MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 3, 497, 1995-09-14

MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 3
497, 1995-09-14

Previous: CONNECTICUT MUTUAL VARIABLE LIFE SEPARATE ACCOUNT 1, 497, 1995-09-14

Next: AMERICAN HIGH INCOME MUNICIPAL BOND FUND INC, 24F-2NT, 1995-09-14

<PAGE>

September 14, 1995

Dear LifeTrust Contract Owner:

The information below supplements Massachusetts Mutual Life Insurance Company's
LifeTrust Prospectus dated May 1, 1995. Please place this supplement with your
prospectus and retain it for future reference.

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

LIFETRUST
Supplement dated September 14, 1995
to the Prospectus dated May 1, 1995

The following should be read in conjunction with the information under the
heading Massachusetts Mutual Life Insurance Company on page 8 of the LifeTrust
Prospectus:

As of September 13, 1995, the Boards of Directors of Massachusetts Mutual Life
Insurance Company and Connecticut Mutual Life Insurance Company had approved the
merger of Connecticut Mutual into MassMutual. The companies plan to execute a
definitive merger agreement in the near future. The merger is subject to
certain conditions, including member and regulatory approvals and is expected to
be completed as soon thereafter as possible. As a result of the merger,
MassMutual would become the nation's fifth largest mutual life insurance company
with estimated consolidated assets of $49 billion and estimated consolidated
contingency reserves of $2.5 billion. The companies believe that the merger of
MassMutual and Connecticut Mutual would be in the best interests of
policyholders because the combined enterprise will enjoy a strong capital
position, a diverse product portfolio and a competitive cost structure. The
merger will not affect any terms of contracts issued by MassMutual.

September 14, 1995

<PAGE>

MassMutual and Affiliated Companies Service Center
Continuum/Vantage Company
301 West 11th Street
Kansas City, MO 64105
(800) 258-4511
or
P. O. Box 419607
Kansas City, MO 64141-1007

PROSPECTUS
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
OPPENHEIMERFUNDS LIFETRUST VARIABLE ANNUITY CONTRACT
VARIABLE ANNUITY SEPARATE ACCOUNT 3

This prospectus (the "Prospectus") describes a flexible purchase payment
individual variable annuity contract (the "Contract") issued by MassMutual Life
Insurance Company ("MassMutual"). The Contract provides for the accumulation of
contract values prior to maturity and for the distribution of annuity benefits
thereafter.

Purchase payments may be allocated among the Divisions of Massachusetts Mutual
Variable Annuity Separate Account 3 (the "Separate Account"). Additionally,
MassMutual may introduce in a limited number of states, a Fixed Account with a
Market Value Adjustment feature (the "Fixed Account" or the "Market Value
Adjustment Account"). For a more thorough discussion of the Fixed Account,
please see - Fixed Account and the Market Value Adjustment Feature on page 16.

Purchase payments allocated to a Division of the Separate Account will be
invested in a corresponding fund (a "Fund") of either MML Series Investment Fund
(the "MML Trust") or Oppenheimer Variable Account Funds (the "Oppenheimer Trust"
- collectively MML Trust and Oppenheimer Trust are referred to as the "Trusts").
The Trusts are both open-end, diversified management investment companies
suitable for use with variable annuity contracts.

Annuity benefits can be either fixed or variable amounts or a combination of
both. The Contract value prior to maturity, except for amounts allocated to the
Fixed Account, and the amount of any variable annuity payments thereafter will
vary with the investment performance of the Funds which You have selected.
MassMutual serves as depositor for the Separate Account.

The Prospectus for MML Trust, which is attached to this Prospectus, describes
the investment objectives and risks of investing in the four available MML
Funds: MML Equity Fund; MML Money Market Fund; MML Managed Bond Fund; and MML
Blend Fund. Similarly, the Prospectus for the Oppenheimer Trust describes the
currently available Oppenheimer Funds: Oppenheimer Money Fund; Oppenheimer High
Income Fund; Oppenheimer Bond Fund; Oppenheimer Capital Appreciation Fund;
Oppenheimer Growth Fund; Oppenheimer Multiple Strategies Fund; Oppenheimer
Global Securities Fund; and Oppenheimer Strategic Bond Fund. That Prospectus
also describes the Oppenheimer Growth and Income Fund which will be available to
the Contracts on July 1, 1995.

This Prospectus sets forth the information that a prospective investor ought to
know before investing. Certain additional information about the Contract is
contained in a Statement of Additional Information dated May 1, 1995 which has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The Table of Contents for the Statement of Additional
Information appears on page 21 of this Prospectus. The Statement of Additional
Information is available upon written or oral request and without charge from
the Service Center.

THIS PROSPECTUS MUST BE ACCOMPANIED BY OR PRECEDED BY THE PROSPECTUSES OF BOTH
THE OPPENHEIMER VARIABLE ACCOUNT FUNDS AND THE MML SERIES FUND, WHICH ARE
ATTACHED HERETO. ADDITIONALLY, IN STATES WHERE THE FIXED ACCOUNT IS OFFERED,
THIS PROSPECTUS MUST ALSO BE ACCOMPANIED BY A PROSPECTUS FOR THE FIXED ACCOUNT.

THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.

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

This Prospectus and the Statement of Additional Information are dated May 1,
1995, and may be amended from time to time.

All Contracts are serviced through MassMutual's Service Center. MassMutual's
Home Office is located in Springfield, Massachusetts. MassMutual's Principal
Administrative Office is located at 1295 State Street Springfield, Massachusetts
01111-0001.
<PAGE>

Contents
Page

Glossary................................................................. 3
Summary.................................................................. 4
Table of Fees and Expenses............................................... 5
Condensed Financial Information.......................................... 7
MassMutual, Oppenheimer Management Corporation,
The Separate Account and The Trusts.................................. 8
Massachusetts Mutual Life Insurance Company............................ 8
Oppenheimer Management Corporation..................................... 8
The Separate Account................................................... 8
The Trusts............................................................. 8
Investments and Objectives of the Available Funds...................... 8
Possible Conflicts..................................................... 9
An Explanation of the Contract........................................... 10
General-Uses of the Contract........................................... 10
The Accumulation (Pay-In) Period....................................... 10
How Contracts May Be Purchased......................................... 10
Initial Purchase....................................................... 10
Subsequent Purchases................................................... 10
Wire Transfer.......................................................... 10
Allocation of Purchase Payments........................................ 10
General Transfer Rules................................................. 11
Telephone Transfers.................................................... 11
Automatic Transfers.................................................... 12
Right to Return Contracts.............................................. 12
The Death Benefit...................................................... 12
Redemption Privileges.................................................. 12
Automatic Partial Redemptions.......................................... 13
Tax Sheltered Annuity Redemption Restrictions.......................... 13
The Annuity (Pay-Out) Period........................................... 13
Annuity Benefits....................................................... 13
Payment Options........................................................ 13
Fixed Income Option.................................................... 14
Variable Monthly Income Option......................................... 14
Fixed-Time Payment Option.............................................. 14
Life Income Payments................................................... 14
Joint-and-Survivor Life Income Payments................................ 14
Joint-and-Survivor Life Income Payments (Two-Thirds to the Survivor)... 14
Payments After Death of Annuitant...................................... 14
Special Limitations.................................................... 14
Charges and Deductions................................................... 15
Asset Charge........................................................... 15
Administrative Charge.................................................. 15
Contingent Deferred Sales Charge....................................... 15
Premium Taxes.......................................................... 16
Fund Expenses.......................................................... 16
The Fixed Account and the Market Value Adjustment Feature................ 16
Market Value Adjustment................................................ 16
Distribution............................................................. 17
Miscellaneous Provisions................................................. 17
Termination of Liability............................................... 17
Adjustment of Units and Unit Values.................................... 17
Periodic Statements.................................................... 17
Contract Owner's Voting Rights........................................... 17
Reservation of Rights.................................................... 18
Federal Tax Status....................................................... 18
Introduction........................................................... 18
Tax Status of MassMutual............................................... 18
Taxation of Contracts in General......................................... 18
Penalty Taxes.......................................................... 19
Annuity Distribution Rules of Section 72(s)............................ 19
Tax Withholding........................................................ 19
Tax Reporting.......................................................... 19
Taxation of Qualified Plans, TSAs and IRAs............................. 19
Performance Measures..................................................... 20
Standardized Average Annual Total Return............................... 20
Additional Performance Measures........................................ 20
Additional Information................................................... 21

2
<PAGE>

Glossary

As used in this Prospectus, the following terms mean:

Accumulated Amount: For each amount credited to a Segment of the Fixed Account
the Accumulated Amount on any date is the amount credited to the Segment
accumulated to that date at the Guaranteed Rate for that amount.

Accumulated Value: The value of a Contract on or prior to the Maturity Date
equal to the Variable Value plus the Fixed Value.

Accumulation Period: The period prior to the Maturity Date, during the lifetime
of the Annuitant and Contract Owner.

Accumulation Unit: A unit of measurement used in determining the value of
amounts credited to a Contract in a Division of the Separate Account on or prior
to the Maturity Date.

Annuitant: The person on whose life the Contract is issued.

Annuity Unit: A unit of measurement used in determining the amount of each
Variable Monthly Income payment.

Application: The document executed by a Contract Owner evidencing his or her
desire to purchase a Contract.

Beneficiary: The person(s) or entity(ies) designated by the Contract Owner to
receive a death benefit under the Contract, if any, upon the death of the
Contract Owner or the Annuitant.

Cash Redemption Value: The value of a Contract which a Contract Owner will
receive if the Contract is redeemed, equal to Accumulated Value less
Administrative Charges, Sales Charges, premium taxes, and a Market Value
Adjustment, if any such charges are applicable.

Contract Date: The Date used to determine the Annuitant's age at the
commencement of the Contract and to determine the start of the first Contract
Year.

Contract Owner(s): The owner (and in some instances the owners) of a Contract.
Contract Owners may include the Annuitant, another individual, an employer, a
trust, or any entity specified in an employee benefit plan. If the Contract is
issued under Section 403(b), Section 408(b) or Section 408(k) of the Internal
Revenue Code, the Contract Owner must be the Annuitant.

Contract Year: A period of 12 months starting on the Contract Date and on each
anniversary of the Contract Date.

Division(s): A sub-account of the Separate Account, the assets of which consist
of shares of a specified Fund of either the MML Trust or the Oppenheimer Trust.
Expiration Date: The Date on which the Guarantee Period for an Accumulated
Amount ends.

Fixed Account: In certain states, the Contract offers a Fixed Account which pays
interest at a Guaranteed Rate on amounts credited to a particular Segment. If
such amounts are withdrawn prior to the end of the Guarantee Period, a Market
Value Adjustment will be made. Assets attributable to the Fixed Account are not
included in assets which are allocated to the Divisions of the Separate Account.

Fixed Income: A benefit providing for periodic payments of a fixed dollar amount
throughout the annuity period. The benefit does not vary with, or reflect the
investment performance of, any Division of the Separate Account.

Fixed Value: On any date, the Fixed Value of the Contract is the sum of the
Accumulated Amounts credited to all Segments of the Fixed Account.

Funds: The thirteen separate series of shares of Oppenheimer Variable Account
Funds and MML Series Investment Fund, both of which are open-end, diversified
management investment companies, registered with the Securities and Exchange
Commission, in which the Divisions of the Separate Account invest. This includes
the Oppenheimer Growth and Income Fund which will be available to the Contracts
on July 1, 1995.

Guarantee Period: The period for which interest accrues at the Guaranteed Rate
on an amount credited to a Segment. Guarantee Periods range in whole-year
periods from one to ten years.

Guaranteed Rate: The effective annual interest rate MassMutual uses to accrue
interest on an amount credited to a Segment as of a certain date. Guarantee
Rates are level for the entire Guarantee Period and are fixed at the time an
amount is credited to the Segment.

Market Value Adjustment ("MVA"): An adjustment made to the amount that the
Contract Owner will receive if money is taken from an Accumulated Amount prior
to the Expiration Date of its Guarantee Period.

Maturity Date: The date designated by the Contract Owner as of which Variable
Monthly Income payments (or, if elected, Fixed Income payments or a payment in
one sum) will begin. This date may be no later than the Annuitant's 90th
birthday (unless an earlier date is required by law.)

Maturity Value: The Cash Redemption Value of a Contract at Maturity.

Non-Qualified Contract: A Contract not used in connection with a retirement plan
receiving favorable federal income tax treatment under Sections 401, 403(b), or
408 of the Internal Revenue Code.

Purchase Payment: An amount paid to MassMutual by, or on behalf of, the
Annuitant.

Qualified Contract: A Contract used in connection with a retirement plan
receiving favorable federal income tax treatment under Sections 401, 403(b), or
408 of the Internal Revenue Code.

Segment: All Guarantee Periods of a given length constitute a Segment. Segments
for all Guarantee Periods may not be available at one time.
Service Center: The office at which the administration of the Contract occurs.

Valuation Date: A valuation date is any date on which the net asset value of the
shares of the Funds is determined.

3
<PAGE>

Generally, this will be any date on which the New York Stock Exchange (or its
successor) is open for trading.

Valuation Period: The period of time from the end of one Valuation Date to the
end of the next Valuation Date.

Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. New York time) on a Valuation Date. All actions to be performed on a
Valuation Date will be performed as of the Valuation Time.

Variable Monthly Income: A benefit providing for monthly payments that vary
with, and reflect the investment performance of, one or more Divisions of the
Separate Account.

Variable Value: On any date, the Variable Value of a Contract is the sum of the
values of the Accumulation Units credited to each Division of the Separate
Account. The value in each Division is equal to the Accumulation Unit Value
multiplied by the number of units in that Division You own.

You or Your refers to the Contract Owner.

Summary

THE NATURE OF THE CONTRACT

The product described in this Prospectus is a flexible premium variable annuity
contract. (See - The Accumulation (Pay-In) Period, page 10). It is designed to
allow a Contract Owner to accumulate values over time for uses such as
retirement planning.

Generally, the Contract is purchased by completing an application and submitting
it for approval together with an initial premium payment to MassMutual through
Your registered representative. The minimum initial premium is $2,000.

PURCHASING THE CONTRACT

Contracts may be purchased by both Qualified Plans and by individuals or
entities not qualifying for favorable tax treatment under the Internal Revenue
Code. The Contracts are also available for certain Tax Sheltered Annuities and
Individual Retirement Annuities.

INVESTMENTS UNDER THE CONTRACT

The Contract offers 12 (13 after July 1, 1995), separate investment Divisions
to which a Contract Owner may allocate money. The Divisions offered represent a
wide range of investment strategies, including money market, bond, blend, global
securities, equity, and high-income (junk bond) funds, among others.
Additionally, a Fixed Account with a Market Value Adjustment feature may be
available in some states. For more information concerning available investments
please review the Separate Account discussion beginning on page 8 of this
prospectus and the Fixed Account discussion beginning on page 16.

INQUIRIES CONCERNING THE CONTRACT

If You have questions about the Contract, please either consult Your registered
representative or contact a customer service representative at the Service
Center.

TRANSFERS

Currently, during the Accumulation Period You may make up to 14 transfers per
Contract Year among the Divisions without incurring a charge. MassMutual
reserves the right to charge a fee of $20 for transfers in excess of 4 transfers
per Contract Year. In the annuity pay-out period, You may make transfers once
every three months. Additionally, subject to certain limitations, You may make
transfers to and from amounts held in the Fixed Account. (See - General Transfer
Rules, page 11.)

REDEMPTION RIGHTS

You may redeem all or part of the Contract's Accumulated Value at any time prior
to the Maturity Date. All redemptions may be subject to a Sales Charge.
Redemptions from the Fixed Account may be subject to a Market Value Adjustment.
Please note that redemptions may result in the imposition of penalty taxes. (See
- Contingent Deferred Sales Charge on page 15, and Penalty Taxes on page 19.)

DEATH BENEFIT PRIOR TO MATURITY

If the Annuitant dies before the death of the Owner and before the Maturity
Date, the Death Benefit will depend on the Annuitant's Age at the time that the
Contract was issued. The beneficiary named in the Contract will receive the
greater of: (a) the total of all purchase payments made to the Contract less all
partial redemptions accumulated at 5% to Annuitant's 75th birthday and 0%
thereafter, but not more than two times the difference between all purchase
payments and all redemptions; or (b) the Accumulated Value of the Contract less
any applicable Administrative Charge (and any Sales Charge, if the Annuitant's
age on the Contract Date exceeds 75).

If the Contract Owner dies prior to the Maturity Date, the named beneficiary
will receive the Cash Redemption Value of the Contract.

Please note that in some states, the Death Benefit described above may not be
available. For more information concerning the available death benefits see The
Death Benefit, page 12.

TAX TREATMENT

Under current law, during the accumulation phase of the Contract, the Contract's
Accumulated Value is not taxed. If redemptions are made from the Contract prior
to age 59 1/2, a ten percent (10%) federal income tax penalty will apply to
the income portion of the withdrawal. In certain instances, the tax penalty will
not apply. Please review Taxation of Contracts in General, beginning on page 18,
for a more detailed description of the tax rules applicable to the Contract.
Partial or full redemption of a Contract may require MassMutual to withhold 20%
of the amount redeemed, as more fully described in the Taxation of Qualified
Plans, TSAs and IRAs, section on page 19.

RIGHT TO RETURN CONTRACT

The Contract entitles the purchaser to a 10-day revocation right more fully
described under Right to Return Contracts on page 12.

4
<PAGE>

CHARGES UNDER THE CONTRACT

MassMutual assesses certain charges for the administration and the mortality and
expense risks associated with the Contract. MassMutual also assesses a
contingent deferred sales charge (the "Sales Charge") if all or some of the
value is redeemed prior to the expiration of a seven-year period following the
date of each purchase payment.

Each Contract Year, MassMutual permits You to redeem, without a Sales Charge, up
to 10% of the Contract's premiums that would otherwise be assessed a Sales
Charge. For more information concerning this feature, please consult Contingent
Deferred Sales Charge commencing on page 15.

ASSET CHARGE

MassMutual currently imposes a charge of 1.40% on an annual basis against the
assets held in the Separate Account. (MassMutual reserves the right to increase
this fee to 1.50% see - Asset Charge, page 15).

ADMINISTRATIVE CHARGE

An administrative charge, currently $30 (maximum $50) will be assessed annually
on each Contract. This charge will be waived for Contracts which have an
Accumulated Value of at least $50,000.

PREMIUM TAXES

Additionally, a deduction is made for premium taxes for purchase payments made
into Contracts in certain jurisdictions where such tax applies. Currently, the
applicable premium tax will be deducted at the time of redemption, death,
maturity, or annuitization. (See - Premium Taxes, page 16.)

Table of Fees and Expenses

Contract Owner Transaction Expenses

Sales Load Imposed on Purchases.................... None

Deferred sales load as a Percentage of Purchase Payments when withdrawn:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================
Full Years since payment 0 1 2 3 4 5 6 7 or more
---------------------------------------------------------------------------------------------------
Percentage 7% 6% 5% 4% 3% 2% 1% 0%
===================================================================================================
</TABLE>

Transfer Fee............................. None for first 14 transfers during the
Accumulation Period ($20 thereafter)**

Annual Administrative Charge*............ $30**

Separate Account Annual Expenses
(as a percentage of average account
values)................................. 1.40%**

Mortality and Expense Risk Fee...... 1.15%
Administrative Fee.................. 0.15%
Death Benefit Fee................... 0.10%
Portfolio Annual Charges and Expenses (as a percentage of Fund average net
assets)

<TABLE>
<CAPTION>
Management Other Total Portfolio
Fees Expenses Annual Expenses
<S> <C> <C> <C>
MML Equity Fund 0.41% 0.02% 0.43%
MML Money Market Fund 0.50% 0.05% 0.55%
MML Managed Bond Fund 0.49% 0.03% 0.52%
MML Blend Fund 0.38% 0.01% 0.39%
Oppenheimer Money Fund 0.45% 0.05% 0.50%
Oppenheimer High Income Fund 0.75% 0.06% 0.81%
Oppenheimer Bond Fund 0.75% 0.06% 0.81%
Oppenheimer Capital Appreciation Fund 0.75% 0.05% 0.80%
Oppenheimer Multiple Strategies Fund 0.74% 0.05% 0.79%
Oppenheimer Growth Fund 0.75% 0.06% 0.81%
Oppenheimer Global Securities Fund 0.75% 0.20% 0.95%
Oppenheimer Strategic Bond Fund 0.75% 0.18% 0.93%
Oppenheimer Growth and Income Fund*** 0.75% 0.18% 0.93%

</TABLE>

*The Administrative Charge will be waived if the Accumulated Value is at least
$50,000 when the Administrative Charge would be deducted.
**These fees and charges are shown on a current basis. MassMutual reserves the
right to raise such charges up to $50, and 1.50% respectively. For more
information please see - Charges and Deductions, page 15.
***This Fund will be available to the Contracts on July 1, 1995.

5
<PAGE>

EXAMPLE:

You would pay the following cumulative expenses on a $1,000 investment assuming
a 5% annual return on assets:

If Your Contract is redeemed at the end of the year:

<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C>
MML Equity Fund $ 83 $106 $132 $226
MML Money Market Fund 84 109 138 239
MML Managed Bond Fund 84 109 136 236
MML Blend Fund 82 105 130 222
Oppenheimer Money Fund 83 108 135 234
Oppenheimer High Income Fund 87 117 151 266
Oppenheimer Bond Fund 87 117 151 266
Oppenheimer Capital Appreciation Fund 86 117 151 265
Oppenheimer Multiple Strategies Fund 86 117 150 264
Oppenheimer Growth Fund 87 117 151 266
Oppenheimer Global Securities Fund 88 122 158 280
Oppenheimer Strategic Bond Fund 88 121 157 278
Oppenheimer Growth and Income Fund* 88 121 157 278
</TABLE>

If Your Contract is not redeemed at the end of the year:

<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C>
MML Equity Fund 20 61 105 226
MML Money Market Fund 21 65 111 239
MML Managed Bond Fund 21 64 109 236
MML Blend Fund 19 60 103 222
Oppenheimer Money Fund 20 63 108 234
Oppenheimer High Income Fund 24 72 124 266
Oppenheimer Bond Fund 24 72 124 266
Oppenheimer Capital Appreciation Fund 23 72 124 265
Oppenheimer Multiple Strategies Fund 24 72 123 264
Oppenheimer Growth Fund 24 72 124 266
Oppenheimer Global Securities Fund 25 77 131 280
Oppenheimer Strategic Bond Fund 25 76 130 278
Oppenheimer Growth and Income Fund* 25 76 130 278
</TABLE>

The purpose of the table set forth above is to assist You in understanding the
various costs and expenses that You bear directly or indirectly. The table is
based on estimated amounts for the most recent fiscal year and reflects the
expenses of the Separate Account and the Trusts, adjusted to reflect changes in
management fee rates and a voluntary expense limitation. The table does not
reflect the deduction of premium taxes.

For the purpose of calculating the expenses in the above examples, we have
converted the $30 annual administrative charge to a 0.11% annual asset charge
based on an average contract size of $27,500.

Converted in this way, this annual charge (on a percentage basis) would be
higher for smaller contracts and lower for larger contracts. No annual
Administrative Charge is assessed on contracts with accumulated values of
$50,000 or more.

The above examples should not be considered representative of past or future
expenses; actual expenses may be more or less than those shown.

*This Fund will be available to the Contracts on July 1, 1995.

6
<PAGE>

Condensed Financial Information

Massachusetts Mutual Variable Annuity Separate Account 3
Accumulation Unit Values (Audited)

<TABLE>
<CAPTION>
*December 31, 1994
<S> <C>
MML Equity Division $1.00
MML Money Market Division $1.00
MML Managed Bond Division $1.01
MML Blend Division $1.00
Oppenheimer Money Division $1.00
Oppenheimer High Income Division $ .97
Oppenheimer Bond Division $ .99
Oppenheimer Capital Appreciation Division $1.00
Oppenheimer Multiple Strategies Division $ .99
Oppenheimer Growth Division $ .98
Oppenheimer Global Securities Division $ .94
Oppenheimer Strategic Bond Division $ .98

</TABLE>

*Public offering commenced on November 14, 1994. All accumulation unit values
were $1.00 on November 14, 1994.

Massachusetts Mutual Variable Annuity Separate Account 3
Number of Accumulation Units Outstanding (Audited)

<TABLE>
<CAPTION>
*December 31, 1994

<S> <C>
MML Equity Division 5,129
MML Money Market Division 5,124
MML Managed Bond Division 5,124
MML Blend Division 5,127
Oppenheimer Money Division 5,098
Oppenheimer High Income Division 5,099
Oppenheimer Bond Division 5,097
Oppenheimer Capital Appreciation Division 5,101
Oppenheimer Multiple Strategies Division 5,100
Oppenheimer Growth Division 5,505
Oppenheimer Global Securities Division 5,502
Oppenheimer Strategic Bond Division 5,000

</TABLE>

*Public offering commenced on November 14, 1994.

Financial Statements

For financial statements and other information concerning the financial
condition of Massachusetts Mutual Variable Annuity Separate Account 3 and of
MassMutual, see the Statement of Additional Information.

7
<PAGE>

Massachusetts Mutual Life Insurance Company,
Oppenheimer Management Corporation,
The Separate Account and The Trusts

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

Massachusetts Mutual Life Insurance Company ("MassMutual") is a mutual life
insurance company chartered in 1851 under the laws of Massachusetts. Its Home
Office is located in Springfield, Massachusetts. MassMutual is licensed to
transact life, accident, and health insurance business in all fifty states of
the United States and certain provinces of Canada. It also has approval to
write variable annuity business in all states. As of December 31, 1994,
MassMutual had total consolidated assets of over $35.7 billion and consolidated
contingency reserves in excess of $1.9 billion.

OPPENHEIMER MANAGEMENT CORPORATION

Oppenheimer Management Corporation ("OMC") is a corporation organized under the
laws of the state of Colorado. It has operated as an investment adviser since
April 30, 1959. It (including a subsidiary) currently advises U.S. investment
companies with assets aggregating over $29 billion as of December 31, 1994, and
having more than 2.4 million shareholder accounts. OMC is owned by Oppenheimer
Acquisition Corp., a holding company owned in part by senior management of OMC,
and ultimately controlled by MassMutual.

THE SEPARATE ACCOUNT

Massachusetts Mutual Variable Annuity Separate Account 3 (the "Separate
Account") was established on January 12, 1994. It is a separate account of
MassMutual registered with the Securities and Exchange Commission as a unit
investment trust. The Separate Account meets the definition of a Separate
Account under Rule 0-1(e) under the Investment Company Act of 1940.

The Separate Account is divided into Divisions. Each Division invests in
corresponding shares of either MML Series Investment Trust ("MML Trust") or
Oppenheimer Variable Account Funds ("Oppenheimer Trust"). The value of both
Accumulation Units and Annuity Units in each Division reflects the investment
results of its underlying Funds. Please note that MassMutual reserves the right
to add, or substitute Divisions, create new separate accounts, in some cases
restrict Funds, and to invest in shares of other series of the Trusts or of
other registered, open-end investment companies. See - Reservation of Rights,
page 18.

Although MassMutual owns the assets of the Separate Account, assets of the
Separate Account equal to the reserves and other Contract liabilities which
depend on the investment performance of the Separate Account and are not
chargeable with liabilities arising out of any other business MassMutual may
conduct. The income and capital gains and losses, realized or unrealized, of
each Division of the Separate Account are credited to or charged against such
Division without regard to the income and capital gains and losses of the other
Divisions or other accounts of MassMutual. This state law provision has been
supported in several recent decisions in states reviewing this issue. All
obligations arising under a Contract, however, are general corporate obligations
of MassMutual.

THE TRUSTS

Each of the Trusts described below has separate assets and liabilities and a
separate net asset value per share. An investor's interest in a Separate Account
is limited to the Fund(s) in which shares are held. Since market risks are
inherent in all securities to varying degrees, assurance cannot be given that
the investment objective of any of the Funds will be met.

Financial Statements for the Oppenheimer Trust and for the MML Trust are
contained in their respective Statements of Additional Information.

Additional information concerning the investment objectives and policies of the
Funds can be found in the current prospectuses for the Trusts which are attached
to this prospectus and should be read carefully before making any decision
concerning allocation of premium payments.

Oppenheimer Trust

Oppenheimer Trust is a diversified, open-end management investment company
organized as a Massachusetts business trust in 1984. It consists of nine
separate Funds - Oppenheimer Money Fund, Oppenheimer Bond Fund and Oppenheimer
Growth Fund, all organized in 1984; Oppenheimer High Income Fund, Oppenheimer
Capital Appreciation Fund, and Oppenheimer Multiple Strategies Fund, all
organized in 1986; Oppenheimer Global Securities Fund, organized in 1990;
Oppenheimer Strategic Bond Fund, organized in 1993; and Oppenheimer Growth and
Income Fund, organized in 1995, which will be available to the Contracts on
July 1, 1995. OMC serves as the investment adviser to Oppenheimer Trust.

MML Trust

MML Trust is a diversified, open-end management investment company having four
series of shares (the "MML Funds"), each of which has different investment
objectives designed to meet different investment needs. These Funds include: MML
Equity Fund organized in 1971; MML Money Market Fund and MML Managed Bond Fund
organized in 1981; and MML Blend Fund organized in 1983. MassMutual (or its
wholly-owned subsidiary Concert Capital Management, Inc.) serves as the
investment adviser to MML Trust.

INVESTMENTS AND OBJECTIVES OF THE AVAILABLE FUNDS:

MML Equity Fund

The assets of the MML Equity Fund are invested primarily in common stocks and
other equity-type securities. The primary investment objective of the MML Equity
Fund is to achieve a superior total rate of return over an extended period

8
<PAGE>

of time from both capital appreciation and current income. A secondary
investment objective is the preservation of capital when business and economic
conditions indicate that investing for defensive purposes is appropriate.

MML Money Market Fund

The assets of the MML Money Market Fund are invested in short-term debt
instruments, including but not limited to commercial paper, certificates of
deposit, bankers' acceptances, and obligations issued, sponsored, or guaranteed
by the United States government or its agencies or instrumentalities. The
investment objectives of the MML Money Market Fund are to achieve high current
income, preservation of capital, and liquidity.

MML Managed Bond Fund

The assets of the MML Managed Bond Fund are invested primarily in publicly
issued, readily marketable, fixed income securities of such maturities as
MassMutual, as investment manager, deems appropriate from time to time in light
of market conditions and prospects. The investment objective of the MML Managed
Bond Fund is to achieve as high a total rate of return on an annual basis as is
considered consistent with the preservation of capital values.

MML Blend Fund

The assets of the MML Blend Fund are invested in a portfolio of common stocks
and other equity-type securities, bonds and other debt securities with
maturities generally exceeding one year, and money market instruments and other
debt securities with maturities generally not exceeding one year. The investment
objective of the MML Blend Fund is to achieve as high a level of total rate of
return over an extended period of time as is considered consistent with prudent
investment risk and the preservation-of-capital values.

Oppenheimer Money Fund

Oppenheimer Money Fund seeks the maximum current income from investments in
"money market" securities consistent with low capital risk and maintenance of
liquidity. Its shares are neither insured nor guaranteed by the U.S. Government,
and there is no assurance that this Fund will be able to maintain a stable net
asset value of $1.00 per share.

Oppenheimer High Income Fund

Oppenheimer High Income Fund seeks a high level of current income from
investment in high yield, high-risk, fixed-income securities, including unrated
securities or securities in the lower rating categories. These securities may be
considered to be speculative. Please consult the Oppenheimer Trust Prospectus
for a more complete discussion of the risks and investment objectives associated
with this Fund.

Oppenheimer Bond Fund

Oppenheimer Bond Fund 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, the Fund seeks
capital growth when consistent with its primary objective.

Oppenheimer Capital Appreciation Fund

Oppenheimer Capital Appreciation Fund seeks to achieve capital appreciation by
investing in "growth-type" companies.

Oppenheimer Growth Fund

Oppenheimer Growth Fund seeks to achieve capital appreciation by investing in
securities of well-known established companies.

Oppenheimer Multiple Strategies Fund

Oppenheimer Multiple Strategies Fund seeks a total investment return (which
includes current income and capital appreciation in the value of its shares)
from investments in common stocks and other equity securities, bonds and other
debt securities, and "money market" securities.

Oppenheimer Global Securities Fund

Oppenheimer Global Securities Fund seeks long-term capital appreciation by
investing a substantial portion of assets in securities of foreign issuers,
"growth-type" companies, cyclical industries and special situations which are
considered to have appreciation possibilities. Current income is not an
objective. This Fund's investments may be considered to be speculative.

