VARIABLE ANNUITY ACCOUNT I OF AETNA INSURANCE CO OF AMERICA, 497, 1998-05-01

VARIABLE ANNUITY ACCOUNT I OF AETNA INSURANCE CO OF AMERICA
497, 1998-05-01

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PROSPECTUS
================================================================================

The Contracts offered in connection with this Prospectus are the "Aetna
Marathon Plus" group and individual deferred variable annuity contracts
("Contracts") issued by Aetna Insurance Company of America (the "Company"). The
Contracts are available as (1) nonqualified deferred annuity contracts; (2)
Individual Retirement Annuities ("IRA") including Roth IRAs under Sections
408(b) and 408A of the Internal Revenue Code (may be subject to approval by
state regulatory agencies); or (3) qualified contracts issued in connection
with certain employer sponsored retirement plans (may be subject to approval by
the Company and state regulatory agencies). Currently, the IRA is not available
as a "SIMPLE IRA" as defined in Section 408(p) of the Internal Revenue Code. In
most states, group Contracts are offered to certain broker-dealers or banks
which have agreed to act as Distributors of the Contracts. Individuals who have
established accounts with those broker-dealers or banks are eligible to
participate in the Contract. Individual Contracts are offered only in those
states where the group Contracts are not authorized for sale. (See "Purchase.")

The securities offered in this Prospectus are distributed through Aetna Life
Insurance and Annuity Company, an affiliate of the Company, as the Underwriter
and by registered broker-dealers or banks selected by it as Distributors. (See
"Purchase.")

In most states, the Contracts provide that Purchase Payments may be allocated
to the AICA Guaranteed Account (the "Guaranteed Account"), a credited interest
option, or to one or more of the Subaccounts of Variable Annuity Account I, a
separate account of the Company. In certain states, Purchase Payments may be
allocated to the Fixed Account when the Guaranteed Account is not available.
The Subaccounts invest directly in shares of the following Funds:

<TABLE>
<S> <C>
[bullet] Aetna Ascent VP (formerly Aetna Ascent Variable Portfolio) [bullet] Fidelity VIP High Income Portfolio
[bullet] Aetna Balanced VP, Inc. (formerly Aetna Investment Advisers [bullet] Fidelity VIP Overseas Portfolio
Fund, Inc.) [bullet] Fidelity VIP II Asset Manager Portfolio
[bullet] Aetna Income Shares d/b/a Aetna Bond VP [bullet] Fidelity VIP II Contrafund Portfolio
[bullet] Aetna Crossroads VP (formerly Aetna Crossroads Variable [bullet] Fidelity VIP II Index 500 Portfolio
Portfolio) [bullet] Janus Aspen Aggressive Growth Portfolio
[bullet] Aetna Growth VP (formerly Aetna Variable Growth [bullet] Janus Aspen Balanced Portfolio
Portfolio) [bullet] Janus Aspen Flexible Income Portfolio
[bullet] Aetna Variable Fund d/b/a Aetna Growth and Income VP [bullet] Janus Aspen Growth Portfolio
[bullet] Aetna Index Plus Large Cap VP (formerly Aetna Variable [bullet] Janus Aspen Worldwide Growth Portfolio
Index Plus Portfolio) [bullet] MFS Total Return Series
[bullet] Aetna International VP [bullet] MFS World Governments Series
[bullet] Aetna Legacy VP (formerly Aetna Legacy Variable Portfolio) [bullet] Oppenheimer Aggressive Growth Fund (formerly
[bullet] Aetna Variable Encore Fund d/b/a Aetna Money Market VP Oppenheimer Capital Appreciation Fund)
[bullet] Aetna Real Estate Securities VP [bullet] Oppenheimer Global Securities Fund
[bullet] Aetna Small Company VP (formerly Aetna Variable Small [bullet] Oppenheimer Growth & Income Fund
Company Portfolio) [bullet] Oppenheimer Strategic Bond Fund
[bullet] Aetna Value Opportunity VP (formerly Aetna Variable [bullet] Portfolio Partners MFS Emerging Equities Portfolio
Capital Appreciation Portfolio) [bullet] Portfolio Partners MFS Research Growth Portfolio
[bullet] Calvert Social Balanced Portfolio (formerly Calvert [bullet] Portfolio Partners MFS Value Equity Portfolio
Responsibly Invested Balanced Portfolio) [bullet] Portfolio Partners Scudder International Growth
[bullet] Fidelity VIP Equity-Income Portfolio Portfolio
[bullet] Fidelity VIP Growth Portfolio [bullet] Portfolio Partners T. Rowe Price Growth Equity
Portfolio
</TABLE>

Except as specifically mentioned, this Prospectus describes only investments
through the Separate Account. The Guaranteed Account is described in Appendix A
to this Prospectus, as well as in the Guaranteed Account's prospectus. The
Fixed Account is described in Appendix B to this Prospectus. The availability
of the Funds, the Guaranteed Account and the Fixed Account is subject to
applicable regulatory authorization; not all options may be available in all
jurisdictions or under all Contracts. (See "Investment Options.")

This Prospectus provides investors with the information about the Separate
Account that they should know before investing in the Contracts. Additional
information about the Separate Account is contained in a Statement of
Additional Information ("SAI") which is available at no charge. The SAI has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. The Table of Contents for the SAI is printed on page 25 of
this Prospectus. An SAI for this Prospectus and for any Fund Prospectus may be
obtained by indicating the request on your Application or by calling the number
listed under the "Inquiries" section of the Prospectus Summary.

THIS PROSPECTUS SHOULD BE READ IN CONJUNCTION WITH THE CURRENT PROSPECTUSES OF
THE FUNDS AND THE AICA GUARANTEED ACCOUNT. ALL PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.

<PAGE>

THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY ANY BANK, NOR
ARE THEY INSURED BY THE FDIC; THEY ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

THIS PROSPECTUS, THE STATEMENT OF ADDITIONAL INFORMATION AND OTHER INFORMATION
ABOUT THE SEPARATE ACCOUNT REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S WEB SITE AT http://www.sec.gov.

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, 1998.

<PAGE>

TABLE OF CONTENTS
================================================================================

<TABLE>
<S> <C>
DEFINITIONS............................................... DEFINITIONS - 1
PROSPECTUS SUMMARY ....................................... SUMMARY - 1
FEE TABLE ................................................ FEE TABLE - 1
CONDENSED FINANCIAL INFORMATION .......................... AUV HISTORY - 1
THE COMPANY ................................................................. 1
VARIABLE ANNUITY ACCOUNT I .................................................. 1
INVESTMENT OPTIONS .......................................................... 1
The Funds ................................................................. 1
Credited Interest Option .................................................. 2
Fixed Account ............................................................. 2
PURCHASE .................................................................... 2
Contract Availability ..................................................... 2
Purchasing Interests in the Contract ...................................... 3
Purchase Payments ......................................................... 3
Contract Rights ........................................................... 3
Designations of Beneficiary and Annuitant ................................. 4
Right to Cancel ........................................................... 4
CHARGES AND DEDUCTIONS ...................................................... 4
Daily Deductions from the Separate Account ................................ 4
Mortality and Expense Risk Charge ....................................... 4
Administrative Charge ................................................... 5
Maintenance Fee ........................................................... 5
Deferred Sales Charge ..................................................... 5
Fund Expenses ............................................................. 6
Premium and Other Taxes ................................................... 6
CONTRACT VALUATION .......................................................... 7
Account Value ............................................................. 7
Accumulation Units ........................................................ 7
Net Investment Factor ..................................................... 7
TRANSFERS ................................................................... 7
Telephone Transfers ....................................................... 8
Dollar Cost Averaging Program ............................................. 8
Account Rebalancing Program ............................................... 8
WITHDRAWALS ................................................................. 9
SYSTEMATIC DISTRIBUTION OPTIONS ............................................. 10
DEATH BENEFIT DURING ACCUMULATION PERIOD .................................... 10
Death Benefit Amount ...................................................... 10
Death Benefit Payment Options ............................................. 12
ANNUITY PERIOD .............................................................. 13
Annuity Period Elections .................................................. 13
Partial Annuitization ..................................................... 13
Annuity Options ........................................................... 13
Annuity Payments .......................................................... 14
</TABLE>

<PAGE>

<TABLE>
<S> <C>
Charges Deducted During the Annuity Period ................................ 15
Death Benefit Payable During the Annuity Period ........................... 15
TAX STATUS .................................................................. 15
Introduction .............................................................. 15
Taxation of the Company ................................................... 15
Tax Status of the Contract ................................................ 16
Taxation of Annuity Contracts ............................................. 17
Contracts Used with Certain Retirement Plans .............................. 19
MISCELLANEOUS ............................................................... 22
Distribution .............................................................. 22
Delay or Suspension of Payments ........................................... 22
Performance Reporting ..................................................... 22
Voting Rights ............................................................. 23
Modification of the Contract .............................................. 23
Transfers of Ownership; Assignment ........................................ 23
Involuntary Terminations .................................................. 24
Legal Matters and Proceedings ............................................. 24
Year 2000 ................................................................. 24
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION ......................... 25
APPENDIX A--AICA GUARANTEED ACCOUNT ......................................... 26
APPENDIX B--FIXED ACCOUNT ................................................... 29
APPENDIX C--DESCRIPTION OF UNDERLYING FUNDS ................................. 30
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
PERSON TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THE OFFERING CONTAINED IN THIS PROSPECTUS EXCEPT AS OTHERWISE CONTAINED HEREIN.

<PAGE>

DEFINITIONS
================================================================================

The following terms are defined as they are used in this Prospectus:

Account: A record that identifies contract values accumulated on each
Certificate Holder's behalf during the Accumulation Period.

Account Value: The total dollar value of amounts held in an Account as of each
Valuation Date during the Accumulation Period.

Account Year: A period of twelve months measured from the date on which an
Account is established (the effective date) or from an anniversary of such
effective date.

Accumulation Period: The period during which Purchase Payment(s) credited to an
Account are invested to fund future annuity payments.

Accumulation Unit: A measure of the value of each Subaccount before annuity
payments begin.

Adjusted Account Value: The Account Value, plus or minus the aggregate market
value adjustment for amounts allocated to the Guaranteed Account.

Annuitant: The person on whose life or life expectancy the annuity payments are
based.

Annuity: A series of payments for life, a definite period or a combination of
the two.

Annuity Date: The date on which annuity payments begin.

Annuity Period: The period during which annuity payments are made.

Annuity Unit: A measure of the value of each Subaccount selected during the
Annuity Period.

Application: The form or collection of information required by the Company to
purchase an interest in a group contract or an individual contract.

Beneficiary(ies): The person or persons who are entitled to receive any death
benefit proceeds. Under Nonqualified Contracts, Individual Retirement Annuities
and Section 403(b) Contracts, Beneficiary refers to the beneficiary named under
the Contract. Under Qualified Contracts sold in conjunction with 401(a) or 457
Plans, Beneficiary refers to the beneficiary under the plan.

Certificate: The document issued to a Certificate Holder for an Account
established under a group contract.

Certificate Holder (You): A person or entity who purchases an individual
Contract or acquires an interest under a group Contract.

Claim Date: The date when proof of death and the Beneficiary's claim are
received in good order at the Company's Home Office.

Company (We, Us): Aetna Insurance Company of America.

Contract: The group and individual deferred, variable annuity contracts offered
by this Prospectus.

Contract Year: The number of completed years since the date of the first
payment under an individual Contract or to an Account under a group Contract.

Distributor(s): The registered broker-dealer(s), or banks that may be acting as
broker-dealers without separate registration under the Securities Exchange Act
of 1934, which have entered into selling agreements with the Company to offer
and sell the Contracts. The Company may also serve as a Distributor.

Fixed Account: A fixed interest option available in certain states which is
described in Appendix B to this prospectus. Amounts allocated to the Fixed
Account are included in the Account Value.

- --------------------------------------------------------------------------------
DEFINITIONS - 1

<PAGE>

Fund(s): An open-end registered management investment company whose shares are
purchased by the Separate Account to fund the benefits provided by the
Contract.

Group Contract Holder: The entity to which a group Contract is issued.

Home Office: The Company's principal executive offices located at 151
Farmington Avenue, Hartford, Connecticut 06156.

Individual Contract Holder: A person or entity who has purchased an individual
variable annuity contract (also referred to as a "Certificate Holder").

Individual Retirement Annuity: An individual or group variable deferred annuity
intended to qualify under Code Section 408(b) or 408A.

Nonqualified Contract: A contract established to supplement an individual's
retirement income, or to provide an alternative investment option under an
Individual Retirement Account qualified under Code Section 408(a).

Purchase Payment(s): The gross payment(s) made to the Company under an Account.

Qualified Contracts: Contracts available for use with plans entitled to special
federal income tax treatment under Code Sections 401(a), 403(b), 408(b), 408A
or 457.

Registered Representative: The individual who is registered with a
broker-dealer acting as Distributor to offer and sell securities, or who is an
employee of a bank acting as Distributor that is exempt from broker-dealer
registration under the Securities Exchange Act of 1934. Registered
Representatives must also be licensed as insurance agents to sell variable
annuity contracts.

Roth IRA: An Individual Retirement Annuity intended to qualify under Code
Section 408A.

Separate Account: Variable Annuity Account I, a separate account established
for the purpose of funding variable annuity contracts issued by the Company.

Subaccount(s): The portion of the assets of the Separate Account that is
allocated to a particular Fund. Each Subaccount invests in the shares of only
one corresponding Fund.

Surrender Value: The amount payable upon the withdrawal of all or any portion
of an Account Value.

Underwriter: The registered broker-dealer which contracts with other registered
broker-dealers, or with banks exempt from broker-dealer registration, to offer
and sell the Contracts. Aetna Life Insurance and Annuity Company will serve as
Underwriter.

Valuation Date: The date and time at which the Accumulation Unit Value and
Annuity Unit Value of a Subaccount is calculated. Currently, this calculation
occurs after the close of business of the New York Stock Exchange on any normal
business day, Monday through Friday, that the New York Stock Exchange is open.

- --------------------------------------------------------------------------------
DEFINITIONS - 2

<PAGE>

PROSPECTUS SUMMARY
================================================================================

CONTRACTS OFFERED

The Contracts offered in connection with this Prospectus are group and
individual deferred variable annuity contracts issued by Aetna Insurance
Company of America (the "Company"). The purpose of the Contract is to
accumulate values and to provide benefits upon retirement. The Contracts are
currently available for (1) individual nonqualified purchases (we reserve the
right to limit the ownership of nonqualified contracts to natural persons); (2)
Individual Retirement Annuities ("IRAs") including Roth IRAs, other than
"SIMPLE IRAs" as defined in Section 408(p) of the Internal Revenue Code
("Code") (may be subject to approval by state regulatory agencies); and (3)
purchases made in conjunction with employer sponsored retirement plans under
Section 403(b) of the Code (may be subject to approval by the Company and by
state regulatory agencies). Prior to May 1, 1998, the Contracts were also
available for purchases made in conjunction with employer-sponsored retirement
plans under Sections 401(a) or 457 of the Code.

In most states, group Contracts are offered to certain broker-dealers or
banks which have agreed to act as Distributors of the Contracts. Individuals
who have established accounts with those broker-dealers or banks are eligible
to participate in the Contract. Individual Contracts are offered in those
states where the group Contracts are not authorized for sale. Joint Certificate
Holders are allowed only on Nonqualified Contracts. A joint Certificate Holder
must be the spouse of the other joint Certificate Holder. In Pennsylvania, the
joint Certificate Holders do not need to be spouses. References to "Certificate
Holders" in this Prospectus mean both of the Certificate Holders on joint
Accounts.

CONTRACT PURCHASE
You may purchase an interest in the Contract by completing an Application
and submitting it to the Company. Purchase Payments can be applied to the
Contract either through a lump-sum payment or through ongoing contributions.
(See "Purchase.")

FREE LOOK PERIOD
You may cancel the Contract or Certificate within 10 days after you
receive it (or longer if required by state law) by returning it to the Company
along with a written notice of cancellation. Unless state law requires
otherwise, the amount you will receive upon cancellation will reflect the
investment performance of the Subaccounts into which your Purchase Payments
were deposited. In some cases this may be more or less than the amount of your
Purchase Payments. Under a Contract issued as an Individual Retirement Annuity,
you will receive a refund of your Purchase Payment. (See "Purchase--Right to
Cancel.") If the Purchase Payment to a Roth IRA is a rollover from a contract
issued by the Company or an affiliate where the deferred sales charge was
eliminated or reduced to facilitate the rollover to this Contract and you
exercise your free look right under this provision, the Purchase Payment will
be restored to the contract from which it came.

INVESTMENT OPTIONS
The Company has established Variable Annuity Account I, a registered unit
investment trust, for the purpose of funding the variable portion of the
Contracts. The Separate Account is divided into Subaccounts which invest
directly in shares of the Funds described herein. The Contract allows
investment in the Subaccounts, as well as in the Guaranteed Account (or Fixed
Account, in certain states) described below subject to the limitations
described in "Investment Options," see page 1. For a complete list of the Funds
available under the Contracts, and a description of the investment objectives
of each of the Funds and their investment advisers, see "Investment
Options--The Funds" and Appendix C in this Prospectus, as well as the
prospectuses for each of the Funds.

The Guaranteed Account is the credited interest option available under the
Contract which allows you to earn a fixed rate of interest, if held for the
guaranteed term. (See Appendix A to this Prospectus and the prospectus for the
Guaranteed Account.)

The Fixed Account is an option available under the Contract in certain
states which allows you to earn a fixed rate of interest. (See Appendix B to
this Prospectus.)

- --------------------------------------------------------------------------------
SUMMARY - 1

<PAGE>

CHARGES AND DEDUCTIONS
Certain charges are associated with these Contracts. These charges include
daily deductions from the Separate Account (the mortality and expense risk
charge and an administrative charge), as well as any applicable maintenance
fee, transfer fees and premium and other taxes. The Funds also incur certain
fees and expenses which are deducted directly from the Funds. A deferred sales
charge may apply upon a full or partial withdrawal of the Account Value. (See
the Fee Table and "Charges and Deductions.")

TRANSFERS
Prior to the Annuity Date, and subject to certain limitations, you can
transfer Account Values among the Subaccounts and the Guaranteed Account (or
Fixed Account in certain states). During the Annuity Period and subject to
state approval, if you have elected variable payments, you can make transfers
among the Subaccounts available during the Annuity Period. Currently, during
the Accumulation Period, transfers are without charge. However, the Company
reserves the right to charge up to $10 for each additional transfer if more
than 12 transfers are made in a calendar year. Any transfer charge will be
applied so that the amount being transferred will be reduced. Transfers can be
requested in writing or by telephone in accordance with the Company's transfer
procedures. If approved by your state, during the Annuity Period, you can
currently make up to four transfers each calendar year. There is no charge for
these transfers. (Transfers from the Guaranteed Account may be restricted and
subject to a market value adjustment. See Appendix A)

The Company also offers a Dollar Cost Averaging Program and an Account
Rebalancing Program. The Dollar Cost Averaging Program permits the automatic
transfer of amounts from any of the Subaccounts and an available Guaranteed
Account term to any of the other Subaccounts on a monthly or quarterly basis.
In a Contract with a Fixed Account, the Fixed Account is only available for
dollar cost averaging from the Fixed Account to the other investment options
over a period not to exceed 12 months. The Account Rebalancing Program allows
you to request that each year, or at other more frequent intervals as we allow,
we automatically reallocate your Account value to specified percentages among
the Subaccounts in which you invest. (See "Transfers.")

WITHDRAWALS
All or a part of the Account Value may be withdrawn prior to the Annuity
Date by properly completing a disbursement form and sending it to the Company.
Certain charges may be assessed upon withdrawal. Amounts withdrawn from the
Guaranteed Account may be subject to a market value adjustment. (See Appendix
A.) The taxable portion of the withdrawal may also be subject to income tax and
a federal tax penalty. (See "Withdrawals.")

The Contract also offers certain Systematic Distribution Options during
the Accumulation Period subject to certain criteria. Some Systematic
Distribution Options are not available in all states and may not be suitable in
every situation. (See "Systematic Distribution Options.")

GUARANTEED DEATH BENEFIT
These Contracts contain a guaranteed death benefit feature. Upon the death
of the Annuitant, the Account Value may be increased under certain
circumstances. (See "Death Benefit During Accumulation Period.")

After Annuity Payments have commenced, a death benefit may be payable to
the Beneficiary depending upon the terms of the Contract and the Annuity Option
selected. (See "Death Benefit Payable During the Annuity Period.")

