<PAGE>
SUPPLEMENT DATED AUGUST 3, 1998, TO
THE PROSPECTUS DATED MAY 1, 1998 FOR
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
issued by
Security Life of Denver Insurance Company
and its
Security Life Separate Account L1
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS.
PLEASE READ IT CAREFULLY AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE.
The "Refund of Sales Charges" section on page 12 is hereby deleted and replaced
in its entirety as follows:
If the Policy has not lapsed, we will, upon full surrender of the Policy
within the first two Policy years, return a percentage of the sales charges
previously deducted from premiums paid. See Refund of Sales Charges, page
33.
The "Refund of Sales Charges" section on page 33 is hereby deleted and replaced
in its entirety as follows:
If the Policy has not lapsed, we will, upon full surrender of the Policy,
refund a percentage of the sales charges previously deducted from premiums
paid. In the first Policy year, the amount of the refund is guaranteed to
be at least 5% of the premiums paid. In the second Policy year, the refund
is guaranteed to be at least 2.5% of the premiums paid in the first Policy
year. The refund of sales charges is guaranteed only for the first two
Policy years.
The "Illustrations of Death Benefits, Account Values, Surrender Values, and
Accumulated Premiums" section on pages 45 - 52 is hereby deleted and replaced in
its entirety as follows:
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND SURRENDER VALUES, AND
ACCUMULATED PREMIUMS
The following tables illustrate how the key financial elements of the Policy
work, specifically, how the death benefits, Account Values and Cash Surrender
Values could vary over an extended period of time. In addition, each table
compares these values with premiums paid accumulated with interest. The
Policies illustrated include the following:
- --------------------------------------------------------------------------------
Strategic Advantage II 1
<PAGE>
<TABLE>
<CAPTION>
Definition
Death of Life Stated Target
Smoker Benefit Insurance Death Death
Sex Age Status Option Test Benefit Premium Benefit Page
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Male 45 Nonsmoker 1 CVAT 300,000 $5,750 300,000 47
Preferred
Male 45 Nonsmoker 1 CVAT 150,000 $5,750 300,000 49
Preferred
Male 45 Nonsmoker 1 GP 300,000 $5,750 300,000 51
Preferred
</TABLE>
The tables show how death benefits, Account Values and Cash Surrender Values of
a hypothetical Policy could vary over an extended period of time if the
Divisions of the Variable Account had constant hypothetical gross annual
investment returns of 0%, 6% or 12% over the periods indicated in each table.
The values will differ from those shown in the tables if the annual investment
returns are not absolutely constant. That is, the death benefits, Account
Values and Cash Surrender Values will be different if the returns averaged 0%,
6% or 12% over a period of years but went above or below those figures in
individual Policy years. These illustrations assume that no Policy Loan has
been taken. The amounts shown would differ if female or unisex rates were used.
The third column of each table shows what would happen if an amount equal to the
premiums were invested to earn interest, after taxes, of 5% compounded annually.
All premium payments are illustrated as if they were made at the beginning of
the year.
The amounts shown for death benefits, Account Values and Cash Surrender Values
sections reflect the fact that the net investment return on the Policy is lower
than the gross investment return on the Divisions of the Variable Account. This
results from the charges levied against the Divisions of the Variable Account
(i.e., the mortality and expense risk charge) as well as the premium loads,
administrative charges and Surrender Charges. Any difference between the
Account Value and the Cash Surrender Value is due to the Refund of Sales
Charges.
The tables illustrate cost of insurance and expense charges at both our current
rates (which are described under Monthly Deductions from the Account Value, page
31) and at the maximum rates we guarantee in the Policies. The amounts shown at
the end of each Policy year reflect a daily charge against the Variable Account
Divisions. This charge includes the charge against the Variable Account for
mortality and expense risks and the effect on each Division's investment
experience of the charge to Portfolio assets for investment management and
direct expenses. The mortality and expense risk fee is 0.75% annually on a
guaranteed basis; illustrations showing current rates reflect a guaranteed
persistency refund equivalent to 0.6% of the Account Value annually beginning
after the 10th Policy anniversary.
The tables also reflect a daily investment advisory fee equivalent to an annual
rate of .6635% of the aggregate average daily net assets of the Portfolios.