Oppenheimer Strategic Bond Fund

Oppenheimer Strategic Bond Fund 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 Fund invests principally
in: (i) foreign government and corporate debt securities; (ii) U.S. Government
securities; and (iii) lower-rated high yield, high-risk debt securities. This
Fund's investments may be considered to be speculative. Please consult the
Oppenheimer Trust Prospectus for a more complete discussion of the risks and
investment objectives associated with this Fund.

All dividends and capital gains distributions paid by the Funds' shares are
automatically reinvested in additional shares at their net asset value
determined on the distribution date.

Oppenheimer Growth and Income Fund

Oppenheimer Growth and Income Fund seeks a high total return (which includes
growth in the value of its shares as well as current income) from equity and
debt securities. From time to time this Fund may focus on small to medium
capitalization common stocks, bonds and convertible securities.

This Fund will be available to the Contracts on July 1, 1995.

POSSIBLE CONFLICTS

MassMutual

Assets of variable life insurance separate accounts are also invested in the MML
Trust. It is possible that under this arrangement conflicts could arise between
the interests of Contract Owners and owners of variable life insurance policies.
The Trustees of the MML Trust will follow monitoring procedures to determine
whether material conflicts have arisen. If an irreconcilable material conflict
exists, the

9
<PAGE>

assets of the variable life insurance separate accounts may be invested solely
in shares of mutual funds which offer their shares exclusively to variable life
insurance separate accounts, unless the owners of the variable life insurance
policies and the variable annuity contracts vote otherwise. For a discussion of
other separate accounts investing in the MML Trust and possible conflicts
arising from such an arrangement, see the MassMutual Statement of Additional
Information.

Oppenheimer

The Oppenheimer Trust was established for use as an investment vehicle by
variable contract separate accounts such as the Separate Account. Accordingly,
it is possible that a material irreconcilable conflict may develop between the
interests of Contract Owners and other separate accounts investing in the
Oppenheimer Trust. The Board of Trustees of the Oppenheimer Trust (the "Board")
will monitor the Oppenheimer Funds for the existence of any such conflicts. If
it is determined that a conflict exists, the Board will notify MassMutual, and
appropriate action will be taken to eliminate such irreconcilable conflict. Such
steps may include: (1) withdrawing the assets allocable to some or all of the
separate accounts from the particular Oppenheimer Fund and reinvesting such
assets in a different investment medium, including (but not limited to) another
Oppenheimer Fund; (2) submitting the question of whether such segregation should
be implemented to a vote of all affected Contract Owners; and (3) establishing a
new registered management investment company or managed separate account.

An Explanation of the Contract

The principal provisions of the Contract are described below. If You desire
additional information, You should refer to the Contract and to the Statement of
Additional Information. For a complete understanding of Your rights, You should
also review any applicable employee benefit plan documents.

General-Uses of the Contract

The Contract described herein is an individual variable annuity contract issued
by MassMutual. Purchase payments are flexible. The Contract may be purchased by
individuals or entities for use in arrangements not receiving favorable tax
treatment under the Internal Revenue Code.

The Contract is also available for use in the following retirement plans which
qualify (with necessary endorsement as appropriate) for special federal tax
treatment under the Internal Revenue Code of 1986, as amended (the "Code"): (1)
pension and profit-sharing plans qualified under Section 401(a) or 403(a) of the
Code ("Qualified Plans"), which may also constitute participant-directed
individual account plans under Section 404(c) of ERISA; (2) annuity purchase
plans adopted by public school systems and certain tax-exempt organizations
pursuant to Section 403(b) of the Code ("Tax Sheltered Annuities" or "TSAs");
and (3) Individual Retirement Annuities established in accordance with Section
408 of the Code ("IRAs"), including those established by employer contributions
under a Simplified Employee Pension Plan arrangement. At MassMutual's request,
the Internal Revenue Service has issued to MassMutual favorable opinion letters
approving specific versions of the Contract. IRA Contract Owners with these
Contracts will receive a copy of the favorable opinion letter. The Internal
Revenue Service approval is a determination only as to the form of the Contract
for use as an IRA and does not represent a determination of the merits of the
Contract as an IRA. Under tax-qualified retirement plans except TSAs and IRAs,
participants may not be the Contract Owners and, therefore, may have no Contract
Owners' rights.

Unless restricted by endorsement or the terms of the Contract, the Contract
Owner has all rights in the Contract prior to the Maturity Date, including the
right to make a partial or full redemption of the Contract, to designate and
change the beneficiaries who will receive the proceeds at the death of the
Annuitant or Contract Owner before the Maturity Date, to transfer amounts among
the Divisions of the Separate Account (and to and from the Fixed Account, if
available) and to designate a payment option to begin on the Maturity Date.
Prior to issue, a Contract will be endorsed to preclude the Contract Owner from
assigning the Contract as collateral. Although both Owner and the Joint Owner
must authorize any change made to the Contract, either the Owner or Joint Owner
may exercise certain Contract rights with the consent, satisfactory to us, of
the other.

The Contract Owner may be the Annuitant or another individual or entity.

The Accumulation (Pay-In) Period

HOW CONTRACTS MAY BE PURCHASED

The minimum initial purchase payment is $2,000. After making Your initial
payment, You may make as many or as few subsequent purchase payments of at least
$100 as You desire. The Contract permits MassMutual to establish a maximum on
total purchase payments that may be made under the Contract. This maximum will
not be less than $500,000.

INITIAL PURCHASE

You may place Your initial purchase payment, together with a completed
Application, with Your registered representative.

SUBSEQUENT PURCHASES

You may make subsequent purchase payments by mailing Your check, clearly
indicating Your name and Contract Number, to the Service Center.

WIRE TRANSFER

You may make purchase payments by wire transfer. For instructions concerning how
to make a wire transfer, please contact the Service Center.

ALLOCATION OF PURCHASE PAYMENTS

You may direct that Your purchase payments (after deducting any applicable
premium taxes) be allocated among the Divisions of the Separate Account.
Additionally, where available, and subject to minimum allocations of $1,000,

10
<PAGE>

purchase payments may be allocated to Segments of the Fixed Account. Initial
purchase payment allocations to either a Division of the Separate Account or to
a Segment will be effective as of the Valuation Date within two business days of
the date an initial purchase payment is received in good order at the Service
Center provided that Your Contract application is complete. Purchase payments
allocated to a Division will be applied to purchase Accumulation Units in that
Division at its Accumulation Unit value on the Valuation Date. These
Accumulation Units will be used in determining the value of amounts held in a
Division of a Separate Account credited to a Contract on or prior to the
Maturity Date. The value of the Accumulation Units in each Division will vary
with and will reflect the investment performance of that Division (which in turn
will reflect the investment performance and expenses of the Fund in which the
assets of that Division are invested), less any applicable taxes and the
applicable Asset Charge. A more detailed description of how the value of an
Accumulation Unit is calculated is contained in the Statement of Additional
Information.

The value of the Accumulation Units purchased is determined as of the Valuation
Date within two days after MassMutual receives Your payment in good order by
mail at its Service Center, provided that Your Contract application is complete.
If an initial purchase payment is not applied within five business days after
receipt (due to incomplete or ambiguous application information, for example),
the payment amount will be refunded unless specific consent to retain the
payment for a longer period is obtained from the prospective purchaser.

GENERAL TRANSFER RULES

Prior to 30 days before the Maturity Date, the Contract Owner may make transfers
among Divisions of the Separate Account (and if available among Segments of the
Fixed Account) without the imposition of a transfer fee. If more than four
transfers have been made in a Contract Year, MassMutual reserves the right to
deduct a transfer fee of $20. Currently 14 transfers may be made per Contract
Year without charge. (Transfers made by Dollar Cost Averaging do not count
against the 14 transfer limit.)

If a Variable Monthly Income is in effect, transfers among the Divisions of the
Separate Account are limited to one transfer every three months.

All transfers, whether occurring before or after the Maturity Date are subject
to the following:

(a.) The minimum amount which may be transferred is the lesser of: (1)
$500; or (2) the Accumulated Value in the Division or the Accumulated
Amount in a Segment.

(b.) Transfers will be effected as of the Valuation Date which is on or
next follows the date Your request is received in good order at the
Service Center. Transfer requests may be made by telephone (during the
Accumulation Period), facsimile, or by written direction. Please note
that no transfers may be made within thirty days before Maturity Date.

(c.) Transfer requests must clearly specify the amount to be transferred
from each Division or Segment (if the Fixed Account is available) and
the Division or Segment to which amounts are to be transferred. Unless
otherwise specified, transfers from a Segment of the Fixed Account
will be taken on a first-in, first-out basis. Transfer requests made
during the Annuity pay-out period must specify the percentage to be
transferred among the Divisions of the Separate Account.

(d.) Transfers to a Segment of the Fixed Account may not be less than
$1,000. If the Segment elected is not available, the transfer will not
be processed.

(e.) Transfers made from the Fixed Account are subject to a Market Value
Adjustment ("MVA") unless the transfer is being taken from an
Accumulated Amount within thirty days prior to its Expiration Date.
The MVA will be applied as of the effective date of the transfer.

(f.) Transfer fees will be deducted from the Division or Segment from which
the transfer has been made, unless the balance remaining in such
Division or Segment is insufficient to cover the applicable transfer
fee. If this is the case, the transfer fee will be deducted from the
amount being transferred.

(g.) We reserve the right to limit the number and frequency of transfers
made during a Contract Year.

(h.) After a payout option has been invoked, transfers may not be made
between a Fixed Income and a Variable Monthly Income option.

TELEPHONE TRANSFERS

Contract Owners, subject to the limitations described below, may make transfers
among either Divisions or the Fixed Account (if available) during the
Accumulation Period by telephoning a transfer request to the Service Center at
its toll free telephone number. This feature will be made automatically
available to Contract Owners unless MassMutual receives different instructions.
Through use of this toll free number, Contract Owners may also obtain
information concerning the Contract including Accumulated Values. This service
is not available to Contracts owned by Custodians or Trustees of Qualified
Plans, or Contracts held by Guardians. Normal transfer provisions apply.

MassMutual will not be liable for complying with any telephone instructions it
reasonably believes to be genuine, nor for any loss, damage, cost or expense in
acting on telephone instructions. MassMutual will employ reasonable procedures
to ensure the legitimacy of telephone transfer requests. Such procedures may
include, among others, requiring forms of personal identification prior to
acting upon telephone instructions, providing written confirmation of such
transactions to the Contract, and/or tape recording of telephone

11
<PAGE>

transfer request instructions received from a Contract Owner. If we fail to
follow such procedures, we may be liable for losses due to unauthorized or
fraudulent instructions.

AUTOMATIC TRANSFERS

MassMutual offers You two automatic transfer options described below. They are
available any time before the Maturity Date. The automatic transfer options are
not available for use with the Fixed Account. Only one of the automatic transfer
options may be in effect at a time. Both options are subject to the transfer
rules discussed above. Although no charge is currently imposed for this service,
MassMutual reserves the right to impose a fee in the future.

Dollar Cost Averaging

Dollar Cost Averaging is a feature whereby a Contract amount is periodically
transferred from one Division of the Separate Account to one or more other
designated Divisions of the Separate Account. Once the feature is elected, these
transfers occur automatically at the frequency elected - monthly, quarterly,
semiannually, or annually.

Dollar Cost Averaging provides a mechanism designed to minimize the negative
effects of short-term market fluctuations. Over a period of time, an investor
may, at least theoretically, be able to purchase more units than he or she would
have been able to purchase had all monies been invested on a single Valuation
Date when the value of the units was high.

Dollar Cost Averaging may be available at any time, provided that the Division
from which the automatic transfers will be made has a value of at least $6,000.
The minimum amount any Division may receive is $100. All Divisions are available
for use with this feature.

Asset Reallocation

You may elect the Asset Reallocation option as a means of maintaining a constant
allocation of Accumulated Value among the Divisions in which You have allocated
Your monies. If You elect this option, we will make automatic transfers among
selected Divisions on a quarterly, semiannual, or annual basis as You instruct
us. A minimum Accumulated Value of $50,000 is required in order to elect this
option. Allocations will be made on a basis consistent with the allocation
selected for new purchase payments.

RIGHT TO RETURN CONTRACTS

You may return Your Contract to MassMutual (at its Service Center) at any time
within 10 days after the Contract has been delivered to you (unless a longer
period is required by applicable state law). If You exercise this right and Your
Contract is not an IRA, then You will receive the Accumulated Value of the
Contract plus any premium tax deductions, except where state law requires us to
return the amount of purchase payment(s) made less the net amount of partial
redemptions. If You exercise this right and Your Contract is an IRA, You will
not receive less than the amount of purchase payment(s) made less the net amount
of partial redemptions. For this purpose, the Accumulated Value of the Contract
will be determined as of the Valuation Time on the date on which the Contract is
received at MassMutual's Service Center or at the next Valuation Time after
receipt if the Contract is received on other than a Valuation Date.

THE DEATH BENEFIT

A death benefit is paid upon the death of either the Contract Owner (for jointly
owned Contracts, upon the first death of the two Owners) or Annuitant. If a
Contract Owner and Annuitant are the same, the Death Benefit paid will be the
Annuitant Death Benefit.

Contract Owner Death Benefit

If the Contract Owner, who is not the Annuitant, dies prior to the Maturity
Date, the named beneficiary will receive the Cash Redemption Value of the
Contract.

Annuitant Death Benefit

Historically, variable annuities have guaranteed a return of premiums less
withdrawals as a minimum standard death benefit. This Contract offers one of two
enhancements, depending on Your contract state.

If the Annuitant dies before the Maturity Date, the beneficiary named in the
Contract will receive the greater of: (a) the total of all purchase payments
made to the Contract less all partial redemptions accumulated at 5% to
Annuitant's 75th birthday and 0% thereafter, but not more than two times the
difference between all purchase payments and all redemptions; or (b) the
Accumulated Value of the Contract less any applicable Administrative Charge (and
any Sales Charge, if the Annuitant's age on the Contract Date exceeds 75).

In certain states, the death benefit described above may not be available for
Annuitant's whose issue age is less than 76. In those instances, the death
benefit during the first three years will be equal to the greater of: (a.) the
total of all purchase payments made to the Contract less all partial
redemptions; or (b.) the Accumulated Value of the Contract less any applicable
Administrative Charge. During any subsequent three Contract Year period, the
death benefit will be the greater of: (a.) the death benefit on the last day of
the previous three Contract Year period plus any purchase payments made less all
partial redemptions since then; or (b.) the Accumulated Value of the Contract
less any applicable Administrative Charge.

In any case, the amount of Death Benefit received will be reduced by the amount
of any applicable premium tax.

The Death Benefit is determined as of the Valuation Date which is on or next
follows the date on which due proof of death is received at the Service Center.
The death benefit will be paid within seven days of receipt of due proof of
death and all other requirements. With MassMutual's consent, the death benefit
may be applied under one or more of the payment options provided for in the
Contract (see - Payment Options, page 13). If a Payment Option is not selected,
the death benefit will be paid in one sum.

A beneficiary who is the surviving spouse of the Contract Owner of a Contract
issued as an IRA may elect to treat the Contract as if he or she were the
Contract Owner.

REDEMPTION PRIVILEGES

Subject to the special rules regarding TSAs, discussed below, You may redeem all
or part of the Accumulated Value of a Contract on or prior to its Maturity Date
if the Annuitant is alive. The amount of any partial redemption, however, must
be at least $100, and requests for a partial redemption which

12
<PAGE>

would reduce the Accumulated Value of the Contract to less than $1,000 plus
outstanding premium taxes will be treated as a request for a full redemption.
You may incur a Sales Charge upon redemption. (See - CHARGES AND DEDUCTIONS,
page 15.) Any partial redemption will be paid in one sum. If the entire Contract
is redeemed, the cash redemption value may be paid in one sum or applied under
one or more of the payment options. You must designate the Division(s) (or the
Segment of the Fixed Account, if available) from which any partial redemption is
to be made. Unless otherwise specified, partial redemptions from a Segment of
the Fixed Account will be taken on a first-in, first-out basis. A partial
redemption from a Division will reduce the number of Accumulation Units in that
Division by an amount equal to the sum of the redemption payment plus any Sales
Charge, divided by the Accumulation Unit Value.

The Accumulation Unit value on redemption is determined as of the Valuation Time
on the date on which the written request for redemption is received in good
order at the Service Center or, if that date is not a Valuation Date, on the
next Valuation Date after receipt.

Redemption payments from a Separate Account will be made within seven days, or a
shorter period if required by law, after written request in good order is
received at MassMutual's Service Center. The right of redemption may be
suspended or payments postponed whenever: (1) the New York Stock Exchange is
closed, except for holidays and weekends; (2) the Securities and Exchange
Commission has determined that trading on the New York Stock Exchange is
restricted; (3) the Securities and Exchange Commission permits suspension or
postponement and so orders; or (4) an emergency exists, as defined by the
Securities and Exchange Commission, so that valuation of the assets of each
Separate Account or disposal of securities held by it is not reasonably
practicable.

Redemptions of amounts from the Fixed Account may be delayed for up to six
months from the date the request is received by us at our Service Center. If
payment is delayed 30 days or more, we will add interest at an annual rate of
not less than 3%.

Amounts withdrawn may be includable in the gross income of the Contract Owner in
the year in which the withdrawal occurs. Additionally, a 10% tax penalty may be
applicable (as described more fully in the Penalty Taxes section on page 19).

Redemption payments may be subject to federal income tax and elective and/or
mandatory tax withholding. (See - FEDERAL TAX STATUS, page 18.)

AUTOMATIC PARTIAL REDEMPTIONS

An Automatic Partial Redemption program permitting Contract Owners to elect to
receive automatic partial redemptions on a periodic basis is available on a
limited basis. All applicable limitations concerning redemptions apply to this
program. Additionally, automatic partial redemptions may be subject to penalty
taxes.

This program is available only during the Accumulation Period of the Contract.

Although no charge is imposed for processing automatic partial redemptions
currently, MassMutual reserves the right to impose a fee for this program in the
future.

TAX SHELTERED ANNUITY REDEMPTION RESTRICTIONS

The redemption of Internal Revenue Code Section 403(b) annuities (Tax Sheltered
Annuities, "TSAs") may be restricted. Specifically, salary reduction
contributions after 1988 and post-1988 earnings on all salary reduction
contributions may not be distributed to the Annuitant until age 59 1/2,
death, disability, or separation from service with the TSA employer. Such salary
reduction contributions may be withdrawn, however, for "hardship".

The Annuity (Pay-Out) Period

ANNUITY BENEFITS

You may elect to change the Maturity Date of Your Contract. The Maturity Date
may not be later than the Contract anniversary nearest the Annuitant's 90th
birthday (or at an earlier date if required by applicable state law). In
general, in order to avoid adverse tax consequences, distributions, either by a
partial redemption or by maturing the Contract, from a Contract issued as an IRA
or as a TSA or under a qualified plan should begin for the calendar year in
which the Annuitant reaches age 70 1/2 and should be made each year
thereafter in an amount no less than the Accumulated Value of the Contract at
the end of the previous year divided by the applicable life expectancy (see
Taxation of Qualified Plans, TSAs and IRAs, page 18, for additional
information). You may elect to defer the Maturity Date to any permissible date
after the previously specified Maturity Date, provided that a written notice
within 90 days before the Maturity Date then in effect is received by MassMutual
at the Service Center. You also may elect to advance the Maturity Date to a date
prior to the specified Maturity Date or prior to any new Maturity Date You may
have selected, provided that written notice is received at MassMutual's Service
Center at least 30 days before the Maturity Date elected. (For additional rules
regarding TSAs, see - Tax Sheltered Annuity Redemption Restrictions, page 13.)

When Your Contract approaches its Maturity Date You may choose to receive either
Fixed Income payments, (referred to as the "Fixed Income Option" in Your
Contract), Variable Monthly Income payments (referred to as the "Variable Income
Option" in Your Contract), or a combination of the two. You also may elect to
receive the Maturity Value in one sum. If You have made no election within
thirty days prior to the Maturity Date, the Contract will automatically pay a
Variable Monthly Income under a life income option with payments guaranteed for
10 years.

PAYMENT OPTIONS

You may elect either a Fixed or a Variable Monthly Income payment option by
submitting a written request in a form satisfactory to MassMutual. MassMutual
must receive this request at the Service Center 30 days prior to the Maturity
Date of the Contract. For a description of payment options from which You (or in
some cases a Beneficiary) may choose, You should refer to the Contracts.
Generally, once selected, You may not change Your payment option.

13
<PAGE>

Income payments may be received under several different payment options. If the
value of a Contract applied to any payment option is less than $2,000 or
produces an initial Income payment of less than $20, MassMutual may discharge
its obligation by paying the value applied, less any applicable Sales Charge, in
one sum to the person entitled to receive the first annuity payment.

Upon Your request, MassMutual will endorse a Contract to eliminate or restrict
any payment option in order that the plan pursuant to which the Contract is
issued remains qualified under the Internal Revenue Code, provided such
endorsement is not otherwise contrary to law. MassMutual may make available
payment options in addition to those set forth in the Contract.

You may transfer amounts among the Divisions if the Variable Monthly Income
option is selected subject to transfer restrictions described in General
Transfer Rules, page 11.

Fixed Income Option

If You select a Fixed Income, each payment will be for a fixed dollar amount and
will not vary with or reflect the investment performance of the Separate
Account. For further information regarding the Fixed Income and the payment
options thereunder, You should refer to Your Contract.

Variable Monthly Income Option

If You select a Variable Monthly Income, amounts held in the Fixed Account that
are to be used to provide Variable Monthly Income payments will be credited to
the MML Money Market Division of the Separate Account unless the Contract Owner
instructs MassMutual otherwise. Each annuity payment will be based upon the
value of the Annuity Units credited to Your Contract.

You may transfer among the Divisions no more frequently than once every 3 months
under this option. (See - General Transfer Rules, page 11 for transfer
guidelines.)

The number of Annuity Units in each Division to be credited to Your Contract is
based on the value of the Accumulation Units in that Division and the applicable
Purchase Rate. The Purchase Rate will differ according to the payment option You
have elected and takes into account the age, year of birth and sex of the
Annuitant. The value of the Annuity Units will vary with, and reflect the
investment performance of, each Division to which Annuity Units are credited
based on an Assumed Investment Rate of 4% per year. This Rate is a fulcrum rate
around which Variable Monthly Income payments will vary. An actual net rate of
return for a Division for the month greater than the Assumed Investment Rate
will increase Variable Monthly Income payments attributable to that Division. An
actual net rate of return for a Division for the month less than the Assumed
Investment Rate will decrease Variable Monthly Income payments attributable to
that Division.

For a more detailed description of how the value of an Annuity Unit and the
amount of Variable Monthly Income payments are calculated, see the Statement of
Additional Information.

Fixed-Time Payment Option

If You elect this option, Variable Monthly Income payments will be made for any
period selected, up to 30 years. If provided in the payment option election, You
may withdraw the full amount, subject to any applicable Sales Charge of the then
present value of the remaining unpaid Variable Monthly Income payments. (See -
CHARGES AND DEDUCTIONS, page 15.) The present value will be calculated using an
assumed investment rate of 4% per year unless a lower rate is required by state
law. A mortality risk charge continues to be assessed against Contract values
under this option. (See - CHARGES AND DEDUCTIONS, page 15.)

Life Income Payments

If You elect this option, Variable Monthly Income payments will be made during
the lifetime of the Annuitant, either: (1) without any guaranteed number of
payments; or (2) with a guaranteed number of payments for 5 or 10 years. Of
these two alternatives, alternative (1) offers the maximum level of monthly
payments since there is no guarantee of a higher number of payments and no
provision for payments to the beneficiary upon the death of the Annuitant. Since
there is no such guarantee, however, it would be possible to receive only one
annuity payment if the Annuitant died prior to the due date of the second
annuity payment, two if he or she died before the third annuity payment date,
etc.

Joint-and-Survivor Life Income Payments

If You elect this option, Variable Monthly Income payments will be made during
the joint lifetime of the two Annuitants and thereafter during the lifetime of
the survivor, either: (1) without a guaranteed number of payments; or (2) with a
guaranteed number of payments for 10 years from the date the payments begin.

Joint-and-Survivor Life Income Payments (Two-Thirds to the Survivor)

If You elect this option, Variable Monthly Income payments will be made during
the joint lifetime of the two annuitants, and thereafter at two-thirds the prior
rate during the lifetime of the survivor, in both cases without a guaranteed
number of payments.

Payments After Death of Annuitant

Generally, if a payment option with a guaranteed number of payments is elected,
and the Annuitant(s) should die before the guaranteed number of payments have
been completed, MassMutual will continue making the guaranteed payments to the
designated beneficiary.

Special Limitations

Where the Contract is issued pursuant to a TSA, or as an IRA, there are special
limitations on the types of payment options which You may elect.

Charges and Deductions

The Separate Account does not bear any expenses other than the charges stated
below.

1. ASSET CHARGE

14
<PAGE>

MassMutual receives a daily-computed charge against the assets of the
Separate Account (the "Asset Charge") for: (1) assuming the risks that (a)
its estimates of longevity will turn out to be inadequate, and (b) the
Administrative Charge may be insufficient to cover the administrative
expenses associated with the Contract; (2) other administrative expenses;
and (3) the Death Benefit. The Asset Charge is currently equal to 1.40% on
an annual basis of the net asset value of the Separate Account assets
attributable to the Contracts.

The mortality and expense risk part of this charge will be computed daily at
an annual rate, currently equal to 1.15% of the net asset value of the
Separate Account assets attributable to the Contracts (0.30% is for assuming
mortality risks and 0.85% is for assuming expense risks). MassMutual
reserves the right to raise this rate up to 1.25%.

The administrative expense part of this Charge will be computed daily at an
annual rate of 0.15%.

The third component of the Asset Charge is 0.10% assessed to reimburse
MassMutual for the cost of providing the enhanced Death Benefit under the
Contract. (For more information concerning the enhanced Death Benefit, see -
Annuitant Death Benefit, page 12.)

2. ADMINISTRATIVE CHARGE

In addition to that portion of the Asset Charge assigned to administrative
expenses, each year on the Contract anniversary date a charge is imposed
against each Contract to reimburse MassMutual for administrative expenses
incurred by MassMutual during the previous year relating to the issuance and
maintenance of the Contract (the "Administrative Charge"). The
Administrative Charge is also imposed on death, maturity, or full
redemption. The Administrative Charge is currently $30 per year. MassMutual
reserves the right to increase the Administrative Charge up to $50 per
year. This charge is not designed to produce a profit and is subject to
statutory limitations.

If a Contract's Accumulated Value is $50,000 or more when the Administrative
Charge would be deducted, the Administrative Charge will be waived. This
charge will be deducted on a pro rata basis from each Division of the
Separate Account and then pro-rata from Segments of the Fixed Account.
Deductions from Segments will be made on a first-in, first-out basis.

3. CONTINGENT DEFERRED SALES CHARGE

Sales charges are not deducted at the time a purchase payment is made.
Instead, to reimburse MassMutual for sales expenses including commissions,
sales literature and related costs, a Contingent Deferred Sales Charge (the
"Sales Charge") may be imposed upon a full or partial redemption, upon
maturity, and upon certain death benefits.

Sales charges are based on the purchase payments made and the time that has
passed since we received them. The part of the sales charge related to each
purchase payment is a level percentage of that payment during each year
since it was paid. For each successive year, the percentage decreases until
it becomes zero. Sales charge percentages for each purchase payment are
shown in the table below.

Sales Charge Percentages

Example: You make a $1,000 purchase payment on May 10, 1991. The sales charge
related to this purchase payment is:

$70 from May 10, 1991, through May 9, 1992;
$60 from May 10, 1992, through May 9, 1993;
:
$10 from May 10, 1997, through May 9, 1998;
and $0 thereafter.

Subject to the limits stated below, the Sales Charge at any time is based
solely on the purchase payments assumed to be redeemed at that time. In
determining the Sales Charge, we assume that purchase payments are redeemed
in the order in which they are paid. Any amounts in excess of purchase
payments are assumed to be redeemed last.

15
<PAGE>

Each Contract Year, You may redeem the following amounts without incurring a
Sales Charge:

(1) all unredeemed purchase payments that are at least seven years old; and

(2) 10% of the purchase payments that are less than seven years old.

No Sales Charge will be imposed upon a death benefit payable upon the
Annuitant's death if the Contract was issued to an Annuitant less than 76
years old. Also a Sales Charge will not be assessed upon a full redemption
or maturity of the Contract if all proceeds of the Contract are:

(1) applied under a variable lifetime payment option or variable fixed-time
payment option (with payment for 10 years or more) in the Contract; or

(2) applied under a fixed or combination fixed-variable lifetime payment
option or fixed-time payment option (with payments for 10 years or more)
in the Contract and the Annuitant is age 59 1/2 or older.

The Sales Charge may also be eliminated when an agent of MassMutual sells a
Contract to specified members of his or her family.

To the extent sales expenses are not covered by the sales charge, they will
be recovered from MassMutual's surplus, which may include proceeds derived
from the asset charge described above.

Any available waiver of a Sales Charge will be applied on a non-
discriminatory basis.

4. PREMIUM TAXES

Several states (and certain municipalities) levy premium taxes on annuities.
Currently, no premium tax will be deducted when purchase payments are
received; any applicable premium tax will be deducted at the time of
redemption, death, maturity or annuitization. MassMutual reserves the right
to deduct premium taxes at the time when a purchase payment is made. Premium
tax rates on annuities currently range up to 3.5%.

Fund Expenses

The Accumulated Value of the Separate Account reflects the value of shares held
in the Oppenheimer Trust and the MML Trust. Each Trust charges certain
investment advisory fees and other expenses against the value of each Fund. For
a complete description of the expenses and deductions for each Trust, please
review the accompanying prospectuses for each Trust.

The Fixed Account and the Market Value Adjustment Feature

The following summarizes certain features of the Fixed Account which is
available in certain states during the Accumulation Period. Please review the
Prospectus for the Fixed Account before making any allocations to it. The Fixed
Account offers different Segments which provide the option of earning interest
at one or more Guaranteed Rates on all or a portion of Your Accumulated Value.
As of the date of this prospectus, we offer Segments with Guarantee Periods of
3, 5, 7, and 10 years.

You may allocate purchase payments or transfer all or a portion of Your
Accumulated Value to one or more Segments of the Fixed Account. Amounts credited
to a Segment of the Fixed Account will earn interest at the Guaranteed Rate
applicable on the date the amounts are credited. The applicable Guarantee Rate
does not change during the Guarantee Period. You may have multiple amounts
credited to a single Segment or multiple Segments. We may change the Segments
available for allocations of purchase payments, transfers and renewals at any
time. The Guaranteed Rate for any Segment may never be less than 3%. Please note
that the if You allocate sums to the Fixed Account, You will bear the investment
risk that such amounts will increase or decrease in value.

The end of a Guarantee Period for a specific amount credited to a Segment is
called its Expiration Date. At that time, the Guarantee Period normally "renews"
and we begin crediting interest for a new Guarantee Period lasting the same
amount of time as the one just ended. The Accumulated Amount then earns interest
at the new Guaranteed Rate applicable at the time of renewal. You may also
choose different Segments from among those we are then offering, or You may
transfer all or a portion of the Accumulated Amount to the Separate Account.

To the extent permitted by law, we reserve the right at any time to offer
Segments with Guarantee Periods that differ from those available when Your
Contract was issued. We also reserve the right, at any time, to stop accepting
new amounts credited, transferred, or renewed for a particular Segment.

Between 75 and 45 days before the end of the Expiration Date for an Accumulation
Amount, we will inform You of the Guaranteed Rates being offered and Segments
available as of the date of such notice. The Guaranteed Rates on the date of a
renewal may be more or less than the rates quoted in such notice.

If Your Accumulated Amount's Segment is no longer available for new amounts
credited, or You choose a different Segment that is no longer available, we will
try to reach You so that You may make another choice.

If a choice is not made at this point, the Segment with the next shortest
Guarantee Period available will be used and if not available, the Segment with
the next longest Period will be used.

Market Value Adjustment

Any withdrawal of Your Accumulated Amount will be subject to a Market Value
Adjustment ("MVA") unless the effective date of the withdrawal is within 30 days
prior to the end of a Guarantee Period. For this purpose, redemptions,
transfers, death benefits based on a Contract Owner's death, and maturity
amounts are treated as withdrawals. The MVA is an adjustment that will be
applied to the amount being withdrawn which is subject to the MVA, after the
deduction of any applicable Administrative Charge and before the deduction of
any applicable Sales Charge. The MVA can be positive or negative. The amount
being withdrawn after application of the MVA can therefore be greater than or
less than the amount withdrawn before application of the MVA.