THE ANNUITY PERIOD
On the Annuity Date, you may elect to begin receiving Annuity Payments.
Annuity Payments can be made on either a fixed, variable or combination fixed
and variable basis. If a variable payout is selected, the payments will
continue to vary with the investment performance of the Subaccount(s) selected.
The Company reserves the right to limit the number of Subaccounts that may be
available during the Annuity Period. (See "Annuity Period.")

- --------------------------------------------------------------------------------
SUMMARY - 2

<PAGE>

TAXES
Earnings are not generally taxed until you or your Beneficiary(ies)
actually receive a distribution from the Contract. A 10% federal tax penalty
may be imposed on certain withdrawals. Special rules apply to distributions
from a Roth IRA. (See "Tax Status.")

INQUIRIES
Questions, inquiries or requests for additional information can be
directed to your agent or local representative, or you may contact the Company
as follows:

<TABLE>
<S> <C>
[bullet] Write to: Aetna Insurance Company of America
151 Farmington Avenue
Hartford, Connecticut 06156-5996
Attention: Customer Service

[bullet] Call Customer Service: 1-800-531-4547 (for automated transfers
or changes in the allocation of Account
Values, call: 1-800-262-3862)
</TABLE>

- --------------------------------------------------------------------------------
SUMMARY - 3

<PAGE>

FEE TABLE
================================================================================

This Fee Table describes the various charges and expenses associated with the
Contract. No sales charge is paid upon purchase of the Contract. All costs that
are borne directly or indirectly under the Subaccounts and Funds are shown
below. Some expenses may vary as explained under "Charges and Deductions." The
charges and expenses shown below do not include premium taxes that may be
applicable. For more information regarding expenses paid out of assets of a
particular Fund, see the Fund's prospectus.

CONTRACTS OTHER THAN ROTH IRA CONTRACTS

CONTRACT HOLDER TRANSACTION EXPENSES

Deferred Sales Charge for withdrawals under each Contract (as a percentage
of each Purchase Payment withdrawn):

<TABLE>
<CAPTION>
- ----------------------------------------------
Years from Receipt of Deferred Sales
Purchase Payment Charge Deduction
- ----------------------------- ----------------
<S> <C>
Less than 2 7%
2 or more but less than 4 6%
4 or more but less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more 0%
- ----------------------------------------------
</TABLE>

SEPARATE ACCOUNT ANNUAL EXPENSES
(Daily deductions, equal to the percentage shown on an annual basis, made from amounts
allocated to the variable options under each Contract)

DURING THE ACCUMULATION PERIOD:
Mortality and Expense Risk Charge .................................................... 1.25%(3)
Administrative Charge ................................................................ 0.15%
-------
Total Subaccount Annual Expenses ................................................. 1.40%
=======
DURING THE ANNUITY PERIOD:
Mortality and Expense Risk Charge .................................................... 1.25%
Administrative Charge ................................................................ 0.00%(4)
-------
Total Subaccount Annual Expenses ................................................. 1.25%
</TABLE>
(1) The maintenance fee, if applicable, will generally be deducted
from each Account annually and if the full Account Value is withdrawn.
The maintenance fee is waived when the Account Value is $50,000 or more
on the date the maintenance fee is due. The amount shown is the maximum
maintenance fee that can be deducted under the Contract.
(2) During the Accumulation Period We currently allow an unlimited number of
transfers without charge. However, we reserve the right to impose a fee
of $10 for each transfer in excess of 12 per year.
(3) Under certain Contracts the mortality and expense risk charge during the
Accumulation Period may be reduced. See "Charges and Deductions."
(4) We currently do not impose an Administrative Charge during the Annuity
Period. However, we reserve the right to deduct a daily charge of not
more than 0.25% per year from the Subaccounts.

- --------------------------------------------------------------------------------
FEE TABLE - 1

<PAGE>

ROTH IRA CONTRACTS

CONTRACT HOLDER TRANSACTION EXPENSES

Deferred Sales Charge for withdrawals under each Contract (as a percentage
of each Purchase Payment withdrawn). If the Purchase Payment is a rollover
from another contract issued by the Company or an affiliate where the
deferred sales charge has been waived, the deferred sales charge is based
on the number of completed Contract Years since the date of the initial
payment to the predecessor contract. The Company reserves the right to not
accept any rollover contribution to an existing Contract.

<TABLE>
<CAPTION>
- ----------------------------------------------
Completed Contract Deferred Sales
Years Charge Deduction
- ----------------------------- ----------------
<S> <C>
Less than 1 5%
1 or more but less than 2 4%
2 or more but less than 3 3%
3 or more but less than 4 2%
4 or more but less than 5 1%
5 or more 0%
- ----------------------------------------------
</TABLE>

<TABLE>
<S> <C>
Annual Maintenance Fee (1) ........................................................... $ 30.00
Transfer Charge (2) .................................................................. $ 0.00
SEPARATE ACCOUNT ANNUAL EXPENSES
(Daily deductions, equal to the percentage shown on an annual basis, made from amounts
allocated to the
variable options under each Contract)
DURING THE ACCUMULATION PERIOD:
Mortality and Expense Risk Charge .................................................... 1.10%(3)
Administrative Charge ................................................................ 0.15%
-------
Total Subaccount Annual Expenses ................................................. 1.25%
=======
DURING THE ANNUITY PERIOD:
Mortality and Expense Risk Charge .................................................... 1.25%
Administrative Charge ................................................................ 0.00%(4)
-------
Total Subaccount Annual Expenses ................................................. 1.25%
=======
</TABLE>

(1) The maintenance fee, if applicable, will generally be deducted from each
Account annually and if the full Account Value is withdrawn. The
maintenance fee is waived when the Account Value is $50,000 or more on
the date the maintenance fee is due. The amount shown is the maximum
maintenance fee that can be deducted under the Contract.
(2) During the Accumulation Period we currently allow an unlimited number of
transfers without charge. However, we reserve the right to impose a fee
of $10 for each transfer in excess of 12 per year.
(3) Under certain Contracts the mortality and expense risk charge during the
Accumulation Period may be reduced. See "Charges and Deductions" in the
Prospectus.
(4) We currently do not impose an Administrative Charge during the Annuity
Period. However, we reserve the right to deduct a daily charge of not
more than 0.25% per year from the Subaccounts.

- --------------------------------------------------------------------------------
FEE TABLE - 2

<PAGE>

ANNUAL EXPENSES OF THE FUNDS (APPLIES TO ALL CONTRACTS)
The following table illustrates the advisory fees and other expenses applicable
to the Funds. Except as noted, the following figures are a percentage of
average net assets and, except where otherwise indicated, are based on figures
for the year ended December 31, 1997. A Fund's "Other Expenses" include
operating costs of the Fund. These expenses are reflected in the Fund's net
asset value and are not deducted from the Account Value.

<TABLE>
<CAPTION>
Investment Other
Advisory Fees(1) Expenses
(after expense (after expense Total Fund
reimbursement) reimbursement) Annual Expenses
--------------- -------------- ---------------
<S> <C> <C> <C>
Aetna Ascent VP(2)(3) 0.57% 0.23% 0.80%
Aetna Balanced VP, Inc.(3) 0.50% 0.10% 0.60%
Aetna Bond VP(3) 0.40% 0.10% 0.50%
Aetna Crossroads VP(2)(3) 0.55% 0.25% 0.80%
Aetna Growth VP(2)(3) 0.16% 0.64% 0.80%
Aetna Growth and Income VP(3) 0.50% 0.09% 0.59%
Aetna Index Plus Large Cap VP(2)(3) 0.32% 0.23% 0.55%
Aetna International VP(2)(3) 0.77% 0.38% 1.15%
Aetna Legacy VP(2)(3) 0.49% 0.31% 0.80%
Aetna Money Market VP(3) 0.25% 0.10% 0.35%
Aetna Real Estate Securities VP(2)(3) 0.62% 0.33% 0.95%
Aetna Small Company VP(2)(3) 0.35% 0.60% 0.95%
Aetna Value Opportunity VP(2)(3) 0.20% 0.60% 0.80%
Calvert Social Balanced Portfolio(4) 0.69% 0.12% 0.81%
Fidelity VIP Equity-Income Portfolio(5) 0.50% 0.08% 0.58%
Fidelity VIP Growth Portfolio(5) 0.60% 0.09% 0.69%
Fidelity VIP High Income Portfolio(5) 0.59% 0.12% 0.71%
Fidelity VIP Overseas Portfolio(5) 0.75% 0.17% 0.92%
Fidelity VIP II Asset Manager Portfolio(5) 0.55% 0.10% 0.65%
Fidelity VIP II Contrafund Portfolio(5) 0.60% 0.11% 0.71%
Fidelity VIP II Index 500 Portfolio(6) 0.24% 0.04% 0.28%
Janus Aspen Aggressive Growth Portfolio(7) 0.73% 0.03% 0.76%
Janus Aspen Balanced Portfolio(7) 0.76% 0.07% 0.83%
Janus Aspen Flexible Income Portfolio 0.65% 0.10% 0.75%
Janus Aspen Growth Portfolio(7) 0.65% 0.05% 0.70%
Janus Aspen Worldwide Growth Portfolio(7) 0.66% 0.08% 0.74%
MFS Total Return Series(8) 0.75% 0.25% 1.00%
MFS World Governments Series(8) 0.75% 0.25% 1.00%
Oppenheimer Aggressive Growth Fund 0.71% 0.02% 0.73%
Oppenheimer Global Securities Fund 0.70% 0.06% 0.76%
Oppenheimer Growth & Income Fund 0.75% 0.08% 0.83%
Oppenheimer Strategic Bond Fund 0.75% 0.08% 0.83%
Portfolio Partners MFS Emerging Equities Portfolio(9)(10) 0.68% 0.13% 0.81%
Portfolio Partners MFS Research Growth Portfolio(9)(10) 0.70% 0.15% 0.85%
Portfolio Partners MFS Value Equity Portfolio(9) 0.65% 0.25% 0.90%
Portfolio Partners Scudder International Growth Portfolio(9) 0.80% 0.20% 1.00%
Portfolio Partners T. Rowe Price Growth Equity Portfolio(9) 0.60% 0.15% 0.75%
</TABLE>

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

(1) Certain of the Fund advisers reimburse the Company for administrative costs
incurred in connection with administering the Funds as variable funding
options under the Contract. These reimbursements are paid out of the
investment advisory fees and are not charged to investors.

(2) Effective May 1, 1998, the Portfolios' adviser has agreed to waive a
portion of its fee or to reimburse certain expenses so that aggregate
expenses do not exceed the total expenses shown above. These fee
waiver/expense reimbursement arrangements will increase total return and
may be modified or terminated at any time.

Without these fee waiver/expense reimbursement arrangements Management Fees
and Total Expenses for the Portfolio would be higher. Management Fees and
Total Expenses would be as follows: 0.60% and 0.83% for Ascent VP; 0.60% and
0.85% for Crossroads VP; 0.60% and 1.24% for Growth VP; 0.35% and 0.58% for
Index Plus Large Cap VP; 0.85% and 1.23% for International VP; 0.60% and
0.91% for Legacy VP; 0.75% and 1.08% for Real Estate Securities VP; 0.75%
and 1.35% for Small Company VP; and 0.60% and 1.20% for Value Opportunity
VP, respectively.

- --------------------------------------------------------------------------------
FEE TABLE - 3
<PAGE>

(3) Prior to May 1, 1998, the investment adviser provided administrative
services to the Fund and assumed the Fund's ordinary recurring direct costs
under an Administrative Services Agreement. Effective May 1, 1998, the
investment adviser will continue to provide administrative services to the
Fund but will no longer assume all of the Fund's ordinary recurring direct
costs under the Administrative Services Agreement. The Administrative Fee
is 0.075% on the first $5 billion in assets and 0.050% on all assets over
$5 billion. The "Other Expenses" shown are not based on actual figures for
the year ended December 31, 1997, but reflect the fee payable under the new
Administrative Services Agreement and estimates of the Fund's ordinary
recurring direct costs.

International VP and Real Estate Securities VP commenced operations in
December 1997, therefore, estimates are based on expenses incurred for
similar funds. Actual expenses incurred may be more or less than the
amounts shown above.
(4) The figures above are based on expenses for the fiscal year 1997, and have
been restated to reflect an increase in transfer agency expenses of 0.01%
for the Portfolio expected to be incurred in 1998. "Management Fees"
includes a performance adjustment, which depending on performance, could
cause the fee to be as high as 0.85% or as low as 0.55%. "Other Expenses"
reflect an indirect fee of 0.03% (relating to an expense offset arrangement
with the Portfolio's custodian). Net fund operating expenses after
reductions for fees paid indirectly (again, restated) would be 0.78%.
(5) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian whereby credits realized, as a result of
uninvested cash balances were used to reduce custodian expenses. Including
these reductions, the total operating expenses would have been 0.57% for
Equity-Income Portfolio; 0.67% for Growth Portfolio; 0.71% for High Income
Portfolio; 0.90% for Overseas Portfolio, 0.64% for Asset Manager Portfolio;
and 0.68% for Contrafund Portfolio.
(6) The Fund's investment adviser agreed to reimburse a portion of Index 500
Portfolio's expenses during the period. Without this reimbursement, the
fund's management fee, other expenses and total expenses would have been
0.27%, 0.13% and 0.40%, respectively, for Index 500 Portfolio.
(7) Management fees for Aggressive Growth, Balanced, Growth and Worldwide
Growth Portfolios reflect a reduced fee schedule effective July 1, 1997.
The management fees shown above are based on the new rate applied to net
assets as of December 31, 1997. Other expenses are based on gross expenses
of the Shares before expense offset arrangements for the fiscal year ended
December 31, 1997. The information for each Portfolio is net of fee waivers
or reductions from Janus Capital. Fee reductions for the Aggressive Growth,
Balanced, Growth and Worldwide Growth Portfolios reduce the management fee
to the level of the corresponding Janus retail fund. Other waivers, if
applicable, are first applied against the management fee and then against
other expenses. Without such waivers or reductions, the Management Fee,
Other Expenses and Total Operating Expenses for the Shares would have been
0.74%, 0.04%, and 0.78% for Aggressive Growth Portfolio; 0.77%, 0.06%, and
0.83% for Balanced Portfolio; 0.74%, 0.04%, and 0.78% for Growth Portfolio;
and 0.72%, 0.09%, and 0.81% for Worldwide Growth Portfolio, respectively.
Janus Capital may modify or terminate the waivers or reductions at any time
upon at least 90 days' notice to the Trustees.
(8) The adviser has agreed to bear expenses for each Series, subject to
reimbursement by each Series, such that each Series' "Other Expenses" shall
not exceed 0.25% of the average daily net assets of the Series during the
current fiscal year. Otherwise, "Other Expenses" for the MFS Total Return
Series and MFS World Governments Series would be 0.27% and 0.40%,
respectively, and "Total Fund Annual Expenses" would be 1.02% and 1.15%,
respectively, for these Series. Each Series has an expense offset
arrangement which reduces the Series' custodian fee based upon the amount
of cash maintained by the Series with its custodian and dividend disbursing
agent, and may enter into other such arrangements and directed brokerage
arrangements (which also have the effect of reducing the Series' expenses).
Any such fee reductions are not reflected under "Other Expenses."
(9) Each Portfolio's aggregate expenses are contractually limited to the
advisory and administrative fees disclosed above. The investment adviser
will not seek an increase in its advisory or administrative fee at any time
prior to May 1, 1999.
(10) The advisory fee is 0.70% of the first $500 million in assets and 0.65% on
the excess.

- --------------------------------------------------------------------------------
FEE TABLE - 4

<PAGE>

HYPOTHETICAL ILLUSTRATION (EXAMPLE) FOR CONTRACTS OTHER THAN ROTH IRAS

THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES
AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW.

The following Examples illustrate the expenses that would have been paid
assuming a $1,000 investment in the Contract and a 5% return on assets. For the
purposes of these Examples, the maximum maintenance fee of $30.00 that can be
deducted under the Contract has been converted to a percentage of assets equal
to 0.012%.

<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
-------------------------------------- ----------------------------------------
If you withdraw the entire Account If you do not withdraw the Account
Value at the end of the periods shown, Value, or if you annuitize at the end of
you would pay the following expenses, the periods shown, you would pay th
including any applicable deferred following expenses (no deferred sales
sales charge: charge is reflected):*
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP $85 $123 $154 $255 $22 $69 $119 $255
Aetna Balanced VP, Inc. $83 $117 $144 $234 $20 $63 $108 $234
Aetna Bond VP $82 $113 $139 $223 $19 $60 $103 $223
Aetna Crossroads VP $85 $123 $154 $255 $22 $69 $119 $255
Aetna Growth VP $85 $123 $154 $255 $22 $69 $119 $255
Aetna Growth and Income VP $83 $116 $143 $233 $20 $63 $108 $233
Aetna Index Plus Large Cap VP $83 $115 $141 $229 $20 $62 $106 $229
Aetna International VP $89 $133 $172 $290 $26 $80 $136 $290
Aetna Legacy VP $85 $123 $154 $255 $22 $69 $119 $255
Aetna Money Market VP $81 $109 $131 $208 $18 $55 $ 96 $208
Aetna Real Estate Securities VP $87 $127 $162 $270 $24 $74 $126 $270
Aetna Small Company VP $87 $127 $162 $270 $24 $74 $126 $270
Aetna Value Opportunity VP $85 $123 $154 $255 $22 $69 $119 $255
Calvert Social Balanced Portfolio $85 $123 $154 $256 $23 $69 $119 $256
Fidelity VIP Equity-Income Portfolio $83 $116 $143 $232 $20 $63 $107 $232
Fidelity VIP Growth Portfolio $84 $119 $148 $243 $21 $66 $113 $243
Fidelity VIP High Income Portfolio $84 $120 $149 $245 $22 $66 $114 $245
Fidelity VIP Overseas Portfolio $86 $126 $160 $267 $24 $73 $125 $267
Fidelity VIP II Asset Manager Portfolio $84 $118 $146 $239 $21 $65 $111 $239
Fidelity VIP II Contrafund Portfolio $84 $120 $149 $245 $22 $66 $114 $245
Fidelity VIP II Index 500 Portfolio $80 $107 $127 $200 $17 $53 $ 92 $200
Janus Aspen Aggressive Growth Portfolio $85 $121 $152 $251 $22 $68 $117 $251
Janus Aspen Balanced Portfolio $86 $124 $156 $258 $23 $70 $120 $258
Janus Aspen Flexible Income Portfolio $85 $121 $151 $250 $22 $68 $116 $250
Janus Aspen Growth Portfolio $84 $120 $149 $244 $21 $66 $113 $244
Janus Aspen Worldwide Growth Portfolio $85 $121 $151 $248 $22 $67 $116 $248
MFS Total Return Series $87 $129 $164 $275 $24 $75 $129 $275
MFS World Governments Series $87 $129 $164 $275 $24 $75 $129 $275
Oppenheimer Aggressive Growth Fund $85 $121 $150 $247 $22 $67 $115 $247
Oppenheimer Global Securities Fund $85 $121 $152 $251 $22 $68 $117 $251
Oppenheimer Growth & Income Fund $86 $124 $156 $258 $23 $70 $120 $258
Oppenheimer Strategic Bond Fund $86 $124 $156 $258 $23 $70 $120 $258
Portfolio Partners MFS Emerging Equities Portfolio $85 $123 $154 $256 $23 $69 $119 $256
Portfolio Partners MFS Research Growth Portfolio $86 $124 $157 $260 $23 $71 $121 $260
Portfolio Partners MFS Value Equity Portfolio $86 $126 $159 $265 $23 $72 $124 $265
Portfolio Partners Scudder International Growth
Portfolio $87 $129 $164 $275 $24 $75 $129 $275
Portfolio Partners T. Rowe Price Growth Equity
Portfolio $85 $121 $151 $250 $22 $68 $116 $250
</TABLE>

- ------------------
* This Example would not apply if a nonlifetime variable annuity option is
selected, and a lump sum settlement is requested within three years after
annuity payments start, since the lump sum payment will be treated as a
withdrawal during the Accumulation Period and will be subject to any deferred
sales charge that would then apply. (Refer to Example A.)