This hypothetical rate is a simple average of the maximum investment advisory
fee applicable to the Divisions of the Variable Account. Other expenses of the
Portfolios are assumed at the rate of .1274% of the average daily net assets of
the Portfolio, which is an average of all the Portfolios' other expenses,
including interest expenses. This amounts to .7909% of the average daily net
assets of an investment division including the investment advisory fee. Actual
fees vary by Portfolio and may be subject to agreements by the sponsor to waive
or otherwise reimburse each investment Division for operating expenses which
exceed certain limits. There can be no assurance that the expense reimbursement
arrangements will continue in the future, and any unreimbursed expenses would be
reflected in the values included on the tables.
The effect of these investment management, direct expenses and mortality and
expense risk charges on a 0% gross rate of return would result in a net rate of
return of (1.53)%, on 6% it would be 4.42%, and on 12% it would be 10.38%.
The tables assume the deduction of charges including administrative and sales
charges. The tables reflect the fact that we do not currently make any charge
against the Variable Account for state or Federal taxes. If such a charge is
made in the future, it will take a higher gross rate of return than the rates
shown to produce death benefits, Account Values, and Cash Surrender Values
shown.
- --------------------------------------------------------------------------------
Stratefic Advantage II 2
<PAGE>
We will furnish, upon request, a comparable illustration based on the Age and
sex of the proposed Insured, standard Premium Class assumptions and an initial
Stated Death Benefit, death benefit option and Scheduled Premiums chosen and
consistent with the Policy form. If the Owner purchases a Policy, we will
deliver an individualized illustration reflecting the Scheduled Premium chosen
and the Insured's actual risk class. After issuance we will provide, upon
request, an illustration of future Policy benefits based on both guaranteed and
current cost factor assumptions and actual Account Value.
- --------------------------------------------------------------------------------
Strategic Advantage II 3
<PAGE>
PROSPECT: INSURED'S NAME
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $300000 DEATH BENEFIT OPTION 1
ANNUAL PREMIUM: $5750.00
CASH VALUE ACCUMULATION TEST
SUMMARY PAGE
ASSUMING GUARANTEED CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
-------0.00%-------- --------12.00%-------- ---------6.00%-------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 3181 3468 300000 3656 3943 300000 3418 3705 300000
2 5750 12377 6219 6363 300000 7596 7739 300000 6892 7036 300000
3 5750 19033 9111 9111 300000 11844 11844 300000 10420 10420 300000
4 5750 26022 11974 11974 300000 16560 16560 300000 14124 14124 300000
5 5750 33361 14677 14677 300000 21657 21657 300000 17879 17879 300000
6 5750 41067 17215 17215 300000 27174 27174 300000 21682 21682 300000
7 5750 49157 19567 19567 300000 33138 33138 300000 25514 25514 300000
8 5750 57653 21719 21719 300000 39587 39587 300000 29363 29363 300000
9 5750 66573 23651 23651 300000 46561 46561 300000 33209 33209 300000
10 5750 75939 25339 25339 300000 54103 54103 300000 37031 37031 300000
15 5750 130281 33191 33191 300000 109809 109809 300000 60211 60211 300000
20 5750 199636 32084 32084 300000 202300 202300 350383 82855 82855 300000
25 5750 288152 15264 15264 300000 345132 345132 534955 101202 101202 300000
30 5750 401124 - - 300000 556060 556060 781820 108094 108094 300000
AGE 65 5750 215655 30242 30242 300000 226441 226441 383139 87000 87000 300000
</TABLE>
THE EXPENSE CHARGES AND COST OF INSURANCE RATES WILL NEVER BE GREATER THAN THOSE
WHICH WERE USED TO CALCULATE THE ABOVE VALUES.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A
NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO THE DIVISIONS OF
THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND THE INVESTMENT
EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT THESE
HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID
IN A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
- --------------------------------------------------------------------------------
Strategic Advantage II 4
<PAGE>
PROSPECT: INSURED'S NAME
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $300000 DEATH BENEFIT OPTION 1
ANNUAL PREMIUM: $5750.00
CASH VALUE ACCUMULATION TEST
SUMMARY PAGE
ASSUMING CURRENT CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
--------0.00%------- --------12.00%-------- -------6.00%---------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 4332 4907 300000 4881 5456 300000 4606 5181 300000
2 5750 12377 8480 9242 300000 10143 10904 300000 9295 10056 300000
3 5750 19033 12483 13000 300000 15867 16384 300000 14108 14625 300000
4 5750 26022 16480 16480 300000 22249 22249 300000 19193 19193 300000
5 5750 33361 20370 20370 300000 29249 29249 300000 24458 24458 300000
6 5750 41067 24153 24153 300000 36935 36935 300000 29911 29911 300000
7 5750 49157 27835 27835 300000 45384 45384 300000 35566 35566 300000
8 5750 57653 31418 31418 300000 54681 54681 300000 41433 41433 300000
9 5750 66573 34903 34903 300000 64917 64917 300000 47523 47523 300000
10 5750 75939 38300 38300 300000 76205 76205 300000 53857 53857 300000
15 5750 130281 57263 57263 300000 160344 160344 314595 94483 94483 300000
20 5750 199636 71969 71969 300000 298553 298553 517095 144160 144160 300000
25 5750 288152 81439 81439 300000 521665 521665 808581 206537 206537 320132
30 5750 401124 83903 83903 300000 880067 880067 1237375 283047 283047 397964
AGE 65 5750 215655 74307 74307 300000 335080 335080 566955 155463 155463 300000
</TABLE>
THE CURRENT COST OF INSURANCE RATES ARE SUBJECT TO CHANGE. ACCOUNT VALUES WILL
VARY FROM THOSE ILLUSTRATED IF ACTUAL RATES DIFFER FROM THOSE ASSUMED. CURRENT
MORTALITY CHARGE RATES ARE BASED ON CURRENT MORTALITY EXPERIENCE AND ARE NOT
DEPENDENT UPON FUTURE IMPROVEMENTS IN UNDERLYING MORTALITY.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS AND POLICY CHARGES MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO
THE DIVISIONS OF THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND
THE INVESTMENT EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT
THESE HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID
IN A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
- --------------------------------------------------------------------------------
Strategic Advantage II 5
<PAGE>
PROSPECT: INSURED'S NAME
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $150000 DEATH BENEFIT OPTION 1
INITIAL ADJUSTABLE TERM RIDER: $150000 ANNUAL PREMIUM: $5750.00
CASH VALUE ACCUMULATION TEST
SUMMARY PAGE
ASSUMING GUARANTEED CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
---------0.00%--------- --------12.00%--------- ------6.00%-------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 3178 3466 300000 3653 3941 300000 3415 3703 300000
2 5750 12377 6215 6358 300000 7590 7734 300000 6887 7031 300000
3 5750 19033 9104 9104 300000 11836 11836 300000 10412 10412 300000
4 5750 26022 11964 11964 300000 16548 16548 300000 14113 14113 300000
5 5750 33361 14664 14664 300000 21640 21640 300000 17864 17864 300000
6 5750 41067 17199 17199 300000 27152 27152 300000 21663 21663 300000
7 5750 49157 19548 19548 300000 33110 33110 300000 25491 25491 300000
8 5750 57653 21696 21696 300000 39551 39551 300000 29334 29334 300000
9 5750 66573 23624 23624 300000 46516 46516 300000 33174 33174 300000
10 5750 75939 25307 25307 300000 54048 54048 300000 36990 36990 300000
15 5750 130281 33128 33128 300000 109676 109676 300000 60119 60119 300000
20 5750 199636 31969 31969 300000 202054 202054 349958 82669 82669 300000