The MVA will reflect the relationship between the Current Rate (as defined
below) for the Accumulated Amount being

16
<PAGE>

withdrawn and the Guaranteed Rate. It also reflects the time remaining in the
applicable Guarantee Period. Generally, if the Guaranteed Rate is lower than the
applicable Current Rate, then the application of the MVA will result in a lower
payment upon withdrawal. Similarly, if the Guaranteed Rate is higher than the
applicable Current Rate, the application of the MVA will result in a higher
payment upon withdrawal.

The Market Value Adjustment which is applied to the amount being withdrawn is
determined by using the following formula:

[(1 + i)/(to the n/365 power)/]
MVA = Amount x [(-------) - 1 ]
[(1 + j) ]

where,

Amount is the amount being withdrawn from a given accumulated amount less any
applicable administrative charges.

i, is the Guaranteed Rate being credited to the Accumulated Amount subject to
the MVA.

j, the "Current Rate," is the Guaranteed Rate, available as of the effective
date of the application of the MVA, for current allocations to the Segment with
a Guarantee Period equal to the time remaining to the Expiration Date for the
amount being withdrawn rounded to the next higher number of complete years.

n, is the number of days remaining in the Guarantee Period of the amount
subject to the MVA.

In the determination of "j," if MassMutual currently does not offer the
applicable Segment, we will determine "j" above using a method as described in
the Statement of Additional Information.

Distribution

MML Investors Services, Inc., 1 Financial Plaza, 1350 Main Street, Springfield,
MA 01103-1686 ("MMLISI"), a wholly-owned subsidiary of MassMutual, acts as the
principal underwriter of the Contracts. MMLISI is registered as a broker-dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The maximum commission a broker-dealer
will receive is 6.25%.

Contracts are sold by registered representatives of MMLISI who are also licensed
to sell MassMutual insurance products under state insurance law. Contracts are
offered in all states where MassMutual has received authority to write variable
annuity business. Contracts may also be offered through broker-dealers having a
selling agreement with MMLISI.

Additionally, Contracts are offered by independent broker-dealers through the
distribution network of Oppenheimer Funds Distributor, Inc. ("OFDI"), a
subsidiary of OMC. OFDI and MMLISI have entered into an agreement pursuant to
which OFDI has agreed to promote sales of the product through wholesale
distribution arrangements with such broker-dealers. Registered representatives
of the particular broker-dealer, who are also properly licensed to sell
MassMutual products may make such sales.

Miscellaneous Provisions

TERMINATION OF LIABILITY

MassMutual's liability under a Contract terminates on the death of the Contract
Owner or Annuitant(s) and on the completion of any guaranteed payments. There is
no liability for any proportionate monthly annuity payment from the date of the
last payment to the date of death.

ADJUSTMENT OF UNITS AND UNIT VALUES

MassMutual reserves the right in its sole discretion to split or consolidate the
number of Accumulation Units or Annuity Units for any Division of the Separate
Account and correspondingly decrease or increase the Accumulation or Annuity
Unit values for any such Division whenever it deems such action to be desirable.
Any such adjustment will have no adverse effect on rights under the Contracts.

PERIODIC STATEMENTS

While the Contract is in force prior to the Maturity Date and before the death
of the Annuitant, MassMutual will furnish to the Contract Owner at least
semiannually a status report showing the number of Accumulation Units credited
to each Division of the Separate Account, the corresponding Accumulation Unit
values, the value of amounts in the Fixed Account (if available) and the
Accumulated Value of the Contract.

CONTRACT OWNER'S VOTING RIGHTS

As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Contract Owner during the lifetime
of the Annuitant, or the beneficiary after the Annuitant's death, will be
entitled to give instructions as to how the shares of the Funds held in the
Separate Account (or other securities held in lieu of such shares) deemed
attributable to the Contract should be voted at meetings of shareholders of the
Funds or the Trusts. Those persons entitled to give voting instructions will be
determined as of the record date for the meeting.

The number of Fund shares held in the Separate Account deemed attributable to a
Contract prior to its Maturity Date and during the lifetime of the Annuitant
will be determined on the basis of the value of Accumulation Units credited to
the Contract in the corresponding Division of the Separate Account as of the
record date. After the Maturity Date or after the death of the Annuitant, the
number of Fund shares deemed attributable to the Contract will be based on the
liability for future Variable Monthly Annuity payments under the Contract as of
the record date and thus the voting rights will decrease as payments are made.

Contract Owners or beneficiaries will receive proxy material and a form with
which voting instructions may be given. Fund shares held by the Separate Account
as to which no effective instructions have been received or which are
attributable to assets transferred from MassMutual's general account will be
voted for or against any proposition in the same proportion as the shares as to
which instructions have been received.

17
<PAGE>

In situations where the Annuitant is not the Contract Owner, the Annuitant will
have the right to instruct the Contract Owner with respect to the votes
attributable to any vested interest the Contract Owner has in the Contract.
MassMutual's obligation in this instance will be to make available to the
Contract Owner copies of the proxy material for distribution to the Annuitant.
Votes representing interests as to which the Contract Owner is not instructed
may, in turn, be voted by the Contract Owner in his discretion.

RESERVATION OF RIGHTS

MassMutual may, at any time, make any change in a Contract to the extent that
such change is required in order to make the Contract conform with any law or
regulation issued by any governmental agency to which MassMutual is subject. If
shares of any Fund should not be available, or, if in the judgment of
MassMutual, investment in shares of a Fund is no longer appropriate in view of
the purposes of a Division of the Separate Account, shares of other series of
the Trusts or of other registered, open-end investment companies may be
substituted for such Fund shares. Payments received after a date specified by
MassMutual may be applied to the purchase of shares of another Trust series or
investment company in lieu of shares of that Fund. Additionally, if in the
judgment of MassMutual, investment in shares of a Fund is no longer appropriate,
MassMutual reserves the right to withdraw availability of a Division of the
Separate Account for further amounts being credited. In any event, approval of
the Securities and Exchange Commission must be obtained. MassMutual reserves the
right to change the name of a Separate Account or to add Divisions to the
Separate Account for the purpose of investing in additional investment vehicles.
Additionally, we reserve the right to terminate the Contract: (a) if no purchase
payment has been received for at least two consecutive years measured from the
date we received the last purchase payment; and (b) if the Accumulated Value
less any deduction we would make for premium taxes, the Cash Redemption Value
and the unredeemed premium payments are all less than $2,000. Before exercising
this right, we will provide You with written notice of our decision.

Federal Tax Status

INTRODUCTION

The ultimate effect of federal income taxes on the value of the Contract, on
annuity payments, and on the economic benefit to the Contract Owner, Annuitant
or Beneficiary depends on a variety of factors including the type of retirement
plan for which the Contract is purchased and the tax and employment status of
the individual concerned. The discussion contained herein is general in nature
and is not intended as tax advice. Each person concerned should consult a
competent tax adviser for complete information and advice. No attempt is made to
consider any applicable state or other local tax laws. Moreover, the discussion
herein is based upon MassMutual's understanding of current federal income tax
laws as they are currently interpreted. No representation is made regarding the
likelihood of continuation of those current federal income tax laws or of the
current interpretations by the Internal Revenue Service ("IRS").

TAX STATUS OF MASSMUTUAL

Under existing federal law, no taxes are payable by MassMutual on investment
income and realized capital gains of the Separate Account credited to the
Contracts. Accordingly, MassMutual does not intend to make any charge to the
Separate Accounts to provide for company income taxes. MassMutual may, however,
make such a charge in the future if an unanticipated construction of current law
or a change in law results in a company tax liability attributable to the
Separate Account.

MassMutual may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, charges for such taxes attributable to the Separate Account may be
made.

Taxation of Contracts in General

Under Section 817(h) of the Internal Revenue Code (the "Code") a Contract (other
than one used in a tax-qualified retirement plan) will not be treated as an
annuity contract and will be taxed on the annual increase in earnings if, as of
the end of any quarter, the Funds, or the Fund on which the Contract is
based are not adequately diversified in accordance with regulations prescribed
by the Treasury Department. It is anticipated that the Trusts will comply with
the Code's diversification requirements.

Subject to certain annuity distribution rules (see - Annuity Distribution Rules
of Section 72(s)), annuity payments under the Contracts are taxable under
Section 72 of the Code. For contributions made after February 28, 1986, a
Contract Owner that is not a natural person will be taxed on the annual increase
in the earnings of a Contract unless the Contract Owner holds the Contract as
agent for a natural person. Otherwise, increases in the value of a Contract are
not subject to tax until actually or constructively received.

Amounts received prior to the Maturity Date from Contracts not under tax
qualified arrangements (see - Taxation of Qualified Plans TSAs and IRAs, page
19, for a discussion of Contracts used in the qualified plan market) are subject
to tax to the extent of any earnings or gains in the Contract; amounts received
which are in excess of such earnings or gains are considered a return of
capital. Similarly, amounts borrowed upon the Contract will be treated as
amounts received under the Contract and will be taxable to the same extent. If
an individual Contract Owner transfers ownership, for other than full and
adequate consideration, the Contract Owner will be taxed on the transfer as
though he or she had taken a full redemption of the Contract. For Contracts
entered into after October 21, 1988, all annuity contracts issued by the same
insurer and its affiliates to the same Contract Owner within the same calendar
year must be aggregated in determining the amount of gain realized on a
withdrawal from any one.

If the Contract is obtained in a tax-free exchange of contracts under Section
1035 of the Code, different tax rules may apply. If a distribution prior to the
Maturity Date of a contract obtained in such an exchange is entirely
attributable to investments in the surrendered contract prior to August 14,
1982, the distribution will first be considered a return of capital

18
<PAGE>

to the extent of those investments and only the amounts received in excess of
those investments will be regarded as taxable earnings or gains.

PENALTY TAXES

In addition to the foregoing tax consequences, certain distributions under the
Contract will be subject to a penalty tax under Code Section 72(q) (for non-tax
qualified Contracts) or 72(t) (for Contracts in tax qualified plans see -
Taxation of Qualified Plans, TSAs and IRAs, page 19) of 10% of the amount of the
distribution that is includable in gross income. However, the following
distributions from non-tax qualified Contracts currently are not subject to the
penalty tax: (1) withdrawals made after the Contract Owner is 59 1/2 years
old; (2) payments made to a beneficiary (or to the estate of the Contract Owner)
on or after the death of the Contract Owner; (3) payments attributable to a
Contract Owner becoming disabled; or (4) substantially equal periodic payments
made (at least annually) for the lifetime (or life expectancy) of the Contract
Owner or for the joint lifetimes (or joint life expectancies) of the Contract
Owner and the beneficiary.

When monthly annuity payments commence, they are taxable as ordinary income in
the year of receipt to the extent that they exceed that portion of the
"Investment in the Contract" allocable to that year. The Investment in the
Contract will equal the gross amount of purchase payments made under the
Contract less any amount that was previously received under the Contract but was
not included in gross income. The Investment in the Contract would also be
increased by any amount that was previously included in gross income under the
Contract but was not received. This amount, divided by the anticipated number of
monthly annuity payments, gives the "excludable amount," which is the portion of
each annuity payment considered to be a return of capital and, therefore, not
taxable. Under this exclusion ratio, the total amount excluded from payments
actually received is limited to the Investment in the Contract. The rules for
determining the excludable amount are contained in Section 72 of the Code and
regulations thereunder and require adjustment when the payment option elected
provides a feature such as a guaranteed number of payments.

ANNUITY DISTRIBUTION RULES OF SECTION 72(S)

Annuity distribution requirements are imposed under Section 72(s) of the Code.
MassMutual understands that these requirements do not apply to Contracts issued
to or under Qualified Plans.

Under Section 72(s), a Contract will not be treated as an annuity subject to
Section 72 of the Code, unless it provides for certain required distributions
from and after the date of death of the Contract Owner. The Contracts will be
endorsed before issue to provide that annuity payments be made only in
accordance with these distribution requirements, as applicable.

TAX WITHHOLDING

Certain tax withholding is imposed on payments that are made under the Contracts
(for Contracts in tax qualified plans, see -Taxation of Qualified Plans, TSAs
and IRAs, page 19). Withheld amounts do not constitute an additional tax, but
are fully creditable on the individual tax return of each payee who is affected
by tax withholding. Furthermore, no payments will be subject to the withholding
if (1) it is reasonable to believe that the payments are not includable in gross
income, or (2) the payee elects not to have withholding apply. The payee may
make such an election either by filing an election form with MassMutual or, in
the case of redemptions, by following procedures that MassMutual has established
to afford payees an opportunity to elect out of withholding. These forms and
procedures will be provided to payees by MassMutual upon a request for payment.

Unless the Payee elects not to have withholding apply (for Contracts in tax
qualified plans see - Taxation of Qualified Plans, TSAs and IRAs, page 19),
MassMutual is required to withhold, for federal income tax purposes, 10% of the
taxable portion of any redemption payment or non-periodic distribution
under the Contracts. Periodic annuity payments under the Contracts are subject
to withholding at the payee's wage base rate. If the payee of these annuity
payments does not file an appropriate withholding certificate (obtainable from
any local IRS office) with MassMutual, it will be presumed that the payee is
married claiming three exemptions.

TAX REPORTING

MassMutual is required to report all taxable payments and distributions to the
IRS and to the payees. Payees will receive reports of taxable payments and
distributions by January 31 of the year following the year of payment.

TAXATION OF QUALIFIED PLANS, TSAS AND IRAS

The tax rules applicable to participants in retirement plans that qualify for
special federal income tax treatment ("Qualified Plans") vary according to the
type of plan and its terms and conditions.

Increases in the value of a Contract are not subject to tax until received by
the employee or his beneficiary. Monthly annuity payments under Qualified Plans
are taxed as described above (see - TAXATION OF CONTRACTS IN GENERAL, page 18),
except that the "investment in the Contract" under a Qualified Plan is normally
the gross amount of purchase payment made by the employee under the Contract or
made by the employer on the employee's behalf and included in the employee's
taxable income when made.

If the Annuitant receives a distribution that qualifies as a "lump sum
distribution" under the Code, he or she may be eligible for special "5-year
averaging" treatment of the funds received (or "10-year averaging" treatment if
he or she was age 50 or older on January 1, 1986). TSAs and IRAs are not
eligible for the special treatment under the "lump sum distribution" rules.

Certain TSA contributions may not be distributed to the Annuitant until age
59 1/2, death, disability, separation of service or hardship. (See -
Redemption Privileges, page 12.) Distributions from Qualified Plans, IRAs and
TSAs may be subject to a 10% penalty tax on amounts withdrawn before age
59 1/2. However, the following distributions from Qualified Plans (and TSAs
and IRAs except as otherwise noted) are not subject to the penalty: (1) payments
made to a beneficiary (or the estate of an Annuitant) on or after the death of
the Annuitant; (2) payments attributable to an Annuitant becoming disabled; (3)
substantially equal periodic payments made (at

19
<PAGE>

least annually) for the lifetime (or life expectancy) of the Annuitant or for
the joint lifetimes (or joint life expectancies) of the Annuitant and the
beneficiary (for Qualified Plans and TSAs, payments can only begin after the
employee separates from service); (4) payment for certain medical expenses (not
applicable to IRAs); (5) payment after age 55 and separation from service (not
applicable to IRAs); and (6) payments to an alternate payee pursuant to a
qualified domestic relations order under Code Section 414(p) (not applicable to
IRAs). Excess retirement accumulations may be subject to a 15% penalty tax.
Excess distributions may be subject to a 15% excise tax.

IRAs are subject to limitations on the amount that may be contributed. The
deductibility of contributions by individuals or their spouses who are active
participants in an employer-maintained pension or profit-sharing plan may be
reduced based on the individual's adjusted gross income. In addition, certain
distributions from Qualified Plans and TSAs may be placed into an IRA on a tax-
deferred basis.

In general, tax law requires that minimum distributions be made from Qualified
Plans, TSAs and IRAs beginning at age 70 1/2. To avoid penalty taxes of 50
percent or more, required distributions, including distributions which should
have been distributed in prior years, should not be rolled over to IRAs.

Distributions from Qualified Plans and TSAs are subject to mandatory federal
income tax withholding. MassMutual is required to withhold 20% when a payment
from a Qualified Plan or TSA is an "eligible rollover distribution" and such
payment is not directly rolled over to another Qualified Plan, TSA or IRA. In
general, an "eligible rollover distribution" is any taxable distribution other
than: (1) payments for the life (or life expectancy) of the Annuitant, or for
joint life (or joint life expectancies) of the Annuitant and the beneficiary;
(2) payments made over a period of ten years or more; and (3) required minimum
distributions (see above). Plan administrators should be able to tell Annuitants
what other payments are not "eligible rollover distributions".

Taxable distributions that are not "eligible rollover distributions" are subject
to the withholding rules for annuities (See - Tax Withholding, page 19.)

Performance Measures

MassMutual may show the performance under the Contracts in the following ways:

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

Except for Divisions of the Separate Account which have been in existence for
less than one year, MassMutual will show the Standardized Average Annual Total
Return for a Division of the Separate Account which, as prescribed by the rules
of the U.S. Securities and Exchange Commission ("SEC"), is the effective annual
compounded rate of return that would have produced the cash redemption value
over the stated period had the performance remained constant throughout. The
Standardized Average Annual Total Return assumes a single $1000 payment made at
the beginning of the period and full redemption at the end of the period. It
reflects a deduction for the Sales Charge, the annual administrative charge and
all other Fund, Separate Account, and Contract level charges except premium
taxes, if any. The annual Administrative Charge will be apportioned among the
Divisions of the Separate Account based upon the percentages of Contracts
investing in each of the Divisions.

For Divisions of the Separate Account which have been in existence for less than
one year, MassMutual will show the aggregate total return as permitted by the
SEC. The aggregate total return assumes a single one thousand dollar payment
made at the beginning of the period and full redemption at the end of the
period. It reflects the change in unit value and a reduction of the contingent
deferred sales charge.

ADDITIONAL PERFORMANCE MEASURES

The performance figures discussed below may be calculated on the basis of the
historical performance of the Funds, and may assume that the Contracts were in
existence prior to the Inception Date (which they were not). Beginning the date
that the product became available for sale to the public, actual Accumulation
Unit Values will be used for the calculations. Such Accumulation Unit Values
will be accompanied by the Standardized Average Annual Total Return described
above.

The difference between the first set of additional performance measures,
PERCENTAGE CHANGE and ANNUALIZED RETURNS on Accumulation Unit Values, and the
second set, the NON-STANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL RETURNS, is
that the second set is based on specified premium patterns and includes the
deduction of the annual Administrative Charge, whereas the first set does not.
Additional details are described below.

Accumulation Unit Values: Percentage Change and Annualized Returns

MassMutual will show the PERCENTAGE CHANGE in the value of an Accumulation Unit
for a Division of the Separate Account with respect to one or more periods. The
ANNUALIZED RETURN, or average annual change in Accumulation Unit Values, may
also be shown with respect to one or more periods. For a one year period, the
Percentage Change and the Annualized Return are effective annual rates of return
and are equal. For periods greater than one year, the Annualized Return is the
effective annual compounded rate of return for the periods stated. Since the
value of an Accumulation Unit reflects the Separate Account and Trust expenses
(see - Table of Fees and Expenses, page 5), the Percentage Change and Annualized
Returns also reflect these expenses. These percentages, however, do not reflect
the annual Administrative Charge and the Sales Charge or premium taxes (if any),
which if included would reduce the percentages reported. For periods of less
than one year, the percentage change in accumulation unit value may be shown.

The NON-STANDARDIZED ANNUAL TOTAL RETURN and the NON-STANDARDIZED AVERAGE ANNUAL
TOTAL RETURN reflect a deduction for the annual Administrative Charge as well as
reflecting deductions for the Separate Account expenses and the expenses of the
Trusts. They are based on specified premium patterns which produce the resulting
Accumulated Values. They do not include Sales Charges or premium taxes (if any),
which would reduce the percentages reported.

20
<PAGE>

The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Division is the effective annual
rate of return that would have produced the ending Accumulated Value, as of the
stated one-year period.

The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Division is the effective
annual compounded rate of return that would have produced the ending Accumulated
Value over the stated period had the performance remained constant throughout.

Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the NON-
STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same period
due to the effect of the annual Administrative Charge. Additionally, the
magnitude of this difference will depend on the size of the Accumulated Value
from which the Annual Administrative Charge is deducted.

YIELD AND EFFECTIVE YIELD. MassMutual may also show yield and effective yield
figures for the Money Market and Money Fund Divisions of the Separate Account.
"Yield" refers to the income generated by an investment in the Money Market and
Money Fund Divisions over a seven-day period, which is then "annualized". That
is, the amount of income generated by the investment during that week is assumed
to be generated each week over a 52-week period and is shown as a percentage of
the investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in these divisions is assumed to
be re-invested. Therefore the effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. These
figures will reflect a deduction for Fund, Separate Account, and certain
Contract level charges, and the Annual Administrative Charge assuming such
Contract remains in force. The Administrative Charge is based on a hypothetical
contract where such charge is applicable. These figures do not reflect the Sales
Charge or premium taxes, (if any), which if included would reduce the yields
reported.

The performance measures discussed above reflect results of the Funds and are
not intended to indicate or predict future performance. For more detailed
information, see the Statement of Additional Information.

Performance information for the Separate Account Divisions may be compared to
other variable annuity separate accounts or other investment products surveyed
by Lipper Analytical Services, Inc. a nationally recognized independent
reporting service that ranks mutual funds and other investment companies by
overall performance, investment objectives and assets, or it may be tracked by
other ratings services, companies, publications or persons who rank separate
accounts or other investment products on overall performance or other criteria.
Performance figures will be calculated in accordance with standardized methods
established by each reporting service.

Additional Information

For further information about the Contracts, You may obtain a Statement of
Additional Information prepared by MassMutual.

The Table of Contents of this Statement is as follows:

1. General Information and History

2. Service Arrangements and Distribution

3. Contract Value Calculations and Annuity Payments

4. Performance Measures

5. Reports of Independent Accountants and Financial Statements.

Section 5 of the Statement of Additional Information contains financial
statements for MassMutual.

21
<PAGE>

PROSPECTUS

DATED MAY 1, 1995

MML SERIES INVESTMENT FUND
1295 STATE STREET
SPRINGFIELD, MASSACHUSETTS
(413) 788-8411

MML Series Investment Fund (the "MML Trust") is a no-load, diversified, open-end
management investment company having four separate series of shares (the
"Funds"), each of which has different investment objectives and is designed to
meet different investment needs.

THE FUNDS

MML EQUITY FUND - The investment objectives are primarily to achieve a superior
total rate of return over an extended period of time from both capital
appreciation and current income and secondarily, depending upon business and
economic conditions, to preserve capital. The Fund invests primarily in
equity-type securities.

MML MONEY MARKET FUND - The investment objectives are to achieve high current
income, the preservation of capital, and liquidity. The Fund invests in
short-term debt instruments, including commercial paper, certificates of
deposit, bankers' acceptances, and obligations of the United States, its
agencies and instrumentalities. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND
WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

MML MANAGED BOND FUND - The investment objective is to achieve as high a total
rate of return on an annual basis as is considered consistent with the
preservation of capital. The Fund invests primarily in investment grade,
publicly-traded, fixed income securities.

MML BLEND FUND - The investment objective is to achieve as high a level of total
rate of return over an extended period of time as is considered consistent with
prudent investment risk and the preservation of capital. The Fund invests in a
portfolio of common stocks and other equity-type securities, bonds and other
debt securities with maturities generally exceeding one year, and money market
instruments and other debt securities with maturities not exceeding one year.

For further information about each Fund's investment objectives and policies,
see "THE FUNDS" on page 8. There is no assurance that the investment objectives
of the Funds will be realized.

This Prospectus sets forth concisely the information about MML Trust and the
Funds that a prospective investor ought to know before investing. Certain
additional information about MML Trust and the Funds is contained in a Statement
of Additional Information dated May 1, 1995, which has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. This
additional information is available upon request and without charge. To obtain
such information, please contact the Secretary, MML Series Investment Fund, 1295
State Street, Springfield, Massachusetts 01111.

This Prospectus should be retained for future reference for information about
MML Trust and the Funds.

_________________________________

<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C>
FINANCIAL HIGHLIGHTS..................................................... 2
MANAGEMENT DISCUSSION.................................................... 5
GENERAL INFORMATION...................................................... 8
THE FUNDS................................................................ 8
INVESTMENT PRACTICES OF THE FUNDS AND RELATED RISKS...................... 10
INVESTMENT RESTRICTIONS.................................................. 13
INVESTMENT MANAGERS...................................................... 13
CAPITAL SHARES........................................................... 14
NET ASSET VALUE.......................................................... 15
SALE AND REDEMPTION OF SHARES............................................ 15
TAX STATUS............................................................... 15
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS................................ 16
INVESTMENT PERFORMANCE................................................... 16
MANAGEMENT OF MML TRUST.................................................. 16
</TABLE>

I. FINANCIAL HIGHLIGHTS

The information in the following tables has been audited by Coopers & Lybrand
L.L.P., independent accountants, whose report on the financial statements of the
Funds is included in MML Trust's Annual Report and in its Statement of
Additional Information. Further information about the performance of the Funds
is contained in the Annual Report which may be obtained from MML Trust's
Secretary without charge.

MML EQUITY FUND

Selected per share data for each series share outstanding throughout each year
ended December 31:

<TABLE>
<CAPTION>
1994 1993* 1992 1991 1990 1989 1988 1987 1986 1985
---- ----- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year.............. $20.510 $19.862 $18.735 $15.659 $16.764 $14.929 $13.828 $15.591 $13.832 $11.749
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income........... .594 .524 .543 .563 .636 .694 .646 .525 .495 .551
Net realized and
unrealized gain (loss)
on investments................. .248 1.365 1.420 3.440 (.722) 2.746 1.660 (.066) 2.174 2.792
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations..................... .842 1.889 1.963 4.003 (.086) 3.440 2.306 .459 2.669 3.343
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income.............. (.594) (.524) (.543) (.562) (.665) (.711) (.639) (.988) (.412) (.738)
Distribution from net
realized gains................. (.238) (.717) (.288) (.365) (.354) (.894) (.566) (1.234) (.498) (.522)
Distribution in excess of
net realized gains............. - - (.005) - - - - - - -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions............. (.832) (1.241) (.836) (.927) (1.019) (1.605) (1.205) (2.222) (.910) (1.260)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of year.................... $20.520 $20.510 $19.862 $18.735 $15.659 $16.764 $14.929 $13.828 $15.591 $13.832
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total return.................... 4.10% 9.52% 10.48% 25.56% (.51)% 23.04% 16.68% 2.10% 20.15% 30.54%
Net assets (in millions):
End of year.................... $ 820.8 $ 663.1 $ 490.6 $ 355.0 $ 235.4 $ 226.4 $ 172.8 $ 150.4 $ 141.5 $ 104.7
Ratio of expenses to
average net assets............. .43% .44% .46% .48% .49% .50% .50% .51% .52% .55%
Ratio of net investment
income to average net assets... 3.04% 3.23% 3.09% 3.43% 4.09% 4.30% 4.05% 3.44% 3.54% 4.49%
Portfolio turnover rate......... 9.99% 11.28% 9.07% 9.37% 13.50% 15.71% 15.97% 15.73% 14.73% 20.83%
</TABLE>

*As of January 1, 1993, Concert Capital Management, Inc. became the Investment
Sub-Adviser. See Investment Managers, page 13 for further information.

2
<PAGE>

MML MONEY MARKET FUND

Selected per share data for each series share outstanding throughout each year
ended December 31:

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year.................. $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income............... .038 .027 .034 .059 .078 .088 .072 .063 .064 .078
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations.... .038 .027 .034 .059 .078 .088 .072 .063 .064 .078
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income.................. (.038) (.027) (.034) (.059) (.078) (.088) (.072) (.063) (.064) (.078)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions................. (.038) (.027) (.034) (.059) (.078) (.088) (.072) (.063) (.064) (.078)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value:
End of year........................ $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return........................ 3.84% 2.75% 3.48% 6.01% 8.12% 9.16% 7.39% 6.49% 6.60% 8.03%
Net assets (in millions):
End of year........................ $ 91.8 $ 73.7 $ 84.6 $ 94.4 $114.6 $ 70.2 $ 66.4 $ 52.3 $ 33.5 $ 36.4
Ratio of expenses to
average net assets................. .55% .54% .53% .52% .54% .54% .55% .57% .57% .59%
Ratio of net investment
income to average net assets....... 3.81% 2.71% 3.42% 5.91% 7.80% 8.79% 7.20% 6.35% 6.44% 7.76%
</TABLE>

MML MANAGED BOND FUND

Selected per share data for each series share outstanding throughout each year
ended December 31:

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year................ $12.405 $12.041 $12.219 $11.318 $11.354 $10.919 $11.052 $12.541 $11.978 $11.160
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income............. .792 .785 .870 .903 .943 .918 .906 .969 1.061 1.227
Net realized and unrealized gain
(loss) on investments and forward
commitments..................... (1.264) .618 .001 .916 (.036) .454 (.133) (.673) .597 .851
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations.. (.472) 1.403 .871 1.819 .907 1.372 .773 .296 1.658 2.078
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income................ (.792) (.784) (.869) (.902) (.943) (.918) (.906) (1.229) (1.095) (1.260)
Distribution from net realized
gains............................ - (.255) (.158) (.016) - (.019) - (.556) - -
Distribution in excess
of net realized gains............ - - (.022) - - - - - - -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions............... (.792) (1.039) (1.049) (.918) (.943) (.937) (.906) (1.785) (1.095) (1.260)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of year...................... $11.141 $12.405 $12.041 $12.219 $11.318 $11.354 $10.919 $11.052 $12.541 $11.978
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total return...................... (3.76%) 11.81% 7.31% 16.66% 8.38% 12.83% 7.13% 2.60% 14.46% 19.94%
Net assets (in millions):
End of year...................... $ 121.2 $ 129.1 $ 88.2 $ 67.0 $ 43.1 $ 40.0 $ 31.3 $ 26.2 $ 30.4 $ 24.7
Ratio of expenses to
average net assets............... .52% .54% .56% .57% .57% .59% .61% .60% .60% .62%*
Ratio of net investment
income to average net assets..... 6.69% 6.37% 7.28% 7.96% 8.40% 8.35% 8.25% 8.24% 8.87% 10.73%*
Portfolio turnover rate........... 32.77% 58.81% 39.51% 61.85% 69.93% 64.77% 74.92% 55.60% 203.76% 154.48%
</TABLE>

*Computed after giving effect to the expense reduction in management fee by
MassMutual. Without this reduction, (a) the ratio of expenses to average net
assets would have been .65% for the year ended December 31, 1985, and (b) the
ratio of net investment income to average net assets would have been 10.70% for
the year ended December 31, 1985.

3
<PAGE>

MML BLEND FUND

Selected per share data for each series share outstanding throughout each year
ended December 31:

<TABLE>
<CAPTION>
1994 1993* 1992 1991 1990 1989 1988 1987 1986 1985
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year............ $ 18.305 $ 17.846 $ 17.307 $14.839 $15.428 $13.876 $13.095 $13.774 $12.244 $10.392
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income......... .707 .655 .707 .736 .792 .823 .734 .624 .540 .608
Net realized and
unrealized gain (loss)
on investments and
forward commitments.......... (.271) 1.057 .880 2.771 (.445) 1.921 1.000 (.148) 1.653 1.887
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations................... .436 1.712 1.587 3.507 .347 2.744 1.734 .476 2.193 2.495
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income............ (.707) (.655) (.707) (.736) (.811) (.835) (.728) (.747) (.560) (.613)
Distribution from net
realized gains............... (.359) (.598) (.326) (.303) (.125) (.357) (.225) (.408) (.103) (.030)
Distribution in excess of
net realized gains........... (.003) - (.015) - - - - - - -
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Total distributions........... (1.069) (1.253) (1.048) (1.039) (.936) (1.192) (.953) (1.155) (.663) (.643)
-------- -------- -------- ------- ------- ------- ------- ------- ------- -------
Net asset value:
End of year.................. $ 17.672 $ 18.305 $ 17.846 $17.307 $14.839 $15.428 $13.876 $13.095 $13.774 $12.244
======== ======== ======== ======= ======= ======= ======= ======= ======= =======
Total return.................. 2.48% 9.70% 9.36% 24.00% 2.37% 19.96% 13.40% 3.12% 18.30% 24.88%

Net assets (in millions):
End of year.................. $1,444.3 $1,296.5 $1,013.3 $ 797.0 $ 574.2 $ 524.3 $ 401.2 $ 346.1 $ 236.2 $ 91.6
Ratio of expenses to
average net assets........... .39% .40% .41% .42% .44% .45% .46% .48% .51% .57%
Ratio of net investment
income to average net assets. 3.93% 3.60% 4.07% 4.54% 5.37% 5.57% 5.29% 4.77% 4.81% 6.29%
Portfolio turnover rate....... 26.59% 20.20% 25.43% 26.92% 24.55% 22.39% 25.70% 36.56% 58.75% 31.06%
</TABLE>

*As of January 1, 1993, Concert Capital Management, Inc. became the Investment
Sub-Adviser. See Investment Managers page 13 for further information.