- --------------------------------------------------------------------------------
FEE TABLE - 5

<PAGE>

HYPOTHETICAL ILLUSTRATION (EXAMPLE): CONTRACTS ISSUED AS ROTH IRAS

<TABLE>
<CAPTION>
EXAMPLE A EXAMPLE B
------------------------------------- -------------------------------------
If you withdraw the entire Account If you do not withdraw the Account
Value at the end of the periods Value, or if you annuitize at the end
shown, you would pay the following of the periods shown, you would pay
expenses, including any applicable the following expenses (no deferred
deferred sales charge: sales charge is reflected):*
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------- --------- --------- --------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Ascent VP $62 $86 $111 $239 $21 $65 $111 $239
Aetna Balanced VP, Inc. $60 $80 $101 $218 $19 $59 $101 $218
Aetna Bond VP $59 $77 $ 96 $208 $18 $55 $ 96 $208
Aetna Crossroads VP $62 $86 $111 $239 $21 $65 $111 $239
Aetna Growth VP $62 $86 $111 $239 $21 $65 $111 $239
Aetna Growth and Income VP $60 $80 $100 $217 $19 $58 $100 $217
Aetna Index Plus Large Cap VP $60 $79 $ 98 $213 $18 $57 $ 98 $213
Aetna International VP $65 $97 $129 $275 $24 $75 $129 $275
Aetna Legacy VP $62 $86 $111 $239 $21 $65 $111 $239
Aetna Money Market VP $58 $73 $ 88 $191 $16 $51 $ 88 $191
Aetna Real Estate Securities VP $64 $91 $119 $255 $22 $69 $119 $255
Aetna Small Company VP $64 $91 $119 $255 $22 $69 $119 $255
Aetna Value Opportunity VP $62 $86 $111 $239 $21 $65 $111 $239
Calvert Social Balanced Portfolio $62 $87 $111 $240 $21 $65 $111 $240
Fidelity VIP Equity-Income Portfolio $60 $80 $100 $216 $19 $58 $100 $216
Fidelity VIP Growth Portfolio $61 $83 $105 $228 $20 $61 $105 $228
Fidelity VIP High Income Portfolio $61 $84 $106 $230 $20 $62 $106 $230
Fidelity VIP Overseas Portfolio $63 $90 $117 $252 $22 $68 $117 $252
Fidelity VIP II Asset Manager Portfolio $61 $82 $103 $223 $19 $60 $103 $223
Fidelity VIP II Contrafund Portfolio $61 $84 $106 $230 $20 $62 $106 $230
Fidelity VIP II Index 500 Portfolio $57 $71 $ 84 $184 $16 $49 $ 84 $184
Janus Aspen Aggressive Growth Portfolio $62 $85 $109 $235 $21 $63 $109 $235
Janus Aspen Balanced Portfolio $62 $87 $112 $242 $21 $66 $112 $242
Janus Aspen Flexible Income Portfolio $62 $85 $108 $234 $20 $63 $108 $234
Janus Aspen Growth Portfolio $61 $83 $106 $229 $20 $62 $106 $229
Janus Aspen Worldwide Growth Portfolio $62 $85 $108 $233 $20 $63 $108 $233
MFS Total Return Series $64 $92 $121 $260 $23 $71 $121 $260
MFS World Governments Series $64 $92 $121 $260 $23 $71 $121 $260
Oppenheimer Aggressive Growth Fund $61 $84 $107 $232 $20 $63 $107 $232
Oppenheimer Global Securities Fund $62 $85 $109 $235 $21 $63 $109 $235
Oppenheimer Growth & Income Fund $62 $87 $112 $242 $21 $66 $112 $242
Oppenheimer Strategic Bond Fund $62 $87 $112 $242 $21 $66 $112 $242
Portfolio Partners MFS Emerging Equities Portfolio $62 $87 $111 $240 $21 $65 $111 $240
Portfolio Partners MFS Research Growth Portfolio $63 $88 $113 $244 $21 $66 $113 $244
Portfolio Partners MFS Value Equity Portfolio $63 $89 $116 $250 $22 $68 $116 $250
Portfolio Partners Scudder International Growth
Portfolio $64 $92 $121 $260 $23 $71 $121 $260
Portfolio Partners T. Rowe Price Growth Equity Portfolio $62 $85 $108 $234 $20 $63 $108 $234

</TABLE>

- --------------------------------------------------------------------------------
FEE TABLE - 6

<PAGE>

CONDENSED FINANCIAL INFORMATION

(Selected data for accumulation units outstanding throughout each period)
================================================================================

The condensed financial information presented below for each of the periods in
the two-year period ended December 31, 1997 (as applicable), is derived from
the financial statements of the Separate Account, which have been audited by
KPMG Peat Marwick LLP, independent auditors. It shows condensed financial
information for contracts with total separate account charges of 1.40%
annually. The financial statements and the independent auditors' report thereon
for the year ended December 31, 1997 are included in the Statement of
Additional Infrmation.

<TABLE>
<CAPTION>
1997 1996
-------- -------
<S> <C> <C>
AETNA ASCENT VP
Value at beginning of period $12.674 $11.003
Value at end of period $14.983 $12.674
Increase (decrease) in value of accumulation unit(1) 18.22% 15.19%(2)
Number of accumulation units outstanding at end of period 72,383 91,927
AETNA BALANCED VP, INC.
Value at beginning of period $11.781 $10.582
Value at end of period $14.228 $11.781
Increase (decrease) in value of accumulation unit(1) 20.77% 11.33%(3)
Number of accumulation units outstanding at end of period 314,447 59,639
AETNA BOND VP
Value at beginning of period $10.489 $10.260
Value at end of period $11.201 $10.489
Increase (decrease) in value of accumulation unit(1) 6.78% 2.23%(4)
Number of accumulation units outstanding at end of period 269,675 95,644
AETNA CROSSROADS VP
Value at beginning of period $12.123 $10.932
Value at end of period $14.054 $12.123
Increase (decrease) in value of accumulation unit(1) 15.93% 10.89%(2)
Number of accumulation units outstanding at end of period 29,532 6,330
AETNA GROWTH VP
Value at beginning of period $10.667
Value at end of period $13.158
Increase (decrease) in value of accumulation units(1) 23.35%(5)
Number of accumulation units outstanding at end of period 68,840
AETNA GROWTH AND INCOME VP
Value at beginning of period $12.769 $10.101
Value at end of period $16.354 $12.769
Increase (decrease) in value of accumulation unit(1) 28.07% 26.41%(4)
Number of accumulation units outstanding at end of period 946,796 299,882
AETNA INDEX PLUS LARGE CAP VP
Value at beginning of period $10.919 $10.000(6)
Value at end of period $14.414 $10.919
Increase (decrease) in value of accumulation units(1) 32.01% 9.19%(6)
Number of accumulation units outstanding at end of period 271,628 2,960
AETNA LEGACY VP
Value at beginning of period $11.613 $10.601
Value at end of period $13.112 $11.613
Increase (decrease) in value of accumulation unit(1) 12.90% 9.55%(7)
Number of accumulation units outstanding at end of period 60,533 8,642
AETNA MONEY MARKET VP
Value at beginning of period $10.481 $10.151
Value at end of period $10.900 $10.481
Increase (decrease) in value of accumulation unit(1) 4.00% 3.25%(3)
Number of accumulation units outstanding at end of period 1,409,840 799,456
</TABLE>

- --------------------------------------------------------------------------------
AUV HISTORY - 1

<PAGE>

CONDENSED FINANCIAL INFORMATION (continued)
================================================================================

<TABLE>
<CAPTION>
1997 1996
----------- ---------
<S> <C> <C>
AETNA SMALL COMPANY VP
Value at beginning of period $11.313
Value at end of period $13.639
Increase (decrease) in value of accumulation units(1) 20.55%(5)
Number of accumulation units outstanding at end of period 188,818
AETNA VALUE OPPORTUNITY VP
Value at beginning of period $10.856
Value at end of period $13.246
Increase (decrease) in value of accumulation units(1) 22.01%(5)
Number of accumulation units outstanding at end of period 67,303
CALVERT SOCIAL BALANCED PORTFOLIO
Value at beginning of period $9.824
Value at end of period $9.976
Increase (decrease) in value of accumulation units(1) 1.55%(8)
Number of accumulation units outstanding at end of period 3,258
FIDELITY VIP EQUITY-INCOME PORTFOLIO
Value at beginning of period $11.855 $10.301
Value at end of period $14.974 $11.855
Increase (decrease) in value of accumulation unit(1) 26.32% 15.09%(4)
Number of accumulation units outstanding at end of period 2,292,971 1,000,050
FIDELITY VIP GROWTH PORTFOLIO
Value at beginning of period $10.940 $9.005
Value at end of period $13.320 $10.940
Increase (decrease) in value of accumulation unit(1) 21.75% 20.82%(4)
Number of accumulation units outstanding at end of period 1,399,424 870,922
FIDELITY VIP HIGH INCOME PORTFOLIO
Value at beginning of period $11.410 $10.493
Value at end of period $13.238 $11.410
Increase (decrease) in value of accumulation unit(1) 16.02% 8.74%(9)
Number of accumulation units outstanding at end of period 862,284 239,917
FIDELITY VIP OVERSEAS PORTFOLIO
Value at beginning of period $11.447 $10.304
Value at end of period $12.590 $11.447
Increase (decrease) in value of accumulation unit(1) 9.99% 11.09%(9)
Number of accumulation units outstanding at end of period 237,376 115,487
FIDELITY VIP II ASSET MANAGER PORTFOLIO
Value at beginning of period $11.674 $10.539
Value at end of period $13.888 $11.674
Increase (decrease) in value of accumulation unit(1) 18.96% 10.77%(10)
Number of accumulation units outstanding at end of period 272,789 104,229
FIDELITY VIP II CONTRAFUND PORTFOLIO
Value at beginning of period $12.093 $10.273
Value at end of period $14.802 $12.093
Increase (decrease) in value of accumulation unit(1) 22.40% 17.72%(9)
Number of accumulation units outstanding at end of period 1,682,029 540,936
FIDELITY VIP II INDEX 500 PORTFOLIO
Value at beginning of period $12.722 $10.828
Value at end of period $16.646 $12.722
Increase (decrease) in value of accumulation unit(1) 30.84% 17.49%(9)
Number of accumulation units outstanding at end of period 1,375,721 384,282
</TABLE>

- --------------------------------------------------------------------------------
AUV HISTORY - 2
<PAGE>

CONDENSED FINANCIAL INFORMATION (continued)
================================================================================

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
JANUS ASPEN AGGRESSIVE GROWTH
Value at beginning of period $11.376 $10.988
Value at end of period $12.637 $11.376
Increase (decrease) in value of accumulation unit(1) 11.09% 3.53%(9)
Number of accumulation units outstanding at end of period 518,686 242,113
JANUS ASPEN BALANCED PORTFOLIO
Value at beginning of period $12.038 $10.836
Value at end of period $14.492 $12.038
Increase (decrease) in value of accumulation unit(1) 20.39% 11.09%(9)
Number of accumulation units outstanding at end of period 533,138 165,079
JANUS ASPEN FLEXIBLE INCOME PORTFOLIO
Value at beginning of period $11.136 $10.173
Value at end of period $12.272 $11.136
Increase (decrease) in value of accumulation unit(1) 10.20% 9.47%(10)
Number of accumulation units outstanding at end of period 163,048 35,326
JANUS ASPEN GROWTH PORTFOLIO
Value at beginning of period $12.171 $11.002
Value at end of period $14.731 $12.171
Increase (decrease) in value of accumulation unit(1) 21.03% 10.63%(9)
Number of accumulation units outstanding at end of period 684,113 255,831
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
Value at beginning of period $13.393 $10.536
Value at end of period $16.131 $13.393
Increase (decrease) in value of accumulation unit(1) 20.44% 27.12%(4)
Number of accumulation units outstanding at end of period 2,772,831 1,030,570
MFS TOTAL RETURN SERIES
Value at beginning of period $10.894 $10.000(11)
Value at end of period $13.030 $10.894
Increase (decrease) in value of accumulation units(1) 19.60% 8.94%(11)
Number of accumulation units outstanding at end of period 523,291 108,482
MFS WORLD GOVERNMENT SERIES
Value at beginning of period $10.471 $10.000(11)
Value at end of period $10.207 $10.471
Increase (decrease) in value of accumulation units(1) (2.51)% 4.71%(11)
Number of accumulation units outstanding at end of period 52,302 20,479
OPPENHEIMER AGGRESSIVE GROWTH FUND
Value at beginning of period $10.516
Value at end of period $12.204
Increase (decrease) in value of accumulation units(1) 16.05%(5)
Number of accumulation units outstanding at end of period 65,695
OPPENHEIMER GLOBAL SECURITIES FUND
Value at beginning of period $10.488
Value at end of period $11.539
Increase (decrease) in value of accumulation units(1) 10.02%(5)
Number of accumulation units outstanding at end of period 87,559
OPPENHEIMER GROWTH AND INCOME FUND
Value at beginning of period $10.497
Value at end of period $12.785
Increase (decrease) in value of accumulation units(1) 21.79%(5)
Number of accumulation units outstanding at end of period 354,269
OPPENHEIMER STRATEGIC BOND FUND
Value at beginning of period $10.187
Value at end of period $10.764
Increase (decrease) in value of accumulation units(1) 5.67%(5)
Number of accumulation units outstanding at end of period 128,720
</TABLE>

- --------------------------------------------------------------------------------
AUV HISTORY - 3

<PAGE>

CONDENSED FINANCIAL INFORMATION (continued)
================================================================================

<TABLE>
<CAPTION>
1997 1996
--------- -------
<S> <C> <C>
PORTFOLIO PARTNERS MFS EMERGING EQUITIES
PORTFOLIO
Value at beginning of period $10.689
Value at end of period $10.554
Increase (decrease) in value of accumulation units(1) (1.26)%(12)
Number of accumulation units outstanding at end of period 2,394,861
PORTFOLIO PARTNERS MFS RESEARCH GROWTH
PORTFOLIO
Value at beginning of period $8.960
Value at end of period $8.786
Increase (decrease) in value of accumulation units(1) (1.94)%(12)
Number of accumulation units outstanding at end of period 1,615,395
PORTFOLIO PARTNERS MFS VALUE EQUITY
PORTFOLIO
Value at beginning of period $10.009
Value at end of period $10.152
Increase (decrease) in value of accumulation units(1) 1.43%(12)
Number of accumulation units outstanding at end of period 216,273
PORTFOLIO PARTNERS SCUDDER INTERNATIONAL
GROWTH PORTFOLIO
Value at beginning of period $9.791
Value at end of period $9.912
Increase (decrease) in value of accumulation units(1) 1.24%(12)
Number of accumulation units outstanding at end of period 2,569
PORTFOLIO PARTNERS T. ROWE PRICE GROWTH
EQUITY PORTFOLIO
Value at beginning of period $13.560
Value at end of period $13.834
Increase (decrease) in value of accumulation units(1) 2.03%(12)
Number of accumulation units outstanding at end of period 1,572,718
</TABLE>

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

(1) The above figures are calculated by subtracting the beginning Accumulation
Unit value from the ending Accumulation Unit value during a calendar year,
and dividing the result by the beginning Accumulation Unit value. These
figures do not reflect the deferred sales charge or the fixed dollar annual
maintenance fee, if any. Inclusion of these charges would reduce the
investment results shown.
(2) Reflects less than a full year of performance activity. Funds were first
received in this option during July 1996.
(3) Reflects less than a full year of performance activity. Funds were first
received in this option during February 1996.
(4) Reflects less than a full year of performance activity. Funds were first
received in this option during January 1996.
(5) Reflects less than a full year of performance activity. Funds were first
received in this option during May 1997.
(6) Reflects less than a full year of performance activity. The initial
Accumulation Unit value was established at $10.000 during September 1996
when the portfolio became available under the option.
(7) Reflects less than a full year of performance activity. Funds were first
received in this option during May 1996.
(8) Reflects less than a full year of performance activity. Funds were first
received in this option during December 1997.
(9) Reflects less than a full year of performance activity. Funds were first
received in this option during March 1996.
(10) Reflects less than a full year of performance activity. Funds were first
received in this option during April 1996.
(11) Reflects less than a full year of performance activity. The initial
Accumulation Unit value was established at $10.000 during May 1996 when the
fund became available under the option.
(12) Reflects less than a full year of performance activity. Funds were first
received in this option during November 1997.

- --------------------------------------------------------------------------------
AUV HISTORY - 4

<PAGE>

THE COMPANY
================================================================================

Aetna Insurance Company of America (the "Company"), the depositor of
Variable Annuity Account I, is the issuer of the Contract, and as such, it is
responsible for providing the insurance and annuity benefits under the
Contract. The Company is a wholly owned subsidiary of Aetna Life Insurance and
Annuity Company ("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna
Retirement Holdings, Inc., which is in turn a wholly owned subsidiary of Aetna
Retirement Services, Inc. and an indirect wholly owned subsidiary of Aetna Inc.
The Company's principal executive offices are located at 151 Farmington Avenue,
Hartford, Connecticut 06156.

VARIABLE ANNUITY ACCOUNT I
================================================================================

The Company established Variable Annuity Account I (the "Separate
Account") in 1994 as a segregated asset account for the purpose of funding its
variable annuity contracts. The Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940 (the "1940 Act"), and
meets the definition of "separate account" under federal securities laws. The
Separate Account is divided into "subaccounts" which do not invest directly in
stocks, bonds or other investments. Instead, each Subaccount buys and sells
shares of a corresponding Fund.

Although the Company holds title to the assets of the Separate Account,
such assets are not chargeable with liabilities of any other business conducted
by the Company. Income, gains or losses of the Separate Account are credited to
or charged against the assets of the Separate Account without regard to other
income, gains or losses of the Company. All obligations arising under the
Contracts are obligations of the Company.

INVESTMENT OPTIONS
================================================================================

THE FUNDS

Purchase Payments may be allocated to one or more of the Subaccounts as
designated on the Application. In turn, the Subaccounts invest in the
corresponding Funds at net asset value. The Company reserves the right to limit
the number of investment options selected during the Accumulation Period. At
this time there is no limit on the number of investment options selected during
the Accumulation Period, but the number of investment options that may be
selected at any one time by a Certificate Holder is limited to 18. Each
Subaccount and each Guaranteed Term of the same duration, or an investment in
the Fixed Account in certain Contracts where the Guaranteed Account is not
available, count as an option.

The availability of Funds may be subject to regulatory authorization. In
addition, the Company may add or withdraw Funds, as permitted by applicable
law. Not all Funds may be available in all jurisdictions or under all
Contracts.

Subject to state regulatory approval, if the shares of any Fund should no
longer be available for investment by the Separate Account or if in the
judgment of the Company, further investment in such shares should become
inappropriate in view of the purpose of the Contract, we may cease to make such
Fund shares available for investment under the Contract prospectively. The
Company may, alternatively, substitute shares of another Fund for shares
already acquired. The Company reserves the right to substitute shares of
another Fund for shares already acquired without a proxy vote. Any elimination,
substitution or addition of Funds will be done in accordance with applicable
state and federal securities laws.

The Funds are described in Appendix C of this prospectus. More detailed
information may be found in the current prospectus for each Fund offered. The
prospectus for the Fund should be read in conjunction with this Prospectus. A
free Fund prospectus is available upon request from the local Company office or
by writing or calling the number listed in the "Inquiries" section of the
Prospectus Summary.

Risks Associated with Investment in the Funds. Some of the Funds may use
instruments known as

- --------------------------------------------------------------------------------
1

<PAGE>

derivatives as part of their investment strategies. The use of certain
derivatives may involve high risk of volatility to a Fund, and the use of
leverage in connection with such derivatives can also increase risk of losses.
Some of the Funds may also invest in foreign or international securities which
involve greater risks than U.S. investments.

More comprehensive information, including a discussion of potential
risks, is found in the current prospectus for each Fund. You should read the
Fund prospectuses and consider carefully, and on a continuing basis, which Fund
or combination of Funds is best suited to your long-term investment objectives.
Additional prospectuses and Statements of Additional Information for this
Prospectus and for each of the Funds can be obtained from the Company's Home
Office at the address and telephone number listed under the "Inquiries" section
of the Prospectus Summary.

Conflicts of Interest (Mixed and Shared Funding). Shares of the Funds are
sold to each of the Subaccounts for funding the variable annuity contracts
issued by the Company. Shares of the Funds may also be sold to other insurance
companies for the same purpose. This is referred to as "shared funding." Shares
of the Funds may also be used for funding variable life insurance contracts
issued by the Company or by third parties. This is referred to as "mixed
funding."