25 5750 288152 15056 15056 300000 344755 344755 534370 100836 100836 300000
30 5750 401124 - - 300000 555489 555489 781018 107353 107353 300000
AGE 65 5750 215655 30112 30112 300000 226174 226174 382686 86786 86786 300000
</TABLE>
THE EXPENSE CHARGES AND COST OF INSURANCE RATES WILL NEVER BE GREATER THAN THOSE
WHICH WERE USED TO CALCULATE THE ABOVE VALUES.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A
NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO THE DIVISIONS OF
THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND THE INVESTMENT
EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT THESE
HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID
IN A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
- --------------------------------------------------------------------------------
Strategic Advantage II 6
<PAGE>
PROSPECT: INSURED'S NAME
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $150000 DEATH BENEFIT OPTION 1
INITIAL ADJUSTABLE TERM RIDER: $150000 ANNUAL PREMIUM: $5750.00
CASH VALUE ACCUMULATION TEST
SUMMARY PAGE
ASSUMING CURRENT CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
------0.00%------ ------12.00%------ ------6.00%------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 4352 4927 300000 4902 5477 300000 4627 5202 300000
2 5750 12377 8550 9312 300000 10220 10982 300000 9368 10130 300000
3 5750 19033 12613 13131 300000 16018 16535 300000 14248 14766 300000
4 5750 26022 16677 16677 300000 22487 22487 300000 19410 19410 300000
5 5750 33361 20633 20633 300000 29587 29587 300000 24757 24757 300000
6 5750 41067 24484 24484 300000 37384 37384 300000 30297 30297 300000
7 5750 49157 28227 28227 300000 45951 45951 300000 36037 36037 300000
8 5750 57653 31861 31861 300000 55367 55367 300000 41984 41984 300000
9 5750 66573 35381 35381 300000 65721 65721 300000 48143 48143 300000
10 5750 75939 38796 38796 300000 77117 77117 300000 54530 54530 300000
15 5750 130281 57736 57736 300000 161902 161902 317652 95351 95351 300000
20 5750 199636 72419 72419 300000 301110 301110 521522 145300 145300 300000
25 5750 288152 81866 81866 300000 525829 525829 815035 208033 208033 322452
30 5750 401124 84303 84303 300000 886812 886812 1246858 284883 284883 400546
AGE 65 5750 215655 74753 74753 300000 337900 337900 571726 156672 156672 300000
</TABLE>
THE CURRENT COST OF INSURANCE RATES ARE SUBJECT TO CHANGE. ACCOUNT VALUES WILL
VARY FROM THOSE ILLUSTRATED IF ACTUAL RATES DIFFER FROM THOSE ASSUMED. CURRENT
MORTALITY CHARGE RATES ARE BASED ON CURRENT MORTALITY EXPERIENCE AND ARE NOT
DEPENDENT UPON FUTURE IMPROVEMENTS IN UNDERLYING MORTALITY.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS AND POLICY CHARGES MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO
THE DIVISIONS OF THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND
THE INVESTMENT EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT
THESE HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID IN
A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
________________________________________________________________________________
Strategic Advantage II 7
<PAGE>
PROSPECT: INSURED'S NAME
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $300000 DEATH BENEFIT OPTION 1
ANNUAL PREMIUM: $5750.00
GUIDELINE PREMIUM TEST
SUMMARY PAGE
ASSUMING GUARANTEED CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
------0.00%------ ------12.00%------ ------6.00%------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 3181 3468 300000 3656 3943 300000 3418 3705 300000
2 5750 12377 6219 6363 300000 7596 7739 300000 6892 7036 300000
3 5750 19033 9111 9111 300000 11844 11844 300000 10420 10420 300000
4 5750 26022 11974 11974 300000 16560 16560 300000 14124 14124 300000
5 5750 33361 14677 14677 300000 21657 21657 300000 17879 17879 300000
6 5750 41067 17215 17215 300000 27174 27174 300000 21682 21682 300000
7 5750 49157 19567 19567 300000 33138 33138 300000 25514 25514 300000