Total return information shown in the Financial Highlights tables does not
reflect expenses that apply at the separate account level or to related
insurance products. Inclusion of these charges would reduce the total return
figures for all periods shown.

4
<PAGE>

II. MANAGEMENT DISCUSSION

A. ECONOMIC AND INVESTMENT ENVIRONMENT

The U.S. economy turned in a strong economic performance during 1994 with real
Gross Domestic Product growth in the 3.5 to 4 percent range. The force behind
the expansion continued to be the consumer, whose confidence rose early during
the year and remained high throughout the period. This performance is
especially impressive given that the growth occurred against a background of
sharply rising interest rates and a Federal Reserve Board (``Fed'') determined
to keep the economy from overheating. The Fed moved strongly during 1994,
raising the discount rate 3 times and the Fed funds' target 6 times. Reflecting
this tightening, yields on three month Treasury bills climbed more than 2.5
percent during the year.

One of the most notable economic statistics for 1994 was the growth in nonfarm
payrolls. Approximately $3.5 million new additions were made to nonfarm
payrolls throughout the year. This figure clearly benefited the consumer
causing personal incomes to rise at a pace around 6 percent. Another strong
point for the U.S. economy last year was the price picture which remained calm
as the Consumer Price Index moved up at roughly a 2.7 percent pace. Housing
starts remained high during 1994, despite an almost 2 percent increase in
mortgage rates. Other bright spots last year included business investment, auto
and truck sales, consumer durables and productivity in the manufacturing sector.

A notable drag on the economy was the performance of the trade deficit which
widened during the year. Our strong economy, combined with slower than expected
recoveries in other parts of the world, caused our net imports to rise. Another
drag on the economy, as noted above, was the 1994 performance of interest rates.
Three month Treasury bills climbed by more than 2.5 percent, while 30 year
Treasury bonds rose by more than 1.5 percent. Price increases were also evident
last year with base commodities climbing at double digit rates. Another concern
with regard to pricing is the level of capacity utilization (a measure of
producer output), which is at levels where price increases have historically
developed.

B. INVESTMENT OUTLOOK

In response to the Fed's tightening, interest rates moved significantly higher
during 1994, resulting in poorly performing bond markets. As an example, the
total return of the Lehman Government/Corporate index was a negative 3.5 percent
for 1994. Despite increasing corporate profits, the stock markets were hampered
by the sharp increase in rates. As a result, the 1994 total return for the
Standard & Poor's 500 index was only 1.3 percent.

During the first quarter of 1995, the bond market will likely be impacted by the
actions of the Federal Reserve. It seems reasonable to assume that the Fed will
continue to increase rates in early-mid 1995. This should cause economic growth
to moderate over the second half, which would be more beneficial to bonds. The
stock market will take its cue from the interaction of interest rate moves and
corporate profits.

C. MML EQUITY

The Standard & Poor's 500 Stock Index closed out 1994 with the third consecutive
year of very low volatility. However, the narrow trading range for the S & P
500 masked considerable volatility within the market. This internal volatility,
although possibly detrimental to investment performance, is not totally
unwelcome because it creates opportunities for value-oriented investors.

In the second half of 1994, we repurchased two portfolio companies previously
sold a few years ago, and implemented three new equity positions. In an effort
to increase the portfolio's exposure to the health care area, Schering-Plough, a
pharmaceutical and personal care products company, was repurchased after being
sold in 1990. Roadway Services, a diversified transportation company, was
repurchased at an attractive price after being sold off in 1992 at a substantial
gain. New companies to the portfolio included Honeywell, a leading factor in
commercial avionic systems and industrial process controls, Kerr-McGee, a medium
sized integrated energy company, and Pepsico, the leading producer of salty
snacks in the U. S. and the number two producer of soft drink concentrates in
the world.

5
<PAGE>

Three stocks were eliminated from the portfolio during the period. Gerber
Products was sold at a substantial gain subsequent to a tender offer; Crane
Company, a relatively small holding in the fund, was sold at a more modest
profit, and Lehman Brothers Holdings was sold. Fourteen positions were reduced
in size during the fourth quarter, while 16 were increased through additional
purchases. For the full year, eleven new stocks were added to the portfolio
while ten were eliminated.

EQUITY FUND

[EQUITY FUND GRAPH APPEARS HERE]

D. MML MONEY MARKET

The Fed aggressively tightened monetary policy throughout 1994 as it strived to
maintain economic expansion at a sustainable pace. During 1994 the Fed raised
the Federal funds target rate on six occasions between February and November for
an increase of 250 basis points to 5.50 percent. Additionally, the Fed
increased the discount rate three times for a total of 175 basis points to 4.75
percent.

As anticipation of the Fed's actions continued to convey uncertainty to the
market, the portfolio's average life fluctuated in the range of 32 to 52 days.
The Fund ended the year with an average life of 36 days as the portfolio was
continually monitored and adjusted to optimize return. Appropriately, given the
higher interest rate environment, the portfolio's seven-day yield increased
nearly 240 basis points to end the year at 5.31 percent.

MONEY MARKET FUND

[MONEY MARKET FUND GRAPH APPEARS HERE]

E. MML MANAGED BOND

This past calendar year was one of the worst in the bond market's history.
Negative returns were posted across almost the entire maturity spectrum and
across almost all market sectors. Only short maturities posted positive returns
for the year. Short-term rates responded dramatically to the Fed's actions as
they increased between 261 and 350 basis points. Intermediate-term Treasuries
rose approximately 250 basis points. The long-end of the market, thirty-year
bonds, reacted modestly in comparison by rising only 153 basis points. The
Treasury yield curve flattened dramatically during the year as short-term
interest rates rose more than long rates. The bulk of the flattening of the
curve occurred beyond the two year area.

The Managed Bond Fund has remained relatively consistent in its sector
allocations over the course of the year. Early in the first quarter, we
increased our position in the corporate sector, however by year-end we moved
this position back slightly. The reduction in our corporate holdings was made as
spreads declined to historically low levels. During the later part of the third
quarter and the first part of the fourth quarter, additional purchases of
asset-backed securities were made. Our mortgage position, however, was
relatively unchanged over the year. The remaining holdings are invested in
Treasuries, U.S. government agencies, and money market instruments.

6
<PAGE>

MANAGED BOND FUND

[MANAGED BOND FUND GRAPH APPEARS HERE]

F. MML BLEND

The Blend Fund combines the profiles of the MML Equity, Bond, and Money Market
Funds into a single portfolio. The specific allocation of stocks, bonds, and
money market issues is based upon the interrelation of current economic and
financial conditions and the values available in the stock and bond markets. As
these relationships change, the exposure to each capital market is gradually
adjusted within the designated ranges. On December 31, 1994, 53 percent of the
Fund was invested in common stocks, 19 percent in marketable bonds, and 28
percent in short-term securities.

BLEND FUND

[BLEND FUND GRAPH APPEARS HERE]

7
<PAGE>

III. GENERAL INFORMATION

MML Trust is a no-load, diversified, open-end management investment company,
objectives and policies. MML Trust was organized as a business trust under the
laws of The Commonwealth of Massachusetts pursuant to an Agreement and
Declaration of Trust dated December 19, 1984, as most recently amended on or
about April 16, 1993. MML Trust was established by Massachusetts Mutual Life
Insurance Company ("MassMutual") for the purpose of providing a vehicle for the
investment of assets of various separate investment accounts established by
MassMutual and its life insurance company subsidiaries, including MML Bay State
Life Insurance Company ("MML Bay State").

Shares of the Funds are offered solely to separate investment accounts
established by MassMutual and any life insurance company subsidiary.

MassMutual is responsible for providing all investment advisory, management, and
administrative services needed by the Funds pursuant to investment management
agreements. MassMutual has entered into investment sub-advisory agreements with
Concert Capital Management, Inc. ("Concert"), a second tier, wholly-owned
subsidiary of MassMutual. These agreements provide that Concert will manage the
equity investments of MML Equity Fund ("MML Equity") and the Equity Sector (the
"Equity Sector") of MML Blend Fund ("MML Blend"). Both MassMutual and Concert
are registered with the Securities and Exchange Commission (the "SEC") as
investment advisers (MassMutual and Concert referred to hereafter as
"Advisers"). For further information, see "Investment Managers" p.13.

IV. THE FUNDS

The investment objectives of each Fund discussed below are fundamental policies
and may not be changed without the vote of a majority of that Fund's outstanding
voting shares (as used in this Prospectus, a majority of the outstanding voting
shares of any Fund means the lesser of (1) 67% of that Fund's outstanding shares
present at a meeting of the shareholders if more than 50% of the outstanding
shares are present in person or by proxy, or (2) more than 50% of that Fund's
outstanding shares). There is no assurance that the investment objectives of the
Funds will be realized. The success of these objectives depends to a great
extent upon managements' ability to assess changes in business and economic
conditions. For further information about investment policies and techniques,
see "Investment Practices of the Fund and Related Risks," at page 10.

A. MML EQUITY FUND

THE PRIMARY INVESTMENT OBJECTIVE OF MML EQUITY FUND ("MML EQUITY") IS TO
ACHIEVE A SUPERIOR TOTAL RATE OF RETURN OVER AN EXTENDED PERIOD OF TIME FROM
BOTH CAPITAL APPRECIATION AND CURRENT INCOME.

A secondary investment objective is the preservation of capital when business
and economic conditions indicate that investing for defensive purposes is
appropriate. Occasional investments may be made with the objective of short-term
appreciation when in the judgment of Concert general economic conditions dictate
that they may benefit MML Equity and are consistent with sound investment
procedure.

Normally, the assets of MML Equity will be invested primarily in common stocks
and other equity-type securities such as preferred stocks, securities
convertible into common stocks and warrants. Investments are made in securities
of companies which, in the opinion of Concert Capital, are of high quality,
offer above-average dividend growth potential and are attractively valued in the
marketplace. Investment quality and dividend growth potential are evaluated
using fundamental analysis emphasizing each issuer's historical financial
performance, balance sheet strength, management capability and competitive
position. Various valuation parameters are examined to determine the
attractiveness of individual securities. On average, the Fund's portfolio
securities will have price/earnings ratios and price/book value ratios below
those of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500
Stock Index"). Consideration is also given to securities of companies whose
current prices do not adequately reflect, in the opinion of Concert Capital, the
ongoing business value of the enterprise. These investments may be maintained in
both rising and declining markets. Concert intends to engage in the active
management of MML Equity's portfolio. The portfolio of the Fund is managed by
David B. Salerno, Managing Director of the Value Equity Group of Concert
Capital. He has been associated with MassMutual since 1975 and with Concert
Capital since January 1, 1993.

B. MML MONEY MARKET FUND

THE INVESTMENT OBJECTIVES OF MML MONEY MARKET FUND ("MML MONEY MARKET") ARE TO
ACHIEVE HIGH CURRENT INCOME, THE PRESERVATION OF CAPITAL, AND LIQUIDITY. THESE
OBJECTIVES ARE OF EQUAL IMPORTANCE.

MML Money Market will invest only in short-term (i.e., 397 days or less
remaining to maturity) debt instruments, including but not limited to commercial
paper; certificates of deposit; bankers' acceptances; short-term corporate
obligations; obligations issued, sponsored, assumed or guaranteed as to
principal and interest by the government of the United States, its agencies or
instrumentalities ("U.S. Government securities"); and certain repurchase
agreements with respect to any of the securities listed above (which underlying
securities must be of the highest quality at the time the repurchase agreement
is entered into but which securities may have maturities of more than one year).
MML Money Market's dollar-weighted average portfolio maturity will be maintained
at 90 days or less.

MML Money Market's non-fundamental investment policy is that, at the time it
acquires a security, it will invest 100% of its net assets in Tier 1 Securities,
but it retains the right to invest no more than 5% of its net assets in Tier 2
Securities. A Tier 1 Security is one that is rated in the highest rating
category by at least one nationally recognized statistical rating organization
("NRSRO") such as Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's"). MML Money Market will invest no more than 5% of its
total assets in Tier 2 Securities. A Tier 2 Security is one that is rated in the
second highest rating category by at least one NRSRO. Securities which are
unrated may also qualify as

8
<PAGE>

Tier 1 and Tier 2 Securities if so determined by the Board of Trustees of MML
Trust (the "Board of Trustees"). For a description of S&P and Moody's ratings,
see the Statement of Additional Information.

Certificates of deposit and bankers' acceptances will be limited to obligations
of banks having deposits of at least $1,000,000,000 as of their most recently
published financial statements. The obligations of U.S. banks in which MML Money
Market may invest include Eurodollar obligations of their foreign branches. In
the case of foreign banks, the $1,000,000,000 deposit requirement will be
computed using exchange rates in effect at the time of their most recently
published financial statements.

Obligations of foreign issuers, including foreign branches of U.S. banks, will
not be acquired if MML Money Market's investment in such obligations would
exceed in the aggregate 25% of its net assets. Foreign obligations may be
affected by foreign governmental action, including imposition of currency
controls, interest limitations, withholding taxes, seizure of assets or the
declaration of a moratorium or restriction on payments of principal or interest.
Foreign branches of U.S. banks and foreign banks may provide less public
information than, and may not be subject to the same accounting, auditing and
financial record-keeping standards, as domestic banks.

MML Money Market will make portfolio investments primarily in anticipation of or
in response to changing economic and money market conditions and trends. Trading
activity is expected to be relatively low. However, it is anticipated that from
time to time, MML Money Market will take advantage of temporary disparities in
the yield relationships among the different segments of the money market or
among particular instruments within the same segment of the market to make
purchases and sales when MassMutual deems that such transactions will improve
the yield or the quality of the portfolio.

The high quality debt instruments in which MML Money Market invests may not
offer as high a yield as may be achieved from lower quality instruments having
less safety. While MML Money Market invests exclusively in First and Second Tier
Securities, investment in MML Money Market is not without risk. If MML Money
Market disposes of an obligation prior to maturity, it may realize a loss or
gain. An increase in interest rates will generally reduce the value of portfolio
investments. In addition, investments are subject to the ability of the issuer
to make payment at maturity. MML Money Market will reassess whether a particular
security presents minimal credit risks in certain circumstances. For example, if
a security ceases to be a Second Tier Security, MML Money Market would dispose
of any such security as soon as practical.

C. MML MANAGED BOND FUND

THE INVESTMENT OBJECTIVE OF MML MANAGED BOND FUND ("MML MANAGED BOND") IS TO
ACHIEVE AS HIGH A TOTAL RATE OF RETURN ON AN ANNUAL BASIS AS IS CONSIDERED
CONSISTENT WITH THE PRESERVATION OF CAPITAL.

Normally, the assets of MML Managed Bond will be invested primarily in
investment grade, publicly-traded, fixed income securities of such maturities as
MassMutual deems appropriate from time to time in light of market conditions and
prospects. Except when invested for defensive purposes, at least 80% of total
invested assets at market value at the time of a purchase will consist of U.S.
Government securities and investment grade quality debt securities which have
been rated in the top four rating categories by S&P (AAA, AA, A or BBB) or
Moody's (Aaa, Aa, A or Baa) or, if unrated, which are judged by MassMutual to be
of equivalent quality to securities so rated. While debt securities rated BBB or
Baa are investment grade securities, they have speculative characteristics and
are subject to greater credit risk, and may be subject to greater market risk,
than higher-rated investment grade securities.

The remaining 20% of MML Managed Bond's total invested assets may be invested in
lower quality debt instruments and preferred stocks. Lower quality debt
instruments generally provide higher yields but are generally subject to greater
market fluctuations and risk of loss of income and principal than higher quality
debt securities. MassMutual seeks to reduce these risks through diversification,
credit analysis and attention to current developments and trends in both the
economy and the financial markets. During 1994, no debt securities were acquired
by MML Managed Bond which were not rated at least BBB/-/ by S&P or Baa/3/ by
Moody's.

In implementing the policies set forth in the preceding two paragraphs, MML
Managed Bond may also invest in the following:

(1) obligations (payable in U.S. dollars) issued or guaranteed as to principal
and interest by the Government of Canada, a Province of Canada, or any
instrumentality or political subdivision thereof, provided that no such
investment will be made if it would result in more than 25% of MML Managed
Bond's net assets being invested in such securities;

(2) publicly-traded debt securities issued or guaranteed by a national or state
bank holding company (as defined in the Federal Bank Holding Company Act, as
amended) having a rating within the three highest grades as determined by
Moody's (Aaa, Aa, or A) or S&P (AAA, AA, or A), and certificates of deposit of
such banks; and

(3) securities of foreign issuers, provided however, MML Managed Bond may invest
not more than 10% of its net assets in such securities, except as provided in
(1) above.

If MML Managed Bond disposes of an obligation prior to maturity, it may realize
a loss or a gain. An increase in interest rates will generally reduce the value
of portfolio investments, and a decline in interest rates will generally
increase the value of portfolio investments. In addition, investments are
subject to the ability of the issuer to make payment at maturity.

Normally, the Fund's duration will range from four to seven years. Portfolio
changes will be accomplished primarily through the reinvestment of cash flows
and selective trading.

The portfolio of the Fund is managed by Mary E. Wilson, Vice President and
Managing Director of MassMutual, with which she has been associated since 1982.
As such, she oversees all public fixed income trading for MassMutual and its
related subsidiaries and affiliates.

9
<PAGE>

D. MML BLEND FUND

THE INVESTMENT OBJECTIVE OF MML BLEND FUND ("BLEND") IS TO ACHIEVE AS HIGH
A LEVEL OF TOTAL RATE OF RETURN OVER AN EXTENDED PERIOD OF TIME AS IS CONSIDERED
CONSISTENT WITH PRUDENT INVESTMENT RISK AND THE PRESERVATION OF CAPITAL.

The Advisers will adjust the mix of investments among its three market sectors
to capitalize on perceived variations in return potential produced by the
interaction of changing financial market and economic conditions. The Advisers
expects that such adjustments will normally be made in a gradual manner over a
period of time. No investment will be made that would result in more than 90% of
MML Blend's net assets being invested in the Equity Sector or in more than 50%
of MML Blend's net assets being invested in the Bond Sector. Up to 100% of MML
Blend's net assets may be invested in the Money Market Sector. No minimum
percentage has been established for any of the sectors.

In addition to MML Blend's investment objective, each of its market sectors has
a specific investment objective. Within the Equity Sector, MML Blend will
attempt to achieve a superior total rate of return over an extended period of
time from both capital appreciation and current income. Within the Bond Sector,
MML Blend will attempt to achieve as high a total rate of return on an annual
basis as is considered consistent with the preservation of capital. Within the
Money Market Sector, MML Blend will attempt to achieve high current income, the
preservation of capital, and liquidity. The portfolio of the Fund is managed by
committee.

In seeking a high rate of return from dividends, interest income and capital
appreciation as well as in seeking to preserve capital, Advisers intend to
engage in the active management of MML Blend's portfolio. (See "Portfolio
Management" on page 12).

The portfolio of MML Blend will be invested in the following three market
sectors:

1. EQUITY SECTOR

The Equity Sector generally invests in equity-type securities in a substantially
similar manner as described in the discussion of MML Equity Fund on page 8.

2. BOND SECTOR

The Bond Sector generally invests in the types of bonds and other debt
securities described in the discussion of MML Managed Bond on page 9 with
maturities usually exceeding one year. The Bond Sector may also invest in debt
securities not described above, including lower quality securities and non-rated
securities acquired directly from issuers in direct placement transactions,
provided no such transaction shall cause such debt securities to exceed 10% of
MML Blend's total assets. Lower quality debt instruments generally provide
higher yields but are generally subject to greater market fluctuations and risk
of loss of income and principal than higher quality debt securities. During
1994, no debt securities were acquired by MML Blend which were not rated at
least BBB by S&P or Baa by Moody's.

3. MONEY MARKET SECTOR

The Money Market Sector invests in money market instruments and other debt
securities with maturities generally not exceeding one year, including:

(a) U.S. Treasury Bills and other U.S. Government securities;

(b) obligations (payable in U.S. dollars) issued or guaranteed as to principal
and interest by the Government of Canada, a Province of Canada, or any
instrumentality or political subdivision thereof, provided such obligations do
not exceed 25% of MML Blend Fund's total assets;

(c) obligations payable in U.S. dollars (including certificates of deposit, time
deposits or bankers' acceptances) of U.S. or Canadian chartered banks having
total deposits in excess of $1,000,000,000, U.S. branches of foreign banks where
said foreign banks have total deposits in excess of $1,000,000,000, U.S. savings
and loan associations having total deposits in excess of $1,000,000,000, and
Eurodollar certificates of deposit issued by foreign branches of U.S. banks
where said U.S. banks have total deposits in excess of $1,000,000,000;

Obligations of foreign banks and of foreign branches of U.S. banks may be
affected by foreign governmental action, including imposition of currency
controls, interest limitations, withholding taxes, seizure of assets or the
declaration of a moratorium or restriction on payments of principal or interest.
Foreign banks and foreign branches of U.S. banks may provide less public
information than, and may not be subject to the same accounting, auditing and
financial record-keeping standards as, domestic banks;

(d) commercial paper, including variable amount master notes, having a rating at
the time of purchase within the two highest grades as determined by Moody's (P-1
or P-2) or S&P (A-1 or A-2), or commercial paper or notes issued by companies
with an unsecured debt issue outstanding having a rating at the time of purchase
within the three highest grades as determined by Moody's (Aaa, Aa or A) or S&P
(AAA, AA or A) and U.S. dollar denominated foreign commercial paper;

(e) publicly-traded bonds, debentures and notes having a rating within the four
highest grades as determined by Moody's (Aaa, Aa, A or Baa) or S&P (AAA, AA, A
or BBB);

(f) repurchase agreements on any of the securities listed in paragraphs (a)
through (e) above, and

(g) securities of foreign issuers; provided, however, MML Blend may invest not
more than 10% of its net assets in such securities except as provided in (b) and
(c) above.

While debt securities rated BBB or Baa are investment grade securities, they
have speculative characteristics and are subject to greater credit risk, and may
be subject to greater market risk, than higher-rated investment grade
securities.

10
<PAGE>

V. INVESTMENT PRACTICES
OF THE FUNDS AND
RELATED RISKS

In managing their portfolios of investments, the Funds, pursuant to policies
adopted by the Board of Trustees or where considered appropriate by Advisers,
may engage in various investment-related practices. The Funds' significant
investment practices, which are pursuant to non-fundamental policies and
therefore may be changed by the Board of Trustees without consent of
shareholders, regarding these investment transactions and practices are
discussed below. For further information see the Statement of Additional
Information.

A. DERIVATIVES TRANSACTIONS

Each Fund is authorized to engage in transactions involving derivatives, as more
fully described in the Statement of Additional Information. For example, the
Funds may enter into financial futures transactions, write and purchase call and
put options, including call options on securities and futures, enter into
forward contracts and swap agreements, and other similar instruments
(collectively referred to as "Derivatives").

The Funds may use Derivatives to attempt to: (a) protect against possible
declines in the market value of a Fund's portfolio resulting from downward
trends in the debt securities markets generally due to increasing interest
rates, (b) protect a Fund's unrealized gains or limit unrealized losses in the
value of its securities, (c) to establish a position in the debt securities
markets as a temporary substitute for purchasing or selling particular debt
securities, (d) to manage the effective maturity or duration of fixed-income
securities in a Fund's portfolio, or (e) to manage its exposure to changing
security prices (collectively, "Derivatives Transactions"). Most, if not all, of
the hedging activity will involve the portfolios of MML Managed Bond and the
Bond Sector of MML Blend as MML Trust has no present intent to enter into
derivatives transactions with regard to MML Money Market, MML Equity, or the
Equity or Money Market Sectors of MML Blend. The Funds will not use Derivatives
for speculative purposes.

1. DERIVATIVES

Some of the Derivatives a Fund may use in Derivatives Transactions are described
below.

a. FINANCIAL FUTURES: Each Fund may enter into exchange-traded futures contracts
for the purchase or sale of debt obligations in order to hedge against
anticipated changes in interest rates. The purpose of hedging in debt
obligations is to establish with more certainty than would otherwise be possible
the effective rate of return on portfolio securities. A futures contract on debt
obligations is a binding contractual commitment which, if held to maturity, will
result in an obligation to make or accept delivery, during a particular month,
of obligations having a standardized face value and rate of return. However,
positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions which may result in a
gain or a loss.

b. CALL AND PUT OPTIONS: Each Fund may write covered call options which are
traded on a national securities exchange with respect to securities in its
portfolio, provided that at all times it will have in its portfolio the
securities which it may be obligated to deliver if the option is exercised or
securities currently convertible into those securities. Each Fund may write call
options on securities in its portfolio in an attempt to realize a greater
current return than would be realized on the securities alone. The Fund may also
enter into "closing purchase transactions" in order to terminate its obligation
as a writer of a call option prior to the expiration of the option.

Each Fund may write covered put options. Put options are "covered" by a Fund,
for example, when it has established a segregated account of cash, short-term
money market instruments or high quality debt securities that can be liquidated
quickly to satisfy any obligation of the Fund to purchase the underlying
security. Each Fund may also write straddles (combinations of calls and puts on
the same underlying security). The writing of straddles generates additional
premium income but may present greater risk.

c. FORWARD CONTRACTS: Each Fund may purchase or sell securities on a "when
issued" or delayed delivery or on a forward commitment basis ("forward
contracts"). When such transactions are negotiated, the price is fixed at the
time of commitment, but delivery and payment for the securities can take place a
month or more after the commitment date. The securities so purchased or sold are
subject to market fluctuations, and no interest accrues to the purchaser during
this period. At the time of delivery, the securities may be worth more or less
than the purchase or sale price.

If a Fund enters into a forward contract, it will establish a segregated account
consisting of cash or high-grade obligations having a current market value equal
to or greater than the aggregate amount of that Fund's commitment under forward
contracts (that is, the purchase price of the underlying security on the
delivery date). While the Funds may also enter into forward contracts with the
initial intention of acquiring securities for its portfolio, they may dispose of
a commitment prior to settlement if Advisers deems it appropriate to do so. The
Funds may realize short-term gains or losses upon the sale of forward contracts.
As an alternative to maintaining all or part of the segregated account, a Fund
could buy call or put options to "cover" the forward contracts.

d. INTEREST RATE SWAP AGREEMENTS: Each Fund may enter into interest rate swap
agreements and related products, such as interest rate caps and floors, in an
attempt to preserve a return or spread on a particular investment or portion of
its portfolio, or, to protect against any increase in the price of securities a
Fund might consider purchasing at a later date. Interest rate swaps involve the
exchange by a Fund with another party of their respective commitments to pay or
receive interest, such as an exchange of floating rate payments for fixed rate
payments.

e. CURRENCY TRANSACTIONS: The Bond Fund and the Bond Sector of MML Blend may
invest in foreign securities that are not denominated in U.S. dollars only if
the Fund contemporaneously enters into a foreign currency transaction to hedge
the currency risk associated with the particular foreign security.

11
<PAGE>

f. OTHER INSTRUMENTS: Each Fund may use other Derivatives and enter into other
Derivatives transactions that are, or become, appropriate in the context of each
Fund's investment objectives and policies - and in a manner and to the extent
permitted by law and authorized by the Board of Trustees.

2. DERIVATIVES - RISK FACTORS

There can be no assurance that the use of Derivatives by any of the Funds will
assist it in achieving its investment objectives. Risks inherent in the use of
Derivatives include: (1) the risk that interest rates and securities prices will
not move in the direction anticipated; (2) imperfect correlation between the
prices of futures, options, and forward contracts and the prices of the
securities being hedged; (3) the fact that skills needed to use these strategies
are different from those needed to select portfolio securities; (4) the possible
absence of a liquid secondary market for any particular instrument at any time;
(5) futures contracts and options can be highly volatile; (6) the writing of
call options could result in increases in the Funds' portfolio turnover rate,
especially during periods when market prices of the underlying securities
appreciate; (7) the possible need to defer closing out certain hedged positions
to avoid adverse tax consequences; (8) the risk that a Fund will not be able to
effect closing purchase transactions as to call options it has written at any
particular time or at any acceptable price; (9) forward contracts involve a risk
of a loss if the value of the security to be purchased declines prior to the
settlement date, which is in addition to the risk of decline of the Funds' other
assets, and (10) the inability of counterparties to perform.

3. DERIVATIVES - LIMITATIONS

MML Trust has imposed certain specific limitations on its use of derivatives.
For example: (1) a Fund would not enter into a futures contract if, as a result,
more than 5% of the Fund's total assets would be committed to initial margin
deposits on such contracts; (2) a Fund will not purchase a put or call option on
securities or investment related instruments if as a result more than 5% of its
total assets would be attributable to premiums paid for such options; (3) a Fund
would not write a covered call or put option if as a result more than 20% of the
Fund's total assets would be in one or more segregated accounts covering call
and put options; and (4) a Fund would not enter into a forward contract if as a
result more than 25% of the Fund's total assets would be in one or more
segregated accounts covering forward contracts.

B. PORTFOLIO MANAGEMENT

Advisers intend to use trading as a means of managing the portfolios of the
Funds in seeking to achieve their investment objectives. Advisers, on behalf of
the Funds, will engage in trading when they believe that the trade, net of
transaction costs, will improve interest income or capital appreciation
potential, or will lessen capital loss potential.

Whether the goals discussed above will be achieved through trading depends on
Advisers' ability to evaluate particular securities and anticipate relevant
market factors, including interest rate trends and variations from such trends.
Such trading places a premium on Advisers' ability to obtain relevant
information, evaluate it properly and take advantage of their evaluations by
completing transactions on a favorable basis. If Advisers' evaluations and
expectations prove to be incorrect, a Fund's income or capital appreciation may
be reduced and its capital losses may be increased. Portfolio trading involves
transaction costs, but, as explained above, will be engaged in when Advisers
believe that the result of the trading, net of transaction costs, will benefit
the Funds.

C. RESTRICTED AND ILLIQUID SECURITIES

The Funds may invest in illiquid securities up to 15% (10% in the case of MML
Money Market) of each Fund's net assets. Each Fund currently expects to invest,
if anything, no more than 10% of its net assets in such securities. This policy
does not limit purchases of securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933 that
are determined to be liquid by the Board of Trustees or by Advisers pursuant to
Board approved guidelines. Such guidelines take into account trading activity
for such securities and the availability of reliable pricing information, among
other factors. If there is a lack of trading interest in particular Rule 144A
securities, a Fund's holdings of those securities may be illiquid. There may be
undesirable delays in selling these securities at prices representing fair
value.

D. REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS

MML Money Market, MML Managed Bond and MML Blend may engage in repurchase
agreements and MML Blend may engage in reverse repurchase agreements. A
repurchase agreement is a contract pursuant to which a Fund agrees to purchase a
security and simultaneously agrees to resell it at an agreed-upon price at a
stated time, thereby determining the yield during the Fund's holding period. A
reverse repurchase agreement is a contract pursuant to which a Fund agrees to
sell a security and simultaneously agrees to repurchase it at an agreed-upon
price at a stated time. For a more detailed description of repurchase agreements
and reverse repurchase agreements, see the Statement of Additional Information.

E. SECURITIES LENDING

MML Managed Bond and MML Blend may make loans of portfolio securities of not
more than 10% of their respective total assets taken at current value, thereby
realizing additional income. Although lending portfolio securities may involve
the risk of delay in recovery of the securities loaned or possible loss of
rights in the collateral should the borrower fail financially, loans will be
made only to borrowers deemed by MassMutual to be of good standing.

F. FEDERAL TAXES

The extent to which the Funds may enter into Derivatives transactions and engage
in portfolio trading may be limited by the Internal Revenue Code's requirements
for qualification for regulated investment companies. It is each Fund's
intention to qualify as such. See "Certain Tax and Accounting Information" in
the Statement of Additional Information.

12
<PAGE>

G. CASH POSITIONS

Each Fund, other than MML Money Market, may hold cash or cash equivalents to
provide for liquidity (e.g. expenses and anticipated redemption payments) and so
that an orderly investment program may be carried out in accordance with the
Fund's investment policies. To provide liquidity or for temporary defensive
purposes, each Fund may invest any portion of its assets in investment grade
debt securities and MML Equity may also invest in non-convertible preferred
stocks.

VI. INVESTMENT RESTRICTIONS

The following is a description of certain investment restrictions, and
exceptions to such restrictions, that apply to each Fund which may not be
changed without a vote of a majority of the outstanding shares of such Fund.
(For a description of additional investment restrictions, reference should be
made to the Statement of Additional Information.)