Because the Funds available under the Contract are sold to fund variable
annuity contracts and variable life insurance policies issued by us or by other
companies, certain conflicts of interest could arise. If a conflict of interest
were to occur, one of the separate accounts might withdraw its investment in a
Fund, which might force that Fund to sell portfolio securities at
disadvantageous prices, causing its per share value to decrease. Each Fund's
Board of Directors or Trustees has agreed to monitor events in order to
identify any material irreconcilable conflicts which might arise and to
determine what action, if any, should be taken to address such conflict

CREDITED INTEREST OPTION
Purchase Payments may be allocated to the AICA Guaranteed Account (the
"Guaranteed Account"). Through the Guaranteed Account, we guarantee stipulated
rates of interest for stated periods of time. Amounts must remain in the
Guaranteed Account for specified periods to receive the quoted interest rates,
or a market value adjustment (which may be positive or negative) will be
applied. (See Appendix A.)

FIXED ACCOUNT
In certain states, Purchase Payments may be allocated to the Fixed
Account. Through the Fixed Account we guarantee to pay the minimum interest
rate specified in the Contract. (See Appendix B.)

PURCHASE
================================================================================

CONTRACT AVAILABILITY

The Contracts are offered as (1) nonqualified deferred annuity contracts
(we reserve the right to limit ownership of nonqualified Contracts to natural
persons); (2) Individual Retirement Annuities, including Roth IRAs, other than
"SIMPLE IRAs" as defined in Section 408(p) of the Internal Revenue Code; or (3)
Qualified Contracts used in conjunction with certain employer sponsored
retirement plans. Individual Retirement Annuities are currently available as
rollovers, and may permit ongoing contributions, subject to state regulatory
approval. Additionally, availability of the Qualified Contracts described under
item (3) is subject to approval by the Company and state regulatory agencies. A
Roth IRA Contract is a special form of IRA which can accept nondeductible
annual contributions. Contributions to a Simplified Employee Pension Plan
("SEP") are not permitted in a Roth IRA Contract. The Roth IRA Contract can
also accept transfers and rollovers, but only from an Individual Retirement
Annuity/Individual Retirement Account, subject to ordinary income tax, or from
another Roth IRA. If the Purchase Payment to a Roth IRA is a rollover from a
contract issued by the Company or an affiliate where the deferred sales charge
was eliminated or reduced and the Contract is canceled during the free look
period, the Purchase Payment will be restored to the predecessor contract.

- --------------------------------------------------------------------------------
2
<PAGE>

each Certificate Holder. In some states, an individual Contract will be owned
by the Certificate Holder. In both cases, a Certificate Holder's interest in
the Contract is known as his or her "Account."

The maximum issue age for the Annuitant is 90 (age 85 for those Contracts
issued in the state of Pennsylvania).

Joint Certificate Holders. Nonqualified Contracts may be purchased by
spouses as joint Certificate Holders. In Pennsylvania, the joint Certificate
Holders do not need to be spouses. References to "Certificate Holders" in this
Prospectus mean both of the Certificate Holders on joint Accounts. Tax law
prohibits the purchase of Qualified Contracts by joint Certificate Holders.

PURCHASING INTERESTS IN THE CONTRACT
Group Contracts. Groups will generally consist of those eligible
individuals who have established an account with a broker-dealer or bank which
has agreed to act as a Distributor for the Contracts. A group Contract is
issued to the group Contract Holder. Certificate Holders may purchase interests
in a group Contract by submitting an Application. Once the Application is
accepted a Certificate will be issued.

Individual Contracts. Certain states will not allow a group Contract due
to provisions in their insurance laws. In those states, an eligible individual
will submit an Application and will be issued a Contract rather than a
Certificate.

Regardless of whether you have purchased an interest in a group or an
individual Contract, the Company must accept or reject the Application within
two business days of receipt. If the Application is incomplete, the Company may
hold any forms and accompanying Purchase Payments for five days. Purchase
Payments may be held for longer periods only with the consent of the
Certificate Holder, pending acceptance of the Application. If the Application
is rejected, the Application and any Purchase Payments will be returned to the
Certificate Holder. However, if the Purchase Payment to a Roth IRA is a
rollover from a contract issued by the Company or an affiliate where the
deferred sales charge was eliminated or reduced and the Contract is canceled
during the free look period, the Purchase Payment will be restored to the
predecessor contract.

PURCHASE PAYMENTS
You may make Purchase Payments under the Contract in one lump sum,
through periodic payments or as a transfer from a pre-existing plan.

The minimum initial Purchase Payment amount is $5,000 for Nonqualified
Contracts and $1,500 for Qualified Contracts. In some states, a Contract issued
as an Individual Retirement Annuity can accept only a lump sum, rollover
Purchase Payment. Additional Purchase Payments made to an existing Contract
must be at least $1,000, or at least $50 per month by electronic funds
transfer, and are subject to the terms and conditions published by us at the
time of the subsequent payment. A Purchase Payment of more than $1,000,000 will
be allowed only with the Company's consent. We also reserve the right to reject
any Purchase Payment to a prospective or existing Account without advance
notice (unless not allowed by state law).

For Qualified Contracts the Code imposes a maximum limit on annual
Purchase Payments which may be excluded from a participant's gross income. (See
"Tax Status.")

Allocation of Purchase Payments. Purchase Payments will initially be
allocated to the Subaccounts or the Guaranteed Account or the Fixed Account as
specified on the Application. Changes in such allocation may be made in writing
or by telephone transfer. Allocations must be in whole percentages, and there
may be limitations on the number of investment options that can be selected.
(See "Investment Options.")

CONTRACT RIGHTS
Under individual Contracts, Certificate Holders have all Contract rights.

Under group Contracts, the group Contract Holder has title to the
Contract and generally only the right to accept or reject any modifications to
the Contract. You have all other rights to your Account under the Contract.
However, under a Nonqualified Contract, if you and the Annuitant are not the
same, and the Annuitant dies first, your rights are automatically transferred
to the Beneficiary. (See "Death Benefit.")

- --------------------------------------------------------------------------------
3
<PAGE>

established. See "Death Benefit" regarding the rights of the surviving joint
Certificate Holder upon the death of a joint Certificate Holder prior to the
Annuity Date.

DESIGNATIONS OF BENEFICIARY AND ANNUITANT
You generally designate the Beneficiary under the Contract on the
Application. You may also elect to specify the form of payment to be made to
the Beneficiary. For Qualified Contracts issued in conjunction with a Code
Section 401(a) qualified pension or profit sharing plan or a Code Section 457
deferred compensation plan, the employer or trustee must be both the
Certificate Holder and the Beneficiary under the Contract, and the participant
on whose behalf the Account was established must be the Annuitant. Under such
plans the participant is generally allowed to designate a beneficiary under the
plan, and the Certificate Holder may direct that we pay any death proceeds to
the plan beneficiary. "Beneficiary" as used in this Prospectus refers to the
person who is ultimately entitled to receive such proceeds.

For Qualified Contracts issued in conjunction with a Code Section 403(b)
tax deferred annuity program subject to the Employee Retirement Income Security
Act (ERISA), the spouse of a married participant must be the Beneficiary of at
least 50% of the Account Value. If the married participant is age 35 or older,
the participant may name an alternate Beneficiary provided the participant
furnishes a waiver and spousal consent which meets the requirements of ERISA
Section 205. The participant on whose behalf the Account was established must
be the Annuitant.

For Qualified Contracts issued as an Individual Retirement Annuity, the
Certificate Holder must be the Annuitant. For Nonqualified Contracts, the
Certificate Holder and the Annuitant may, but need not, be the same person.
(See "Purchase-Contract Availability.")

RIGHT TO CANCEL
You may cancel the Contract or Certificate without penalty by returning
it to the Company with a written notice of your intent to cancel. In most
states, you have ten days to exercise this "free look" right; some states allow
you longer. Unless state law requires otherwise, the amount you will receive
upon cancellation will reflect the investment performance of the Subaccounts
into which your Purchase Payments were deposited. In some cases this may be
more or less than the amount of your Purchase Payments; therefore, you bear the
entire investment risk for amounts allocated among the Subaccounts during the
free look period. Under Contracts issued as Individual Retirement Annuities,
you will receive a refund of your Purchase Payment. Account Values will be
determined as of the Valuation Date on which we receive your request for
cancellation at our Home Office. If the Purchase Payment to a Roth IRA is a
rollover from a contract issued by the Company or an affiliate where the
deferred sales charge was eliminated or reduced and the Contract is canceled
during the free look period, the Purchase Payment will be restored to the
predecessor contract.

CHARGES AND DEDUCTIONS
================================================================================

DAILY DEDUCTIONS FROM THE SEPARATE ACCOUNT

Mortality and Expense Risk Charge. The Company makes a daily deduction
from each of the Subaccounts for the mortality and expense risk charge. The
charge is equal, on an annual basis, to 1.25% of the daily net assets of the
Subaccounts and compensates the Company for the assumption of the mortality and
expense risks under the Contract. If the Contract is issued as a Roth IRA, the
mortality and expense risk charge is equal, on an annual basis to 1.10% of the
daily net assets of the Subaccounts. The mortality risks are those assumed for
our promise to make lifetime payments according to annuity rates specified in
the Contract. The expense risk is the risk that the actual expenses for costs
incurred under the Contract will exceed the maximum costs that can be charged
under the Contract.

In certain circumstances, the risk of adverse expense experience
associated with this Contract may be reduced. In such event, the mortality and
expense risk charge applicable to that Contract may likewise be reduced.
Whether such a reduction is available will be determined by the Company based
upon consideration of one of the following factors:

(1) the size and composition of the prospective group such as a group made up
of active employees of the Company or its affiliates;
(2) the type and frequency of administrative and sales services provided; and

- --------------------------------------------------------------------------------
4
<PAGE>

(3) the level of maintenance fee and deferred sales charges.

Any reduction of the mortality and expense risk charge will not be
unfairly discriminatory against any person. We will make any reduction in the
mortality and expense risk charge according to our own rules in effect at the
time the Contract is issued. We reserve the right to change these rules from
time to time.

If the amount deducted for mortality and expense risks is not sufficient
to cover the mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess may be used to
recover distribution expenses relating to the Contracts and as a source of
profit to the Company. The Company expects to make a profit from the mortality
and expense risk charge.

Administrative Charge. During the Accumulation Period, the Company makes
a daily deduction from each of the Subaccounts for an administrative charge.
The charge is equal, on an annual basis, to 0.15% of the daily net assets of
the Subaccounts and compensates the Company for administrative expenses that
exceed revenues from the maintenance fee described below. The charge is set at
a level which does not exceed the average expected cost of the administrative
services to be provided while the Contract is in force. The Company does not
expect to make a profit from this charge.

During the Annuity Period, the Company reserves the right to make a
deduction for the administrative charge of an amount equal, on an annual basis,
to a maximum of 0.25% of the daily net assets of the Subaccounts. There is
currently no administrative charge during the Annuity Period. Once an Annuity
Option is elected, the charge will be established and will be effective during
the entire Annuity Period.

MAINTENANCE FEE
During the Accumulation Period, the Company will deduct an annual
maintenance fee from the Account Value. The maintenance fee is to reimburse the
Company for some of its administrative expenses relating to the establishment
and maintenance of the Accounts.

The maximum maintenance fee deducted under the Contract is $30. The
maintenance fee will be deducted annually on the anniversary of the Contract
effective date. It is deducted on a pro rata basis from each investment option
in which you have an interest. If your entire Account Value is withdrawn, the
full maintenance fee, if applicable, will be deducted at the time of
withdrawal. The maintenance fee will not be deducted (either annually or upon
withdrawal) if your Account Value is $50,000 or more on the day the maintenance
fee is due.

DEFERRED SALES CHARGE
Withdrawals of all or a portion of the Account Value may be subject to a
deferred sales charge. The deferred sales charge is a percentage of Purchase
Payments withdrawn from the Subaccounts and the Guaranteed Account or Fixed
Account and, except for Roth IRAs, is based on the number of years which have
elapsed since the Purchase Payment was made. The deferred sales charge on
withdrawals from a Roth IRA is based on the number of years which have elapsed
from the Account effective date. The deferred sales charge for each Purchase
Payment is determined by multiplying the Purchase Payment withdrawn by the
appropriate percentage, in accordance with the schedule set forth in the tables
below. If the Purchase Payment is a rollover from another contract issued by
the Company or an affiliate where the deferred sales charge has been waived,
the deferred sales charge is based on the number of completed Contract Years
since the date of the initial payment to the predecessor contract. The Company
reserves the right to not accept any rollover contribution to an existing
contract.

Withdrawals are taken first against Purchase Payments, then against any
increase in value. However, the deferred sales charge only applies to the
Purchase Payment (not to any associated changes in value). To satisfy a partial
withdrawal other than from a Roth IRA, the deferred sales charge is calculated
as if the Purchase Payments are withdrawn from the Subaccounts in the same
order they were applied to the Account. Partial withdrawals from the Guaranteed
Account or the Fixed Account will be treated as described in the Appendices
attached to this Prospectus and the prospectus for the Guaranteed Account. The
total charge will be the sum of the charges applicable for all of the Purchase
Payments withdrawn.

- --------------------------------------------------------------------------------
5
<PAGE>

CONTRACTS OTHER THAN ROTH IRAS

<TABLE>
<CAPTION>
- -------------------------------------------------
Years since receipt of Deferred Sales
Purchase Payment Charge Deduction
- ----------------------------- -----------------
<S> <C>
Less than 2 7%
2 or more but less than 4 6%
4 or more but less than 5 5%
5 or more but less than 6 4%
6 or more but less than 7 3%
7 or more 0%
- -------------------------------------------------
</TABLE>

ROTH IRA CONTRACTS

<TABLE>
<CAPTION>
- -------------------------------------------------
Completed Contract Deferred Sales
Years Charge Deduction
- ----------------------------- -----------------
<S> <C>
Less than 1 5%
1 or more but less than 2 4%
2 or more but less than 3 3%
3 or more but less than 4 2%
4 or more but less than 5 1%
5 or more 0%
- -------------------------------------------------
</TABLE>

A deferred sales charge will not be deducted from any portion of a
Purchase Payment withdrawn if the withdrawal is:

[bullet] applied to provide Annuity benefits;

[bullet] paid to a Beneficiary due to the Annuitant's death before Annuity
payments start, up to a maximum of the Purchase Payment(s) in the
Account on the Annuitant's date of death;

[bullet] made due to the election of a Systematic Distribution Option (see
"Systematic Distribution Options");

[bullet] if approved by your state, under a Qualified Contract when the amount
withdrawn is equal to the minimum distribution required by the Code
for this Contract calculated using a method permitted under the Code
and agreed to by the Company;

[bullet] paid upon a full withdrawal where the Account Value is $2,500 or less
and no amount has been withdrawn during the prior 12 months; or

[bullet] paid if we close out your Account when the value is less than $2,500
(or other amount required by state law);

[bullet] if the withdrawal is applied as a rollover to certain Roth Individual
Retirement Annuities issued by the Company or an affiliate.

After the first Account Year, you may withdraw all or a portion of your
Purchase Payments without a deferred sales charge, provided that (1) such
withdrawal occurs within three years of the Annuitant's admission to a licensed
nursing care facility (including non-licensed facilities in New Hampshire) and
(2) the Annuitant has spent at least 45 consecutive days in such facility. This
waiver of deferred sales charge does not apply if the Annuitant is in a nursing
care facility at the time the Account is established. It will also not apply if
otherwise prohibited by state law.

The Company does not anticipate that the deferred sales charge will cover
all sales and administrative expenses which it incurs in connection with the
Contract. The difference will be covered by the general assets of the Company
which are attributable, in part, to mortality and expense risk charges under
the Contract described above.

Free Withdrawals. Subject to the restrictions described below, you may
withdraw up to the greater of 10% of your current Account Value or the minimum
distribution amount required by law during each calendar year without
imposition of a deferred sales charge. The free withdrawal amount will be based
on the Account Value calculated on the Valuation Date next following our
receipt of your request for withdrawal and will be adjusted for amounts
requested for distribution under a Systematic Distribution Option, during the
calendar year. If your withdrawal exceeds the applicable free withdrawal
allowance, we will deduct a deferred sales charge on the excess amount. (See
Appendix A for a discussion of withdrawals from the Guaranteed Account.)

FUND EXPENSES
Each Fund incurs certain expenses which are paid out of its net assets.
These expenses include, among other things, the investment advisory or
"management" fee. The expenses of the Funds are set forth in the Fee Table in
this Prospectus and described more fully in the accompanying Fund prospectuses.

PREMIUM AND OTHER TAXES
Several states and municipalities currently impose a premium tax on
Annuities. These taxes currently range from 0% to 4%. Ordinarily, any
applicable state premium tax will be deducted from the Account Value when it is
applied to an Annuity Option. However, we reserve the right to deduct state
premium tax from the Purchase Payment(s) or from the Account Values at any

- --------------------------------------------------------------------------------
6
<PAGE>

time, but no earlier than when we have a tax liability under state law.

Any municipal premium tax assessed at a rate in excess of 1% will be
deducted from the Purchase Payment(s) or from the amount applied to an Annuity
Option based on our determination of when such tax is due. We will absorb any
municipal premium tax which is assessed at 1% or less. We reserve the right,
however, to reflect this added expense in our Annuity purchase rates for
residents of such municipalities.

CONTRACT VALUATION
================================================================================

ACCOUNT VALUE

Until the Annuity Date, the Account Value is the total dollar value of
amounts held in the Account as of any Valuation Date. The Account Value at any
given time is based on the value of the units held in each Subaccount, plus the
value of amounts held in the Guaranteed Account or Fixed Account.

ACCUMULATION UNITS
The value of your interests in a Subaccount is expressed as the number of
"Accumulation Units" that you hold multiplied by an "Accumulation Unit Value"
(or "AUV") for each unit. The AUV on any Valuation Date is determined by
multiplying the value on the immediately preceding Valuation Date by the net
investment factor of that Subaccount for the period between the immediately
preceding Valuation Date and the current Valuation Date. (See "Net Investment
Factor" below.) The Accumulation Unit Value will be affected by the investment
performance, expenses and charges of the applicable Fund and is reduced each
day by a percentage that accounts for the daily assessment of mortality and
expense risk charges and the administrative charge.

Initial Purchase Payments will be credited to your Account at the AUV
next computed following our acceptance of the Application as described under
"Purchasing Interests in the Contract." Each subsequent Purchase Payment (or
amount transferred) received by the Company by the close of business of the New
York Stock Exchange will be credited to your Account at the AUV next computed
following our receipt of your payment or transfer request. The value of an
Accumulation Unit may increase or decrease.

NET INVESTMENT FACTOR
The net investment factor is used to measure the investment performance
of a Subaccount from one Valuation Date to the next. The net investment factor
for a Subaccount for any valuation period is equal to the sum of 1.0000 plus
the net investment rate. The net investment rate equals:

(a) the net assets of the Fund held by the Subaccount on the current
Valuation Date, minus

(b) the net assets of the Fund held by the Subaccount on the preceding
Valuation Date, plus or minus

(d) divided by the total value of the Subaccount's Accumulation and
Annuity Units on the preceding Valuation Date;

(e) minus a daily charge at the annual effective rate of a maximum of
1.25% for mortality and expense risks (1.10% for Roth IRA
Contracts), and an administrative charge of 0.15% during the
Accumulation Period and up to 0.25% during the Annuity Period
(currently 0% during the Annuity Period).

The net investment rate may be either positive or negative.

TRANSFERS
================================================================================

- --------------------------------------------------------------------------------
7

<PAGE>

subject to certain restrictions. Amounts may not be transferred into the Fixed
Account from any of the investment options. If approved by your state, during
the Annuity Period, if you have elected a variable Annuity, you can make
transfers only among the Subaccounts available during the Annuity Period. (See
"Annuity Options.") A request for transfer can be made either in writing or by
telephone. (See "Telephone Transfers" below.) All transfers must be in
accordance with the terms of the Contract. Any transfer will be based on the
Accumulation Unit Value next determined after the Company receives a valid
transfer request at its Home Office.

During the Accumulation Period, twelve free transfers are allowed per
calendar year. Thereafter, the Company reserves the right to charge up to $10
for each additional transfer. This charge will be deducted from the gross
amount of the transfer. The Company currently does not impose this charge.
Currently, during the Annuity Period, four transfers are allowed each calendar
year.