8 5750 57653 21719 21719 300000 39587 39587 300000 29363 29363 300000
9 5750 66573 23651 23651 300000 46561 46561 300000 33209 33209 300000
10 5750 75939 25339 25339 300000 54103 54103 300000 37031 37031 300000
15 5750 130281 33191 33191 300000 109809 109809 300000 60211 60211 300000
20 5750 199636 32084 32084 300000 203296 203296 300000 82855 82855 300000
25 5750 288152 15264 15264 300000 367807 367807 426656 101202 101202 300000
30 5750 401124 - - 300000 641349 641349 686244 108094 108094 300000
AGE 65 5750 215655 30242 30242 300000 229358 229358 300000 87000 87000 300000
</TABLE>
THE EXPENSE CHARGES AND COST OF INSURANCE RATES WILL NEVER BE GREATER THAN THOSE
WHICH WERE USED TO CALCULATE THE ABOVE VALUES.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A
NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO THE DIVISIONS OF
THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND THE INVESTMENT
EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT THESE
HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID IN
A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
________________________________________________________________________________
Strategic Advantage II 8
<PAGE>
PROSPECT: INSURED'S NAME:
MALE 45 NON-SMOKER PRESENTED BY:
PREFERRED
SECURITY LIFE
STRATEGIC ADVANTAGE II VARIABLE UNIVERSAL LIFE
STATED DEATH BENEFIT: $300000 DEATH BENEFIT OPTION 1
ANNUAL PREMIUM: $5750.00
GUIDELINE PREMIUM TEST
SUMMARY PAGE
ASSUMING CURRENT CHARGES
Assuming Hypothetical Gross Investment Return of:
<TABLE>
<CAPTION>
------0.00%------ ------12.00%------ ------6.00%------
PREMIUM CASH CASH CASH
ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH
YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 5750 6037 4332 4907 300000 4881 5456 300000 4606 5181 300000
2 5750 12377 8480 9242 300000 10143 10904 300000 9295 10056 300000
3 5750 19033 12483 13000 300000 15867 16384 300000 14108 14625 300000
4 5750 26022 16480 16480 300000 22249 22249 300000 19193 19193 300000
5 5750 33361 20370 20370 300000 29249 29249 300000 24458 24458 300000
6 5750 41067 24153 24153 300000 36935 36935 300000 29911 29911 300000
7 5750 49157 27835 27835 300000 45384 45384 300000 35566 35566 300000
8 5750 57653 31418 31418 300000 54681 54681 300000 41433 41433 300000
9 5750 66573 34903 34903 300000 64917 64917 300000 47523 47523 300000
10 5750 75939 38300 38300 300000 76205 76205 300000 53847 53847 300000
15 5750 130281 57263 57263 300000 160359 160359 300000 94483 94483 300000
20 5750 199636 71969 71969 300000 303091 303091 369683 144160 144160 300000
25 5750 288152 81439 81439 300000 542281 542281 629046 206741 206741 300000
30 5750 401124 83903 83903 300000 942840 942840 1008839 289652 289652 309927
AGE 65 5750 215655 74307 74307 300000 341630 341630 409956 155463 155463 300000
</TABLE>
THE CURRENT COST OF INSURANCE RATES ARE SUBJECT TO CHANGE. ACCOUNT VALUES WILL
VARY FROM THOSE ILLUSTRATED IF ACTUAL RATES DIFFER FROM THOSE ASSUMED. CURRENT
MORTALITY CHARGE RATES ARE BASED ON CURRENT MORTALITY EXPERIENCE AND ARE NOT
DEPENDENT UPON FUTURE IMPROVEMENTS IN UNDERLYING MORTALITY.
THE HYPOTHETICAL GROSS RATES OF RETURN SHOWN ARE ILLUSTRATIVE ONLY AND SHOULD
NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL
INVESTMENT RESULTS AND POLICY CHARGES MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE TO
THE DIVISIONS OF THE VARIABLE ACCOUNT AND THE GUARANTEED INTEREST DIVISION AND
THE INVESTMENT EXPERIENCE OF THE DIVISIONS. NO REPRESENTATION CAN BE MADE THAT
THESE HYPOTHETICAL GROSS INVESTMENT RETURNS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS ANNUAL RATES OF RETURN AVERAGED
0.00%, 12.00% AND 6.00% OVER A PERIOD OF YEARS BUT VARIED ABOVE OR BELOW THAT
AVERAGE DURING THE PERIOD. THEY WOULD ALSO BE DIFFERENT IF PREMIUMS WERE PAID IN
A DIFFERENT FREQUENCY THAN SHOWN. THE ABOVE VALUES ASSUME NO LOANS OR
WITHDRAWALS ARE TAKEN.