A. INVESTMENT RESTRICTIONS

Each Fund will not:

(1) Pledge or mortgage assets taken at market to an extent greater than 15% of
the total assets of the Fund taken at cost;

(2) Borrow money, except from banks as a temporary measure for extraordinary or
emergency purposes (but not for the purpose of making investments), and except
to the extent that each Fund engages in financial futures transactions (as
described on page 11) and in reverse repurchase agreements (as described on page
12), provided (a) that the aggregate amount of all such borrowings at the time
of borrowing does not exceed 10% of the total assets of the Fund taken at cost,
and (b) that immediately after the borrowing, and at all times thereafter, there
will be an asset coverage of at least 300% for all of the Fund's borrowings
(including all obligations under financial futures contracts on debt
obligations); and

(3) Concentrate its investments in any one industry, as determined by the Board
of Trustees, and in this connection it will not acquire securities of companies
in any one industry if, immediately after giving effect to any such acquisition,
more than 25% of the value of the total assets of the Fund would be invested in
such industry, with the following exceptions:

(a) In the case of MML Money Market there is no limitation in respect of
certificates of deposit and bankers' acceptances (see "The Funds - MML Money
Market Fund" on pages 8-9).

(b) MML Money Market, MML Managed Bond and the Bond Sector of MML Blend each
may invest up to 40% of the value of their respective total assets in each
of the electric utility and telephone industries. However, it currently is
MassMutual's intent not to invest more than 25% of any one of these funds
total assets in either the electric utility or telephone industries.

B. EXCEPTIONS

(1) Notwithstanding any of the above investment restrictions or those set forth
in the Statement of Additional Information, and in addition to the authority
each Fund had as of April 30, 1993, each Fund may engage in derivatives
transactions, techniques, and practices using futures, options, swap agreements,
and similar instruments, to the extent and in a manner permitted by law.

(2) Notwithstanding any of the above investment restrictions or those set forth
in the Statement of Additional Information, each Fund may invest in any security
or investment related instrument, or engage in any investment related
transaction or practice, such as newly developed debt securities or hedging
programs, provided that the Board of Trustees has determined that to do so is
consistent with the Fund's investment objectives and policies, has adopted
reasonable guidelines for use by the Fund's Advisers and provided further that
at the time of entering into such investment or transaction such investments or
instruments account for no more than 10% of the Fund's total assets.

VII. INVESTMENT MANAGERS

MassMutual serves as investment manager of each Fund pursuant to a separate
investment management agreement executed by MassMutual and each Fund. Under the
agreements, which are substantially identical, MassMutual is authorized to
engage in portfolio transactions on behalf of the Funds, subject to such general
or specific instructions as may be given by the Board of Trustees. MassMutual
also acts as the transfer agent and the dividend paying agent.

The investment management agreements between MassMutual and the Funds provide
that MassMutual will perform all administrative functions relating to the Funds
and will bear all expenses of the Funds except (1) taxes and corporate fees
payable to government agencies, (2) brokerage commissions (which may be higher
than other brokers charge if paid to a broker which provides brokerage and
research services to Advisers or for use in providing investment advice and
management to the Funds and other accounts over which Advisers exercise
investment discretion) and other capital items payable in connection with the
purchase or sale of Fund investments, (3) interest on account of any borrowings
by the Funds, (4) fees and expenses of Trustees of MML Trust who are not
interested persons, as defined in the Investment Company Act of 1940, as amended
(the "1940 Act"), of the Advisers or MML Trust, and (5) fees of the Funds'
independent certified public accountants.

For providing the services described above, MassMutual is paid a quarterly fee
at the annual rate of .50% of the first $100,000,000 of the average daily net
asset value of each Fund, .45% of the next $200,000,000, .40% of the next
$200,000,000 and .35% of any excess over $500,000,000. MassMutual has agreed to
bear expenses of each Fund (other than the management fee, interest, taxes,
brokerage commissions and extraordinary expenses) in excess of .11% of average
daily net asset value through April 30, 1996. In 1994 MML Equity, MML Money
Market, MML Managed Bond, and MML Blend paid fees to MassMutual amounting to
.41%, .50%, .49% and .38%, respectively, of their average daily net assets
during the year.

13
<PAGE>

The investment management agreement between MassMutual and each Fund
automatically terminates: (1) unless its continuance is specifically approved at
least annually by the affirmative vote of a majority of the Board of Trustees,
which affirmative vote shall include a majority of the members of the Board who
are not interested persons (as defined in the 1940 Act) of MassMutual or of MML
Trust, or (2) upon its assignment. Under the terms of each investment management
agreement, each Fund recognizes MassMutual's control of the initials "MML" and
each Fund agrees that its right to use these initials is non-exclusive and can
be terminated by MassMutual at any time. Under each agreement, MassMutual's
liability regarding its investment management obligations and duties is limited
to situations involving its willful misfeasance, bad faith, gross negligence or
reckless disregard of such obligations and duties.

MassMutual is a mutual life insurance company organized in 1851 under the laws
of The Commonwealth of Massachusetts. MassMutual is licensed to transact a life,
accident and health insurance business in all states of the United States, the
District of Columbia and certain Provinces of Canada. At December 31, 1994
MassMutual had total assets of approximately $35.2 billion, including
approximately $17.7 billion in debt securities, $3.0 billion in mortgage loans,
$197.0 million in common stocks (excluding investments in subsidiaries), $1.3
billion in real estate and $2.4 billion in other investments. The persons who
are responsible for the management of the bond and money market portfolios of
MassMutual are also responsible for managing investments of the Funds.

As of January 1, 1993, MassMutual transferred its equity investment advisory
operations to Concert. All of the senior investment professionals of
MassMutual's Equity Management Department transferred to and became employees of
Concert. MassMutual indirectly owns 100% of Concert's voting stock and a
majority of Concert's Directors are officers and employees of MassMutual.
Concert manages institutional investment advisory accounts pursuant to written
contracts. As of December 31, 1994, Concert had $4.4 billion of assets under
management.

Pursuant to two investment sub-advisory agreements with MassMutual, Concert
manages the investment of the assets of MML Equity and the Equity Sector of MML
Blend and MassMutual pays Concert a quarterly fee equal to an annual rate of
.13% of the average daily net asset value. The agreements provide that they
automatically terminate upon the termination of the respective investment
management agreements between MassMutual and MML Equity and MML Blend. Concert
also serves as the investment sub-adviser to Oppenheimer Value Stock Fund which
had net assets of $104 million as of December 31, 1994.

Securities held by the Funds are also frequently held by Advisers in their
investment accounts and by other investment companies for which Advisers act as
investment advisers. If the same security is purchased or sold for any Fund and
such investment account or companies at the same time, such purchases or sales
normally will be combined, to the extent practicable, and will be allocated as
nearly as practicable on a pro rata basis in proportion to the amounts to be
purchased or sold for each. In determining the amounts to be purchased or sold,
the main factors to be considered will be the investment objectives of the
respective portfolios, the relative size of portfolio holdings of the same or
comparable security, availability of cash for investment by the various
portfolios and the size of their respective investment commitments. It is
believed that the ability of the Funds to participate in larger volume
transactions will, in most cases, produce better execution for the Funds. In
some cases, however, this procedure could have a detrimental effect on the price
and amount of a security available to a Fund or the price at which a security
may be sold. It is the opinion of MML Trust's management that, such execution
advantage and the desirability of retaining Advisers as investment managers of
the Funds outweigh the disadvantages, if any, which might result from this
procedure.

VIII. CAPITAL SHARES

MML Trust is a "series" company which is authorized to issue shares in separate
series of the same class. Shares of four series have been authorized,
constituting the interests in the four Funds described in this Prospectus. Under
MML Trust's Declaration of Trust, however, the Board of Trustees is authorized
to create new shares in addition to the Funds without the necessity of a vote of
shareholders of MML Trust. MML Trust may issue an unlimited number of shares of
the same class, in one or more series as MML Trustees may authorize, with or
without par value as MML Trustees may prescribe. Each share of a particular
series represents an equal proportionate interest in that series with each other
share of the same series, none having priority or preference over another. Each
series shall be preferred over all other series in respect of the assets
allocated to that series. Each share of a particular series is entitled to a pro
rata share of any distributions declared by that series and, in the event of
liquidation, a pro rata share of the net assets of that series remaining after
satisfaction of outstanding liabilities. When issued, shares are fully paid and
nonassessable and have no preemptive, conversion or subscription rights.

MML Trust is not required to hold annual meetings of shareholders. Special
meetings may be called for purposes such as electing MML Trustees, voting on
management agreements, and with respect to such additional matters relating to
MML Trust as may be required by MML Trust's Declaration of Trust and the 1940
Act. Shareholders holding 10% of the shares of MML Trust may call a meeting to
be held to consider removal of MML Trustees. On any matter submitted to
shareholders, shares of each Fund entitle their holder to one vote per share
(with proportionate voting for fractional shares), irrespective of the relative
net asset values of the Funds' shares. On any matters submitted to a vote of
shareholders, all shares of MML Trust then entitled to vote shall be voted by
individual Fund, except that (i) when required by the 1940 Act, shares shall be
voted in the aggregate and not by individual Fund, and (ii) when MML Trustees
have determined that any matter affects only the interests of one or more Funds,
then only shareholders of such Fund or Funds shall be entitled to vote thereon.
Shareholder inquiries should be made by contacting the Secretary, MML Series
Investment Fund, 1295 State Street, Springfield, Massachusetts 01111.

The assets of certain variable annuity and variable life insurance separate
accounts for which MassMutual or an affiliate is the depositor are invested in
shares of the Funds. Because these separate accounts are invested in the same
underlying Funds it is possible that material conflicts could arise between
owners of the variable life insurance contracts and owners

14
<PAGE>

of the variable annuity contracts. Possible conflicts could arise if (i) state
insurance regulators should disapprove or require changes in investment
policies, investment advisers or principal underwriters or if the depositor
should be permitted to act contrary to actions approved by holders of the
variable life or variable annuity contracts under rules of the Securities and
Exchange Commission, (ii) adverse tax treatment of the variable life or variable
annuity contracts would result from utilizing the same underlying Funds, (iii)
different investment strategies would be more suitable for the variable annuity
contracts than the variable life contracts, or (iv) state insurance laws or
regulations or other applicable laws would prohibit the funding of both variable
life and variable annuity separate accounts by the same Funds.

The Board of Trustees will follow monitoring procedures which have been
developed to determine whether material conflicts have arisen and what action,
if any, should be taken in the event of such conflicts. If a material
irreconcilable conflict should arise between owners of the variable life
insurance contracts and owners of the variable annuity contracts, one or the
other group of owners may have to terminate its participation in the Funds. More
information regarding possible conflicts between variable annuity and variable
life insurance contracts is contained in the prospectuses for those contracts.

Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of MML Trust. However, MML Trust's
Declaration of Trust disclaims liability of the shareholders, MML Trustees, or
officers of MML Trust for acts or obligations of MML Trust, which are binding
only on the assets and property of MML Trust, and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into or
executed by MML Trust or MML Trustees. MML Trust's Declaration of Trust provides
for indemnification out of MML Trust property for all loss and expense of any
shareholder held personally liable for the obligations of MML Trust. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which the
disclaimer is inoperative and MML Trust itself would be unable to meet its
obligations.

IX. NET ASSET VALUE

The net asset value of each Fund's shares is determined once daily as of the
normal close of trading on the New York Stock Exchange (presently 4:00 p.m.) on
each day on which the Exchange is open for trading.

A. MML MONEY MARKET FUND

It is the intention of MML Money Market to maintain a per share net asset value
of $1.00, although this cannot be assured. Since the net income of MML Money
Market is declared as a dividend each time it is determined, the net asset value
per share of MML Money Market remains at $1.00 per share immediately after each
determination and dividend declaration. Any increase in the value of a
shareholder's investment in MML Money Market representing the reinvestment of
dividend income is reflected by an increase in the number of shares of MML Money
Market in the shareholder's account, which increase is recorded promptly after
the end of each calendar month. MML Money Market's portfolio instruments are
valued on the basis of amortized cost.

B. OTHER FUNDS

Generally, the other Funds value portfolio securities on the basis of market
value. For example, equity securities, including those traded on national
securities exchanges, the NASDAQ national market system, or over-the-counter
securities not so listed, are valued by one or more pricing services, as
authorized by the Board of Trustees. Normally, the values are based upon the
last reported sale price of the security. Long-term bonds are valued on the
basis of valuations furnished by a pricing service, authorized by the Board of
Trustees, which determines valuations taking into account appropriate factors
such as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and other
market data. Debt obligations with less than one year but more than sixty days
to maturity are valued on the basis of their market value, and debt obligations
having a maturity of sixty days or less are generally valued at amortized cost
when the Board of Trustees believes that amortized cost approximates market
value. If acquired, preferred stocks will be valued on the basis of their market
value if market quotations are readily available. Futures contracts are valued
based on market prices unless such prices do not reflect the fair value of the
contract, in which case they will be valued by or under the direction of the
Board of Trustees. In all other cases, assets (including restricted securities)
will be valued at fair value as determined in good faith by the Board of
Trustees, although the actual calculations may be made by persons acting
pursuant to the direction of the Board of Trustees.

X. SALE AND REDEMPTION OF SHARES

The shares of each Fund are sold at their net asset value (which in the case of
MML Money Market is expected to remain at $1.00) as next computed after receipt
of the purchase order, without the deduction of any selling commission or "sales
load."

Each Fund redeems its shares at their net asset value (which in the case of MML
Money Market is expected to remain at $1.00) as next computed after receipt of
the request for redemption. The redemption price for shares of MML Equity, MML
Managed Bond and MML Blend may be more or less than the shareholder's cost. No
fee is charged on redemption.

Redemption payments will be made within seven days after receipt of the written
request therefore by MML Trust, except that the right of redemption may be
suspended or payments postponed when permitted by applicable law and
regulations.

XI. TAX STATUS

It is the policy of each Fund to comply, and in 1994 each Fund did comply, with
the provisions of the Internal Revenue Code applicable to regulated investment
companies. As a result, none of the Funds will be subject to federal income tax
on

15
<PAGE>

any net income or any capital gains to the extent they are distributed or are
deemed to have been distributed to shareholders.

Regulations issued under Internal Revenue Code Section 817(h) require each of
the Funds to be adequately diversified in order for a variable annuity and
variable life contract funded by MML Trust to receive favorable tax treatment as
an annuity or life insurance contract. Among other requirements, the regulations
limit each Fund's investment in a single issuer to 55% of its assets; while this
requirement applies to U.S. Government securities, each government agency or
instrumentality is treated for this purpose as a separate issuer. The Funds
intend to comply with these diversification requirements. For further
information, see the Statement of Additional Information.

Tax consequences to investors in the separate investment accounts which are
invested in the Funds are described in the prospectuses for such accounts.

XII. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

The Funds intend to declare capital gain and ordinary income dividends and to
distribute such dividends in a manner designed to avoid a 4% excise tax on
undistributed regulated investment company income, imposed by the Tax Reform Act
of 1986. The declaration and distribution policies specific to each Fund are
outlined below.

A. MML EQUITY FUND

Distributions, if any, are declared and paid annually. Distributions may be
taken either in cash or in additional shares of MML Equity at net asset value on
the day after the record date for the distribution, at the option of the
shareholder.

B. MML MONEY MARKET FUND

The net income of MML Money Market, as defined below, is determined as of the
normal close of trading on the New York Stock Exchange on each day on which the
Exchange is open, and all the net income so determined is declared as a dividend
to shareholders of record as of that time. Dividends are distributed promptly
after the end of each calendar month in additional shares of MML Money Market at
the then current net asset value, or in cash, at the option of the shareholder.

For this purpose the net income of MML Money Market (from the time of the
immediately preceding determination thereof) consists of all interest income
accrued on its portfolio, plus realized gains or minus realized losses, and less
all expenses and liabilities chargeable against income. Interest income includes
discount earned (including both original issue and market discount) on paper
purchased at a discount, less amortization of premium, accrued ratably to the
date of maturity. Expenses, including the compensation payable to MassMutual,
are accrued each day.

Should MML Money Market incur or anticipate any unusual expense, or loss or
depreciation which would adversely affect its net asset value per share or
income for a particular period, the Board of Trustees would at that time
consider whether to adhere to the present dividend policy described above or to
revise it in the light of the then prevailing circumstances. For example, if MML
Money Market's net asset value per share were reduced, or were anticipated to be
reduced, below $1.00, the Board of Trustees might suspend further dividend
payments until the net asset value returned to $1.00. Thus, such expenses or
losses or depreciation might result in an investor receiving no dividends for
the period during which he held his shares and in his receiving upon redemption
a price per share lower than that which he paid.

C. MML MANAGED BOND AND MML BLEND FUNDS

Dividends out of net investment income are declared and paid quarterly. Capital
gains declarations and distributions of net capital gains, if any, for the year
are made annually. Distributions may be taken either in cash or in additional
shares of the applicable Fund at net asset value on the day after the record
date for the distribution, at the option of the shareholder.

XIII. INVESTMENT PERFORMANCE

Each of the Funds may from time to time advertise certain investment performance
figures. These figures are based on historical earnings and are not intended to
indicate future performance.

MML Money Market may quote its yield and its effective yield. The yield of MML
Money Market refers to the income generated by the Fund over a seven-day period
(which period will be stated in the advertisement). This income is then assumed
to be earned each week over a 52-week period. The effective yield is calculated
similarly, but the income earned by an investment in the Fund is assumed to be
reinvested.

MML Managed Bond, MML Blend and MML Equity may also quote yield. The yield for
each of these Funds refers to the net investment income earned by the Fund over
a 30-day period (which period will be stated in the advertisement). This income
is then assumed to be earned for a full year and to be reinvested each month for
six months. The resulting semi-annual yield is doubled.

Each of the Funds may advertise its total return and its holding period return
for various periods of time. Total return is calculated by determining, over a
period of time, which will be stated in the advertisement, the average annual
compounded rate of return that an investment in the Fund earned over that
period, assuming reinvestment of all distributions. Holding period return refers
to the percentage change in the value of an investment in a Fund over a period
of time (which period will be stated in the advertisement), assuming
reinvestment of all distributions. Total return and holding period return differ
from yield in that the return figures include capital changes in an investment
while yield measures the rate of net income generated by a Fund. Total return
differs from holding period return principally in that total return is an
average annual figure while holding period return is an aggregate figure for the
entire period.

These investment performance figures may be of limited use for comparative
purposes because they do not reflect charges imposed by the separate investment
accounts invested in the Funds which, if included, would decrease the
performance fig-

16
<PAGE>

ures. For more information about the investment performance of the Funds, see
the Statement of Additional Information.

XIV. MANAGEMENT OF MML TRUST

The affairs of MML Trust are generally supervised by its Board of Trustees and
officers. As stated previously, MassMutual acts as investment manager of each of
the Funds and Concert is the sub-adviser to MML Equity and the Equity Sector of
MML Blend. In those capacities, MassMutual and Concert are part of the
management of MML Trust. For more information concerning the management of MML
Trust, reference should be made to the Statement of Additional Information.

The name MML Series Investment Fund is the designation of Trustees under a
Declaration of Trust dated December 19, 1984, as amended from time to time. The
obligations of MML Trust are not personally binding upon, nor shall resort be
had to the property of, any of the Trustees, shareholders, officers, employees
or agents of MML Trust, but MML Trust's property only shall be bound.

17
<PAGE>

MML SERIES INVESTMENT FUND
1295 State Street
Springfield, Massachusetts 01111

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

INVESTMENT MANAGER

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
1295 State Street
Springfield, Massachusetts 01111

INVESTMENT SUB-ADVISOR

CONCERT CAPITAL MANAGEMENT, INC.
125 High Street
Boston, Massachusetts 02110

INDEPENDENT ACCOUNTANTS

COOPERS & LYBRAND L.L.P.
2300 BayBank Tower
Springfield, Massachusetts 01101

CUSTODIAN

CITIBANK N.A.
111 Wall Street
New York, New York 10005

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

This Prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. No person is authorized to make any
representations in connection with this offering other than those contained in
this Prospectus.

<PAGE>

OPPENHEIMER VARIABLE ACCOUNT FUNDS
3410 South Galena Street
Denver, CO 80231
1-800-525-7048
Prospectus dated May 1, 1995

OPPENHEIMER VARIABLE ACCOUNT FUNDS (the "Trust") is a diversified open-end
investment company consisting of nine separate funds (collectively, the
"Funds"):

OPPENHEIMER MONEY FUND ("Money Fund") seeks the maximum current income from
investments in "money market" securities consistent with low capital risk and
the maintenance of liquidity. Its shares are neither insured nor guaranteed by
the U.S. government, and there is no assurance that this Fund will be able to
maintain a stable net asset value of $1.00 per share.

OPPENHEIMER HIGH INCOME FUND ("High Income Fund") seeks a high level of current
income from investment in high yield fixed-income securities. High Income Fund's
investments include unrated securities or high risk securities in the lower
rating categories, 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.

OPPENHEIMER BOND FUND ("Bond Fund") 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
Fund seeks capital growth when consistent with its primary objective.

OPPENHEIMER CAPITAL APPRECIATION FUND ("Capital Appreciation Fund") seeks to
achieve capital appreciation by investing in "growth-type" companies.

OPPENHEIMER GROWTH FUND ("Growth Fund") seeks to achieve capital appreciation by
investing in securities of well-known established companies.

OPPENHEIMER MULTIPLE STRATEGIES FUND ("Multiple Strategies Fund") seeks a total
investment return (which includes current income and capital appreciation in the
value of its shares) from investments in common stocks and other equity
securities, bonds and other debt securities, and "money market" securities.

OPPENHEIMER GROWTH & INCOME FUND ("Growth & Income Fund") seeks a high total
return (which includes growth in the value of its shares as well as current
income) from equity and debt securities. From time to time this Fund may focus
on small to medium capitalization common stocks, bonds and convertible
securities.

OPPENHEIMER GLOBAL SECURITIES FUND ("Global Securities Fund") seeks long-term
capital appreciation by investing a substantial portion of assets in securities
of foreign issuers, "growth-type" companies, cyclical industries and special
situations which are considered to have appreciation possibilities. Current
income is not an objective. These securities may be considered to be
speculative.

OPPENHEIMER STRATEGIC BOND FUND ("Strategic Bond Fund") 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 Fund
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.

Shares of the Funds are sold only to provide benefits under variable life
insurance policies and variable annuity contracts (collectively, the
"Accounts"). The Accounts invest in shares of one or more of the Funds in
accordance with allocation instructions received from Account owners. Such
allocation rights are further described in the accompanying Account Prospectus.
Shares are redeemed to the extent necessary to provide benefits under an
Account.

This Prospectus explains concisely what you should know before investing in the
Trust and the Funds. Please read this Prospectus carefully and keep it for
future reference. You can find more detailed information about the Funds in the
May 1, 1995 Statement of Additional Information. For a free copy, call
Oppenheimer Shareholder Services, the Funds' Transfer Agent, at 1-800-525-7048,
or write to the Transfer Agent at the address on the back cover. The Statement
of Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference (which means
that it is legally part of this Prospectus).

TX-1
<PAGE>

CONTENTS

ABOUT THE FUNDS
OVERVIEW OF THE FUNDS......................... 3
FINANCIAL HIGHLIGHTS.......................... 4
INVESTMENT OBJECTIVES AND POLICIES............ 12
HOW THE FUNDS ARE MANAGED..................... 20
PERFORMANCE OF THE FUNDS...................... 21

ABOUT YOUR ACCOUNT
HOW TO BUY SHARES............................. 27
HOW TO SELL SHARES............................ 27
DIVIDENDS, CAPITAL GAINS AND TAXES............ 27
APPENDIX A: DESCRIPTION OF TERMS.............. A-1
APPENDIX B: DESCRIPTION OF SECURITIES RATINGS. B-1
</TABLE>

TX-2
<PAGE>

OVERVIEW OF THE FUNDS

Some of the important facts about the Funds are summarized below, with
references to the section of this Prospectus where more complete information can
be found. You should carefully read the entire Prospectus before making a
decision about investing. Keep the Prospectus for reference after you invest.

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES? The MONEY FUND'S investment objective
is to seek current income from investments in "money market" securities
consistent with low capital risk and the maintenance of liquidity. The HIGH
INCOME FUND'S investment objective is to seek a high level of current income
from investment in high yield fixed-income securities. The BOND FUND'S
investment objective is to seek a high level of current income from investment
in high yield fixed-income securities rate "baa" or better by Moody's or "BBB"
or better by Standard & Poor's. As a secondary investment objective, the Bond
Fund seeks capital growth when consistent with its primary objective. The
CAPITAL APPRECIATION FUND'S investment objective is to achieve capital
appreciation by investing in "growth-type" companies. The GROWTH FUND'S
investment objective is to seek to achieve capital appreciation by investing in
securities of well-known established companies. The MULTIPLE STRATEGIES FUND'S
investment objective is to seek a total investment return (which includes
current income and capital appreciation in the value of its shares) from
investment in common stocks and other equity securities, bonds and other debt
securities, and "money market" securities. The GROWTH & INCOME FUND'S investment
objective is to seek a total return (which includes growth in the value of its
shares) as well as current income from equity and debt securities. The GLOBAL
SECURITIES FUND'S investment objective is to seek long-term capital appreciation
by investing a substantial portion of assets in securities of foreign issuers,
"growth-type" companies, cyclical industries and special situations which are
considered to have appreciation possibilities. The STRATEGIC BOND FUND'S
investment objective is to seek 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.

WHAT DO THE FUNDS INVEST IN? To seek their respective investment objectives, the
Funds invest as follows. MONEY FUND primarily invests in money market
securities. HIGH INCOME FUND primarily invests in high yield fixed-income
securities, including unrated securities or high risk securities in the lower
rating categories, commonly known as "junk bonds." BOND FUND primarily invests
in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB"
or better by Standard & Poor's. CAPITAL APPRECIATION FUND primarily invests in
"growth-type" companies. GROWTH FUND primarily invests in securities of
well-known established companies. MULTIPLE STRATEGIES FUND primarily invests in
common stocks and other equity securities, bonds and other debt securities, and
money market securities. GROWTH & INCOME FUND is a new fund that will primarily
invest in equity and debt securities and focus from time to time on small to
medium capitalization companies. GLOBAL SECURITIES FUND primarily invests in
securities of foreign issuers, "growth-type" companies, cyclical industries and
special situations. STRATEGIC BOND FUND primarily invests in foreign government
and corporate debt securities, U.S. Government securities, and lower-rated high
yield domestic and foreign debt securities, commonly know as "junk bonds." These
investments are more fully explained for each Fund in "Investment Objectives and
Policies," starting on page 12.

WHO MANAGES THE FUNDS? The Funds' investment adviser is Oppenheimer Management
Corporation, which (including a subsidiary) advises investment company
portfolios having over $29 billion in assets. Each Fund's portfolio manager is
primarily responsible for the selection of securities of that Fund. The
portfolio managers are as follows: for MONEY FUND, Arthur Zimmer; for HIGH
INCOME FUND, BOND FUND, MULTIPLE STRATEGIES FUND and STRATEGIC BOND FUND, David
Negri (joined by Richard Rubinstein for MULTIPLE STRATEGIES FUND and by Arthur
Steinmetz for STRATEGIC BOND FUND); for CAPITAL APPRECIATION FUND, Paul LaRocco;
for GROWTH FUND, Jane Putnam; for GLOBAL SECURITIES FUND, George Evans; and for
GROWTH & INCOME FUND, Robert C. Doll, Jr., Bruce Bartlett and Diane L. Sobin.
The Manager is paid an advisory fee by each Fund, based on its assets. The
Trust's Board of Trustees, elected by shareholders, oversees the investment
adviser and the portfolio manager. Please refer to "How The Funds Are Managed,"
starting on page 20 for more information about the Manager and its fees.

HOW RISKY ARE THE FUNDS? While different types of investments have risks that
differ in type and magnitude, all investments carry risk to some degree. Changes
in overall market movements or interest rates, or factors affecting a particular
industry or issuer, can affect the value of the Funds' investments and their
price per share. Equity investments are generally subject to a number of risks
including the risk that values will fluctuate as a result of changing
expectations for the economy and individual issuers. For both equity and income
investments, foreign investments are subject to the risk of adverse currency
fluctuation and additional risks and expenses in comparison to domestic
investments. In comparing levels of risk among the equity and equity-income
funds, Growth Fund is most conservative, followed by Multiple Strategies Fund,
Growth & Income Fund, Capital Appreciation Fund and Global Securities Fund.
Fixed-income investments are generally subject to the risk that values will
fluctuate with inflation, with lower-rated fixed-income investments being
subject to a greater risk that the issuer will default in its interest or
principal payment obligations. In comparing levels of risk among the
fixed-income funds, Bond Fund is most conservative, followed by Strategic Bond
Fund and High Income Fund. Money Fund is the most conservative of all nine Funds
in that Money Fund intends to maintain a stable net asset value, although there
is no assurance that it will be able to do so.

HOW CAN I BUY OR SELL SHARES? Shares of each Fund are offered only for purchase
by Accounts as an investment medium for variable life insurance policies and
variable annuity contracts. Account owners should refer to the accompanying
Account Prospectus on how to buy or sell shares of the Funds.

HOW HAVE THE FUNDS PERFORMED? Money Fund, High Income Fund, Bond Fund and
Strategic Bond Fund measure their performance by quoting their yields. All of
the Funds with the exception of Money Fund may measure their performance by
quoting average annual total return and cumulative total return, which measure
historical performance. Those returns can be compared to the returns (over
similar periods) of other funds. Of course, other funds may have different
objectives, investments, and levels of risk. The performance of all but two of
the Funds can also be compared to broad market indices, which we have done
starting on page 23. Please remember that past performance does not guarantee
future results.

TX-3
<PAGE>

FINANCIAL HIGHLIGHTS

The table on the following pages presents selected financial information,
including per share data and expense ratios and other data about all the Funds
[except Growth & Income Fund, which did not commence operations until after
December 31, 1994]. The information is based on each such Fund's average net
assets. This information has been audited by Deloitte & Touche LLP, the Funds
independent auditors, whose report on the Funds' financial statements for the
fiscal year ended December 31, 1994, is included in the Statement of Additional
Information.