TELEPHONE TRANSFERS
You automatically have the right to make transfers among Funds by
telephone. We have enacted procedures to prevent abuses of Account transactions
by telephone, including requiring the use of a personal identification number
(PIN) to execute transactions. You are responsible for safeguarding your PIN,
and for keeping Account information confidential. Although the Company's
failure to follow reasonable procedures may result in the Company's liability
for any losses due to unauthorized or fraudulent telephone transfers, the
Company will not be liable for following instructions communicated by telephone
which it reasonably believes to be genuine. Any losses incurred pursuant to
actions taken by the Company in reliance on telephone instructions reasonably
believed to be genuine shall be borne by you. To ensure authenticity, we record
calls on the 800 line.

DOLLAR COST AVERAGING PROGRAM
You may establish automated transfers of Account Values on a monthly or
quarterly basis through the Company's Dollar Cost Averaging Program. Dollar
cost averaging is a system for investing a fixed amount of money at regular
intervals over a period of time. The Dollar Cost Averaging Program permits the
transfer of amounts from any of the variable funding options and an available
Guaranteed Term or Fixed Account subject to the Company's terms and conditions
to any of the Subaccounts. A market value adjustment will not be applied to
dollar cost averaging transfers from any such Guaranteed Term during
participation in the Dollar Cost Averaging Program. If dollar cost averaging
from a Guaranteed Term is discontinued, the Company will automatically transfer
the balance remaining in the Guaranteed Term from which dollar cost averaging
is withdrawn to a Guaranteed Term of the same duration unless the Certificate
Holder initiates a transfer to another investment option. In either case, a
market value adjustment will apply. If Dollar Cost Averaging is stopped with
regard to amounts in the Fixed Account, the remaining balance in the Fixed
Account will be transferred to the Aetna Money Market VP Subaccount. There is
no additional charge for the Dollar Cost Averaging Program. (See Appendix A for
a discussion of the restrictions and features attributable to the Guaranteed
Account.)

Dollar cost averaging does not ensure a profit nor guarantee against loss
in a declining market. You should consider your financial ability to continue
purchases through periods of low price levels. For additional information,
please refer to the "Inquiries" section of the Prospectus Summary, which
describes how you can obtain further information.

The Dollar Cost Averaging Program is not available to individuals who
have elected the Account Rebalancing Program.

ACCOUNT REBALANCING PROGRAM
The Account Rebalancing Program allows you to have portions of your
Account Value automatically reallocated annually to a specified percentage or
at other more frequent intervals as allowed by the Company under the program.
Only Account Values accumulating in the Subaccounts can be rebalanced. You may
participate in this program by completing the Account Rebalancing section of
the Application, or by sending a written request to the Company at its Home
Office. The Account Rebalancing Program does not ensure a profit nor guarantee
against loss in a declining market.

The Account Rebalancing Program is not available to Certificate Holders
who have elected the Dollar Cost Averaging Program.

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<PAGE>

WITHDRAWALS
================================================================================

All or a portion of your Account Value may be withdrawn at any time
during the Accumulation Period. Withdrawal restrictions applicable under
Section 403(b) Contracts are described below. To request a withdrawal, you must
properly complete a disbursement form and send it to our Home Office. Payments
for withdrawal requests will be made in accordance with Securities and Exchange
Commission requirements, but normally not later than seven calendar days
following our receipt of a disbursement form. Withdrawals may be subject to a
deferred sales charge (see "Charges and Deductions") and to taxes and to tax
penalties (see "Tax Status"). Roth IRAs provide for a tax-free withdrawal of
all assets in the Account, both contributions and earnings, provided the
withdrawal is not made within the 5-taxable year period beginning with the
first tax year for which a contribution was made, and the distribution is made
after attainment of age 59-1/2, or on account of death or disability, or for a
qualified first-time home purchase.

Withdrawals may be requested in one of the following forms:

[bullet] Full Withdrawal of an Account: The amount paid for a full withdrawal
will be the Adjusted Account Value minus any applicable deferred sales
charge and maintenance fee due.

[bullet] Partial Withdrawals: (Percentage): The amount paid will be the
percentage of the Adjusted Account Value requested minus any
applicable deferred sales charge.

[bullet] Partial Withdrawals: (Specified Dollar Amount): The amount paid will
be the dollar amount requested. However, the amount withdrawn from
your Account will equal the amount you request plus any applicable
deferred sales charge and plus or minus any applicable market value
adjustment. For any partial withdrawal, the value of the Accumulation
Units canceled will be withdrawn proportionately from the Guaranteed
Account or Fixed Account or each Subaccount in which your Account is
invested, unless you request otherwise in writing. All amounts paid
will be based on your Account Value as of the next Valuation Date
after we receive a request for withdrawal at our Home Office, or on
such later date as the disbursement form may specify.

[bullet] The tax treatment of withdrawals from each Nonqualified Contract may
be affected if you own other annuity contracts issued by us (or our
affiliates) that were purchased after October 21, 1988. (See "Tax
Status.")

[bullet] Withdrawal Restrictions from 403(b) Plans. Under Section 403(b)
Contracts, the withdrawal of salary reduction contributions and
earnings on such contributions is generally prohibited prior to the
participant's death, disability, attainment of age 59-1/2, separation
from service or financial hardship. (See "Tax Status.")

[bullet] Reinstatement Privilege Following Withdrawal. You may elect to
reinstate all or a portion of the proceeds received from the full
withdrawal of your Account within 30 days after the withdrawal.
Reinvested amounts must be received by the Company within 60 days of
the withdrawal. Accumulation Units will be credited to your Account
for the amount reinstated, as well as for any maintenance fee charged
and any portion of any deferred sales charge imposed at the time of
withdrawal. However, any aggregate negative market value adjustment
made to the Guaranteed Account will not be credited. Reinstated
amounts will be reallocated to applicable investment options in the
same proportion as they were allocated at the time of withdrawal.

The number of Accumulation Units credited will be based upon the
Accumulation Unit Value(s) next computed following receipt at our Home Office
of the reinstatement request along with the amount to be reinstated. Any
maintenance fee which falls due after the withdrawal and before the
reinstatement will be deducted from the amount reinstated. The reinstatement
privilege may be used only once and does not apply to Certificate Holder's
Accounts that we close out as described in Section entitled "Involuntary
Terminations." If you are contemplating reinstatement, you should seek
competent advice regarding the tax consequences associated with this type of a
transaction.

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SYSTEMATIC DISTRIBUTION OPTIONS
================================================================================

The Company offers certain withdrawal options under the Contract that are
not considered Annuity Options ("Systematic Distribution Options"). To exercise
these options, your Account Value must meet the minimum dollar amount and age
criteria applicable to that option.

The Systematic Distribution Options currently available under the
Contract include the following:

[bullet] SWO--Systematic Withdrawal Option. SWO is a series of partial
withdrawals from your Account based on a payment method you select. It
is designed for those who want a periodic income while retaining
investment flexibility for amounts accumulated under a Contract.

[bullet] ECO--Estate Conservation Option. ECO offers the same investment
flexibility as SWO but is designed for those who want to receive only
the minimum distribution that the Code requires each year. ECO is
available only under Qualified Contracts. Under ECO, the Company
calculates the minimum distribution amount required by law, and pays
you that amount once a year. (See "Tax Status.")

ECO is not available under the Roth IRA Contract.

Other Systematic Distribution Options may be added from time to time.
Additional information relating to any of the Systematic Distribution Options
may be obtained from your local representative or from the Company at its Home
Office.

If you select one of the Systematic Distribution Options, you will retain
all of the rights and flexibility permitted under the Contract during the
Accumulation Period. Your Account Value will continue to be subject to the
charges and deductions described in this Prospectus. Taking a withdrawal under
one of these Systematic Distribution Options may have tax consequences. Any
person concerned about tax implications should consult a competent tax advisor
prior to electing an option.

Once you elect a Systematic Distribution Option, you may revoke it any
time by submitting a written request to our Home Office. Once an option is
revoked, it may not be elected again for three years, nor may any other
Systematic Distribution Option be elected unless permitted by the Code. The
Company reserves the right to discontinue the availability of one or all of
these Systematic Distribution Options for new elections at any time, and/or to
change the terms of future elections.

DEATH BENEFIT DURING ACCUMULATION PERIOD
================================================================================

A death benefit will be payable to the Beneficiary(ies) if the
Certificate Holder or the Annuitant dies before Annuity payments have
commenced. Upon the death of a joint Certificate Holder prior to the Annuity
Date, the surviving Certificate Holder, if any, will become the designated
Beneficiary. Any other Beneficiary designation on record with the Company at
the time of death will be treated as a contingent Beneficiary.

DEATH BENEFIT AMOUNT
If approved by your state, upon the death of the Annuitant, the death
benefit proceeds will be the greater of:

(1) The minimum guaranteed death benefit (described below) as of the date of
death, plus any Purchase Payments made, and less any amount(s) surrendered,
applied to an Annuity option or deducted from the Account, since the minimum
guaranteed death benefit was determined, or

(2) The Account Value on the Claim Date.

The minimum guaranteed death benefit is determined as follows: On the
effective date of the Contract ("Effective Date"), the minimum guaranteed death
benefit equals the amount of the initial Purchase Payment. On each Effective
Date anniversary before the Annuitant reaches age 85, the minimum guaranteed
death benefit is the greater of:

(1) The prior minimum guaranteed death benefit, plus any Purchase Payments made,
and less any amount(s) surrendered, applied to an Annuity option or deducted
from the Account, since the minimum guaranteed death benefit was previously
determined, or

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10

<PAGE>

(2) The Account Value on the Effective Date anniversary.

After the Annuitant reaches age 85 the minimum guaranteed death benefit
is equal to the minimum guaranteed death benefit determined on the Effective
Date anniversary immediately preceding the date the Annuitant attained age 85
plus any Purchase Payments made, and less any amounts surrendered, applied to
an Annuity option or deducted from the Account.

On the Claim Date, if the minimum guaranteed death benefit is greater
than the Account Value, the amount by which the minimum guaranteed death
benefit exceeds the Account Value is allocated to Aetna Money Market VP
Subaccount. The Beneficiary may elect a death benefit option as permitted
unless the Certificate Holder has specified the form of payment to the
Beneficiary.

Under Nonqualified Contracts only, if the Certificate Holder is not the
Annuitant and dies, the minimum guaranteed death benefit will not apply. The
amount paid on account of the death benefit of the Certificate Holder will be
equal to the Adjusted Account Value on the Claim Date. Full or partial
withdrawals may be subject to a deferred sales charge. The Beneficiary may
elect a death benefit option available under the Contract unless the
Certificate Holder has specified the form of payment to the Beneficiary.

If a spousal Beneficiary continued the Account at the death of the
Certificate Holder who was also the Annuitant, the spousal Beneficiary will
become the Annuitant and the minimum guaranteed death benefit will also apply
at the death of the spousal Beneficiary. The initial minimum guaranteed death
benefit equals the Account Value as adjusted for any minimum guaranteed death
benefit payable at the death of the original Certificate Holder/Annuitant.
Thereafter, the minimum guaranteed death benefit is determined as above.

If the spousal Beneficiary continued the Account at the death of the
Certificate Holder who was not also the Annuitant, the Annuitant will not
change and the amount of death benefit proceeds payable upon the spousal
Beneficiary's death will be equal to the Adjusted Account Value on the Claim
Date, less any deferred sales charge.

If the death benefit described above has not been approved by your state,
the following death benefit shall apply:

Upon the death of the Annuitant, the guaranteed death benefit proceeds
will be the greatest of:

(1) the total Purchase Payment(s) applied to the Account, minus the sum of all
amounts withdrawn, annuitized or deducted from such Account;

(2) the highest step-up value as of the date of death. The step-up value is
determined on each anniversary of the Effective Date, up to the Annuitant's
75th birthday. Each step-up value is calculated as the Account Value on the
Effective Date anniversary, increased by Purchase Payments applied, and
decreased by partial withdrawals, annuitizations and deductions taken from
the Account since the Effective Date anniversary; or

(3) the Account Value as of the date of death.

The excess, if any, of the guaranteed death benefit value over the
Account Value is determined as of the date of death. Any excess amount will be
deposited and allocated to the Aetna Money Market VP Subaccount. The Account
Value on the claim date plus any excess amount deposited into the Account
becomes the Certificate Holder's Account Value. The death benefit paid will
equal the Account Value when request for payment is made and no deferred sales
charge applies.

Under Nonqualified Contracts only, if the Certificate Holder is not the
Annuitant and dies, the guaranteed death benefit will not apply. The amount of
death benefit proceeds, will be equal to the Adjusted Account Value on the
Claim Date. Full or partial withdrawals may be subject to a deferred sales
charge. If the spousal Beneficiary continued the Account after the death of the
Certificate Holder who was the Annuitant, the amount of the death benefit
proceeds payable upon the spousal Beneficiary's death will be equal to the
Adjusted Account Value on the Claim Date, less any deferred sales charge
applicable to any Purchase Payments made since the death of the Certificate
Holder/Annuitant.

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11

<PAGE>

approved in your state, the deferred sales charge will apply only to Purchase
Payments made since the death of the Certificate Holder. For amounts held in
the Guaranteed Account, see Appendix A for a discussion of the calculation of
death benefit proceeds.

DEATH BENEFIT PAYMENT OPTIONS
Death benefit proceeds may be paid to the Beneficiary as described below.
If you die and no Beneficiary exists, the death benefit will be paid in a lump
sum to your estate. Prior to any election by the Beneficiary, the Account Value
will remain in the Account and the Account Value will continue to be affected
by the investment performance of the investment option(s) selected. The
Beneficiary has the right to allocate or transfer any amount to any available
investment option (subject to a market value adjustment, as applicable). The
Code requires that distributions begin within a certain time period, as
described below. If no elections are made, no distributions will be made.
Failure to commence distributions within those time periods can result in tax
penalties.

Nonqualified Contracts. Under a Nonqualified Contract, if you die, and
the Beneficiary is your surviving spouse, or if you are a nonnatural person and
the Annuitant dies, and the Beneficiary is the Annuitant's surviving spouse, he
or she automatically becomes the successor Certificate Holder. The successor
Certificate Holder may exercise all rights under the Account and (1) continue
in the Accumulation Period; (2) elect to apply some or all of the Adjusted
Account Value to any of the Annuity Options; or (3) receive at any time a lump
sum payment equal to all or a portion of the Adjusted Account Value. If you die
and you are not the Annuitant, any applicable deferred sales charge will be
applied if a lump sum is elected. Under the Code, distributions are not
required until the successor Certificate Holder's death. If you die and the
Beneficiary is not your surviving spouse, he or she may elect option (2) or (3)
above. According to the Code, any portion of the Adjusted Account Value not
distributed in installments over the life or life expectancy beginning within
one year of your death, must be paid within five years of your death. (See "Tax
Status of the Contract.")

If you are a natural person but not the Annuitant and the Annuitant dies,
the Beneficiary may elect to apply the Adjusted Account Value to an Annuity
Option within 60 days or to receive a lump sum payment equal to the Adjusted
Account Value, subject to state regulatory approval. If the Beneficiary does
not elect an Annuity Option within 60 days of the date of death, the gain, if
any, will be includable in the Beneficiary's income in the year the Annuitant
dies.

If SWO is in effect, payments will cease at the Certificate Holder's or
Annuitant's death. A Beneficiary, however, may elect to continue SWO.

Qualified Contracts. Under a Qualified Contract, the death benefit is
paid at the death of the participant, who is the Annuitant under the Contract.
The Beneficiary has the following options: (1) apply some or all of the
Adjusted Account Value to any of the Annuity Options, subject to the
distribution rules in Code Section 401(a)(9), or (2) receive at any time a lump
sum payment equal to all or a portion of the Adjusted Account Value. If the
Account was established in conjunction with a Section 401(a) qualified pension
or profit sharing plan or a Section 457 deferred compensation plan, payment
will be made, as directed by the Certificate Holder, to either the Certificate
Holder or to the plan Beneficiary.

If ECO or SWO is in effect and the participant dies before the required
beginning date for minimum distributions, payments will cease. A Beneficiary,
or the Certificate Holder on behalf of a plan Beneficiary, may elect ECO or SWO
provided the election would satisfy the Code minimum distribution rules.

If ECO or SWO is in effect and the participant dies after the required
beginning date for minimum distributions, payments will continue as permitted
under the Code minimum distribution rules, unless the option is revoked.

Death benefit payments must satisfy the distribution rules in Code
Section 401(a)(9). (See "Tax Status of the Contract.")

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12
<PAGE>

ANNUITY PERIOD
================================================================================

ANNUITY PERIOD ELECTIONS

You must notify us in writing of the date you want Annuity Payments to
start (the "Annuity Date") and the Annuity Option elected. Payments may not
begin earlier than one year after purchase, or, unless we consent, later than
the later of (a) the first day of the month following the Annuitant's 85th
birthday, or (b) the tenth anniversary of the last Purchase Payment (fifth
anniversary for Contracts issued in Pennsylvania).

Annuity Payments will not begin until you have selected an Annuity Date
and an Annuity Option. Until a date and option are elected, the Account will
continue in the Accumulation Period.

As of January 1, 1997, the Code generally requires that for Qualified
Contracts, other than for IRAs and for five-percent owners in other Qualified
Contracts, minimum annual distributions of the Account Value begin by April 1st
of the calendar year following the calendar year in which a participant attains
age 70-1/2 or retires, whichever occurs later. For IRA depositors and for
five-percent owners, minimum distributions must begin by April 1 of the
calendar year following the calendar year in which the participant attains age
70-1/2. In addition, distributions must be in a form and amount sufficient to
satisfy the Code requirements. These requirements may be satisfied by the
election of certain Annuity Options or Systematic Distribution Options. (See
"Tax Status.") For Nonqualified Contracts, failure to select an Annuity Option
and an Annuity Date, or postponement of the Annuity Date past the Annuitant's
85th birthday or tenth anniversary of your last Purchase Payment may have
adverse tax consequences. You should consult with a qualified tax adviser if
you are considering such a course of action.

For Roth IRAs, the minimum distribution rules do not apply prior to your
death. You are not required to begin taking minimum annual distributions by
April 1 of the calendar year following the calendar year in which you attain
age 70-1/2. The general rule that annuity payments may not extend beyond your
life/life expectancy or beyond the joint lives/joint life expectancies of you
and your beneficiaries does not apply to a Roth IRA. The minimum distribution
rules which apply to the beneficiary at your death and which are described in
the Prospectus continue to apply. The rules differ depending on whether you die
after distributions have begun.

At least 30 days prior to the Annuity Date, you must notify us in writing
of the following:

[bullet] the date on which you would like Annuity Payments to begin;

[bullet] the Annuity Option under which you want payments to be calculated and
paid;

[bullet] whether the payments are to be made monthly, quarterly, semi-annually
or annually; and

[bullet] the investment option(s) used to provide Annuity Payments (i.e., a
fixed Annuity using the general account or a variable Annuity using
any of the Subaccounts available at the time of annuitization or a
combination of the two). ("See Annuity Options.")

Once Annuity Payments begin, the Annuity Option may not be changed.

PARTIAL ANNUITIZATION
You may elect an Annuity Option with respect to a portion of your Account
Value, while leaving the remaining portion of your Account Value invested in
the Accumulation Period. The Code and the regulations do not specifically
address the tax treatment applicable to payments provided in this way. Whether
such payments are taxable as annuity payments or as withdrawals is currently
unclear; therefore, you should consult with a qualified tax adviser if you are
considering a partial annuitization of your Account.

ANNUITY OPTIONS
The Certificate Holder may choose one of the following Annuity Options:

Lifetime Annuity Options:

Option 1--Life Annuity--An annuity with payments ending on the Annuitant's
death.

Option 2--Life Annuity with Guaranteed Payments--An annuity with payments
guaranteed for 5-30 years.

*Option 3--Life Annuity with Cash Refund Feature--An annuity with a cash refund
feature. Payments are guaranteed for the amount applied to the Annuity Option.
If the Annuitant dies before the amount applied to the Annuity Option (less any
applicable premium tax) has been paid, any remaining balance will

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13
<PAGE>

be paid in one sum to the Beneficiary. This option is available only when all
payments are as a fixed Annuity.

Option 4--Life Annuity Based Upon the Lives of Two Annuitants--An annuity paid
during the lives of the Annuitant and a second Annuitant. The Certificate
Holder selects an Annuity with 100%, 66-2/3% or 50% of the payment to continue
after the first death, or an Annuity with 100% of the payment to continue at
the death of the second Annuitant and 50% of the payment to continue at the
death of the Annuitant.