________________________________________________________________________________
Strategic Advantage II 9
<PAGE>
The "Hypothetical Illustrations" section on pages 156 - 161 of Appendix C is
hereby deleted and replaced in its entirety as follows:
HYPOTHETICAL ILLUSTRATIONS
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
________________________________________________________________________________
NEUBERGER & BERMAN AMT LIMITED MATURITY BOND PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/88 7.17% 5,271 4,696 300,000
12/31/89 10.77% 10,660 9,898 300,000
12/31/90 8.32% 15,701 15,183 300,000
12/31/91 11.34% 21,519 21,519 300,000
12/31/92 5.18% 26,883 26,883 300,000
12/31/93 6.63% 32,892 32,892 300,000
12/31/94 (0.15)% 36,696 36,696 300,000
12/31/95 10.94% 44,959 44,959 300,000
12/31/96 4.31% 50,773 50,773 300,000
12/31/97 6.74% 58,099 58,099 300,000
NEUBERGER & BERMAN AMT GROWTH PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/88 25.97% 6,131 5,556 300,000
12/31/89 29.47% 13,483 12,721 300,000
12/31/90 (8.19)% 15,919 15,401 300,000
12/31/91 29.73% 25,402 25,402 300,000
12/31/92 9.54% 32,239 32,239 300,000
12/31/93 6.79% 38,630 38,630 300,000
12/31/94 (4.99)% 40,323 40,323 300,000
12/31/95 31.73% 58,213 58,213 300,000
12/31/96 9.14% 67,537 67,537 300,000
12/31/97 29.01% 91,841 91,841 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 10
<PAGE>
HYPOTHETICAL ILLUSTRATION (Continued)
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
________________________________________________________________________________
NEUBERGER & BERMAN AMT PARTNERS PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/95 36.47% 6,612 6,037 300,000
12/31/96 29.57% 14,113 13,351 300,000
12/31/97 31.25% 23,487 22,969 300,000
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/89 64.48% 7,898 7,323 300,000
12/31/90 8.71% 13,309 12,547 300,000
12/31/91 57.54% 26,896 26,378 300,000
12/31/92 3.55% 31,517 31,517 300,000
12/31/93 13.28% 40,239 40,239 300,000
12/31/94 (4.38)% 42,162 42,162 300,000
12/31/95 44.31% 66,510 66,510 300,000
12/31/96 4.18% 73,096 73,096 300,000
12/31/97 11.39% 85,434 85,434 300,000
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/94 (1.54)% 4,873 4,298 300,000
12/31/95 44.45% 13,183 12,421 300,000
12/31/96 11.90% 19,019 18,501 300,000
12/31/97 15.01% 26,031 26,031 300,000
ALGER AMERICAN GROWTH PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/90 4.14% 5,132 4,557 300,000
12/31/91 40.39% 13,187 12,425 300,000
12/31/92 12.38% 19,105 18,587 300,000
12/31/93 22.47% 27,842 27,842 300,000
12/31/94 1.45% 32,298 32,298 300,000
12/31/95 36.37% 49,506 49,506 300,000
12/31/96 13.35% 60,439 60,439 300,000
12/31/97 25.75% 80,718 80,718 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 11
<PAGE>
HYPOTHETICAL ILLUSTRATION (Continued)
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
________________________________________________________________________________
ALGER AMERICAN LEVERAGED ALL CAP
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/96 12.04% 5,494 4,919 300,000
12/31/97 19.68% 11,743 10,981 300,000
FIDELITY VIP GROWTH PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/88 15.58% 5,655 5,080 300,000
12/31/89 31.51% 13,067 12,305 300,000
12/31/90 (11.73)% 14,948 14,430 300,000
12/31/91 45.51% 27,125 27,125 300,000
12/31/92 9.32% 34,047 34,047 300,000
12/31/93 19.37% 45,367 45,367 300,000
12/31/94 (0.02)% 49,151 49,151 300,000
12/31/95 35.36% 71,717 71,717 300,000
12/31/96 14.71% 86,420 86,420 300,000
12/31/97 23.48% 111,088 111,088 300,000
FIDELITY VIP OVERSEAS PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/88 8.13% 5,315 4,740 300,000
12/31/89 26.28% 12,139 11,377 300,000
12/31/90 (1.67)% 15,719 15,201 300,000
12/31/91 8.00% 20,884 20,884 300,000
12/31/92 (10.72)% 22,210 22,210 300,000
12/31/93 37.35% 36,086 36,086 300,000
12/31/94 1.72% 40,622 40,622 300,000
12/31/95 9.74% 48,754 48,754 300,000
12/31/96 13.15% 59,384 59,384 300,000
12/31/97 11.56% 70,304 70,304 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 12
<PAGE>
HYPOTHETICAL ILLUSTRATION (Continued)
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