OPPENHEIMER MONEY FUND
----------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985(1)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>

PER SHARE OPERATING DATA:
Net asset value, beginning $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
of year
Income from investment
operations - net
investment income
and net realized
gain on investments .04 .03 .04 .06 .08 .09 .07 .06 .06 .05
Dividends and
distributions to
shareholders (.04) (.03) (.04) (.06) (.08) (.09) (.07) (.06) (.06) (.05)
----------------------------------------------------------------------------------------------
Net asset value, end of
year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
==============================================================================================

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $89,671 $61,221 $58,266 $58,709 $89,143 $68,440 $69,468 $42,538 $28,218 $ 2,506
Average net assets (in
thousands) $90,264 $57,654 $61,317 $75,747 $82,966 $67,586 $60,241 $35,138 $12,914 $ 2,080
Number of shares
outstanding at
end of year (in thousands) 89,695 61,221 58,266 58,703 89,141 68,439 69,468 42,538 28,218 2,506
Ratios to average net
assets:
Net investment income 4.18% 3.12% 3.76% 5.97% 7.80% 8.82% 7.31% 6.33% 5.68% 7.25%(2)
Expenses .43% .43% .50% .49% .51% .53% .55% .59% .75% .75%(2)

1. For the period from April 3, 1985 (commencement of operations) to December 31, 1985.
2. Annualized.

</TABLE>

TX-4
<PAGE>

Financial Highlights (Continued)
<TABLE>
<CAPTION>
OPPENHEIMER HIGH INCOME FUND
----------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986(1)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>

PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 $ 9.30 $ 9.14 $ 10.04 $ 10.00
Income (loss) from
investment operations:
Net investment income .94 .82 1.19 1.28 1.21 1.09 1.12 1.30 .72
Net realized and
unrealized gain (loss) on
investments, options
written and foreign
currency transactions (1.27) 1.65 .43 1.30 (.82) (.65) .23 (.51) (.24)
----------------------------------------------------------------------------------------------
Total income (loss) from
investment operations (.33) 2.47 1.62 2.58 .39 .44 1.35 .79 .48
----------------------------------------------------------------------------------------------
Dividends and
distributions to
shareholders:
Dividends from net
investment income (.66) (1.19) (1.28) (1.08) (1.08) (1.08) (1.07) (1.55) (.44)
Distributions from net
realized gain on
investments, options
written and foreign
currency transactions (.24) -- -- -- -- (.07) (.12) (.14) --
----------------------------------------------------------------------------------------------
Total dividends and
distributions to
shareholders (.90) (1.19) (1.28) (1.08) (1.08) (1.15) (1.19) (1.69) (.44)
----------------------------------------------------------------------------------------------
Net asset value, end of
period $ 9.79 $ 11.02 $ 9.74 $ 9.40 $ 7.90 $ 8.59 $ 9.30 $ 9.14 $ 10.04
==============================================================================================
TOTAL RETURN, AT NET ASSET
VALUE/(2)/ (3.18)% 26.34% 17.92% 33.91% 4.65% 4.84% 15.58% 8.07% 4.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $ 95,698 $93,011 $40,817 $27,308 $19,172 $23,698 $25,551 $21,768 $14,833
Average net assets (in
thousands) $101,096 $67,000 $36,861 $23,663 $21,493 $26,040 $24,530 $20,637 $ 8,036
Number of shares
outstanding at end of
period (in thousands) 9,779 8,443 4,189 2,905 2,427 2,760 2,746 2,382 1,478
Ratios to average net
assets:
Net investment income 9.15% 10.50% 12.08% 14.26% 14.32% 11.52% 11.94% 13.13% 11.18%(3)
Expenses .67% .68% .73% .75% .75% .75% .75% .75% .75%(3)
Portfolio turnover
rate/(4)/ 110.1% 135.7% 144.2% 108.0% 95.1% 78.7% 57.9% 42.1% 18.3%
</TABLE>
1. For the period from April 30, 1986 (commencement of operations) to
December 31, 1986.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-5
<PAGE>

Financial Highlights (Continued)

OPPENHEIMER BOND FUND
----------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985(1)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 $ 10.15 $ 10.19 $ 11.15 $ 11.27 $10.00
Income (loss) from
investment operations:
Net investment income .76 .65 .87 .95 .97 .98 .94 .97 .97 .86
Net realized and
unrealized gain (loss) on
investments and foreign
currency transactions (.98) .76 (.17) .80 (.18) .32 (.05) (.71) .09 .99
----------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations (.22) 1.41 .70 1.75 .79 1.30 .89 .26 1.06 1.85
----------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.62) (.75) (.86) (.93) (.95) (.96) (.93) (1.17) (1.03) (.58)
Distributions from net
realized gain on
investments and foreign
currency transactions (.03) -- -- -- -- -- -- (.05) (.15) --
----------------------------------------------------------------------------------------------------
Total dividends and
distributions to
shareholders (.65) (.75) (.86) (.93) (.95) (.96) (.93) (1.22) (1.18) (.58)
----------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 10.78 $ 11.65 $ 10.99 $ 11.15 $ 10.33 $ 10.49 $ 10.15 $ 10.19 $11.15 $11.27
====================================================================================================
TOTAL RETURN, AT NET ASSET
VALUE/(2)/ (1.94)% 13.04% 6.50% 17.63% 7.92% 13.32% 8.97% 2.53% 10.12% 18.82%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $135,067 $111,846 $63,354 $32,762 $16,576 $13,422 $ 9,989 $10,415 $7,377 $2,725
Average net assets (in
thousands) $121,884 $ 87,215 $45,687 $22,169 $15,088 $11,167 $11,028 $ 8,748 $4,647 $1,614
Number of shares
outstanding at end of
period (in thousands) 12,527 9,602 5,766 2,939 1,604 1,280 984 1,022 662 242
Ratios to average net
assets:
Net investment income 7.30% 7.20% 7.81% 8.73% 9.30% 9.34% 9.08% 9.17% 8.71% 10.52%/(3)/
Expenses .57% .46% .56% .64% .61% .64% .70% .75% .75% .75%/(3)/
Portfolio turnover
rate/(4)/ 35.1% 36.3% 41.3% 7.6% 7.4% 5.4% 36.3% 5.9% 27.7% 101.3%
</TABLE>

1. For the period from April 3, 1985 (commencement of operations) to December
31, 1985.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-6
<PAGE>

Financial Highlights (Continued)

OPPENHEIMER CAPITAL APPRECIATION FUND
----------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986(2) 1985(1)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 $ 16.31 $ 14.39 $13.12 $16.21 $13.71
Income (loss) from
investment operations:
Net investment income .10 .05 .06 .08 .32 .50 .33 .21 .12 .09
Net realized and
unrealized gain (loss) on
investments and options
written (2.22) 6.71 3.43 8.18 (3.54) 3.93 1.60 1.67 (1.24) 3.40
----------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations (2.12) 6.76 3.49 8.26 (3.22) 4.43 1.93 1.88 (1.12) 3.49
----------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.04) (.06) (.14) (.26) (.53) (.34) -- (.34) (.21) (.20)
Distributions from net
realized gain on
investments and options
written (3.53) (1.10) (.55) -- (1.41) -- (.01) (.27) (1.76) (.79)
----------------------------------------------------------------------------------------------------
Total dividends and
distributions to
shareholders (3.57) (1.16) (.69) (.26) (1.94) (.34) (.01) (.61) (1.97) (.99)
----------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 25.95 $ 31.64 $ 26.04 $ 23.24 $ 15.24 $ 20.40 $ 16.31 $14.39 $13.12 $16.21
====================================================================================================
TOTAL RETURN, AT NET ASSET
VALUE/(3)/ (7.59)% 27.32% 15.42% 54.72% (16.82)% 27.57% 13.41% 14.34% (1.65)% N/A
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $185,774 $136,885 $83,335 $49,371 $ 23,295 $27,523 $13,667 $9,692 $4,549 $3,852
Average net assets (in
thousands) $153,832 $ 98,228 $56,371 $34,887 $ 24,774 $21,307 $13,239 $8,598 $3,099 $2,292
Number of shares
outstanding at end of
period (in thousands) 7,158 4,326 3,201 2,125 1,528 1,349 838 674 347 238
Ratios to average net
assets:
Net investment income .50% .23% .30% .81% 1.93% 3.27% 2.13% 1.68% 2.36%/(4)/ 2.27%
Expenses .57% .47% .54% .63% .71% .68% .73% .75% 1.01%/(4)/ 2.17%
Portfolio turnover
rate/(5)/ 96.5% 122.8% 78.9% 122.3% 222.0% 130.5% 128.7% 138.7% 100.1% 464.8%
</TABLE>

1. For the year ended June 30, 1986. Operating results were achieved by
Centennial Capital Appreciation Fund, a separate investment company acquired
by OCAP on August 14, 1986.
2. For the six months ended December 31, 1986. Operating results prior to August
15, 1986 were achieved by Centennial Capital Appreciation Fund, a separate
investment company acquired by OCAP on August 14, 1986.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-7
<PAGE>

Financial Highlights (Continued)

OPPENHEIMER GROWTH FUND
--------------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985(1)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 $ 13.64 $ 11.21 $ 12.53 $10.95 $10.00
Income (loss) from
investment operations:
Net investment income .22 .46 .16 .30 .56 .66 .29 .20 .13 .16
Net realized and
unrealized gain (loss) on
investments and foreign
currency transactions (.05) .74 1.99 2.82 (1.79) 2.50 2.19 .24 1.76 .79
---------------------------------------------------------------------------------------------------
Total income from
investment operations .17 1.20 2.15 3.12 (1.23) 3.16 2.48 .44 1.89 .95
---------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.15) (.14) (.36) (.49) (.62) (.35) -- (.34) (.15) --
Distributions from net
realized gain on
investments and foreign
currency transactions (.04) (.32) -- -- (1.99) (.07) (.05) (1.42) (.16) --
--------------------------------------------------------------------------------------------------
Total dividends and
distributions to
shareholders (.19) (.46) (.36) (.49) (2.61) (.42) (.05) (1.76) (.31) --
--------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 17.68 $ 17.70 $ 16.96 $ 15.17 $ 12.54 $ 16.38 $ 13.64 $ 11.21 $12.53 $10.95
==================================================================================================
TOTAL RETURN, AT NET ASSET
VALUE/(2)/ .97% 7.25% 14.53% 25.54% (8.21)% 23.59% 22.09% 3.32% 17.76% 9.50%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $63,283 $56,701 $36,494 $22,032 $15,895 $19,301 $17,746 $14,692 $8,287 $ 820
Average net assets (in
thousands) $59,953 $46,389 $25,750 $18,810 $17,235 $18,596 $15,585 $15,121 $3,744 $ 388
Number of shares
outstanding at end of
period (in thousands) 3,580 3,203 2,152 1,453 1,267 1,179 1,301 1,311 661 75
Ratios to average net
assets:
Net investment income 1.38% 1.13% 1.36% 2.82% 4.09% 3.72% 2.39% 1.56% 2.62% 4.25%/(3)/
Expenses .58% .50% .61% .70% .71% .70% .70% .75% .75% .75%/(3)/
Portfolio turnover rate/(4)/ 53.8% 12.6% 48.7% 133.9% 267.9% 148.0% 132.5% 191.0% 100.9% 132.9%
</TABLE>

TX-8
<PAGE>

Financial Highlights (Continued)

OPPENHEIMER MULTIPLE STRATEGIES FUND
-----------------------------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988 1987/(1)/
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 $ 11.58 $ 10.04 $ 10.00
Income (loss) from
investment operations:
Net investment income .63 .55 .55 .69 .73 .73 .66 .44
Net realized and
unrealized gain (loss) on
investments, options
written and foreign
currency transactions (.90) 1.41 .50 1.15 (.97) 1.04 1.53 .07
-----------------------------------------------------------------------------------------
Total income (loss) from
investment operations (.27) 1.96 1.05 1.84 (.24) 1.77 2.19 .51
-----------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.60) (.55) (.54) (.78) (.70) (.68) (.65) (.43)
Distributions from net
realized gain on
investments, options
written and foreign
currency transactions (.10) -- -- -- (.46) (.37) -- (.04)
-----------------------------------------------------------------------------------------
Total dividends and
distributions to
shareholders (.70) (.55) (.54) (.78) (1.16) (1.05) (.65) (.47)
-----------------------------------------------------------------------------------------
Net asset value, end of
period $ 12.91 $ 13.88 $ 12.47 $ 11.96 $ 10.90 $ 12.30 $ 11.58 $ 10.04
=========================================================================================
TOTAL RETURN, AT NET ASSET
VALUE/(2)/ (1.95)% 15.95% 8.99% 17.48% (1.91)% 15.76% 22.15% 3.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $292,067 $250,290 $159,464 $124,634 $118,888 $121,286 $78,386 $53,291
(in thousands)
Average net assets (in
thousands) $279,949 $199,954 $139,011 $117,000 $123,231 $101,057 $64,298 $34,256
Number of shares
outstanding at end of
period (in thousands) 22,620 18,026 12,792 10,421 10,908 9,860 6,766 5,306
Ratios to average net
assets:
Net investment income 4.90% 4.44% 4.63% 5.95% 6.53% 6.36% 6.18% 6.12%/(3)/
Expenses .56% .48% .55% .54% .55% .57% .58% .65%/(3)/
Portfolio turnover
rate/(4)/ 31.4% 32.4% 57.8% 80.3% 99.2% 66.9% 110.0% 46.9%
</TABLE>

1. For the period from February 9, 1987 (commencement of operations) to December
31, 1987.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-9
<PAGE>

Financial Highlights (Continued)

OPPENHEIMER GLOBAL SECURITIES FUND
--------------------------------------------------
1994 1993 1992 1991 1990/(1)/
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 16.30 $ 9.57 $ 10.38 $10.04 $10.00
Income (loss) from investment
operations:
Net investment income .04 (.02) .07 .04 --
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (.96) 6.75 (.80) .30 .04
--------------------------------------------------
Total income (loss) from investment
operations (.92) 6.73 (.73) .34 .04
--------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.04) -- (.04) -- --
Distributions from net realized gain on
investments and foreign currency
transactions (.25) -- (.04) -- --
--------------------------------------------------
Total dividends and distributions to
shareholders (.29) -- (.08) -- --
--------------------------------------------------
Net asset value, end of period $ 15.09 $ 16.30 $ 9.57 $10.38 $10.04
==================================================
TOTAL RETURN, AT NET ASSET VALUE/(2)/ (5.72)% 70.32% (7.11)% 3.39% .40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $297,842 $96,425 $13,537 $7,339 $ 432
Average net assets (in thousands) $214,545 $31,696 $11,181 $3,990 $ 263
Number of shares outstanding at end of
period (in thousands) 19,743 5,917 1,415 707 43
Ratios to average net assets:
Net investment income .54% .72% 1.04% .75% .08%/(3)/
Expenses .91% .92% 1.06% 1.32% 6.84%/(3)/
Portfolio turnover rate/(4)/ 70.4% 65.1% 34.1% 29.5% 0.0%
</TABLE>

1. For the period from November 12, 1990 (commencement of operations) to
December 31, 1990.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-10
<PAGE>

Financial Highlights (Continued)

<TABLE>
<CAPTION>
OPPENHEIMER STRATEGIC BOND FUND
--------------------------------
1994 1993/(1)/
------------- ---------------
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period
Income (loss) from investment $ 5.12 $ 5.00
operations:
Net investment income .35 .10
Net realized and unrealized gain
(loss) on investments, options
written and foreign currency
transactions (.54) .11
------- ------
Total income (loss) from investment
operations (.19) .21
------- ------
Dividends and distributions to
shareholders:
Dividends from net investment income (.32) (.09)
Distributions from net realized gain
on investments, options written and
foreign currency transactions -- --
Distributions in excess of net
realized gain on investments (.01) --
------- ------
Total dividends and distributions to
shareholders (.33) (.09)
------- ------
Net asset value, end of period $ 4.60 $ 5.12
======= ======
TOTAL RETURN, AT NET ASSET VALUE/(2)/ (3.78)% 4.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $20,320 $9,887
Average net assets (in thousands) $15,389 $4,259
Number of shares outstanding at end of
period (in thousands) 4,418 1,930
Ratios to average net assets:
Net investment income 8.36% 5.67%/(3)/
Expenses .87% .96%/(3)/
Portfolio turnover rate/(4)/ 136.6% 10.9%
</TABLE>

1. For the period from May 3, 1993 (commencement of operations) to December 31,
1993.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Total return information does not reflect expenses that apply at the separate
account level or to related insurance products. Inclusion of these charges
would reduce the total return figures for all periods shown.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.

TX-11
<PAGE>

INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE AND POLICIES - MONEY FUND. The objective of Money Fund is
to seek the maximum current income from investments in "money market" securities
consistent with low capital risk and the maintenance of liquidity. The
Securities and Exchange Commission Rule 2a-7 ("Rule 2a-7") under the Investment
Company Act of 1940 (the "Investment Company Act") places restrictions on a
money market fund's investments. Under Rule 2a-7, Money Fund may purchase only
"Eligible Securities," as defined below, that the Trust's Board of Trustees has
determined have minimal credit risk. An "Eligible Security" is (a) a security
that has received a rating in one of the two highest short-term rating
categories by any two "nationally-recognized statistical rating organizations"
as defined in Rule 2a-7 ("Rating Organizations"), or, if only one Rating
Organization has rated that security, by that Rating Organization, or (b) an
unrated security that is judged by the Trust's investment adviser, Oppenheimer
Management Corporation (the "Manager") to be of comparable quality to
investments that are "Eligible Securities" rated by Rating Organizations. Rule
2a-7 permits Money Fund to purchase "First Tier Securities," which are Eligible
Securities rated in the highest category for short-term debt obligations by at
least two Rating Organizations, or, if only one Rating Organization has rated a
particular security, by that Rating Organization, or comparable unrated
securities. Under Rule 2a-7, Money Fund may invest only up to 5% of its assets
in "Second Tier Securities," which are Eligible Securities that are not "First
Tier Securities." In addition to the overall 5% limit on Second Tier Securities,
Money Fund may not invest (i) more than 5% of its total assets in the securities
of any one issuer (other than the U.S. Government, its agencies or
instrumentalities) or (ii) more than 1% of its total assets or $1 million
(whichever is greater) in Second Tier Securities of any one issuer. The Trust's
Board must approve or ratify the purchase of Eligible Securities that are
unrated or are rated by only one Rating Organization. Additionally, under Rule
2a-7, Money Fund must maintain a dollar-weighted average portfolio maturity of
no more than 90 days, and the maturity of any single portfolio investment may
not exceed 397 days. The Trust's Board has adopted procedures under Rule 2a-7
pursuant to which the Board has delegated to the Manager the responsibility of
conforming Money Fund's investments with the requirements of Rule 2a-7 and those
Procedures.

Ratings at the time of purchase will determine whether securities may be
acquired under the above restrictions. The rating restrictions described in this
Prospectus do not apply to banks in which the Trust's cash is kept. Subsequent
downgrades in ratings may require reassessment of the credit risk presented by a
security and may require its sale. See "Investment Objective and Policies -
Money Fund" in the Statement of Additional Information for further details.

The Trust intends to exercise due care in the selection of portfolio securities.
However, a risk may exist that the issuers of Money Fund's portfolio securities
may not be able to meet their duties and obligations on interest or principal
payments at the time called for by the instrument. There is also the risk that
because of a redemption demand greater than anticipated by management, some of
Money Fund's portfolio may have to be liquidated prior to maturity at prices
less than the original cost or maturity value. Any of these risks, if
encountered, could cause a reduction in the net asset value of Money Fund's
shares.

The types of instruments that will form the major part of Money Fund's
investments are certificates of deposit, bankers' acceptances, commercial paper,
U.S. Treasury bills, securities of U.S. government agencies or instrumentalities
and other debt instruments (including bonds) issued by corporations, including
variable and floating rate instruments, and variable rate master demand notes.
Some of such instruments may be supported by letters of credit or may be subject
to repurchase transactions (described below). Except as described below, Money
Fund will purchase certificates of deposit or bankers' acceptances only if
issued or guaranteed by a domestic bank subject to regulation by the U.S.
Government or by a foreign bank having total assets at least equal to U.S. $1
billion. Money Fund may invest in certificates of deposit of up to $100,000 of a
domestic bank if such certificates of deposit are fully insured as to principal
by the Federal Deposit Insurance Corporation. For purposes of this section, the
term "bank" includes commercial banks, savings banks, and savings and loan
associations and the term "foreign bank" includes foreign branches of U.S. banks
(issuers of "Eurodollar" instruments), U.S. branches and agencies of foreign
banks (issuers of "Yankee dollar" instruments) and foreign branches of foreign
banks. Money Fund also may purchase obligations issued by other entities if they
are: (i) guaranteed as to principal and interest by a bank or corporation whose
certificates of deposit or commercial paper may otherwise be purchased by Money
Fund, or (ii) subject to repurchase agreements (explained below), if the
collateral for the agreement complies with Rule 2a-7. In addition, the Fund may
also invest in other types of securities described above in accordance with the
requirements of the rule. For further information, see "Foreign Securities" and
"Other Investment Restrictions" below. See Appendix A below and "Investment
Objectives and Policies" in the Statement of Additional Information for further
information on the investments which Money Fund may make. See Appendix B below
for a description of the rating categories of the Rating Organizations.

INVESTMENT OBJECTIVES AND POLICIES - HIGH INCOME FUND, BOND FUND AND STRATEGIC
BOND FUND.

HIGH INCOME FUND. The objective of High Income Fund is to earn a high level of
current income by investing primarily in a diversified portfolio of high yield,
fixed-income securities (long-term debt and preferred stock issues, including
convertible securities) believed by the Manager not to involve undue risk. The
Fund may also acquire participation interests in loans that are made to
corporations (see "Participation Interests," below). High Income Fund's
investment policy is to assume certain risks (discussed below) in seeking high
yield, which is ordinarily associated with high risk securities, commonly known
as "junk bonds," in the lower rating categories of the established securities
ratings services (i.e., securities rated "Baa" or lower by Moody's Investor
Service, Inc. ("Moody's") or "BBB" or lower by Standard & Poor's Corporation
("Standard & Poor's")), and unrated securities.

TX-12
<PAGE>

The investments in which High Income Fund will invest principally will be in the
lower rating categories; it may invest in securities rated as low as "C" by
Moody's or "D" by Standard & Poor's. Such ratings indicate that the obligations
are speculative in a high degree and may be in default. Appendix B of this
Prospectus describes these rating categories.

High Income Fund is not obligated to dispose of securities whose issuers
subsequently are in default or if the rating is subsequently downgraded. High
Income Fund may invest, without limit, in unrated securities if such securities
offer, in the opinion of the Manager, yields and risks comparable to rated
securities. Risks of high yield securities are discussed under "Risk Factors"
below. High Income Fund's portfolio at December 31, 1994 contained domestic and
foreign corporate bonds in the following rating categories as rated by Standard
& Poor's (the percentages relate to the weighted average value of the bonds in
each rating category as a percentage of that Fund's total assets): AAA, 1.70%;
AA, 2.10%; A, 3.06%; BBB, 1.06%; BB, 5.93%; B, 37.14%; CCC, 5.53%; CC, 1.04%; D,
1.69%; and unrated, 18.02%. If a bond was not rated by Standard & Poor's but was
rated by Moody's, it is included in the comparable category. The Manager will
not rely principally on the ratings assigned by rating services. The Manager's
analysis may include consideration of the financial strength of the issuer,
including its historic and current financial condition, the trading activity in
its securities, present and anticipated cash flow, estimated current value of
assets in relation to historical cost, the issuer's experience and managerial
expertise, responsiveness to changes in interest rates and business conditions,
debt maturity schedules, current and future borrowing requirements, and any
change in the financial condition of the issuer and the issuer's continuing
ability to meet its future obligations. The Manager also may consider
anticipated changes in business conditions, levels of interest rates of bonds as
contrasted with levels of cash dividends, industry and regional prospects, the
availability of new investment opportunities and the general economic,
legislative and monetary outlook for specific industries, the nation and the
world.

BOND FUND. Bond Fund's primary objective is to earn a high level of current
income by investing primarily in a diversified portfolio of high yield
fixed-income securities. As a secondary objective, Bond Fund seeks capital
growth when consistent with its primary objective. As a matter of
non-fundamental policy, Bond Fund will, under normal market conditions, invest
at least 65% of its total assets in bonds. Bond Fund will invest only in
securities rated "Baa" or better by Moody's or "BBB" or better by Standard &
Poor's. However, Bond Fund is not obligated to dispose of securities if the
rating is reduced, and therefore will from time to time hold securities rated
lower than "Baa" by Moody's or "BBB" by Standard & Poor's.

STRATEGIC BOND FUND. The investment objective of Strategic Bond Fund is to seek
a high level of current income principally derived from interest on debt
securities and to enhance such income by writing covered call options on debt
securities. Although the premiums received by Strategic Bond Fund from writing
covered calls are a form of capital gain, the Fund generally will not make
investments in securities with the objective of seeking capital appreciation.

The Fund intends to invest principally in: (i) lower-rated high yield domestic
debt securities; (ii) U.S. Government securities, and (iii) foreign government
and corporate debt securities. Under normal circumstances, the Fund's assets
will be invested in each of these three sectors. However, Strategic Bond Fund
may from time to time invest up to 100% of its total assets in any one sector
if, in the judgment of the Manager, the Fund has the opportunity of seeking a
high level of current income without undue risk to principal. Accordingly, the
Fund's investments should be considered speculative. Distributable income will
fluctuate as the Fund assets are shifted among the three sectors.

. High Yield Securities. The higher yields and high income sought by
Strategic Bond Fund are generally obtainable from securities in the lower rating
categories of the established rating services, commonly known as "junk bonds."
Such securities are rated "Baa" or lower by Moody's or "BBB" or lower by
Standard & Poor's. Strategic Bond Fund may invest in securities rated as low as
"C" by Moody's or "D" by Standard & Poor's. Such ratings indicate that the
obligations are speculative in a high degree and may be in default. Risks of
high yield, high risk securities are discussed under "Risk Factors" below.
Strategic Bond Fund's portfolio at December 31, 1994, contained securities in
the following rating categories as rated by Standard & Poor's (the percentages
relate to the weighted average of the bonds in each rating category as a
percentage of that Fund's total assets): AAA, 22.53%; AA, 2.41%; BBB, .41%; BB,
5.32%; B, 20.57%; CCC, 3.17%; D, .62%; unrated, 17.76%. If a bond was not rated
by Standard & Poor's but was rated by Moody's, it is included in the comparable
category. The Manager will not rely principally on the ratings assigned by
rating services. Strategic Bond Fund is not obligated to dispose of securities
whose issuers subsequently are in default or if the rating of such securities is
reduced. Appendix B of this Prospectus describes these rating categories.
Strategic Bond Fund may also invest in unrated securities which, in the opinion
of the Manager, offer yields and risks comparable to those of securities which
are rated.

. International Securities. The Fund may invest in foreign government and
foreign corporate debt securities (which may be denominated in U.S. dollars or
in non-U.S. currencies) issued or guaranteed by foreign corporations, certain
supranational entities (such as the World Bank) and foreign governments
(including political subdivisions having taxing authority) or their agencies or
instrumentalities. These investments may include (i) U.S. dollar-denominated
debt obligations known as "Brady Bonds," which are issued for the exchange of
existing commercial bank loans to foreign entities for new obligations that are
generally collateralized by zero coupon Treasury securities having the same
maturity, (ii) debt obligations such as bonds (including sinking fund and
callable bonds), (iii) debentures and notes (including variable rate and
floating rate instruments), and (iv) preferred stocks and zero coupon
securities. Further information about investments in foreign securities is set
forth below under "Other Investment Techniques and Strategies - Foreign
Securities."

. U.S. Government Securities. U.S. Government Securities are debt
obligations issued by or guaranteed by the United States Government or one of
its agencies or instrumentalities. Although U.S. Government Securities are
considered among

TX-13
<PAGE>

the most creditworthy of fixed-income investments and their yields are generally
lower than the yields available from corporate debt securities, the values of
U.S. Government Securities (and of fixed-income securities generally) will vary
inversely to changes in prevailing interest rates. To compensate for the lower
yields available on U.S. Government securities, Strategic Bond Fund will attempt
to augment these yields by writing covered call options against them. See
"Hedging," below. Certain of these obligations, including U.S. Treasury notes
and bonds, and mortgage-backed securities guaranteed by the Government National
Mortgage Association ("Ginnie Maes"), are supported by the full faith and credit
of the United States. Certain other U.S. Government Securities, issued or
guaranteed by Federal agencies or government-sponsored enterprises, are not
supported by the full faith and credit of the United States. These latter
securities may include obligations supported by the right of the issuer to
borrow from the U.S. Treasury, such as obligations of Federal Home Loan Mortgage
Corporation ("Freddie Macs"), and obligations supported by the credit of the
instrumentality, such as Federal National Mortgage Association bonds ("Fannie
Maes"). U.S. Government Securities in which the Fund may invest include zero
coupon U.S. Treasury securities, mortgage-backed securities and money market
instruments.

Zero coupon Treasury securities are: (i) U.S. Treasury notes and bonds which
have been stripped of their unmatured interest coupons and receipts; or (ii)
certificates representing interests in such stripped debt obligations or
coupons. Because a zero coupon security pays no interest to its holder during
its life or for a substantial period of time, it usually trades at a deep
discount from its face or par value and will be subject to greater fluctuations
of market value in response to changing interest rates than debt obligations of
comparable maturities which make current distributions of interest. Because the
Fund accrues taxable income from these securities without receiving cash, the
Fund may be required to sell portfolio securities in order to pay cash dividends
or to meet redemptions. The Fund may invest up to 50% of its total assets at the
time of purchase in zero coupon securities issued by either corporations or the
U.S. Treasury.

. Domestic Securities. The Fund's investments in domestic securities may
include preferred stocks, participation interests and zero coupon securities.
Domestic investments include fixed-income securities and dividend-paying common
stocks issued by domestic corporations in any industry which may be denominated
in U.S. dollars or non-U.S. currencies.

The Fund's investments may include securities which represent participation
interests in loans made to corporations (see "Participation Interests," below)
and in pools of residential mortgage loans which may be guaranteed by agencies
or instrumentalities of the U.S. Government (e.g. Ginnie Maes, Freddie Macs and
Fannie Maes), including collateralized mortgage-backed obligations ("CMOs"), or
which may not be guaranteed. Such securities differ from conventional debt
securities which provide for periodic payment of interest in fixed amounts
(usually semi-annually) with principal payments at maturity or specified call
dates. Mortgage-backed securities provide monthly payments which are, in effect,
a "pass-through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans. The
Fund's reinvestment of scheduled principal payments and unscheduled prepayments
it receives may occur at lower rates than the original investment, thus reducing
the yield of the Fund. CMOs in which the Fund may invest are securities issued
by a U.S. Government instrumentality or private corporation that are
collateralized by a portfolio of mortgages or mortgage-backed securities which
may or may not be guaranteed by the U.S. Government. The issuer's obligation to
make interest and principal payments is secured by the underlying portfolio of
mortgages or mortgage-backed securities. Mortgage-backed securities may be less
effective than debt obligations of similar maturity at maintaining yields during
periods of declining interest rates.

The Fund may also invest in CMOs that are "stripped." That means that the
security is divided into two parts, one of which receives some or all of the
principal payments (and is known as a "P/O") and the other which receives some
or all of the interest (and is known as an "I/O"). P/Os and I/Os are generally
referred to as "derivative investments," discussed further below.

The yield to maturity on the class that receives only interest is extremely
sensitive to the rate of payment of the principal on the underlying mortgages.
Principal prepayments increase that sensitivity. Stripped securities that pay
"interest only" are therefore subject to greater price volatility when interest
rates change, and they have the additional risk that if the underlying mortgages
are prepaid, the Fund will lose the anticipated cash flow from the interest on
the prepaid mortgages. That risk is increased when general interest rates fall,
and in times of rapidly falling interest rates, the Fund might receive back less
than its investment.

The value of "principal only" securities generally increases as interest rates
decline and prepayment rates rise. The price of these securities is typically
more volatile than that of coupon-bearing bonds of the same maturity.

Stripped securities are generally purchased and sold by institutional investors
through investment banking firms. At present, established trading markets have
not yet developed for these securities. Therefore, some stripped securities may
be deemed "illiquid." If the Fund holds illiquid stripped securities, the amount
it can hold will be subject to the Fund's investment policy limiting investments
in illiquid securities to 15% of the Fund's assets.

The Fund may also enter into "forward roll" transactions with mortgage-backed
securities. The Fund sells mortgage-backed securities it holds to banks or other
buyers and simultaneously agrees to repurchase a similar security from that
party at a later date at an agreed-upon price. Forward rolls are considered to
be a borrowing. The Fund is required to place liquid assets in a segregated
account with its custodian bank in an amount equal to its obligation under the
forward roll. The main risk of this investment strategy is risk of default by
the counterparty.

The Fund may also invest in asset-backed securities, which are securities that
represent fractional undivided interests in pools of consumer loans and trade
receivables, similar in structure to the mortgage-backed securities in which the
Fund may invest, described above. Payments of principal and interest are passed
through to holders of asset-backed securities and are typically supported by
some form of credit enhancement, such as a letter of credit, surety bond,
limited

TX-14
<PAGE>

guarantee by another entity or having a priority to certain of the borrower's
other securities. The degree of credit enhancement varies, and generally applies
to only a fraction of the asset-backed security's par value until exhausted.

RISK FACTORS. The securities in which High Income Fund and Strategic Bond Fund
principally invest are considered speculative and involve greater risk than
lower yielding, higher rated fixed-income securities, while providing higher
yields than such securities. Lower rated securities may be less liquid, and
significant losses could be experienced if a substantial number of other holders
of such securities decide to sell at the same time. Other risks may involve the
default of the issuer or price changes in the issuer's securities due to changes
in the issuer's financial strength or economic conditions. Issuers of lower
rated or unrated securities are generally not as financially secure or
creditworthy as issuers of higher-rated securities. These Funds are not
obligated to dispose of securities when issuers are in default or if the rating
of the security is reduced. These risks are discussed in more detail in the
Statement of Additional Information.

INVESTMENT OBJECTIVES AND POLICIES - CAPITAL APPRECIATION FUND, GROWTH FUND,
MULTIPLE STRATEGIES FUND, GROWTH & INCOME FUND AND GLOBAL SECURITIES FUND.

CAPITAL APPRECIATION FUND. In seeking its objective of capital appreciation,
Capital Appreciation Fund will emphasize investments in securities of
"growth-type" companies. Such companies are believed to have relatively
favorable long-term prospects for increasing demand for their goods or services,
or to be developing new products, services or markets, and normally retain a
relatively larger portion of their earnings for research, development and
investment in capital assets. "Growth-type" companies may also include companies
developing applications for recent scientific advances. Capital Appreciation
Fund may also invest in cyclical industries and in "special situations" that the
Manager believes present opportunities for capital growth. "Special situations"
are anticipated acquisitions, mergers or other unusual developments which, in
the opinion of the Manager, will increase the value of an issuer's securities,
regardless of general business conditions or market movements. An additional
risk is present in this type of investment since the price of the security may
be expected to decline if the anticipated development fails to occur.