Option 5--Life Annuity Based Upon the Lives of Two Annuitants with Guaranteed
Payments--An Annuity with Payments for a minimum of 5-30 years, with 100% of
the payment to continue after the first death.

*Option 6--Life Annuity Based Upon the Lives of Two Annuitants with a Cash
Refund Feature--An Annuity with 100% of the payment to continue after the first
death with a cash refund feature. Payments are guaranteed for the amount
applied to the Annuity Option. If both Annuitants die prior to the total
payment of the amount applied to the Annuity Option (less any premium tax), any
remaining balance will be paid in one sum to the Beneficiary. This option is
available only when all payments are as a fixed Annuity.

*(If approved by your state)

If Option 1 or 4 is elected, it is possible that only one Annuity Payment will
be made if the Annuitant under Option 1, or the surviving Annuitant under
Option 4, should die prior to the due date of the second Annuity Payment. Once
lifetime Annuity payments begin, the Certificate Holder cannot elect to receive
a lump-sum settlement.

Nonlifetime Annuity Option:
Under the nonlifetime option, payments may be made for generally 5-30
years, as selected by the Certificate Holder. If this option is elected as a
variable Annuity, the Certificate Holder may request that the present value of
all or any portion of the remaining variable payments be paid in one sum.
However, any lump-sum elected before three years of payments have been
completed will be treated as a withdrawal during the Accumulation Period and
any applicable deferred sales charge will be assessed. (See "Charges and
Deductions--Deferred Sales Charge.") If the nonlifetime option is elected on a
fixed basis, you cannot elect to receive a lump-sum settlement.

We may also offer additional Annuity Options under your Contract from
time to time. You can call the number listed in the "Inquiries" section of the
Prospectus Summary to determine which options are available and the terms of
such options. Additional or enhanced options may not be made available to those
already receiving Annuity payments.

ANNUITY PAYMENTS
Date Payments Start. When payments start, the age of the Annuitant plus
the number of years for which payments are guaranteed must not exceed 95. For
Qualified Contracts only, Annuity Payments may not extend beyond (a) the life
of the Annuitant, (b) the joint lives of the Annuitant and Beneficiary, (c) a
period certain greater than the Annuitant's life expectancy, or (d) a period
certain greater than the joint life expectancies of the Annuitant and
Beneficiary.

Amount of Each Annuity Payment. The amount of each payment depends on how
you allocate your Account Value between fixed and variable payouts (some
options require that all payments be made on a fixed basis). No election may be
made that would result in the first Annuity Payment of less than $50, or total
yearly Annuity Payments of less than $250 (less if required by state law). If
the Account Value on the Annuity Date is insufficient to elect an option for
the minimum amount specified, a lump-sum payment must be elected. We reserve
the right to increase the minimum first Annuity Payment amount and the minimum
annual Annuity Payment amount based on increases reflected in the Consumer
Price Index-Urban (CPI-U), since July 1, 1993.

If Annuity Payments are to be made on a variable basis, the first and
subsequent payments will vary depending on the assumed net investment rate
selected (3-1/2% or 5% per annum). Selection of a 5% rate causes a higher first
payment, but Annuity Payments will increase thereafter only to the extent that
the net investment rate exceeds 5% on an annualized basis. Annuity Payments
would decline if the rate were below 5%. Use of the 3-1/2% assumed rate causes a
lower first payment, but subsequent payments would increase more rapidly or
decline more slowly as changes occur in the net investment rate. (See the
Statement of Additional Information for further discussion on the impact of
selecting an assumed net investment rate.)

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<PAGE>

CHARGES DEDUCTED DURING THE ANNUITY PERIOD
We make a daily deduction for mortality and expense risks from any
amounts held on a variable basis. Therefore, electing the nonlifetime option on
a variable basis will result in a deduction being made even though we assume no
mortality risk. We may also deduct a daily administrative charge from amounts
held under the variable options. This charge, established when a variable
Annuity Option is elected, will not exceed 0.25% per year of amounts held on a
variable basis. Once established, the charge will be effective during the
entire Annuity Period. (See "Charges and Deductions.")

DEATH BENEFIT PAYABLE DURING THE
ANNUITY PERIOD
The death benefit, if any, due when the Annuitant dies after Annuity
Payments have begun, will depend on the terms of the Contract and the Annuity
Option selected. If Option 1 or Option 4 was elected, Annuity Payments will
cease on the death of the Annuitant under Option 1 or the death of the
surviving Annuitant under Option 4.

If Lifetime Option 2 or Option 5 was elected and the death of the
Annuitant under Option 2, or the surviving Annuitant under Option 5, occurs
prior to the end of the guaranteed minimum payment period, we will continue
payments to the Beneficiary unless the Beneficiary elects a lump sum, provided
the Certificate Holder has not prohibited such an election in the Beneficiary
designation.

If the nonlifetime option was elected, and the Annuitant dies before all
payments are made, remaining payments will be paid to the Beneficiary unless
the Beneficiary elects a lump sum, provided the Certificate Holder has not
prohibited such an election in the Beneficiary designation.

When the Annuitant dies after Annuity Payments have begun and if there is
a death benefit payable under the Annuity option elected, the remaining value
must be distributed to the Beneficiary at least as rapidly as under the
original method of distribution.

Any lump-sum payment paid under the applicable lifetime or nonlifetime
Annuity options will be made within seven calendar days after acceptable proof
of death, and a request for payment are received at our Home Office. The value
of any death benefit proceeds will be determined as of the next Valuation Date
after we receive acceptable proof of death and a request for payment. Under
Options 2 and 5, such value will be reduced by any payments made after the date
of death.

TAX STATUS
================================================================================

INTRODUCTION

The following provides a general discussion and is not intended as tax
advice. This discussion reflects the Company's understanding of current federal
income tax law. Such laws may change in the future, and it is possible that any
change could be retroactive (i.e., effective prior to the date of the change).
In addition, this discussion does not cover the potential application of
federal estate and gift tax laws, or state, local or any other tax law. The
Company makes no guarantee regarding the tax treatment of any contract or
transaction involving a Contract.

The Contract may be purchased on a non-tax qualified basis ("Nonqualified
Contract") or purchased and used in connection with certain retirement
arrangements entitled to special income tax treatment under Section 403(b),
408(b) or 408A of the Code, or prior to May 1, 1998 under Sections 401(a) or
457 of the Code("Qualified Contracts"). The ultimate effect of federal income
taxes on the amounts held under a Contract, on Annuity payments, and on the
economic benefit to the Contract Holder, Certificate Holder or Beneficiary may
depend upon the tax status of the individual concerned. Any person concerned
about these tax implications should consult a competent tax adviser before
initiating any transaction.

TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under the Code. Since
the Separate Account is not an entity separate from the Company, it will not be
taxed separately as a "regulated investment company" under the Code. Investment
income and realized capital gains are automatically applied to increase
reserves under the Contracts. Under existing federal income tax law, the
Company believes that the Separate Account investment income and realized net
capital gains will not be taxed to the extent that such income and gains are
applied to increase the reserves under the Contracts.

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15
<PAGE>

Accordingly, the Company does not anticipate that it will incur any
federal income tax liability attributable to the Separate Account and,
therefore, the Company does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretation thereof result in
the Company being taxed on income or gains attributable to the Separate
Account, then the Company may impose a charge against the Separate Account
(with respect to some or all Contracts) in order to set aside provisions to pay
such taxes.

TAX STATUS OF THE CONTRACT
Diversification. Section 817(h) of the Code requires that with respect to
Nonqualified Contracts, the investments of the Funds be "adequately
diversified" in accordance with Treasury Regulations in order for the Contracts
to qualify as annuity contracts under federal tax law. The Separate Account,
through the Funds, intends to comply with the diversification requirements
prescribed by the Treasury in Reg. Sec. 1.817-5, which affects how the Funds'
assets may be invested.

In addition, in certain circumstances, owners of variable annuity
contracts may be considered the owners, for federal income tax purposes, of the
assets of the separate accounts used to support their contracts. In these
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has stated in
published rulings that a variable contract owner will be considered the owner
of separate account assets if the owner possesses incidents of investment
control over the assets. The ownership rights under the contract are similar
to, but different in certain respects from those described by the IRS in
rulings in which it was determined that owners were not owners of separate
account assets. For example, a Certificate Holder has additional flexibility in
allocating premium payments and account values. In addition, the number of
funds provided under the Contract is significantly greater than the number of
funds offered in contracts on which rulings have been issued. These differences
could result in a Certificate Holder being treated as the owner of a pro rata
portion of the assets of the Separate Account. The Company reserves the right
to modify the Contract as necessary to attempt to prevent a Certificate Holder
from being considered the owner of a pro rata share of the assets of the
Separate Account.

Required Distributions--Nonqualified Contracts: In order to be treated as
an annuity contract for federal income tax purposes, Section 72(s) of the Code
requires Nonqualified Contracts to provide that (a) if any Certificate Holder
dies on or after the Annuity Date but prior to the time the entire interest in
the Contract has been distributed, the remaining portion of such interest will
be distributed at least as rapidly as under the method of distribution in
effect at the time of the Certificate Holder's death, and (b) if any
Certificate Holder dies prior to the Annuity Date, the entire interest in the
Contract will be distributed within five years after the date of such
Certificate Holder's death. These requirements will be considered satisfied as
to any portion of a Certificate Holder's interest which is payable to or for
the benefit of a "designated beneficiary" and which is distributed over the
life of such "designated beneficiary" or over a period not extending beyond the
life expectancy of that beneficiary, provided that such distributions begin
within one year of the Certificate Holder's death. The "designated beneficiary"
refers to a natural person designated by the Certificate Holder as a
Beneficiary and to whom ownership of the contract passes by reason of death.
However, if the "designated beneficiary" is the surviving spouse of the
deceased Certificate Holder, the Account may be continued with the surviving
spouse as the new Certificate Holder. If the Certificate Holder is a
non-natural person, the surviving spouse who is the "designated beneficiary" of
the deceased Annuitant may continue the Account.

If the Certificate Holder is a natural person but not the Annuitant and
the Annuitant dies, if the Beneficiary does not elect an Annuity Option within
60 days of the date of death, the gain, if any, will be includible in the
Beneficiary's income in the year the Annuitant dies.

Required Distributions--Qualified Contracts: The Code has required
distribution rules for Section 401(a), 403(b) and 457 Plans and Individual
Retirement Annuities. Other than for IRAs and for five-percent owners in other
Qualified Contracts distributions must generally begin by April 1 of the
calendar year following the calendar year in which the participant attains age
70-1/2 or retires, whichever occurs later. For traditional IRA participants and
for five-percent owners, minimum distributions must begin by April 1 of the
calendar year following the calendar year in which the participant attains age
70-1/2. There is no required distribution date for participants in a Roth IRA.
Under 403(b) plans, if

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<PAGE>

the Company maintains separate records, distribution of amounts held as of
December 31, 1986 must generally begin by the end of the calendar year in which
the participant attains age 75 (or retires, whichever occurs later). However,
special rules require that some or all of the balance be distributed earlier if
any distributions are taken in excess of the minimum required amount.

To comply with these provisions, distributions must be in a form and
amount sufficient to satisfy the minimum distribution and minimum distribution
incidental death benefit rules specified in Section 401(a) (9) of the Code.

In general, annuity payments from a traditional IRA must be distributed
over the participant's life or the joint lives of the participant and
beneficiary, or over a period not greater than the participant's life expectancy
or the joint life expectancies of the participant and beneficiary. Also, any
distribution under a Section 457 Plan payable over a period of more than one
year must be made in substantially nonincreasing amounts.

If the participant dies on or after the required beginning date for
minimum distributions, distributions to the beneficiary must be made at least as
rapidly as the method of distribution in effect at the time of the participant's
death. However, if the required minimum distribution is calculated each year
based on the participant's single life expectancy or the joint life expectancies
of the participant and beneficiary, the regulations for Code Section 401(a)(9)
provide specific rules for calculating the required minimum distributions at the
participant's death. For example, if ECO was elected with the calculation based
on the participant's single life expectancy, and the life expectancy is
recalculated each year, the recalculated life expectancy becomes zero in the
calendar year following the participant's death and the entire remaining
interest must be distributed to the beneficiary by December 31 of the year
following the participant's death. However, a spousal beneficiary, other than
under a Section 457 Plan, has certain rollover rights which can only be
exercised in the year of the participant's death. The rules are complex and the
participant should consult a tax adviser before electing the method of
calculation to satisfy the minimum distribution requirements.

If the participant dies before the required beginning date for minimum
distributions, the entire interest must be distributed by December 31 of the
calendar year containing the fifth anniversary of the date of the participant's
death. Alternatively, payments may be made over the life of the beneficiary or
over a period not extending beyond the life expectancy of the beneficiary, not
to exceed 15 years for a non-spousal beneficiary under a Section 457 Plan,
provided the distribution begins to a non-spouse beneficiary by December 31 of
the calendar year following the calendar year of the participant's death. If
payments are made to a spousal beneficiary, distributions must begin by the
later of December 31 of the calendar year following the calendar year of the
death or December 31 of the calendar year in which the participant would have
attained age 70-1/2.

An exception applies for a spousal beneficiary under an Individual
Retirement Annuity. In lieu of taking a distribution under these rules, a
spousal beneficiary may elect to treat the Account as his or her own IRA and
defer taking a distribution until his or her age 70-1/2. The surviving spouse is
deemed to have made such an election if the surviving spouse makes a rollover to
or from the Account or fails to take a distribution within the required time
period.

The minimum distribution rules also apply to beneficiaries under a Roth
IRA and are based on whether the participant dies before or after distribution
begins.

If the participant or beneficiary fails to take the required minimum
distribution for any tax year, a 50% excise tax is imposed on the required
amount that was not distributed.

TAXATION OF ANNUITY CONTRACTS
In General: Section 72 of the Code governs taxation of annuities in
general. The Company believes that a Certificate Holder under a Nonqualified
Contract who is a natural person generally is not taxed on increases in the
Account Value until distribution occurs by withdrawing all or part of such
Account Value (e.g., withdrawals or Annuity Payments under the Annuity Option
elected). The taxable portion of a distribution (in the form of a single sum
payment or an Annuity) is taxable as ordinary income.

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17
<PAGE>

the year in the Surrender Value, adjusted for Purchase Payments made during the
year, amounts previously distributed and amounts previously included in income.
There are some exceptions to the rule and a non-natural person should consult
with its tax adviser prior to purchasing this Contract. A non-natural person
exempt from federal income taxes should consult with its tax adviser regarding
treatment of "income on the contract" for purposes of the unrelated business
income tax. When the Certificate Holder is not a natural person, the Annuitant
is considered the Certificate Holder for the purpose of meeting the required
distribution-at-death rules. In addition, when the Certificate Holder is not a
natural person, a change in Annuitant is treated as the death of the
Certificate Holder.

The following discussion generally applies to Qualified Contracts or
Nonqualified Contracts owned by a natural person.

Withdrawals: In the case of a withdrawal under a Qualified Contract,
including withdrawals under SWO or ECO, the amount taxable is generally based on
the ratio of the "investment in the contract" to Account Value. The "investment
in the contract" generally equals the amount of any nondeductible Purchase
Payments paid by or on behalf of any individual less any amount received
previously which was excludable from gross income. For a Qualified Contract, the
"investment in the contract" can be zero. Special tax rules may be available for
certain distributions from a Qualified Contract.

With respect to Nonqualified Contracts, partial withdrawals, including
withdrawals under SWO, are generally treated as taxable income to the extent
that the Account Value immediately before the withdrawal exceeds the "investment
in the contract" at that time. The Account Value immediately before a withdrawal
may have to be increased by any positive market value adjustment (MVA) that
results from such a withdrawal. There is, however, no definitive guidance on the
proper tax treatment of MVAs in these circumstances, and a Certificate Holder
should contact a competent tax advisor with respect to the potential tax
consequences of any MVA that arises as a result of a partial withdrawal.

Full withdrawals of a Nonqualified Contract are treated as taxable income
to the extent that the amount received exceeds the "investment in the contract."

Any "qualified" distribution from a Roth IRA is not includible in gross
income. A "qualified" distribution is any distribution made after the
participant attains age 59-1/2, or on account of the participant's death or
disability, or for a qualified first-time home purchase. A distribution will not
be treated as "qualified" if it is made within the 5-taxable year period
beginning with the first taxable year for which a contribution was made. If a
distribution is not "qualified", the accumulated earnings are includible in
income. The 10% premature distribution penalty will apply to the taxable portion
of the distribution unless one of the exceptions under the Code applies. (See
"Penalty Tax" below.) A partial distribution will first be treated as a return
of cost basis (i.e. aggregate amount of contributions.)

For Roth IRAs, the minimum distribution rules do not apply prior to the
participant's death. (See "Annuity Period".)

Annuity Payments: Although the tax consequences may vary depending on the
Annuity Payment elected under the Contract, in general, only the portion of the
Annuity Payment that represents the amount by which the Account Value exceeds
the "investment in the contract" will be taxed; after the "investment in the
contract" is recovered, the full amount of any additional annuity payments is
taxable. For variable Annuity Payments, the taxable portion is generally
determined by an equation that establishes a specific dollar amount of each
payment that is not taxed. The dollar amount is determined by dividing the
"investment in the contract" by the total number of expected periodic payments.
However, the entire distribution will be taxable once the recipient has
recovered the dollar amount of his or her "investment in the contract." For
fixed annuity payments, in general there is no tax on the portion of each
payment which represents the same ratio that the "investment in the contract"
bears to the expected number of payments as defined in Code Section 72(d);
however, the remainder of each Annuity Payment is taxable. Once the "investment
in the contract" has been fully recovered, the full amount of any additional
Annuity Payments is taxable. If Annuity Payments cease as a result of an
Annuitant's death before full recovery of the "investment in the contract,"
consult a competent tax advisor regarding deductibility of the unrecovered
amount.

Penalty Tax: In the case of a distribution pursuant to a Nonqualified
Contract, or a Qualified Contract

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18
<PAGE>

other than a Qualified Contract sold in conjunction with a Code Section 457
Plan, there may be imposed a federal income tax penalty equal to 10% of the
amount treated as taxable income.

In general, there is no penalty tax on distributions from a Nonqualified
Contract: (1) made on or after the date on which the taxpayer attains age
59-1/2; (2) made as a result of the death of the Certificate Holder; (3)
attributable to the taxpayer's total and permanent disability; (4) received in
substantially equal periodic payments (at least annually) over the life or life
expectancy of the taxpayer or the joint lives or joint life expectancies of the
taxpayer and a "designated beneficiary"; or (5) allocable to "investment in the
contract" before August 14, 1982.

If a distribution is made from a Qualified Contract sold in conjunction
with a Section 401(a) Plan or Section 403(b) Plan, the penalty tax will not
apply on distribution made when the participant (a) attains age 59-1/2, (b)
becomes permanently and totally disabled, (c) dies, (d) separates from service
with the plan sponsor at or after age 55, (e) rolls over the distribution amount
to another plan of the same type in accordance with the terms of the Code, or
(f) takes the distributions in substantially equal periodic payments (at least
annually) over his or her life or life expectancy or the joint lives or joint
life expectancies of the participant and beneficiary, provided the participant
has separated from service with the plan sponsor. In addition, the penalty tax
does not apply for the amount of a distribution equal to unreimbursed medical
expenses incurred by the participant that qualify for deduction as specified in
the Code. The Code may impose other penalty taxes in other circumstances.

In general, except for (d), the same exceptions described in the preceding
paragraph will apply to distributions made from an Individual Retirement
Annuity, including a distribution from a Roth IRA that is not a "qualified
distribution" or a rollover to a Roth IRA that is not a "qualified rollover"
contribution. Beginning January 1, 1997, the penalty tax is also waived on
distributions made from an IRA to pay for health insurance premiums for certain
unemployed individuals. Beginning January 1, 1998, the penalty tax is waived if
the amounts withdrawn are used for a qualified first-time home purchase or for
higher education expenses.

Taxation of Death Benefit Proceeds: Amounts may be distributed from the
Contract because of the death of a Certificate Holder or the Annuitant.
Generally, such amounts are includible in the income of the recipient as
follows: (1) if distributed in a lump sum, they are taxed in the same manner as
a full surrender as described above, or (2) if distributed under an Annuity
Option, they are taxed in the same manner as Annuity Payments, as described
above.

Special rules may apply on Nonqualified Contracts. See "Required
Distributions--Nonqualified Contracts."

