Act of 1933, insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

REPRESENTATIONS REGARDING THE REASONABLENESS OF FEES AND CHARGES

Jefferson Pilot Financial Insurance Company hereby represents that the fees and
charges deducted under the Flexible Premium Variable Life Insurance Policies
hereby registered by this Registration Statement in the aggregate are reasonable
in relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by Jefferson Pilot Financial Insurance Company.

REPRESENTATION PURSUANT TO RULE 6e-3(T)

This filing is made pursuant to Rule 6e-3(T) under the Investment Company Act of
1940, as amended (the "1940 Act").

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet

The prospectus consisting of 63 pages

The undertaking to file reports

The Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
regarding indemnification

The representation as to fees and charges.

The representation pursuant to Rule 6e-3(T)

The signatures

Written consents of the following persons:

(a) Richard Dielensnyder, FSA, MAAA, contained in Exhibit 6 below.

(b) Ernst & Young LLP.

The following exhibits:
<PAGE>

1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:

(a)(i) Certified Copy of Resolution of the Executive Committee of the Board
of Directors of JP Financial Insurance Company of America establishing Chubb
Separate Account C. (Incorporated by reference to Registrant's Registration
Statement on Form S-6, filed on December 10, 1993, File No. 33-72830.)

(ii) Certified Copy of Resolution of the Board of Directors of JP Financial
Insurance Company of America authorizing the registration of a new policy
offered through the Chubb Separate Account C (Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on Form
S-6, filed on March 13, 1996, File No. 33-01781).

(b) Not Applicable

(c)(i) Form of Distribution Agreement among JP Financial Insurance Company
of America, Chubb Separate Account C, and Chubb Securities Corporation.
(Incorporated by reference to Registrant's Registration Statement on Form S-6,
filed on December 10, 1993, File No. 33-72830.)

(ii) Specimen Variable Contracts Selling Agreement between Jefferson Pilot
Variable Corporation and Selling Broker-Dealers. (Incorporated by reference to
Post-Effective Amendment No. 3 to Registrant's Registration Statement on Form
S-6, filed on November 18, 1998).

(iii) Schedule of Sales Commissions. (Incorporated by reference to
Post-Effective Amendment No. 3 to Registrant's Registration Statement on Form
S-6, filed on November 18, 1998).

(d) Not Applicable

(e) Not Applicable

(i) Specimen last survivor flexible premium variable life insurance policy.
(Incorporated by reference to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form S-6, filed on November 18, 1998).

(ii) Forms of Riders. (Incorporated by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement on Form S-6, filed on
November 18, 1998).

(f)(i) Amended and Restated Charter, with all amendments, of JP Financial
Insurance Company. (Incorporated by reference to Exhibit 1(f)(i) of Registrant's
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6, filed
March 13, 1996, File No. 33-01781).

(ii) By-Laws of JP Financial Insurance Company. (Incorporated by reference
to Exhibit 1(f)(i) of Registrant's Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, filed March 13, 1996, File No. 33-01781).

(g) No Applicable
<PAGE>

(h)(i) Participation Agreement by and among Oppenheimer Variable Account
Funds, Chubb Life Insurance Company of America and Oppenheimer Funds Inc., dated
January 8, 1998. (Incorporated by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form S-6, filed on November 18, 1998).

(ii) Participation Agreement among MFS Variable Trust, Chubb Life Insurance
Company of America and Massachusetts Financial Services Company dated December
9, 1997. (Incorporated by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form S-6, filed on November 18, 1998).

(iii) Participation Agreement among Templeton Variable Products Series
Fund, Franklin Templeton Distributors Inc., and Chubb Life Insurance Company of
America, The Colonial Life Insurance Company of America dated May 1, 1995.
(Incorporated by reference to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form S-6, filed on November 18, 1998).

(iv) Participation Agreement among Variable Insurance Products Fund,
Fidelity Distributors Corporation and Chubb Life Insurance Company of America
dated May 1, 1996. (Incorporated by reference to Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form S-6, filed on November 18, 1998).

(v) Participation Agreement among Variable Insurance Products Fund II,
Fidelity Distributors Corporation and Chubb Life Insurance Company of America
dated May 1, 1996. (Incorporated by reference to Post-Effective Amendment No. 3
to Registrant's Registration Statement on Form S-6, filed on November 18, 1998).
<PAGE>

(i) Not applicable

(j) Specimen Application. (Incorporated by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement on Form S-6, filed on
November 18, 1998).

2. Opinion of counsel as to securities being registered. (Incorporated by
reference to Post-Effective Amendment No. 3 to Registrant's Registration
Statement on Form S-6, filed on November 18, 1998).

3. Not Applicable.

4. No Applicable.

5. Actuarial opinions and consents of Richard Dielensnyder, FSA, MAAA.
(Incorporated by reference to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form S-6, filed on November 18, 1998).

6. Consent of Independent Auditors.

7. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
1940 Act. (Incorporated by reference to Post-Effective Amendment No. 3 to
Registrant's Registration Statement on Form S-6, filed on November 18, 1998).

8. Form of Reinsurance Agreement. (Incorporated by reference to
Registrant's Pre-Effective Amendment No. 1 to the Registration Statement on Form
S-6, filed May 24, 1994, File No. 33-72830).

9. Memorandum regarding reliance on Order of the Commission to deduct the
DAC Tax Charge (Incorporated by reference to Pre-Effective Amendment No. 1 to
the Registration Statement on Form S-6 filed on March 13, 1996, File No.
33-01781).

27. Financial Data Schedule. Not Applicable.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant,
JPF Separate Account C, has caused this Post-Effective Amendment No. 4 to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in Concord, New Hampshire, on the 26th
day of April, 1999.

JPF Separate Account C
(Registrant)

Jefferson Pilot Financial Insurance Company
(Depositor)

By: /s/ Charles C. Cornelio
------------------------------------
Charles C. Cornelio
Title: Executive Vice President

Attest: /s/ Ronald Angarella
------------------------------------
Ronald Angarella
Senior Vice President

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, JP Financial
Insurance Company of America has caused this Post-Effective Amendment No. 4 to
be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in Concord, New Hampshire on the
26th day of April, 1999.

(Seal)

Jefferson Pilot Financial Insurance Company

By: /s/ Charles C. Cornelio
-------------------------------
Charles C. Cornelio
Title: Executive Vice President

Attest:

/s/ Ronald Angarella
-------------------------------
Ronald Angarella
Senior Vice President

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

Signatures Title

/s/ Dennis R. Glass
- ---------------------------
Dennis R. Glass Director

/s/ Kenneth C. Mlekush
- ---------------------------
Kenneth C. Mlekush Director

/s/ David A. Stonecipher
- ---------------------------
David A. Stonecipher Director

/s/ E. Jay Yelton
- ---------------------------
E. Jay Yelton Director

<PAGE>

EXHIBIT INDEX

6. Consent of Independent Auditors
...............................

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our reports dated February 8, 1999 with respect to
the financial statements of Jefferson Pilot Financial Insurance Company and
subsidiaries and April 9, 1999 with respect to the financial statements of JPF
Separate Account C in Post-Effective Amendment No. 4 to the Registration
Statement (Form S-6 No. 333-01781) and related Prospectus for the registration
of units of interest in the JPF Separate Account C under survivorship flexible
premium variable life insurance policies offered by Jefferson Pilot Financial
Insurance Company.

/s/ ERNST & YOUNG LLP

Greensboro, North Carolina
April 21, 1999