GROWTH FUND. In seeking its objective of capital appreciation, Growth Fund will
emphasize investments in securities of well-known and established companies.
Such securities generally have a history of earnings and dividends and are
issued by seasoned companies (having an operating history of at least five
years, including predecessors). Current income is a secondary consideration in
the selection of Growth Fund's portfolio securities.

MULTIPLE STRATEGIES FUND. The objective of Multiple Strategies Fund is to seek a
high total investment return, which includes current income as well as capital
appreciation in the value of its shares. In seeking that objective, Multiple
Strategies Fund may invest in equity securities (including common stocks,
preferred stocks, convertible securities and warrants), debt securities
(including bonds, participation interests, asset-backed securities,
private-label mortgage-backed securities and CMOs, zero coupon securities and
U.S. government obligations, described above under "Investment Objectives and
Policies - High Income Fund, Bond Fund and Strategic Bond Fund" and under
"Participation Interests" below) and cash and cash equivalents (identified above
as the types of instruments in which the Money Fund may invest).

The composition of Multiple Strategies Fund's portfolio among the different
types of permitted investments will vary from time to time based upon the
Manager's evaluation of economic and market trends and perceived relative total
anticipated return from such types of securities. Accordingly, there is neither
a minimum nor a maximum percentage of Multiple Strategies Fund's assets that
may, at any given time, be invested in any of the types of investments
identified above. In the event future economic or financial conditions adversely
affect equity securities, it is expected that Multiple Strategies Fund would
assume a defensive position by investing in debt securities (with an emphasis on
securities maturing in one year or less from the date of purchase), or cash and
cash equivalents.

GROWTH & INCOME FUND. The objective of Growth & Income Fund is to seek a high
total return, which includes growth in the value of its shares as well as
current income from equity and debt securities. In seeking that objective,
Growth & Income Fund may invest in equity and debt securities. Its equity
investments will include common stocks, preferred stocks, convertible securities
and warrants. Its debt securities will include bonds, participation interests,
asset-backed securities, private-label mortgage-backed securities and CMOs, zero
coupon securities and U.S. government obligations. From time to time Growth &
Income Fund may focus on small to medium capitalization issuers, the securities
of which may be subject to greater price volatility than those of larger
capitalized issuers.

The composition of Growth & Income Fund's portfolio among equity and
fixed-income investments will vary from time to time based upon the Manager's
evaluation of economic and market trends and perceived relative total
anticipated return from such types of investments. Accordingly, there is neither
a minimum nor a maximum percentage of Growth & Income Fund's assets that may, at
any given time, be invested in either type of investment. In the event future
economic or financial conditions adversely affect equity securities, it is
expected that Growth & Income Fund would assume a defensive position by
investing in debt securities (with an emphasis on securities maturing in one
year or less from the date of purchase).

GLOBAL SECURITIES FUND. The objective of Global Securities Fund is to seek
long-term capital appreciation. Current income is not an objective. In seeking
its objective, the Fund will invest a substantial portion of its invested assets
in securities of foreign issuers, "growth-type" companies (those which, in the
opinion of the Manager, have relatively favorable long-term prospects for
increasing demand or which develop new products and retain a significant part of
earnings for research and development), cyclical industries (e.g. base

TX-15
<PAGE>

metals, paper and chemicals) and special investment situations which are
considered to have appreciation possibilities (e.g., private placements of
start-up companies). The Fund may invest without limit in "foreign securities"
(as defined below in "Other Investment Techniques and Strategies - Foreign
Securities") and thus the relative amount of such investments will change from
time to time. It is currently anticipated that Global Securities Fund may invest
as much as 80% or more of its total assets in foreign securities. Under normal
market conditions, the Fund will invest its total assets in securities of
issuers traded in markets of at least three countries (which may include the
United States). See "Other Investment Techniques and Strategies - Foreign
Securities," below, for further discussion as to the possible rewards and risks
of investing in foreign securities and as to additional diversification
requirements for the Fund's foreign investments.

CAN THE FUNDS' INVESTMENT OBJECTIVES AND POLICIES CHANGE? The Funds have
investment objectives, described above, as well as investment policies each
follows to try to achieve its objectives. Additionally, the Funds use certain
investment techniques and strategies in carrying out those investment policies.
The Funds' investment policies and techniques are not "fundamental" unless this
Prospectus or the Statement of Additional Information says that a particular
policy is "fundamental." Each Fund's investment objectives are fundamental
policies.

The Trust's Board of Trustees may change non-fundamental policies without
shareholder approval, although significant changes will be described in
amendments to this Prospectus. Fundamental policies are those that cannot be
changed without the approval of a "majority" of the Fund's outstanding voting
shares. The term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is explained
in the Statement of Additional Information).

OTHER INVESTMENT TECHNIQUES AND STRATEGIES. Some of the Funds can also use the
investment techniques and strategies described below. These techniques involve
certain risks. The Statement of Additional Information contains more information
about these practices, including limitations on their use that are designed to
reduce some of the risks.

SPECIAL RISKS - BORROWING FOR LEVERAGE. From time to time, Capital Appreciation
Fund, Strategic Bond Fund, Growth Fund, Multiple Strategies Fund, Growth &
Income Fund and Global Securities Fund may borrow money from banks to buy
securities. These Funds will borrow only if they can do so without putting up
assets as security for a loan. This is a speculative investment method known as
"leverage." This investing technique may subject the Fund to greater risks and
costs than funds that do not borrow. These risks may include the possibility
that a Fund's net asset value per share will fluctuate more than funds that
don't borrow, since a Fund pays interest on borrowings and interest expense
affects a Fund's share price and yield. Growth Fund may borrow only up to 5% of
the value of its total assets and Global Securities Fund may borrow up to 10% of
the value of its total assets. Global Securities Fund will not borrow, if as a
result of such borrowing more than 25% of its total assets would consist of
investments in when-issued or delayed delivery securities or borrowed funds.
Borrowing for Leverage is subject to regulatory limits described in more detail
in "Borrowing" in the Statement of Additional Information.

Pursuant to an undertaking by Capital Appreciation Fund, Strategic Bond Fund,
Multiple Strategies Fund, Growth & Income Fund and Global Securities Fund,
borrowing by each such Fund is limited to 25% of the value of its net assets,
which is further limited to 10% if the borrowing is for a purpose other than to
facilitate redemptions. Neither percentage limitation is a fundamental policy.

INVESTMENTS IN SMALL, UNSEASONED COMPANIES. Money Fund, Capital Appreciation
Fund, Multiple Strategies Fund, Growth & Income Fund, Growth Fund, Global
Securities Fund and Strategic Bond Fund may each invest in securities of small,
unseasoned companies. These are companies that have been in operation for less
than three years, counting the operations of any predecessors. Securities of
these companies may have limited liquidity (which means that the Fund may have
difficulty selling them at an acceptable price when it wants to) and the prices
of these securities may be volatile. It is not currently intended that
investments in securities of companies (including predecessors) that have
operated less than three years will exceed 5% of the net assets of either Growth
Fund or Multiple Strategies Fund. Money Fund, Capital Appreciation Fund, Growth
& Income Fund, Global Securities Fund and Strategic Bond Fund are not subject to
this restriction.

PARTICIPATION INTERESTS. Strategic Bond Fund, Global Securities Fund, High
Income Fund and Multiple Strategies Fund and Growth & Income Fund may acquire
participation interests in U.S. dollar-denominated loans that are made to U.S.
or foreign companies (the "borrower"). They may be interests in, or assignments
of, the loan, and are acquired from the banks or brokers that have made the loan
or are members of the lending syndicate. No more than 5% of a Fund's net assets
can be invested in participation interests of the same borrower. The Manager has
set certain creditworthiness standards for issuers of loan participations, and
monitors their creditworthiness. The value of loan participation interests
primarily depends upon the creditworthiness of the borrower, and its ability to
pay interest and principal. Borrowers may have difficulty making payments. If a
borrower fails to make scheduled interest or principal payments, the Fund could
experience a decline in the net asset value of its shares. Some borrowers may
have senior securities rated as low as "C" by Moody's or "D" by Standard &
Poor's, but may be deemed acceptable credit risks. Participation interests are
subject to each Fund's limitations on investments in illiquid securities. See
"Illiquid and Restricted Securities" below.

FOREIGN SECURITIES. Each Fund may purchase "foreign securities" that is,
securities of companies organized under the laws of countries other than the
United States that are traded on foreign securities exchanges or in the foreign
over-the-counter markets. Securities of foreign issuers that are represented by
American Depository Receipts ("ADRs"), or that are listed on a U.S. securities
exchange or are traded in the United States over-the-counter markets are not
considered "foreign securities" for this purpose because they are not subject to
many of the special considerations and risks (discussed below and in the
Statement of Additional Information) that apply to foreign securities traded and
held abroad. If a Fund's securities are held abroad, the countries in which such
securities may be held and the sub-custodians holding them must be approved by
the Fund's Board of Trustees under applicable SEC rules. Each Fund may also

TX-16
<PAGE>

invest in debt obligations issued or guaranteed by foreign corporations, certain
supranational entities (such as the World Bank) and foreign governments
(including political subdivisions having taxing authority) or their agencies or
instrumentalities, subject to the investment policies described above. Foreign
securities which the Funds may purchase may be denominated in U.S. dollars or in
non-U.S. currencies. The Funds may convert U.S. dollars into foreign currency,
but only to effect securities transactions and not to hold such currency as an
investment, other than in hedging transactions (see "Hedging" below).

It is currently intended that each Fund (other than Global Securities Fund,
Multiple Strategies Fund, Growth & Income Fund or Strategic Bond Fund) will
invest no more than 25% of its total assets in foreign securities or in
government securities of any foreign country or in obligations of foreign banks.
Multiple Strategies Fund will invest no more than 35% of its total assets in
foreign securities or in government securities of any foreign country or in
obligations of foreign banks. Global Securities Fund, Growth & Income Fund and
Strategic Bond Fund have no restrictions on the amount of their assets that may
be invested in foreign securities. Investments in securities of issuers in
non-industrialized countries generally involve more risk and may be considered
highly speculative.

The Funds have undertaken to comply with the foreign country diversification
guidelines of Section 10506 of the California Insurance Code, as follows:
Whenever a Fund's investment in foreign securities exceeds 25% of its net
assets, it will invest its assets in securities of issuers located in a minimum
of two different foreign countries; this minimum is increased to three foreign
countries if foreign investments comprise 40% or more of a Fund's net assets, to
four if 60% or more and to five if 80% or more. In addition, no such Fund will
have more than 20% of its net assets invested in securities of issuers located
in any one foreign country; that limit is increased to 35% for Australia,
Canada, France, Japan, the United Kingdom or Germany.

The percentage of each Fund's assets that will be allocated to foreign
securities will vary depending on the relative yields of foreign and U.S.
securities, the economies of foreign countries, the condition of their financial
markets, the interest rate climate of such countries, and the relationship of
such countries' currencies to the U.S. dollar. These factors are judged on the
basis of fundamental economic criteria (e.g., relative inflation levels and
trends, growth rate forecasts, balance of payments status, and economic
policies) as well as technical and political data. Subsequent foreign currency
losses may result in a Fund having previously distributed more income in a
particular period than was available from investment income, which could result
in a return of capital to shareholders. Each such Fund's portfolio of foreign
securities may include those of a number of foreign countries or, depending upon
market conditions and subject to the above diversification requirements those of
a single country. In summary, foreign securities markets may be less liquid and
more volatile than the markets in the U.S. Risks of foreign securities investing
may include foreign withholding taxation, changes in currency rates or currency
blockage, currency exchange costs, difficulty in obtaining and enforcing
judgments against foreign issuers, relatively greater brokerage and custodial
costs, risk of expropriation or nationalization of assets, less publicly
available information, and differences between domestic and foreign legal,
auditing, brokerage and economic standards. See "Investment Objectives and
Policies - Foreign Securities" in the Statement of Additional Information for
further details.

WARRANTS AND RIGHTS. Warrants basically are options to purchase stock at set
prices that are valid for a limited period of time. Rights are options to
purchase securities, normally granted to current holders by the issuer. Each of
the Funds (except Money Fund) may invest up to 5% of its total assets in
warrants and rights. That 5% does not apply to warrants and rights that have
been acquired as part of units with other securities or that were attached to
other securities. No more than 2% of each such Fund's total assets may be
invested in warrants that are not listed on either the New York or American
Stock Exchanges. For further details about these investments, see "Warrants and
Rights" in the Statement of Additional Information.

REPURCHASE AGREEMENTS. Each Fund may acquire securities that are subject to
repurchase agreements to generate income while providing liquidity. In a
repurchase transaction, the Fund buys a security and simultaneously sells it to
the vendor for delivery at a future date. Repurchase agreements must be fully
collateralized. However, if the vendor fails to pay the resale price on the
delivery date, the Fund may incur costs in disposing of the collateral and may
experience losses if there is any delay in its ability to do so. No Fund will
enter into a repurchase agreement that causes more than 15% of its net assets
(10% of net assets for Money Fund) to be subject to repurchase agreements having
a maturity beyond seven days. There is no limit on the amount of a Fund's net
assets that may be subject to repurchase agreements of seven days or less.

ILLIQUID AND RESTRICTED SECURITIES. Under the policies and procedures
established by the Board of Trustees, the Manager determines the liquidity of a
Fund's investments. Investments may be illiquid because of the absence of a
trading market, making it difficult to value them or dispose of them promptly at
an acceptable price. A restricted security is one that has a contractual
restriction on resale or cannot be sold publicly until it is registered under
the Securities Act of 1933. No Fund will invest more than 15% of its net assets
in illiquid or restricted securities; no Fund presently intends to invest more
than 10% of its net assets in illiquid or restricted securities. This policy
applies to participation interests, bank time deposits, master demand notes and
repurchase transactions maturing in more than seven days, over-the-counter
("OTC") options held by any Fund and that portion of assets used to cover such
OTC options [High Income, Global Securities and Strategic Bond Funds]; it does
not apply to certain restricted securities that are eligible for resale to
qualified institutional purchasers.

LOANS OF PORTFOLIO SECURITIES. To attempt to increase its income, each Fund may
lend its portfolio securities to brokers, dealers and other financial
institutions. These loans are limited to 25% of the Fund's net assets and are
subject to other conditions described in the Statement of Additional
Information. The Funds presently do not intend to lend portfolio securities, but
if any Fund does, the value of securities

TX-17
<PAGE>

loaned is not expected to exceed 5% of the value of that Fund's total assets.

"WHEN-ISSUED" OR DELAYED DELIVERY TRANSACTIONS. Each Fund may purchase
securities on a "when-issued" basis and may purchase or sell securities on a
"delayed delivery" basis. These terms refer to securities that have been created
and for which a market exists, but which are not available for immediate
delivery. There may be a risk of loss to a Fund if the value of the security
changes prior to the settlement date.

HEDGING. As described below, the Funds (other than Money Fund) may purchase and
sell certain kinds of futures contracts, put and call options, forward
contracts, and options on futures and broadly-based stock or bond indices, or
enter into interest rate swap agreements. These are all referred to as "hedging
instruments." The Funds do not use hedging instruments for speculative purposes,
and have limits on the use of them, described below. The hedging instruments the
Funds may use are described below and in greater detail in "Other Investment
Techniques and Strategies" in the Statement of Additional Information.

The Funds may buy and sell options, futures and forward contracts for a number
of purposes. They may do so to try to manage their exposure to the possibility
that the prices of their portfolio securities may decline, or to establish a
position in the securities market as a temporary substitute for purchasing
individual securities. High Income Fund, Bond Fund, Multiple Strategies Fund,
Growth & Income Fund and Strategic Bond Fund may do so to try to manage their
exposure to changing interest rates. Some of these strategies, such as selling
futures, buying puts and writing covered calls, hedge the Funds' portfolio
against price fluctuations.

Other hedging strategies, such as buying futures and call options, tend to
increase the Funds' exposure to the securities market. Forward contracts are
used to try to manage foreign currency risks on Funds' foreign investments.
Foreign currency options are used to try to protect against declines in the
dollar value of foreign securities the Funds own, or to protect against an
increase in the dollar cost of buying foreign securities. Writing covered call
options may also provide income to the Funds for liquidity purposes or to raise
cash to distribute to shareholders.

Futures. Global Securities Fund, Capital Appreciation Fund, Growth Fund,
Multiple Strategies Fund, Growth & Income Fund and Strategic Bond Fund may buy
and sell futures contracts that relate to broadly-based stock indices (these are
referred to as Stock Index Futures). The latter three Funds and Global
Securities Fund, Bond Fund and High Income Fund may buy and sell futures
contracts that relate to interest rates (these are referred to as Interest Rate
Futures). These types of Futures are described in "Hedging" in the Statement of
Additional Information.

Put and Call Options. The Funds may buy and sell certain kinds of put options
(puts) and call options (calls).

The Funds may buy calls only on securities, broadly-based stock and bond
indices, foreign currencies and Futures that the Fund is permitted to buy and
sell (as explained above) or to terminate their obligation on a call that the
Fund previously wrote. The Funds may write (that is, sell) covered call options
on up to 100% of each Fund's assets. When a Fund writes a call, it receives cash
(called a premium). The call gives the buyer the ability to buy the investment
on which the call was written from that Fund at the call price during the period
in which the call may be exercised. If the value of the investment does not rise
above the call price, it is likely that the call will lapse without being
exercised, while the Fund keeps the cash premium (and the investment).

The Funds may purchase put options. Buying a put on an investment gives that
Fund the right to sell the investment at a set price to a seller of a put on
that investment. The Funds can buy only those puts that relate to (1) securities
(whether or not that Fund owns such securities), (2) Futures that the Fund is
permitted to buy and sell (as explained above), (3) broadly-based stock or bond
indices or (4) foreign currencies. A Fund can buy a put on a Future whether or
not that Fund owns the particular Future in its portfolio. A Fund may not sell a
put other than a put that it previously purchased.

The Funds may buy and sell puts and calls only if certain conditions are met:
(1) calls the Funds buy or sell must be listed on a securities or commodities
exchange, or quoted on the Automated Quotation System of the National
Association of Securities Dealers, Inc. ("NASDAQ"); (2) in the case of puts and
calls on foreign currency, they must be traded on a securities or commodities
exchange, or in the over-the-counter market, or quoted by recognized dealers in
those options; (3) none of the Funds will write puts if, as a result, more than
50% of its net assets would be required to be segregated liquid assets; (4) each
call the Funds write must be "covered" while it is outstanding: that means a
Fund must own the investment on which the call was written or it must own other
securities that are acceptable for the escrow arrangements required for calls;
(5) a Fund may write calls on Futures contracts it owns, but these calls must be
covered by securities or other liquid assets the Fund owns and segregates to
enable it to satisfy its obligations if the call is exercised; (6) a call or put
option may not be purchased if the value of all of a Fund's put and call options
would exceed 5% of that Fund's total assets.

If a call written by a Fund is exercised, the Fund forgoes any possible profit
from an increase in the market price of the underlying security over the
exercise price less the commissions paid on the sale. In addition, the Fund
could experience capital losses which might cause previously distributed
short-term capital gains to be recharacterized as non-taxable return of capital
to shareholders.

Forward Contracts. Forward contracts are foreign currency exchange contracts.
They are used to buy or sell foreign currency for future delivery at a fixed
price. The Funds (other than Money Fund) use them to "lock-in" the U.S. dollar
price of a security denominated in a foreign currency that a Fund has bought or
sold, or to protect against losses from changes in the relative values of the
U.S. dollar and a foreign currency. Such Funds may also use "cross hedging,"
where a Fund hedges against changes in currencies other than the currency in
which a security it holds is denominated.

Interest Rate Swaps. Strategic Bond Fund, High Income Fund and Bond Fund can
also enter into interest rate swap transactions. In an interest rate swap, a
Fund and another party exchange their right to receive or their obligation to
pay interest on a security. For example, they may swap a right to receive
floating rate payments for fixed rate payments. A Fund enters into swaps only on
securities it owns. Each of these Funds

TX-18
<PAGE>

may not enter into swaps with respect to more than 50% of its total assets.
Also, each Fund will segregate liquid assets (such as cash or U.S. Government
securities) to cover any amounts it could owe under swaps that exceed the
amounts it is entitled to receive, and it will adjust that amount daily, as
needed.

Hedging instruments can be volatile investments and may involve special risks.
The use of hedging instruments requires special skills and knowledge of
investment techniques that are different than what is required for normal
portfolio management. If the Manager uses a hedging instrument at the wrong time
or judges market conditions incorrectly, hedging strategies may reduce that
Fund's return. A Fund could also experience losses if the prices of its futures
and options positions were not correlated with its other investments or if it
could not close out a position because of an illiquid market for the future or
option.

Options trading involves the payment of premiums and has special tax effects on
the Funds. There are also special risks in particular hedging strategies. If a
covered call written by a Fund is exercised on a security that has increased in
value, that Fund will be required to sell the security at the call price and
will not be able to realize any profit if the security has increased in value
above the call price. The use of forward contracts may reduce the gain that
would otherwise result from a change in the relationship between the U.S. dollar
and a foreign currency. To limit its exposure in foreign currency exchange
contracts, each Fund limits its exposure to the amount of its assets denominated
in the foreign currency. Interest rate swaps are subject to credit risks (if the
other party fails to meet its obligations) and also to interest rate risks. The
Funds could be obligated to pay more under their swap agreements they receive
under them, as a result of interest rate changes. These risks are described in
greater detail in the Statement of Additional Information.

DERIVATIVE INVESTMENTS. Each Fund (other than Money Fund) can invest in a number
of different kinds of "derivative investments." Such Funds may use some types of
derivatives for hedging purposes, and may invest in others because they offer
the potential for increased income and principal value. In general, a
"derivative investment" is a specially-designed investment whose performance is
linked to the performance of another investment or security, such as an option,
future, index or currency. In the broadest sense, derivative investments include
exchange-traded options and futures contracts (please refer to "Hedging").

One risk of investing in derivative investments is that the company issuing the
instrument might not pay the amount due on the maturity of the instrument. There
is also the risk that the underlying investment or security might not perform
the way the Manager expected it to perform. The performance of derivative
investments may also be influenced by interest rate changes in the U.S. and
abroad. All of these risks can mean that a Fund will realize less income than
expected from its investments, or that it can lose part of the value of its
investments, which will affect that Fund's share price. Certain derivative
investments held by the Funds may trade in the over-the-counter markets and may
be illiquid. If that is the case, the Funds' investment in them will be limited,
as discussed in "Illiquid and Restricted Securities."

Another type of derivative the Funds (other than Money Fund) may invest in is an
"index-linked" note. On the maturity of this type of debt security, payment is
made based on the performance of an underlying index, rather than based on a set
principal amount for a typical note. Another derivative investment such Funds
may invest in are currency-indexed securities. These are typically short-term or
intermediate-term debt securities. Their value at maturity or the interest rates
at which they pay income are determined by the change in value of the U.S.
dollar against one or more foreign currencies or an index. In some cases, these
securities may pay an amount at maturity based on a multiple of the amount of
the relative currency movements. This variety of index security offers the
potential for greater income but at a greater risk of loss.

Other derivative investments the Funds (other than Money Fund) may invest in
include "debt exchangeable for common stock" of an issuer or "equity-linked debt
securities" of an issuer. At maturity, the debt security is exchanged for common
stock of the issuer or is payable in an amount based on the price of the
issuer's common stock at the time of maturity. In either case there is a risk
that the amount payable at maturity will be less than the principal amount of
the debt (because the price of the issuer's common stock is not as high as was
expected).

PORTFOLIO TURNOVER. A change in the securities held by the Fund is known as
"portfolio turnover." The Funds may engage frequently in short-term trading to
try to achieve their objectives. High turnover and short-term trading involve
correspondingly greater commission expenses and transaction costs for Capital
Appreciation Fund, Growth Fund, Multiple Strategies Fund, Growth & Income Fund
and Global Securities Fund and to a lesser extent, higher transaction costs for
Money Fund, Bond Fund, Strategic Bond Fund and High Income Fund. The "Financial
Highlights," above show the portfolio turnover for the past fiscal years for
each Fund except Growth & Income Fund, which is not expected to exceed a
portfolio turnover rate of 200% in the current fiscal year. If any Fund derives
30% or more of its gross income from the sale of securities held less than three
months, it may fail to qualify under the tax laws as a regulated investment
company (see "Dividends, Capital Gains and Taxes," below).

SHORT SALES AGAINST-THE-BOX. In a short sale, the seller does not own the
security that is sold, but normally borrows the security to fulfill its delivery
obligation. The seller later buys the security to repay the loan, in the
expectation that the price of the security will be lower when the purchase is
made, resulting in a gain. The Funds may not sell securities short except that
each Fund (except Money Fund) may sell securities short in collateralized
transactions referred to as "short sales against-the-box." No more than 15% of
any Fund's net assets will be held as collateral for such short sales at any one
time.

OTHER INVESTMENT RESTRICTIONS

Each of the Funds has certain investment restrictions which, together with its
investment objective, are fundamental policies. Under some of those
restrictions, each Fund cannot: (1) with respect to 75% of its total assets,
invest in securities (except those of the U.S. Government or its agencies or

TX-19
<PAGE>

instrumentalities) of any issuer if immediately thereafter, either (a) more than
5% of that Fund's total assets would be invested in securities of that issuer,
or (b) that Fund would then own more than 10% of that issuer's voting securities
or 10% in principal amount of the outstanding debt securities of that issuer
(the latter limitation on debt securities does not apply to Strategic Bond
Fund); (2) lend money except in connection with the acquisition of debt
securities which a Fund's investment policies and restrictions permit it to
purchase; the Funds may also make loans of portfolio securities (see "Loans of
Portfolio Securities"); (3) pledge, mortgage or hypothecate any assets to secure
a debt; the escrow arrangements which are involved in options trading are not
considered to involve such a mortgage, hypothecation or pledge; (4) concentrate
investments in any particular industry, other than securities of the U.S.
Government or its agencies or instrumentalities [Money Fund, Bond Fund and High
Income Fund, only]; therefore these Funds will not purchase the securities of
issuers primarily engaged in the same industry if more than 25% of the total
value of that Fund's assets would (in the absence of special circumstances)
consist of securities of companies in a single industry; however, there is no
limitation as to concentration of investments by Money Fund in obligations
issued by domestic banks, foreign branches of domestic banks (if guaranteed by
the domestic parent), savings and loan associations or in obligations issued by
the federal government and its agencies and instrumentalities; and (5) deviate
from the percentage requirements and other restrictions listed under "Warrants
and Rights," and the first paragraph under "Special Risks-Borrowing for
Leverage." None of the percentage limitations and restrictions described above
and in the Statement of Additional Information for the Funds with respect to
writing covered calls, hedging, short sales and derivatives is a fundamental
policy.

All of the percentage restrictions described above and elsewhere in this
Prospectus, other than those described under "Other Investment Techniques and
Strategies-Special Risks-Borrowing for Leverage," apply only at the time a Fund
purchases a security. A Fund need not dispose of a security merely because the
size of the Fund's assets has changed or the security has increased in value
relative to the size of the Fund. Money Fund has separately undertaken to
exclude savings and loan associations from the exception to the concentration
limitation set forth under investment restriction (4), above. There are other
fundamental policies discussed in the Statement of Additional Information. The
Trustees of the Trust are required to monitor events to identify any
irreconcilable conflicts which may arise between the variable life insurance
policies and variable annuity contracts that invest in the Funds. Should any
conflict arise which ultimately requires that any substantial amount of assets
be withdrawn from any Fund, its operating expenses could increase.

HOW THE FUNDS ARE MANAGED

ORGANIZATION AND HISTORY. The Trust was organized in 1984 as a Massachusetts
business trust. The Trust is an open-end, diversified management investment
company, with an unlimited number of authorized shares of beneficial interest.
It consists of nine separate Funds - Money Fund, Bond Fund and Growth Fund, all
organized in 1984, High Income Fund, Capital Appreciation Fund and Multiple
Strategies Fund, all organized in 1986, Global Securities Fund, organized in
1990, Strategic Bond Fund, organized in 1993 and Growth & Income Fund, which is
expected to commence operations in 1995.

The Trust is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The Trustees
meet periodically throughout the year to oversee the Funds' activities, review
performance, and review the actions of the Manager. "Trustees and Officers of
the Trust" in the Statement of Additional Information names the Trustees and
provides more information about them and the officers of the Trust. Although the
Trust is not required by law to hold annual meetings, it may hold shareholder
meetings from time to time on important matters, and shareholders have the right
to call a meeting to remove a Trustee or to take other action described in the
Trust's Declaration of Trust.

THE MANAGER AND ITS AFFILIATES. The Funds are managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Funds' investments and handles its day-to-day business. The Manager carries out
its duties, subject to the policies established by the Board of Trustees, under
Investment Advisory Agreements for each Fund which state the Manager's
responsibilities. The Agreements set forth the fees paid by each Fund to the
Manager and describe the expenses that each Fund is responsible to pay to
conduct its business.

The Manager has operated as an investment adviser since 1959. The Manager
(including a subsidiary) currently manages investment companies, including other
OppenheimerFunds, with assets of more than $29 billion as of December 31, 1994,
and with more than 2.4 million shareholder accounts. The Manager is owned by
Oppenheimer Acquisition Corp., a holding company that is owned in part by senior
officers of the Manager and controlled by Massachusetts Mutual Life Insurance
Company, a mutual life insurance company.

PORTFOLIO MANAGERS. The Portfolio Manager of High Income Fund, Bond Fund,
Multiple Strategies Fund and Strategic Bond Fund is David P. Negri, joined by
Richard H. Rubinstein for Multiple Strategies Fund and by Arthur P. Steinmetz
for Strategic Bond Fund. They are the persons principally responsible for the
day-to-day management of those Funds since July 1989, January 1990, July 1989
(April 1991 for Mr. Rubinstein) and May 1993, respectively. During the past five
years, Messrs. Steinmetz and Negri have also served as officers of other
OppenheimerFunds. During the past five years, Mr. Rubinstein has served as an
officer of other OppenheimerFunds and was formerly Vice President and Portfolio
Manager/Security Analyst for Oppenheimer Capital Corp., an investment adviser.
The Portfolio Manager of Global Securities Fund is George Evans. He has been the
person principally responsible for the day-to-day management of that Fund since
February, 1991. During the past five years, he has also served as an Associate
Portfolio Manager for other OppenheimerFunds and formerly served as an
international equities portfolio manager/analyst with Brown Brothers Harriman &
Co. The Portfolio Manager of the Money Fund is Arthur Zimmer. Since October
1990, he has been the person principally responsible for the day-to-day
management of that Fund's portfolio. During the past five years, he has also
served as an officer of other OppenheimerFunds and formerly served as Vice
President of Hanifen Imhoff Management Company (mutual fund

TX-20
<PAGE>

investment adviser). The Portfolio Manager of Growth Fund is Jane Putnam. She
has been the person principally responsible for the day-to-day management of
that Fund's portfolio since May 1994. During the past five years, Ms. Putnam has
also served as an Associate Portfolio Manager for other OppenheimerFunds and
formerly served as a portfolio manager and equity research analyst for Chemical
Bank. The Portfolio Manager of Capital Appreciation Fund is Paul LaRocco. He has
been the person principally responsible for the day-to-day management of that
Fund's portfolio since January 1994. During the past five years, he has also
served as an Associate Portfolio Manager for other OppenheimerFunds and formerly
served as a securities analyst with Columbus Circle Investors, prior to which he
was an investment analyst for Chicago Title & Trust Co. The Portfolio Managers
of Growth & Income Fund are Robert C. Doll, Jr., Bruce Bartlett and Diane L.
Sobin. They will be the persons principally responsible for the day-to-day
management of that Fund after its inception in July, 1995. Each of the Growth &
Income Fund Portfolio Managers are officers of other OppenheimerFunds. Mr. Doll
is an Executive Vice President and Director of Equity Investment of the Manager.
During the past five years, Mr. Bartlett, a Vice President of the Manager, was
previously a Vice President and Senior Portfolio Manager with First of America
Investment Corporation. During the past five years, Ms. Sobin, a Vice President
of the Manager, was previously a Vice President and Senior Portfolio Manager
with Dean Witter InterCapital, Inc. Messrs. Negri, Evans, Zimmer and Rubinstein
are Vice Presidents of the Manager, Mr. Steinmetz is a Senior Vice President of
the Manager, and Ms. Putnam and Mr. LaRocco are Assistant Vice Presidents of the
Manager. Each of the Portfolio Managers named above are also Vice Presidents of
the Trust.