Transfers, Assignments or Exchanges of the Contract: A transfer of
ownership of a Contract, the designation of an Annuitant, payee or other
Beneficiary who is not also a Certificate Holder, the selection of certain
Annuity Dates, or the exchange of a Contract may result in certain tax
consequences. The assignment, pledge, or agreement to assign or pledge any
portion of the Account Value generally will be treated as a distribution. The
assignment or transfer of ownership of a Qualified Contract generally is not
allowed. Anyone contemplating any such designation, transfer, assignment,
selection, or exchange should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.

Multiple Contracts: All deferred nonqualified annuity contracts that are
issued by the Company (or its affiliates) to the same owner during any calendar
year are treated as one annuity contract for purposes of determining the amount
includible in gross income under Section 72(e) of the Code. In addition, the
Treasury Department has specific authority to issue regulations that prevent the
avoidance of Section 72(e) through the serial purchase of annuity contracts or
otherwise.

CONTRACTS USED WITH CERTAIN RETIREMENT PLANS
Qualified Contracts in General. The Qualified Contract is designed for use
as a Code Section 408(b) Individual Retirement Annuity or as a Contract used in
connection with certain employer sponsored retirement plans. The tax rules
applicable to participants and beneficiaries in Qualified Contracts are complex.
Special favorable tax treatment may be available for certain types of
contributions and distributions. Adverse tax consequences may result from
contributions in excess of specified limits; distributions prior to age 59-1/2
(subject to certain exceptions); distributions that do not conform to specified
commencement and minimum distribution rules; and in other specified
circumstances.

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19
<PAGE>

The Company makes no attempt to provide more than general information
about use of the Contracts with the various types of retirement plans.
Participants and beneficiaries under Qualified Contracts may be subject to the
terms and conditions of the retirement plans themselves, in addition to the
terms and conditions of the Contract issued in connection with such plans. Some
retirement plans are subject to distribution and other requirements that are not
incorporated in the provisions of the Contracts. Purchasers are responsible for
determining that contributions, distributions and other transactions with
respect to the Contracts satisfy applicable laws, and should consult their legal
counsel and tax adviser regarding the suitability of the Contract.

Section 457 Plans. Code Section 457 provides for certain deferred
compensation plans. These plans may be offered with respect to service for state
governments, local governments, political subdivisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. These plans are subject to various restrictions on contributions
and distributions. The plans may permit participants to specify the form of
investment for their deferred compensation account. Prior to the August 20, 1996
enactment of the Small Business Job Protection Act of 1996 (the "Small Business
Act") compensation deferred under the plans, all property and rights purchased
with such amounts, and all income attributable to such amounts, property or
rights remained solely the property and rights of the employer (without being
restricted to the provision of benefits) subject only to the claims of the
employer's general creditors. For that reason, depending on the terms of the
particular plan, the employer may have been entitled to draw on deferred amounts
for purposes unrelated to its Section 457 plan obligations.

Under the Small Business Act, plans maintained by State or local
governments, their political subdivisions, agencies, instrumentalities and
certain affiliates will be required to hold all assets and income of the Plan in
trust for the exclusive benefit of plan participants and their beneficiaries.
For purposes of meeting the new requirement, custodial accounts and annuity
contracts are treated as trusts. State and local government plans that were in
existence on August 20, 1996 are allowed a transition period that ends January
1, 1999 to comply with the new requirement.

In general, all amounts received under a Section 457 plan are taxable and
reportable to the IRS as taxable income. Also, all amounts except death benefit
proceeds are subject to federal income tax withholding as wages. If we make
payments directly to a participant on behalf of the employer as owner, we will
withhold federal taxes (and state taxes, if applicable).

The Code imposes a maximum limit on annual Purchase Payments which may be
excluded from the participant's gross income. Such limit is generally the lesser
of $8,000 (as adjusted to reflect changes in the cost of living) or 33-1/2% of
the participant's includible compensation (25% of gross compensation).

Section 401(a) Plans. Section 401(a) permits corporate employers to
establish various types of retirement plans for employees, and permits self-
employed individuals to establish various types of retirement plans for
themselves and for their employees. These retirement plans may permit the
purchase of the Contract to accumulate retirement savings under the plans.
Adverse tax consequences to the plan, to the participant or to both may result
if this Contract is assigned or transferred to an individual except to a
participant as a means to provide benefit payments.

The Code imposes a maximum limit on annual Purchase Payments that may be
excluded from a participant's gross income. Such limit must be calculated under
the Plan by the employer in accordance with Section 415 of the Code. This limit
is generally the lesser of 25% of the participant's compensation or $30,000.
Compensation means compensation from the participant's employer sponsoring the
plan, and for years beginning after December 31, 1997, includes any elective
deferrals under Code Section 402 (g) and any amounts not includible in gross
income under Code Sections 125 or 457. In addition, Purchase Payments will be
excluded from a participant's gross income only if the Section 401(a) Plan meets
certain nondiscrimination requirements.

All distributions will be taxed as they are received unless the
distribution is rolled over to another plan of the same type or to an individual
retirement annuity/ account ("IRA") in accordance with the Code, or unless the
participant has made after-tax contributions to the plan, which are not taxed
upon distribution. The Code has specific rules that apply, depending on the type
of distribution received, if after-tax contributions were made.

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20
<PAGE>

In general, payments received by a beneficiary after the participant's
death are taxed in the same manner as if the participant had received those
payments, except that a limited death benefit exclusion may apply for payments
due to deaths that occurred on or before August 20, 1996. This exclusion no
longer applies to payments due to deaths occurring after August 20, 1996.

Section 403(b) Plans. Under Section 403(b), contributions made by public
school systems or nonprofit healthcare organizations and other Section 501(c)(3)
tax exempt organizations to purchase annuity contracts for their employees are
generally excludable from the gross income of the employee.

In order to be excludable from taxable income, total annual contributions
made by the participant and his or her employer cannot exceed either of two
limits set by the Code. The first limit, under Section 415, is generally the
lesser of 25% of includible compensation or $30,000. Compensation means
compensation from the participant's employer sponsoring the plan, and for years
beginning after December 31, 1997, includes any elective deferrals under Code
Section 402 (g) and any amounts not includible in gross income under Code
Sections 125 or 457. The second limit, which is the exclusion allowance under
Section 403(b), is usually calculated according to a formula that takes into
account the participant's length of employment and any pretax contributions you
and your employer made to the plan and to certain other retirement plans. These
two limits apply to the participant's contributions as well as to any
contributions made by the employer on behalf of the participant. There is an
additional limit that specifically limits salary reduction contributions to
generally no more than $10,000 annually (subject to indexing); a participant's
own limit may be higher or lower, depending on certain conditions. In addition,
Purchase Payments will be excluded from a participant's gross income only if the
Plan meets certain nondiscrimination requirements.

Section 403(b)(11) restricts the distribution under Section 403(b)
contracts of: (1) salary reduction contributions made after December 31, 1988;
(2) earnings on those contributions; and (3) earnings during such period on
amounts held as of December 31, 1988. Distribution of those amounts may only
occur upon death of the participant, attainment of age 59-1/2, separation from
service, total and permanent disability, or financial hardship. In addition,
income attributable to salary reduction contributions may not be distributed in
the case of hardship.

INDIVIDUAL RETIREMENT ANNUITIES AND
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(b) of the Code permits eligible individuals to contribute to
an individual retirement program known as a traditional Individual Retirement
Annuity, hereinafter referred to as an "IRA." Also, distributions from certain
other types of qualified plans may be "rolled over" on a tax-deferred basis into
an IRA. Employers may establish Simplified Employee Pension (SEP) Plans and
contribute to an IRA owned by the employee. Purchasers of a Qualified Contract
for use with IRAs will be provided with supplemental information required by the
Internal Revenue Service. Purchasers should seek competent advice as to the
suitability of the Contract for use with IRAs.

Section 408A of the Code permits eligible individuals to contribute to a
Roth IRA on an after-tax (non-deductible) basis.

Distributions from other types of qualified plans are not permitted to be
transferred or rolled over to a Roth IRA. A Roth IRA can accept
transfers/rollovers only from an IRA, subject to ordinary income tax, or from
another Roth IRA.

WITHHOLDING
Pension and annuity distributions generally are subject to withholding for
the recipient's federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients may be provided
the opportunity to elect not to have tax withheld from distributions; however,
certain distributions from Section 401(a) Plans and Section 403(b) tax-deferred
annuities are subject to mandatory 20% federal income tax withholding. If the
recipient is a non-resident alien, any withholding will be governed by Code
Section 1441 based on the individual's citizenship, the country of domicile and
treaty status. We will report to the IRS the taxable portion of all
distributions.

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<PAGE>

MISCELLANEOUS
================================================================================

DISTRIBUTION

Aetna Life Insurance and Annuity Company ("ALIAC") will serve as the
principal underwriter for the securities sold by this Prospectus. ALIAC is
registered as a broker-dealer with the Securities and Exchange Commission
("SEC") and is a member of the National Association of Securities Dealers, Inc.
("NASD"). As principal underwriter, ALIAC will contract with one or more
registered broker-dealers, or with banks that may be acting as broker-dealers
without separate registration under the Securities Exchange Act of 1934 pursuant
to legal and regulatory exceptions ("Distributors") to offer and sell the
Contracts. ALIAC and one or more of its affiliates may also sell the Contracts
directly. All individuals offering and selling the Contracts must either be
registered representatives of a broker-dealer, or employees of a bank exempt
from registration under the Securities Exchange Act of 1934, and must also be
licensed as insurance agents to sell variable annuity contracts.

From time to time, ALIAC may offer customers of certain broker-dealers
special guaranteed rates in connection with the Guaranteed Account offered
through the Contracts, and may negotiate different commissions for these
broker-dealers.

ALIAC may also contract with independent third party broker-dealers who
will act as wholesalers by assisting ALIAC in finding broker-dealers or banks
interested in acting as Distributors for the Contracts. These wholesalers may
also provide training, marketing and other sales related functions for ALIAC and
other Distributors and may provide certain administrative services to ALIAC in
connection with the Contracts. ALIAC may pay such wholesalers compensation based
on Purchase Payments for the Contracts purchased through Distributors selected
by the wholesaler.

ALIAC may also designate third parties to provide services in connection
with the Contracts such as reviewing applications for completeness and
compliance with insurance requirements and providing the Distributors with
approved marketing material, prospectuses or other supplies. These parties will
also receive payments based on Purchase Payments for their services, to the
extent such payments are allowed by applicable securities laws. All costs and
expenses related to these services will be paid by ALIAC.

Payment of Commissions. Commissions will be paid to Distributors who sell
the Contracts. Distributors will be paid commissions up to an amount currently
equal to 6.5% of Purchase Payments. Pursuant to agreements between the
Underwriter and the Distributor, commissions may be paid as a combination of a
certain percentage amount at the time of sale and a trail commission of up to
0.40% of assets due to Purchase Payments (which, when combined, could exceed
6.5% of Purchase Payments). At times the Company may offer certain Distributors
an enhanced commission for a limited period of time. In addition, some sales
personnel may receive various types of non-cash compensation such as special
sales incentives, including trips and educational and/or business seminars.
Supervisory and other management personnel of the Company may receive
compensation that will vary based on the relative profitability to the Company
of the funding options you select. Funding options that invest in Funds advised
by the Company or its affiliates are generally more profitable to the Company.

Other than the mortality and expense risk charge and the administrative
charge, all expenses incurred in the operations of the Separate Account are
borne by the Company.

DELAY OR SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of payment
for any benefit or values (a) on any Valuation Date on which the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings) or when trading on the Exchange is restricted; (b) when an emergency
exists, as determined by the SEC, so that disposal of securities held in the
Subaccounts is not reasonably practicable or it is not reasonably practicable
for the Company fairly to determine the value of the Subaccount's assets; or (c)
during such other periods as the SEC may by order permit for the protection of
investors. The conditions under which restricted trading or an emergency exists
shall be determined by the rules and regulations of the SEC.

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22
<PAGE>

returns" of the Subaccounts, calculated in a manner prescribed by the SEC, as
well as the "non-standardized returns." "Standardized average annual total
returns" are computed according to a formula in which a hypothetical investment
of $1,000 is applied to the Subaccount and then related to the ending
redeemable values over the most recent one, five and ten-year periods (or since
contributions were first received in the Fund under the Separate Account, if
less than the full period). Standardized returns will reflect the reduction of
all recurring charges during each period (e.g., mortality and expense risk
charges, annual maintenance fees, administrative charge and any applicable
deferred sales charge). "Non-standardized returns" will be calculated in a
similar manner, except that non-standardized figures will not reflect the
deduction of any applicable deferred sales charge (which would decrease the
level of performance shown if reflected in these calculations). The
non-standardized figures may also include monthly, quarterly, year-to-date and
three-year periods and may include performance from the Fund's inception date.

The Company may also advertise certain ratings, rankings or other
information related to the Company, the Subaccounts or the Funds. Further
details regarding performance reporting and advertising are described in the
Statement of Additional Information.

VOTING RIGHTS
Each Contract Holder may direct us in the voting of shares at
shareholders' meetings of the appropriate Funds(s). The number of votes to which
each Contract Holder may give direction will be determined as of the record
date. The number of votes each Contract Holder is entitled to direct with
respect to a particular Fund during the Accumulation Period equals the portion
of the Account Values(s) of the Contract attributable to that Fund, divided by
the net asset value of one share of that Fund. During the Annuity Period, the
number of votes is equal to the valuation reserve for the portion of the
Contract attributable to that Fund, divided by the net asset value of one share
of that Fund. In determining the number of votes, fractional votes will be
recognized. Where the value of the Contract or valuation reserve relates to more
than one Fund, the calculation of votes will be performed separately for each
Fund.

If you are a Certificate Holder under a group Contract, you have a fully
vested (100%) interest in the benefits provided to you under your Account.
Therefore, you may instruct the group Contract Holder how to direct the Company
to cast the votes for the portion or the value of valuation reserve attributable
to your Account. Votes attributable to those Certificate Holders who do not
instruct the group Contract Holder will be cast by the Company in the same
proportion as votes for which instructions have been received by the group
Contract Holder. Votes attributable to individual or group Contract Holders who
do not direct us will be cast by us in the same proportion as votes for which
directions we have received.

You will receive a notice of each meeting of shareholders, together with
any proxy solicitation materials, and a statement of the number of votes
attributable to your Account.

MODIFICATION OF THE CONTRACT
The Company may change the Contract as required by federal or state law.
In addition, the Company may, upon 30 days written notice to the Contract
Holder, make other changes to group Contracts that would apply only to
individuals who become Certificate Holders under that Contract after the
effective date of such changes. If the Contract Holder does not agree to a
change, the Company reserves the right to refuse to establish new Accounts under
the Contract. Certain changes will require the approval of appropriate state or
federal regulatory authorities.

TRANSFERS OF OWNERSHIP; ASSIGNMENT
Assignments or transfers of ownership of a Qualified Contract generally
are not allowed except as permitted under the Code, incident to a divorce. The
prohibition does not apply to a Qualified Contract sold in conjunction with (1)
a Section 457 deferred compensation plan, or (2) a Section 401(a) plan where the
Contract is owned by a trustee. We will accept assignments or transfers of
ownership of a Nonqualified Contract or a Qualified Contract where assignments
or transfers of ownership are not prohibited, with proper notification. The date
of any such transfer will be the date we receive the notification at our Home
Office. (Refer to "Tax Status" for general tax information.) If you are
contemplating a transfer of ownership or assignment you should consult a tax
adviser due to the potential for tax liability.

No assignment of a Contract will be binding on us unless made in writing
and sent to us at our Home Office. The Company will use reasonable procedures to

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<PAGE>

confirm that the assignment is authentic, including verification of signature.
If the Company fails to follow its procedures, it would be liable for any
losses to you directly resulting from the failure. Otherwise, we are not
responsible for the validity of any assignment. The rights of the Certificate
Holder and the interest of the Annuitant and any Beneficiary will be subject to
the rights of any assignee of record.

INVOLUNTARY TERMINATIONS
We reserve the right to terminate any Account with a value of $2,500 or
less immediately following a partial withdrawal (unless otherwise required by
State law). However, an Individual Retirement Annuity may only be closed out
when Purchase Payments have not been received for a 24-month period and the
paid-up annuity benefit at maturity would be less than $20 per month. If such
right is exercised, you will be given 90 days advance written notice. No
deferred sales charge will be deducted for involuntary terminations. The Company
does not intend to exercise this right in cases where the Account Value is
reduced to $2,500 or less solely due to investment performance.

LEGAL MATTERS AND PROCEEDINGS
The Company knows of no material legal proceedings pending to which the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The validity of the securities offered by this Prospectus has
been passed upon by Counsel to the Company.

YEAR 2000
As a healthcare and financial services enterprise, Aetna Inc. (referred to
collectively with its affiliates and subsidiaries as Aetna), is dependent on
computer systems and applications to conduct its business. Aetna has developed
and is currently executing a comprehensive risk-based plan designed to make its
computer systems, applications and facilities Year 2000 ready. The plan covers
four stages including (i) inventory, (ii) assessment, (iii) remediation and (iv)
testing and certification. At year end 1997, Aetna , including the Company, had
substantially completed the inventory and assessment stages. The remediation
process is currently underway and targeted for completion by December 31, 1998.
Testing and certification of these systems and applications are targeted for
completion by mid-1999. The costs of these efforts will not affect the Separate
Account.

The Company, its affiliates and the mutual funds that serve as investment
options for the Separate Account also have relationships with investment
advisers, broker dealers, transfer agents, custodians or other securities
industry participants or other service providers that are not affiliated with
Aetna. Aetna, including the Company, is initiating communication with its
critical external relationships to determine the extent to which Aetna may be
vulnerable to such parties' failure to resolve their own Year 2000 issues. Where
practicable Aetna and the Company will assess and attempt to mitigate their
risks with respect to the failure of these parties' to be Year 2000 ready. There
can be no assurance that failure of third parties to complete adequate
preparations in a timely manner, and any resulting systems interruptions or
other consequences, would not have an adverse effect, directly or indirectly, on
the Separate Account, including, without limitation, its operation or the
valuation of its assets and units.

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CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
================================================================================

The Statement of Additional Information contains more specific information
on the Separate Account and the Contract, as well as the financial statements
of the Separate Account and the Company. A list of the contents of the SAI is
set forth below:

General Information and History
Variable Annuity Account I
Offering and Purchase of Contracts
Performance Data
General
Average Annual Total Return Quotations
Annuity Payments
Sales Material and Advertising
Independent Auditors
Financial Statements of the Separate Account
Financial Statements of the Company

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APPENDIX A

AICA GUARANTEED ACCOUNT
================================================================================

The AICA Guaranteed Account (the "Guaranteed Account") is a credited
interest option available during the Accumulation Period under the Contracts.
This Appendix is a summary of the Guaranteed Account and is not intended to
replace the Guaranteed Account prospectus. You should read the accompanying
Guaranteed Account prospectus carefully before investing.

The Guaranteed Account is a credited interest option in which we guarantee
stipulated rates of interest for stated periods of time on amounts directed to
the Guaranteed Account. A guaranteed rate is credited for the full term. The
interest rate stipulated is an annual effective yield; that is, it reflects a
full year's interest. Interest is credited daily at a rate that will provide the
guaranteed annual effective yield for one year. Guaranteed interest rates will
never be less than an annual effective rate of 3%.

During a deposit period, amounts may be applied to any of the available
guaranteed terms. A Guaranteed Term is the period of time specified by the
Company for which a specific Guaranteed Rate or Rates are offered on amounts
invested during a specific Deposit Period. Guaranteed Terms are made available
by the Company subject to the Company's terms and conditions. The Company may
offer more than one Guaranteed Term of the same duration and credit one with a
higher rate contingent upon use only with the Dollar Cost Averaging Program. If
amounts are applied to a Guaranteed Term which is credited with a higher rate
using dollar cost averaging and the dollar cost averaging is discontinued, the
amounts will be transferred to another Guaranteed Term of the same duration and
a market value adjustment ("MVA") will apply. The Company also reserves the
right to limit the number of Guaranteed Terms or the availability of certain
Guaranteed Terms. See the prospectus for the Guaranteed Account for further
details regarding Guaranteed Term. Purchase Payments received after the initial
payment will be allocated in the same proportions as the last allocation, if no
new allocation instructions are received with the Purchase Payment. If the same
guaranteed term(s) are not available, the next shortest term will be used. If no
shorter guaranteed term is available, the next longer guaranteed term will be
used.