_______________________________________________________________________________
FIDELITY VIP MONEY MARKET PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/88 7.39% 5,281 4,706 300,000
12/31/89 9.12% 10,520 9,758 300,000
12/31/90 8.04% 15,511 14,993 300,000
12/31/91 6.09% 20,289 20,289 300,000
12/31/92 3.90% 25,282 25,282 300,000
12/31/93 3.23% 30,189 30,189 300,000
12/31/94 4.25% 35,526 35,526 300,000
12/31/95 5.87% 41,654 41,654 300,000
12/31/96 5.41% 47,846 47,846 300,000
12/31/97 5.51% 54,352 54,352 300,000
FIDELITY VIP II ASSET MANAGER PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/90 6.72% 5,250 4,675 300,000
12/31/91 22.56% 11,717 10,955 300,000
12/31/92 11.71% 17,360 16,842 300,000
12/31/93 21.23% 25,455 25,455 300,000
12/31/94 (6.09)% 27,646 27,646 300,000
12/31/95 16.96% 36,998 36,998 300,000
12/31/96 14.60% 46,851 46,851 300,000
12/31/97 20.65% 61,118 61,118 300,000
FIDELITY VIP II INDEX 500 PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/93 9.74% 5,388 4,813 300,000
12/31/94 1.04% 9,886 9,124 300,000
12/31/95 37.19% 18,777 18,259 300,000
12/31/96 22.82% 27,523 27,523 300,000
12/31/97 32.82% 41,961 41,961 300,000
INVESCO VIF TOTAL RETURN PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/95 22.79% 5,985 5,410 300,000
12/31/96 12.18% 11,586 10,824 300,000
12/31/97 22.91% 18,920 18,402 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 13
<PAGE>
HYPOTHETICAL ILLUSTRATION (Continued)
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
________________________________________________________________________________
INVESCO VIF INDUSTRIAL INCOME PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/95 29.25% 6,281 5,706 300,000
12/31/96 22.28% 12,944 12,182 300,000
12/31/97 28.17% 21,451 20,933 300,000
INVESCO VIF HIGH YIELD PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/95 19.76% 5,847 5,272 300,000
12/31/96 16.59% 11,861 11,099 300,000
12/31/97 17.33% 18,391 17,873 300,000
INVESCO VIF UTILITIES PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/95 9.08% 5,358 4,783 300,000
12/31/96 12.76% 10,941 10,179 300,000
12/31/97 23.41% 18,204 17,686 300,000
VAN ECK WORLDWIDE BOND PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/90 11.25% 5,457 4,882 300,000
12/31/91 18.39% 11,579 10,817 300,000
12/31/92 (5.25)% 14,627 14,109 300,000
12/31/93 7.79% 19,673 19,673 300,000
12/31/94 (1.32)% 23,392 23,392 300,000
12/31/95 17.30% 32,144 32,144 300,000
12/31/96 2.53% 36,928 36,928 300,000
12/31/97 2.38% 41,696 41,696 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 14
<PAGE>
HYPOTHETICAL ILLUSTRATION (Continued)
Nonsmoker Male Age 45 Cash Value Accumulation Test
Standard Risk Class Death Benefit Option 1
Stated Death Benefit $300,000 Annual Premium $5,750
________________________________________________________________________________
VAN ECK WORLDWIDE HARD ASSETS FUND
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/91 (2.93)% 4,810 4,235 300,000
12/31/92 (4.09)% 8,858 8,096 300,000
12/31/93 64.83% 20,842 20,324 300,000
12/31/94 (4.78)% 23,229 23,229 300,000
12/31/95 10.99% 30,272 30,272 300,000
12/31/96 18.04% 40,426 40,426 300,000
12/31/97 (1.67)% 43,502 43,502 300,000
VAN ECK WORLDWIDE EMERGING MARKETS FUND
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/96 26.82% 6,170 5,595 300,000
12/31/97 (11.61)% 9,399 8,637 300,000
AIM VI GOVERNMENT SECURITIES PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/94 (3.73)% 4,773 4,198 300,000
12/31/95 15.56% 10,528 9,766 300,000
12/31/96 2.29% 14,706 14,188 300,000
12/31/97 8.16% 19,825 19,825 300,000
AIM VI CAPITAL APPRECIATION PORTFOLIO
Year Annual Total Cash Surrender Account Death
Ended Return* Value Value Benefit
12/31/94 2.50% 5,058 4,483 300,000
12/31/95 35.69% 12,661 11,899 300,000
12/31/96 17.58% 19,364 18,846 300,000
12/31/97 13.51% 26,077 26,077 300,000
The assumptions underlying these values are described in Performance
Information, page 155.
* These Annual Total Return figures reflect the Portfolio's management fees and
other operating expenses but do not reflect the Policy level or Variable Account
asset-based charges and deductions which, if reflected, would result in lower
total return figures than those shown.
________________________________________________________________________________
Strategic Advantage II 15