FEES AND EXPENSES. The monthly management fee payable to the Manager is computed
separately on the net assets of each Fund as of the close of business each day.
The management fee rates that became effective September 1, 1994 are as follows:
(i) for Money Fund: 0.450% of the first $500 million of net assets, 0.425% of
the next $500 million, 0.400% of the next $500 million, and 0.375% of net assets
over $1.5 billion; (ii) for Capital Appreciation Fund, Growth Fund, Multiple
Strategies Fund, Growth & Income Fund and Global Securities Fund: 0.75% of the
first $200 million of net assets, 0.72% of the next $200 million, 0.69% of the
next $200 million, 0.66% of the next $200 million, and 0.60% of net assets over
$800 million; and (iii) for High Income Fund, Bond Fund and Strategic Bond Fund:
0.75% of the first $200 million of net assets, 0.72% of the next $200 million,
0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the
next $200 million, and 0.50% of net assets over $1 billion. The management fee
rates in effect prior to September 1, 1994 are contained in note 8 to the Funds'
financial statements included in the Statement of Additional Information.

During the fiscal year ended December 31, 1994, the management fee (computed on
an annualized basis as a percentage of the net assets of all the Funds as of the
close of business each day) and the total operating expenses as a percentage of
average net assets of each Fund, when restated to reflect the current management
fee rates described above and the current limitation on expenses described in
the Statement of Additional Information, were as follows:

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OPERATING
FEES EXPENSES(1)
<S> <C> <C>
Money Fund .45% .50%
High Income Fund .75% .81%
Bond Fund .75% .81%
Capital Appreciation Fund .75% .80%
Growth Fund .75% .81%
Multiple Strategies Fund .74% .79%
Global Securities Fund .75% .95%
Strategic Bond Fund .75% .93%
Growth & Income Fund(2) .75% .93%
--------------------
</TABLE>
(1) This table does not reflect expenses that apply at the separate account
level or to related insurance products.

(2) Because Growth & Income Fund is a new fund and has not completed a full
fiscal year, the expenses shown above are based on amounts estimated to be
payable in the current fiscal year, assuming that Growth & Income Fund will have
average net assets of $15 million at the end of the current fiscal year.

The Funds pay expenses related to their daily operations, such as custodian
fees, Trustees' fees, transfer agency fees, legal and auditing costs. Those
expenses are paid out of the Funds' assets and are not paid directly by
shareholders. However, those expenses reduce the net asset value of shares, and
therefore are indirectly borne by shareholders through their investment. More
information about the investment advisory agreement is contained in the
Statement of Additional Information.

There is also information about the Funds' brokerage policies and practices in
"Brokerage Policies of the Funds" in the Statement of Additional Information.
That section discusses how brokers and dealers are selected for the Funds'
portfolio transactions. When deciding which brokers to use, the Manager is
permitted by the investment advisory agreements to consider whether brokers have
sold shares of the Funds or any other funds for which the Manager serves as
investment adviser.

SHAREHOLDER INQUIRIES. Inquiries by policyowners for Account information are to
be directed to the insurance company issuing the Account at the address or
telephone number shown in the accompanying Account Prospectus.

PERFORMANCE OF THE FUNDS

EXPLANATION OF PERFORMANCE TERMINOLOGY. Money Fund uses the terms "yield" to
illustrate its performance. High Income Fund, Bond Fund and Strategic Bond Fund
use the terms "yield," "total return," and "average annual total return" to
illustrate performance. All the Funds, except Money Fund, use the terms "average
annual total return" and "total return" to illustrate their performance. This
performance information may be useful to help you see how well your investment
has done and to compare it to other funds or market indices, as we have done
below.

It is important to understand that the Funds' total returns and yields represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but more
detailed information about how total returns and yields are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Funds' performance. Each
Fund's investment

TX-21
<PAGE>

performance will vary over time, depending on market conditions, the composition
of the portfolio and expenses.

YIELDS. Money Fund's "yield" is the income generated by an investment in that
Fund over a seven-day period, which is then "annualized." In annualizing, the
amount of income generated by the investment during that seven days is assumed
to be generated each week over a 52-week period, and is shown as a percentage of
the investment. The compounded "effective yield" is calculated similarly, but
the annualized income earned by an investment in Money Fund is assumed to be
reinvested. The compounded effective yield will therefore be slightly higher
than the yield because of the effect of the assumed reinvestment.

Yield for High Income Fund, Strategic Bond Fund or Bond Fund will be computed in
a standardized manner for mutual funds, by dividing that Fund's net investment
income per share earned during a 30-day base period by the maximum offering
price (equal to the net asset value) per share on the last day of the period.
This yield calculation is compounded on a semi-annual basis, and multiplied by 2
to provide an annualized yield. The Statement of Additional Information
describes a dividend yield and a distribution return that may also be quoted for
these Funds.

TOTAL RETURNS. There are different types of total returns used to measure each
Fund's performance. Total return is the change in value of a hypothetical
investment in the Fund over a given period, assuming that all dividends and
capital gains distributions are reinvested in additional shares. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show the Funds'
actual year-by-year performance.

HOW HAVE THE FUNDS PERFORMED? Below is a discussion by the Manager of the Funds'
performance during their last fiscal year ended December 31, 1994, followed by a
graphical comparison of each Fund's performance, except Money Fund and Growth &
Income Fund (which commenced operations after that date) to an appropriate
broad-based market index.

MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the Funds' fiscal year ended
December 31, 1994, the Manager emphasized the following investment strategies
and techniques. For HIGH INCOME FUND, bonds issued by U.S. companies that derive
a large percentage of their earnings from Europe were emphasized, together with
bonds positioned to benefit from rising commodity prices, notably those issued
by companies in the chemicals, industrial metals and forest product sectors. For
BOND FUND, intermediate and long-term U.S. government bonds were emphasized. For
CAPITAL APPRECIATION FUND, stocks of well-managed, innovative companies in
sectors with high potential were emphasized, including technology, health care
and consumer cyclicals, such as specialty retailing. For GROWTH FUND, consumer
and industrial company stocks were emphasized, including financial, technology
and health care issues. MULTIPLES STRATEGIES FUND'S equity portfolio emphasized
technology, health care and industrial issues; its fixed income portfolio
emphasized commodity-based industries, telecommunications and media issues. For
GLOBAL SECURITIES FUND, emerging markets such as Latin America were emphasized,
including stocks with strong earnings potential driven by corporate
restructurings and the privatization of state-owned industries. For STRATEGIC
BOND FUND, corporate bonds in U.S. companies that derive a large percentage of
their earnings from Europe were emphasized, foreign fixed-income securities were
emphasized in Latin American, Asian and Eastern European countries, and U.S.
government securities of a longer term were emphasized.

COMPARING EACH FUND'S PERFORMANCE TO THE MARKET. The charts below show the
performance of hypothetical $10,000 investments in each Fund (except for Money
Fund and Growth & Income Fund) held until December 31, 1994. Performance
information does not reflect charges that apply to separate accounts investing
in the Funds and is not restated to reflect the increased management fee rates
that took effect September 1, 1994. If these charges and expenses were taken
into account, performance would be lower.

High Income Fund's performance is compared to the performance of the Salomon
Brothers High Yield Market Index which is an unmanaged index of below-investment
grade (but rated at least BB+/Ba1 by Standard & Poor's or Moody's) U.S.
corporate debt obligations, widely-recognized as a measure of the performance of
the high-yield corporate bond market. Bond Fund's performance is compared to the
performance of the Lehman Brothers Corporate Bond Index, which is an unmanaged
index of publicly-issued non-convertible investment grade corporate debt of U.S.
issuers, widely recognized as a measure of the U.S. fixed-rate corporate bond
market. The performance of Capital Appreciation Fund and Growth Fund is compared
to the performance of the S&P 500 Index, a broad-based index of equity
securities widely regarded as a general measurement of the performance of the
U.S. equity securities market. Multiple Strategies Fund's performance is
compared to the S&P 500 Index and the Lehman Brothers Aggregate Bond Index, a
broad-based, unmanaged index of U.S. corporate bond issues, U.S. government
securities and mortgage-backed securities, widely recognized as a measure of the
performance of the domestic debt securities market. Global Securities Fund's
performance is compared to the Morgan Stanley World Index, an unmanaged index of
issuers listed on the stock exchanges of 20 foreign countries and the U.S., and
is widely recognized as a measure of global stock market performance. Strategic
Bond Fund's performance is compared to the Lehman Brothers Aggregate Bond Index
and the Salomon Brothers World Government Bond Index. The Salomon Brothers World
Government Bond Index is an unmanaged index of fixed-rate bonds having a
maturity of one year or more, and is widely recognized as a benchmark of fixed
income performance on a world-wide basis. Index performance reflects the
reinvestment of dividends but does not consider the effect of capital gains or
transaction costs, and none of the data below shows the effect of taxes. Also, a
Fund's performance reflects the effect of that Fund's business and operating
expenses. While index comparisons may be useful to provide a benchmark for a
Fund's performance, it must be noted that the Fund's investments are not limited
to the securities in the one index. Moreover, the index performance data does
not reflect any assessment of the risk of the investments included in the index.

TX-22
<PAGE>

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer High Income Fund and Salomon Brothers High Yield Market Index

[GRAPH TO COME]

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Bond Fund and Lehman Brothers Corporate Bond Index

[GRAPH TO COME]

TX-23

<PAGE>

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Capital Appreciation Fund and S&P 500 Index

[GRAPH TO COME]

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Growth Fund and the S&P 500 Index

[GRAPH TO COME]

TX-24

<PAGE>

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Multiple Strategies Fund, Lehman Brothers
Aggregate Bond Index and S&P 500 Index

[GRAPH TO COME]

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Global Securities Fund and Morgan Stanley World Index

[GRAPH TO COME]

TX-25
<PAGE>

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Strategic Bond Fund, Lehman Brothers Aggregate Bond
Index and Salomon Brothers World Government Bond Index

[GRAPH TO COME]

TX-26

<PAGE>

ABOUT YOUR ACCOUNT

HOW TO BUY SHARES

Shares of each Fund are offered only for purchase by Accounts as an investment
medium for variable life insurance policies and variable annuity contracts, as
described in the accompanying Account Prospectus. The sale of shares will be
suspended during any period when the determination of net asset value is
suspended and may be suspended by the Board of Trustees whenever the Board
judges it in that Fund's best interest to do so. Shares of each Fund are offered
at their respective offering price, which (as used in this Prospectus and the
Statement of Additional Information) is net asset value (without sales charge).
SHARES OF GROWTH & INCOME FUND WILL NOT BE OFFERED PRIOR TO JULY 1, 1995.

All purchase orders are processed at the offering price next determined after
receipt by the Trust of a purchase order in proper form. The offering price (and
net asset value) is determined as of the close of The New York Stock Exchange,
which is normally 4:00 P.M., New York time, but may be earlier on some days. Net
asset value per share of each Fund is determined by dividing the value of that
Fund's net assets by the number of its shares outstanding. The Board of Trustees
has established procedures for valuing each Fund's securities. In general, those
valuations are based on market value. Under Rule 2a-7, the amortized cost method
is used to value Money Fund's net asset value per share, which is expected to
remain fixed at $1.00 per share except under extraordinary circumstances; see
"About Your Account - How to Buy Shares - Money Fund Net Asset Valuation" in the
Statement of Additional Information for further information. There can be no
assurance that Money Fund's net asset value will not vary. Further details are
in "About Your Account" How to Buy Shares - Money Fund Net Asset Valuation" in
the Statement of Additional Information.

HOW TO SELL SHARES

Payment for shares tendered by an Account for redemption is made ordinarily in
cash and forwarded within seven days after receipt by the Trust's transfer
agent, Oppenheimer Shareholder Services (the "Transfer Agent"), of redemption
instructions in proper form, except under unusual circumstances as determined by
the Securities and Exchange Commission. The Trust understands that payment to
the Account owner will be made in accordance with the terms of the accompanying
Account Prospectus. The redemption price will be the net asset value next
determined after the receipt by the Transfer Agent of a request in proper form.
The market value of the securities in the portfolio of the Funds is subject to
daily fluctuations and the net asset value of the Funds' shares (other than
shares of the Money Fund) will fluctuate accordingly. Therefore, the redemption
value may be more or less than the investor's cost.

DIVIDENDS, CAPITAL GAINS AND TAXES

DIVIDENDS OF THE MONEY FUND. The Trust intends to declare Money Fund's dividends
from its net investment income on each day the New York Stock Exchange is open
for business. Such dividends will be payable on shares held of record at the
time of the previous determination of net asset value. Daily dividends accrued
since the prior dividend payment will be paid to shareholders monthly as of a
date selected by the Board of Trustees. Money Fund's net income for dividend
purposes consists of all interest income accrued on portfolio assets, less all
expenses of that Fund for such period. Accrued market discount is included in
interest income; amortized market premium is treated as an expense. Although
distributions from net realized gains on securities, if any, will be paid at
least once each year, and may be made more frequently, Money Fund does not
expect to realize long-term capital gains, and therefore does not contemplate
payment of any capital gains distribution. Distributions from net realized gains
will not be distributed unless Money Fund's capital loss carry forwards, if any,
have been used or have expired. Money Fund seeks to maintain a net asset value
of $1.00 per share for purchases and redemptions. To effect this policy, under
certain circumstances the Money Fund may withhold dividends or make
distributions from capital or capital gains (see "Dividends, Capital Gains and
Taxes" in the Statement of Additional Information).

DIVIDENDS AND DISTRIBUTIONS OF HIGH INCOME FUND, BOND FUND, STRATEGIC BOND FUND,
GROWTH & INCOME FUND AND MULTIPLE STRATEGIES FUND. The Trust intends to declare
High Income Fund, Bond Fund, Strategic Bond Fund, Growth & Income Fund and
Multiple Strategies Fund dividends quarterly, payable in March, June, September
and December.

DIVIDENDS AND DISTRIBUTIONS OF CAPITAL APPRECIATION FUND, GROWTH FUND AND GLOBAL
SECURITIES FUND. The Trust intends to declare Capital Appreciation Fund, Growth
Fund and Global Securities Fund dividends on an annual basis.

CAPITAL GAINS. Any Fund (other than Money Fund) may make a supplemental
distribution annually in December out of any net short-term or long-term capital
gains derived from the sale of securities, premiums from expired calls written
by the Fund, and net profits from hedging transactions. Each such Fund may also
make a supplemental distribution of capital gains and ordinary income following
the end of its fiscal year. All dividends and capital gains distributions paid
on shares of any of the Funds are automatically reinvested in additional shares
of that Fund at net asset value determined on the distribution date. There are
no fixed dividend rates and there can be no assurance as to payment of any
dividends or the realization of any capital gains.

TAX TREATMENT TO THE ACCOUNT AS SHAREHOLDER. Dividends paid by each Fund from
its ordinary income and distributions of each Fund's net realized short-term or
long-term capital gains are includable in gross income of the Accounts holding
such shares. The tax treatment of such dividends and distributions depends on
the tax status of that Account.

TAX STATUS OF THE FUNDS. If the Funds qualify as "regulated investment
companies" under the Internal Revenue Code, the Trust will not be liable for
Federal income taxes on amounts paid as dividends and distributions from any of
the Funds. The Funds did qualify during their last fiscal year and the Trust
intends that they will qualify in current and future years. However, the Code
contains a number of complex tests relating to qualification which any Fund
might not meet in any particular year (see, e.g., "Other Investment Techniques
and Strategies - Portfolio Turnover"). If any Fund does not so qualify, it would
be treated for tax purposes as an ordinary corporation and would receive no tax
deduction for payments made to shareholders of that Fund. The above discussion
relates solely to Federal tax laws. This discussion is not exhaustive and a
qualified tax adviser should be consulted.

TX-27
<PAGE>

APPENDIX A --
DESCRIPTION OF TERMS

Some of the terms used in the Prospectus and the Statement of Additional
Information are described below:

BANK OBLIGATIONS include CERTIFICATES OF DEPOSIT which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually 14 days to one year) at
a stated interest rate. BANKERS' ACCEPTANCES are credit instruments evidencing
the obligation of a bank to pay a draft which has been drawn on it by a
customer; these instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. TIME DEPOSITS
are non-negotiable deposits maintained in a banking institution for a specified
period of time at a stated interest rate. BANK NOTES are short-term direct
credit obligations of the issuing bank or bank holding company.

COMMERCIAL PAPER consists of short-term (usually 1 to 270 days) unsecured
promissory notes issued by corporations in order to finance their current
operations. VARIABLE RATE MASTER DEMAND NOTES are obligations that permit the
investment of fluctuating amounts at varying rates of interest pursuant to
direct arrangement between the holder and the borrower. The holder has the
right to increase the amount under the note at any time up to the face amount,
or to decrease the amount borrowed, and the borrower may repay up to the face
amount of the note without penalty.

CORPORATE OBLIGATIONS are bonds and notes issued by corporations and other
business organizations, including business trusts, in order to finance their
long-term credit needs.

LETTERS OF CREDIT are obligations by the issuer (a bank or other person) to
honor drafts or other demands for payment upon compliance with specified
conditions.

SECURITIES ISSUED OR GUARANTEED BY THE UNITED STATES GOVERNMENT OR ITS AGENCIES
OR INSTRUMENTALITIES include issues of the United States Treasury, such as
bills, certificates of indebtedness, notes and bonds, and issues of agencies and
instrumentalities established under the authority of an act of Congress. Such
agencies and instrumentalities include, but are not limited to, Bank for
Cooperatives, Federal Financing Bank, Federal Home Loan Bank, Federal
Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Issues of the United States
Treasury are direct obligations of the United States Government. Issues of
agencies or instrumentalities are (i) guaranteed by the United States Treasury,
or (ii) supported by the issuing agency's or instrumentality's right to borrow
from the United States Treasury, or (iii) supported by the issuing agency's or
instrumentality's own credit.

A-1

<PAGE>

APPENDIX B -- DESCRIPTION OF SECURITIES RATINGS

This is a description of (i) the two highest rating categories for Short Term
Debt and Long Term Debt by the Rating Organizations referred to under
"Investment Objectives and Policies -- Money Fund", and (ii) additional rating
categories that apply principally to investments by High Income Fund, Strategic
Bond Fund and Bond Fund. The rating descriptions are based on information
supplied by the Rating Organizations to subscribers.

Short Term Debt Ratings.

Moody's Investors Service, Inc. ("Moody's"): The following rating designations
for commercial paper (defined by Moody's as promissory obligations not having
original maturity in excess of nine months), are judged by Moody's to be
investment grade, and indicate the relative repayment capacity of rated issuers:

PRIME-1: Superior capacity for repayment. Capacity will normally be evidenced by
the following characteristics: (a) leveling market positions in well-established
industries; (b) high rates of return on funds employed; (c) conservative
capitalization structures with moderate reliance on debt and ample asset
protection; (d) broad margins in earning coverage of fixed financial charges and
high internal cash generation; and (e) well established access to a range of
financial markets and assured sources of alternate liquidity.

PRIME-2: Strong capacity for repayment. This will normally be evidenced by many
of the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

Standard & Poor's Corporation ("S&P"): The following ratings by S&P for
commercial paper (defined by S&P as debt having an original maturity of no more
than 365 days) assess the likelihood of payment:

A-1: Strong capacity for timely payment. Those issues determined to possess
extremely strong safety characteristics are denoted with a plus sign (+)
designation.

A-2: Satisfactory capacity for timely payment. However, the relative degree of
safety is not as high as for issues designated "A-1".

Fitch Investors Service, Inc. ("Fitch"): Fitch assigns the following short-term
ratings to debt obligations that are payable on demand or have original
maturities of generally up to three years, including commercial paper,
certificates of deposit, medium-term notes, and municipal and investment notes:

F-1+: Exceptionally strong credit quality; the strongest degree of assurance for
timely payment.

F-1: Very strong credit quality; assurance of timely payment is only slightly
less in degree than issues rated "F-1+".

F-2: Good credit quality; satisfactory degree of assurance for timely payment,
but the margin of safety is not as great as for issues assigned "F-1+" or "F-1"
ratings.

Duff & Phelps, Inc. ("Duff & Phelps"): The following ratings are for commercial
paper (defined by Duff & Phelps as obligations with maturities, when issued, of
under one year), asset-backed commercial paper, and certificates of deposit (the
ratings cover all obligations of the institution with maturities, when issued,
of under one year, including bankers' acceptance and letters of credit):

DUFF 1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding, and safety is just below risk-free U.S. Treasury short-term
obligations.

DUFF 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.

DUFF 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.

DUFF 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.

IBCA Limited or its affiliate IBCA Inc. ("IBCA"): Short-term ratings, including
commercial paper (with maturities up to 12 months), are as follows:

A1+: Obligations supported by the highest capacity for timely repayment.

A1: Obligations supported by a very strong capacity for timely repayment.

A2: Obligations supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic, or
financial conditions.

Thomson BankWatch, Inc. ("TBW"): The following short-term ratings apply to
commercial paper, certificates of deposit, unsecured notes, and other securities
having a maturity of one year or less.

TBW-1: The highest category; indicates the degree of safety regarding timely
repayment of principal and interest is very strong.

TBW-2: The second highest rating category; while the degree of safety regarding
timely repayment of principal and interest is strong, the relative degree of
safety is not as high as for issues rated "TBW-1".

Long Term Debt Ratings.

These rating categories apply principally to investments by High Income Fund,
Strategic Bond Fund and Bond Fund. For Money Fund only, the two highest rating
categories of each Rating Organization are relevant for securities purchased
with a remaining maturity of 397 days or less, or for rating issuers of
short-term obligations.

Moody's: Bonds (including municipal bonds) are rated as follows:

Aaa: Judged to be the best quality. They carry the smallest degree of investment
risk and are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin, and principal is
secure. While the

B-1

<PAGE>

various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong positions of
such issues.

Aa: Judged to be of high quality by all standards. Together with the "Aaa"
group, they comprise what are generally known as high-grade bonds. They are
rated lower than the best bonds because margins of protection may not be as
large as in "Aaa" securities or fluctuations of protective elements may be of
greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.

A: Possess many favorable investment attributes and are to be considered as
upper-medium grade obligations. Factors giving security to principal and
interest are considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.

Baa: Considered medium grade obligations, i.e., they are neither highly
protected nor poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and have speculative characteristics as
well.

Ba: Judged to have speculative elements; their future cannot be considered
well-assured. Often the protection of interest and principal payments may be
very moderate and not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.

B: Bonds rated "B" generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa: Of poor standing and may be in default or there may be present elements of
danger with respect to principal or interest.

Ca: Represent obligations which are speculative in a high degree and are often
in default or have other marked shortcomings.

C: Bonds rated "C" can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies numerical modifiers "1", "2" and "3" in each generic rating
classification from "Aa" through "B" in its corporate bond rating system. The
modifier "1" indicates that the security ranks in the higher end of its generic
rating category; the modifier "2" indicates a mid-range ranking; and the
modifier "3" indicates that the issue ranks in the lower end of its generic
rating category.

Standard & Poor's: Bonds are rated as follows:

AAA: The highest rating assigned by S&P. Capacity to pay interest and repay
principal is extremely strong.

AA: A strong capacity to pay interest and repay principal and differ from "AAA"
rated issues only in small degree.

A: Have a strong capacity to pay principal and interest, although they are
somewhat more susceptible to adverse effects of change in circumstances and
economic conditions.

BBB: Regarded as having an adequate capacity to pay principal and interest.
Whereas they normally exhibit protection parameters, adverse economic conditions
or changing circumstances are more likely to lead to a weakened capacity to pay
principal and interest for bonds in this capacity than for bonds in the "A"
category.

BB, B, CCC, CC: Regarded, on balance, as predominantly speculative with respect
to the issuer's capacity to pay interest and repay principal in accordance with
the terms of the obligation. "BB" indicates the lowest degree of speculation
and"CC" the highest degree. While such bonds will likely have some equality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.

C, D: Bonds on which no interest is being paid are rated "C." Bonds rated "D"
are in default and payment of interest and/or repayment of principal is in
arrears.

Fitch:

AAA: Considered to be investment grade and of the highest credit quality. The
obligor has an exceptionally strong ability to pay interest and repay principal,
which is unlikely to be affected by reasonably foreseeable events.

AA: Considered to be investment grade and of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated "AAA". Plus (+) and minus (-) signs are used
in the "AA" category to indicate the relative position of a credit within that
category.

Because bonds rated in the "AAA" and "AA" categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated "F-1+".

Duff & Phelps:

AAA: The highest credit quality. The risk factors are negligible, being only
slightly more than the risk-free U.S. Treasury debt.

AA: High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions. Plus (+) and
minus (-) signs are used in the "AA" category to indicate the relative position
of a credit within that category.

IBCA: Long-term obligations (with maturities of more than 12 months) are rated
as follows:

AAA: The lowest expectation for investment risk. Capacity for timely repayment
of principal and interest is substantial such that adverse changes in business,
economic, or financial conditions are unlikely to increase investment risks
significantly.

AA: A very low expectation for investment risk. Capacity for timely repayment of
principal and interest is substantial. Adverse changes in business, economic, or
financial conditions may increase investment risk albeit not very significantly.

A plus (+) or minus (-) sign may be appended to a long term rating to denote
relative status within a rating category.

TBW: TBW issues the following ratings for companies. These ratings assess the
likelihood of receiving payment of principal and interest on a timely basis and
incorporate TBW's opinion as to the vulnerability of the company to adverse
developments, which may impact the market's perception of the company, thereby
affecting the marketability of its securities.

A: Possesses an exceptionally strong balance sheet and earnings record,
translating into an excellent reputation and unquestioned access to its natural
money markets. If weakness

B-2

<PAGE>

or vulnerability exists in any aspect of the company's business, it is entirely
mitigated by the strengths of the organization.

A/B: The company is financially very solid with a favorable track record and no
readily apparent weakness. Its overall risk profile, while low, it not quite as
favorable as for companies in the highest rating category.

B-3
<PAGE>

OPPENHEIMER VARIABLE ACCOUNT FUNDS
3410 South Galena Street
Denver, Colorado 80231
1-800-525-7048

INVESTMENT ADVISER
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203

TRANSFER AGENT
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217

CUSTODIAN OF PORTFOLIO SECURITIES
The Bank of New York
One Wall Street
New York, New York 10015

INDEPENDENT AUDITORS
Deloitte & Touche LLP
1560 Broadway
Denver, Colorado 80202

LEGAL COUNSEL
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202

NO DEALER, BROKER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS OR THE STATEMENT OF ADDITIONAL INFORMATION, AND IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE FUND, OPPENHEIMER MANAGEMENT CORPORATION OR ANY AFFILIATE
THEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY STATE TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH STATE.

<PAGE>

OPPENHEIMER VARIABLE ACCOUNT FUNDS PROSPECTUS
For
OppenheimerFunds LifeTrust Variable Annuity

Graphic Appendix List
---------------------

Page 23 - Top of Page

(Graph comparing total return of High Income Fund shares to performance of
Salomon Brothers High Yield Market Index)

Average Annual Total Return at 12/31/94/(1)/

1 year 5 years Life of Fund

-3.18% 15.09% 12.47%

(1) The inception date of the Fund was 4/30/86. The average annual total returns
and the ending account value in the graph reflect reinvestment of all dividends
and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

Page 23 - Bottom of Page

(Graph comparing total return of Bond Fund shares to performance of Lehman
Brothers Corporate Bond Index)

Average Annual Total Return at 12/31/94/(1)/

1 year 5 years Life of Fund

-1.94% 8.43% 9.78%

(a) The inception date of the Fund was 4/3/85. The average annual total returns
and the ending account value in the graph reflect reinvestment of all dividends
and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

<PAGE>

Page 24 - Top of Page

(Graph comparing total return of Capital Appreciation Fund shares to performance
of S&P 500 Index)

Average Annual Total Return at 12/31/94/(1)/

1 year 5 years Life of Fund

-7.59% 11.81% 13.28%

(1) The inception date of the Fund was 8/15/86. The average annual total returns
and the ending accounting value in the graph reflect reinvestment of all
dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

Page 24 - Bottom of Page

(Graph comparing total return of Growth Fund shares to performance of S&P
500 Index)

Average Annual Total return at 12/31/94/(1)/

1 year 5 years Life of Fund

0.97% 7.40% 11.44%

(1) The inception date of the Fund was 4/3/85. The average annual total returns
and the ending account value in the graph reflect reinvestment of all dividends
and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

2
<PAGE>

Page 25 - Top of Page

(Graph comparing total return of Multiple Strategies Fund shares to performance
of S&P 500 Index and Lehman Brothers Aggregate Bond Index)

Average Annual Total Return at 12/31/94/(1)/

1 year 5 years Life of Fund

-1.95% 7.38% 9.85%

(1) The inception date of the Fund was 2/9/87. The average annual total returns
and the ending account value in the graph reflect reinvestment of all dividends
and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

Page 25 - Bottom of Page

(Graph comparing total return of Global Securities Fund shares to performance of
Morgan Stanley World Index)

Average Annual Total Return at 12/31/94/(1)/

1 year Life of Fund

-5.72% 11.15%

(1) The inception date of the Fund was 11/12/90. The average annual total
returns and the ending account value in the graph reflect reinvestment of all
dividends and capital gains distributions.
Past performance is not predictive of future performance.
Graphs are not drawn to same scale.

3
<PAGE>

Page 26 - Top of Page

(Graph comparing total return of Strategic Bond Fund to performance of Lehman
Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index)

Average Annual Total return at 12/31/94/(1)/

1 year Life of Fund

-3.78% 0.19%

------------------
/(1)/ The inception date of the Fund was 5/3/93. The average annual total
returns and the ending account value in the graph reflect reinvestment of all
dividends and capital gains distributions.
Past Performance is not predictive of future performance.
Graphs are not drawn to same scale.

4
<PAGE>

------------------------------------------------------------------------
Top of page: a line graph reflecting the growth of a hypothetical
investment of $10,000 invested in the MML Equity Fund and the Standard &
Poors's 500 Index. In the upper left portion of the graph is a table
listing the average annual total returns for the MML Equity Fund for the
1, 5, and 10 year time periods.

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

<TABLE>
<CAPTION>
Plot points for table:
<S> <C>
1 Yr 4.10%
5 Yr 9.49%
10 Yr 13.72%

<CAPTION>
Plot points for graph: MML Equity S & P 500
<S> <C> <C>
1/1/85 10,000 10,000
1985 13,049 13,177
1986 15,678 15,639
1987 16,007 16,460
1988 18,677 19,192
1989 22,981 25,278
1990 22,863 24,476
1991 28,707 31,934
1992 31,715 34,367
1993 34,733 37,828
1994 36,159 38,324
</TABLE>

Page 6

------------------------------------------------------------------------
Bottom of page: a table listing the average annual total returns for the
MML Money Market Fund and the Lipper Taxable Money Market Fund Average
for the 1, 5, and 10 year time periods.

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

<TABLE>
<CAPTION>
MML Money Lipper Taxable
Plot points for table: Market Money Mkt
<S> <C> <C>
1 Yr 3.84% 3.65%
5 Yr 4.82% 4.59%
10 Yr 6.17% 5.89%
</TABLE>

<PAGE>

--------------------------------------------------------------------
Top of page: a line graph reflecting the growth of a hypothetical
investment of $10,000 invested in the MML Managed Bond Fund and the
Lehman Brothers Government/Corporate Bond Index. In the upper left
portion of the graph is a table listing the average annual total
returns for the MML Managed Bond Fund for the 1, 5, and 10 year time
periods.
--------------------------------------------------------------------

Plot points for table:
<S> <C>
1 Yr -3.76%
5 Yr 7.86%
10 Yr 9.53%

MML Managed Lehman Brothers
Plot points for graph: Bond G/C Bond
<S> <C> <C>
1/1/85 10,000 10,000
1985 11,994 12,134
1986 13,729 14,022
1987 14,086 14,346
1988 15,090 15,431
1989 17,026 17,631
1990 18,452 19,091
1991 21,526 22,170
1992 23,099 23,848
1993 25,827 26,486
1994 24,855 25,556

</TABLE>
Page 7
---------------------------------------------------------------------
Bottom of page: a line graph reflecting the growth of a hypothetical
investment of $10,000 invested in the MML Blend Fund and the Lipper
Balanced Fund Index. In the upper left portion of the graph is a
table listing the average annual total returns for the MML Blend Fund
for the 1, 5, and 10 year time periods.
---------------------------------------------------------------------

Plot points for table:
<S> <C>
1 Yr 2.48%
5 Yr 9.31%
10 Yr 12.46%

<CAPTION>
Lipper
Plot points for graph: MML Blend Balanced
<S> <C> <C>
1/1/85 10,000 10,000
1985 12,488 12,983
1986 14,774 15,376
1987 15,234 16,010
1988 17,276 17,800
1989 20,725 21,306
1990 21,216 21,446
1991 26,309 26,985
1992 28,772 28,942
1993 31,561 32,329
1994 32,343 31,523

</TABLE>