Except for transfers from an available Guaranteed Term subject to the
Company's terms and conditions in connection with the Dollar Cost Averaging
Program, withdrawals taken in connection with an Estate Conservation or
Systematic Withdrawal distribution option, and, if approved by your state,
withdrawals for minimum distributions required by the Code for which the
deferred sales charge is waived, withdrawals or transfers from a guaranteed term
before the guaranteed term matures may be subject to an MVA. An MVA reflects the
change in the value of the investment due to changes in interest rates since the
date of deposit. When interest rates increase after the date of deposit, the
value of the investment decreases, and the MVA is negative. Conversely, when
interest rates decrease after the date of deposit, the value of the investment
increases, and the MVA is positive. It is possible that a negative MVA could
result in the Certificate Holder receiving an amount which is less than the
amount paid into the Guaranteed Account.

For partial withdrawals during the Accumulation Period, amounts to be
withdrawn from the Guaranteed Account will be withdrawn on a pro rata basis from
each group of deposits having the same length of time until the Maturity Date
("Guaranteed Term Group"). Within a Guaranteed Term Group, the amount will be
withdrawn first from the oldest Deposit Period, then from the next oldest, and
so on until the amount requested is satisfied.

As a Guaranteed Term matures, assets accumulating under the Guaranteed
Account may be (a) transferred to a new Guaranteed Term, (b) transferred to
other available investment options, or (c) withdrawn. Amounts withdrawn may be
subject to a deferred sales charge. If no direction is received by the Company
at its Home Office by the maturity date of a guaranteed term, the amount from
the maturing guaranteed term will be transferred to the current deposit period
for a similar length guaranteed term. If the same guaranteed term is no longer
available the next shortest guaranteed term available in the current deposit
period will be used. If no shorter guaranteed term is available, the next longer
guaranteed term will be used.

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<PAGE>

If you do not provide instructions concerning the maturity value of a
maturing guaranteed term, the maturity value transfer provision applies. This
provision allows you to transfer without an MVA to available guaranteed terms of
the current deposit period or to other available investment options, or
surrender without an MVA (if applicable, a deferred sales charge is assessed on
the surrendered amount). The provision is available only during the calendar
month immediately following a guaranteed term maturity date and only applies to
the first transaction regardless of the amount involved in the transaction.

MORTALITY AND EXPENSE RISK CHARGES
We make no deductions from the credited interest rate for mortality and
expense risks; these risks are considered in determining the credited rate.

TRANSFERS
Amounts applied to a guaranteed term during a deposit period may not be
transferred to any other funding option or to another guaranteed term during
that deposit period or for 90 days after the close of that deposit period. This
does not apply to (1) amounts transferred on the Maturity Date or under the
maturity value transfer provision; (2) amounts transferred from the Guaranteed
Account before the Maturity Date due to the election of an Annuity Option; (3)
amounts distributed under the Estate Conservation or Systematic Withdrawal
Options; and (4) amounts transferred from an available Guaranteed Term in
connection with the Dollar Cost Averaging Program. However, if the Certificate
Holder discontinues the Dollar Cost Averaging Program and the amounts in it are
transferred in accordance with the Company's terms and conditions governing
Guaranteed Terms, an MVA will apply. Transfers after the 90-day period are
permitted from guaranteed term(s) to other guaranteed term(s) available during a
deposit period or to other available investment options. Except for transactions
described in items (1), (3) and (4) above, amounts withdrawn or transferred from
the Guaranteed Account prior to the maturity date will be subject to an MVA.
However, only a positive aggregate MVA will be applied to transfers made due to
annuitization under one of the lifetime Annuity Options described in item (2)
above.

The Company reserves the right to limit the number of investment options
selected during the Accumulation Period. At this time there is no limit on the
number of options selected during the Accumulation Period, but the number of
investment options that may be selected at any one time by a Certificate Holder
presently is limited to 18. Under the Guaranteed Account, each guaranteed term
is counted as one funding option. If a guaranteed term matures, and is renewed
for the same term, it will not count as an additional investment option.

Transfers of the Guaranteed Account values on or within one calendar month
of a term's maturity date are not counted as one of the 12 free transfers of
accumulated values in the Account.

By notifying us at least 30 days prior to the Annuity Date, you may elect a
variable annuity and have amounts that have been accumulating under the
Guaranteed Account transferred to one or more of the Subaccounts available
during the Annuity Period. The Guaranteed Account cannot be used as an
investment option during the Annuity Period. Transfers made due to the election
of a lifetime Annuity Option will be subject to only a positive aggregate MVA.

DEATH BENEFIT
Full and partial withdrawals and transfers made from the Guaranteed
Account within six months after the date of the Annuitant's death will be the
greater of:

(1) the aggregate MVA amount (i.e., the sum of all market value adjusted
amounts calculated due to a withdrawal of amounts) which may be greater or
less than the Account Value of those amounts; or

(2) the applicable portion of the Account Value attributable to the Guaranteed
Account.

After the six-month period, the surrender or transfer amount will be
adjusted for the aggregate MVA amount, which may be greater or less than the
Account Value of those amounts.

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<PAGE>

DISTRIBUTION
Aetna Life Insurance and Annuity Company ("ALIAC") is the principal
underwriter of the Contract. ALIAC is registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 as a broker-
dealer, and is a member of the National Association of Securities Dealers, Inc.

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<PAGE>

APPENDIX B

FIXED ACCOUNT
================================================================================

The Fixed Account is an investment option available during the Accumulation
Period under Contracts offered in certain states. The following summarizes
material information concerning the Fixed Account that is offered as an option
under the Contract. Additional information may be found in your Contract.
Amounts allocated to the Fixed Account are held in the Company's general account
that supports insurance and annuity obligations. Interests in the Fixed Account
have not been registered with the SEC in reliance on exemptions under the
Securities Act of 1933, as amended. Disclosure in this prospectus regarding the
Fixed Account, however, may be subject to certain generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of the statements. Disclosure in this Appendix regarding the Fixed
Account has not been reviewed by the SEC.

FIXED ACCOUNT
Amounts allocated to this option will earn the minimum guaranteed interest
rate specified in the Contract. The Company may credit a higher interest rate
from time to time. The Company's determination of interest rates reflects the
investment income earned on invested assets and the amortization of any capital
gains and/or losses realized on the sale of invested assets. Under this option,
the Company assumes the risk of investment gain or loss by guaranteeing Net
Purchase Payment values and promising a minimum interest rate and Annuity
payment.

Amounts applied to the Fixed Account will earn the interest rate in effect
when actually applied to the Fixed Account. The Fixed Account is only available
in certain states. If a withdrawal is made from the Fixed Account, a deferred
sales charge may apply. Amounts allocated to the Fixed Account will count as an
option for purposes of the 18 investment option limit. (See "Investment
Options.")

DOLLAR COST AVERAGING
Amounts invested in the Fixed Account must be transferred into the other
investment options available under the Contract over a period not to exceed 12
months under the Dollar Cost Averaging Program. In the event a Certificate
Holder discontinues dollar cost averaging, the remaining balance amounts in the
Fixed Account will be transferred into the Aetna Money Market VP Subaccount
unless directed otherwise.

MORTALITY AND EXPENSE RISK CHARGES
The Fixed Account will reflect a compound interest rate credited by the
Company. The interest rate quoted is an annual effective yield. The Company
makes no deductions from the credited interest rate for mortality and expense
risks; these risks are considered in determining the credited rate.

TRANSFERS AMONG INVESTMENT OPTIONS
Transfers from the Fixed Account to any other available investment option
under the Contract are allowed in each calendar year during the Accumulation
Period. The amount which may be transferred may vary at the Company's
discretion; however, it will never be less than 10% of the amount held under the
Fixed Account.

By giving notice to the Company at its Home Office at least 30 days before
Annuity payments begin, the Certificate Holder may elect to have amounts which
have been accumulated under the Fixed Account transferred to one or more of the
investment options available during the Annuity Period to provide variable
Annuity payments.

Under certain emergency conditions, we may defer payment of a Fixed Account
withdrawal value (a) for a period of up to six months, or (b) as allow provided
by federal law.

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<PAGE>

APPENDIX C

DESCRIPTION OF UNDERLYING FUNDS
================================================================================

The investment results of the Funds described below are likely to differ
significantly and there is no assurance that any of the Funds will achieve their
respective investment objectives. Except where otherwise noted, all of the Funds
are diversified, as defined in the 1940 Act.

Aetna Balanced VP, Inc. (formerly Aetna Investment Advisers Fund, Inc.)

Investment Objective
Seeks to maximize investment return, consistent with reasonable safety of
principal by investing in a diversified portfolio of one or more of the
following asset classes: stocks, bonds, and cash equivalents, based on the
investment adviser's judgment of which of those sectors or mix thereof offers
the best investment prospects.

Policies
Assets are allocated among common and preferred stocks, bonds, U.S.
Government securities and derivatives, and money market instruments. The Fund
may also invest in when-issued or delayed-delivery securities. The Fund
generally will maintain at least 25 percent of its total assets in fixed income
securities.

Risks
There can be no assurance that the investment adviser will always allocate
assets to the best performing sectors. The Fund's performance would suffer if a
major proportion of its assets were allocated to stocks in a declining market
or, similarly, if a major portion of its assets were allocated to bonds in a
time of adverse interest rate movement. High -yield bonds involve additional
investment risk. Foreign securities may involve certain additional risks. Such
risks include: currency fluctuations and related currency conversion costs; less
liquidity; price or income volatility; less government supervision and
regulation of foreign stock exchanges, brokers and listed companies; adverse
foreign political and economic developments; different accounting procedures and
auditing standards; and less publicly available information about foreign
issuers.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Income Shares d/b/a Aetna Bond VP

Investment Objective
Seeks to maximize total return, consistent with reasonable risk, through
investments in a diversified portfolio consisting primarily of debt securities.

Policies
The Fund will invest at least 65 percent of its total assets in debt
securities. It is anticipated that the portfolio's effective average maturity
will normally be between three and ten years. The Fund will normally invest at
least 70 percent of its assets in one or more of the following: a) debt
securities or obligations that are rated at the time of purchase within the four
highest categories assigned by Moody's Investors Service, Inc., Standard &
Poor's Corporation, or other rating agencies, or, if not rated, that are
considered by the investment adviser to be of comparable quality; b) securities
of, or guaranteed by, the U.S. Government, its agencies or instrumentalities; c)
marketable securities or obligations of, or guaranteed by, foreign governments;
d) commercial paper and other short-term investments having a maturity of less
than one year that are considered by the investment adviser to be investment
grade; and, e) cash or cash equivalents. May invest up to 30 percent of its
total assets in high-yield bonds. May invest up to 25 percent of its total
assets in foreign debt and/or equity securities.

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<PAGE>

Risks
The value of debt securities may be affected by changes in general interest
rates. High-yield bonds tend to offer higher yields than investment-grade bonds,
but additional risks are associated with them. Foreign securities may involve
certain additional risks. Such risks include: currency fluctuations and related
currency conversion costs; less liquidity; price or income volatility; less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies; adverse foreign political and economic developments; different
accounting procedures and auditing standards; and less publicly available
information about foreign issuers.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Fund d/b/a Aetna Growth and Income VP

Investment Objective
Seeks to maximize total return through investments in a diversified
portfolio of common stocks and securities convertible into common stock. It is
anticipated that capital appreciation and investment income will both be major
factors in achieving total return.

Policies
The Fund will invest principally in common stocks and securities
convertible into common stock that the investment adviser believes have
significant potential for capital appreciation and/or investment income. May
invest up to 25 percent of its total assets in foreign equity securities. The
Fund may invest in nonconvertible preferred stocks, debt securities, rights and
warrants; the Fund may maintain a reserve of cash and high-grade, short-term
debt securities and the Fund may purchase securities on a when-issued or
delayed-delivery basis.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Foreign
securities may involve certain additional risks. Such risks include: currency
fluctuations and related currency conversion costs; less liquidity; price or
income volatility; less government supervision and regulation of foreign stock
exchanges, brokers and listed companies; adverse foreign political and economic
developments; different accounting procedures and auditing standards; and less
publicly available information about foreign issuers.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Encore Fund d/b/a Aetna Money Market VP

Investment Objective
Seeks to provide high current return, consistent with preservation of
capital and liquidity, through investment in high-quality money market
instruments.

Policies
The Fund will Invest primarily in: a) money market instruments that have a
maturity at the time of purchase, of 397 days or less (762 days or less for U.S.
government securities), and b) debt securities with a longer maturity, if the
Fund has the absolute right to sell such securities back to the issuer for at
least the face amount of the debt obligation within 397 days after the date of
purchase. At least 95 percent of total Fund assets are invested in high- quality
securities (those receiving the highest credit rating by any two rating agencies
or one if only one agency has rated the security). May invest up to 25 percent
of its total assets in foreign securities.

Risks
Yield will fluctuate with interest rates. The Fund is neither insured nor
guaranteed by the U.S. government. Foreign securities may involve certain
additional risks. Such risks include: currency fluctuations and related
currency conversion costs; less liquidity; price or income volatility; less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies; adverse foreign political and economic developments;
different accounting procedures and auditing standards; and less publicly
available information about foreign issuers.

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<PAGE>

An investment in the Fund is neither insured nor guaranteed by the U.S.
Government.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Generation Portfolios, Inc.--Aetna Ascent VP (formerly Aetna Ascent
Variable Portfolio)

Investment Objective
Seeks to provide capital appreciation. The Portfolio is designed for
investors who have an investment horizon exceeding 15 years and who have a high
level of risk tolerance.

Policies
Invests assets within specified maximum percentage ranges and adjusts the
allocation mix in response to market trends and indicators:

[bullet] Equity securities are chosen on the basis of their potential for
capital appreciation.

[bullet] Fixed income securities may include obligations of the U.S. and
foreign governments as well as obligations of corporations and
high-yield bonds.

[bullet] Money market investments are high quality and present minimal
credit risk.

The benchmark portfolio is 80 percent equities and 20 percent fixed income
under neutral market conditions.

Risks
Equity securities are subject to a decline in the stock market or in the
value of the company, while debt securities may be affected by changes in
general interest rates and in the creditworthiness of the issuer. High-yield
bonds have additional credit risks, including lack of liquidity, greater
likelihood of default and increased sensitivity to difficult economic and
corporate developments.

Foreign securities involve currency and other special risks not present in
domestic securities. Real estate securities may be subject to the same risks
associated with direct ownership of real estate.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Generation Portfolios, Inc.--Aetna Crossroads VP (formerly Aetna
Crossroads Variable Portfolio)

Investment Objective
Seeks to provide total return (i.e., income and capital appreciation, both
realized and unrealized). The Portfolio is designed for investors who have an
investment horizon exceeding ten years and who have a moderate level of risk
tolerance.

Policies
Invests assets within specified maximum percentage ranges and adjusts the
allocation mix in response to market trends and indicators:

[bullet] Equity securities are chosen on the basis of their potential for
capital appreciation.

[bullet] Fixed income securities may include obligations of the U.S. and
foreign governments as well as obligations of corporations and
high-yield bonds.

[bullet] Money market investments are high quality and present minimal
credit risk.

The benchmark portfolio is 60 percent equities and 40 percent fixed income
under neutral market conditions.

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<PAGE>

additional credit risks. International securities involve currency and other
special risks not present in domestic securities. Real estate securities may be
subject to the same risks associated with direct ownership of real estate.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Generation Portfolios, Inc.--Aetna Legacy VP (formerly Aetna Legacy
Variable Portfolio)

Investment Objective
Seeks to provide total return consistent with preservation of capital. The
Portfolio is designed for investors who have an investment horizon exceeding
five years and who have a low level of risk tolerance.

Policies
Invests assets within specified maximum percentage ranges and adjusts the
allocation mix in response to market trends and indicators:

[bullet] Equity securities are chosen on the basis of their potential for
capital appreciation.

[bullet] Fixed income securities may include obligations of the U.S. and
foreign governments as well as obligations of corporations and
high-yield bonds.

[bullet] Money market investments are high-quality and present minimal
credit risk.

The benchmark portfolio is 40 percent equities and 60 percent fixed income
under neutral market conditions.

Risks
Equity securities are subject to a decline in the stock market or value of
the issuer; debt securities may be affected by changes in general interest
rates and creditworthiness of the issuer. High-yield bonds have additional
credit risks. International securities involve currency and other special risks
not present in domestic securities. Real estate securities may be subject to
the same risks associated with direct ownership of real estate.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Portfolios, Inc.--Aetna Growth VP (formerly Aetna Variable
Growth Portfolio)

Investment Objective
Seeks growth of capital through investment in a diversified portfolio of
common stocks and securities convertible into common stocks believed to offer
growth potential.

Policies
Normally invests at least 65 percent of its total assets in common stocks
that have significant potential for capital growth. May also invest in
convertible and nonconvertible preferred stocks. May buy and sell put and call
options, and stock index futures and options. May enter into repurchase
agreements and invest up to 25 percent of its total assets in foreign
securities. Will not invest more than 15 percent of the total value of its
assets in high-yield bonds.

Risks
Equity securities are subject to a decline in the stock market or in the
value of the company and preferred stocks have price risk and some interest
rate and credit risk. Foreign investing involves certain additional risks not
present in U.S. securities. Such risks may include: currency fluctuations and
related currency conversion costs: less liquidity; price or income volatility;
less government supervision and regulation of foreign stock exchanges, brokers
and listed companies; adverse foreign political and economic developments;
different accounting procedures and auditing standards; and less publicly
available information about foreign issuers. High-yield bonds may provide a
higher return, but have added risk. Derivatives may experience greater price
swings and may be less liquid than other securities.

Investment Adviser: Aeltus Investment Management, Inc.

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Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP (formerly
Aetna Variable Index Plus Portfolio)

Investment Objective
Seeks to outperform the total return performance of publicly traded common
stocks represented in the Standard & Poor's 500 Composite Stock Price Index
(S&P 500).

Policies
The Portfolio attempts to be fully invested in common stocks and normally
invests at least 90 percent of its assets in certain common stocks represented
in the S&P 500. Portfolio managers will attempt to outperform the S&P 500 by
creating a portfolio that has similar market risk characteristics to the S&P
500, but will use a disciplined quantitative analysis to identify those stocks
having the greatest likelihood of either outperforming or underperforming the
market.

Risks
Because the Portfolio invests in common stocks, it is subject to the
possibility that common stock prices will decline over short or even extended
periods. The U.S. stock market tends to be cyclical, with periods when stock
prices generally rise and periods when prices generally decline. There is no
assurance that the Portfolio's objectives will be met.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Portfolios, Inc.--Aetna International VP

Investment objective
Seeks long-term capital growth primarily though investment in a
diversified portfolio of common stocks principally traded in countries outside
of the United States. The Portfolio will not target any given level of current
income.

Policies
Invests at least 65 percent of its total assets among securities
principally traded in three or more countries outside of North America. The
Portfolio will invest primarily in equity securities, including securities
convertible into stocks. The Portfolio will invest in a broad spectrum of
companies and industries. Further, from time to time, the Portfolio may hold up
to 10 percent of its total assets in long-term debt securities with an S&P or
Moody's rating of AA/Aa or above, or, if unrated, are considered by the
investment adviser to be of comparable quality. Additionally, the Portfolio may
invest in options, futures, enter into repurchase agreements and engage in
currency hedging.

Risks
Equity securities are subject to a decline in the stock market or in the
value of the company. Investments in foreign securities involve certain
additional risks. Such risks may include: currency fluctuations and related
currency conversion costs; less liquidity; price or income volatility; less
government supervision and regulation of foreign stock exchanges, brokers and
listed companies; adverse foreign economic and political developments;
different accounting procedures and auditing standards; and less publicly
available information about foreign issuers. Derivatives may experience greater
price swings and may be less liquid than other securities.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Portfolios, Inc.--Aetna Real Estate Securities VP

Investment Objective
Seeks maximum total return primarily through investment in a diversified
portfolio of equity securities issued by real estate companies, the majority of
which are real estate investment trusts (REITs).

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<PAGE>

Policies
Normally invests at least 65 percent of total assets in income-producing
equity securities of publicly-traded companies "principally engaged" in the real
estate industry, including those companies that, at the time of purchase, derive
a significant proportion (at least 50 percent) of their revenues or profits from
real estate operations or related services. The Portfolio may invest in
convertible securities and preferred stock. Additionally, the Portfolio may
invest in options and futures, enter into repurchase agreements, and invest up
to 25 percent of its total assets in foreign securities. The Portfolio will not
invest more than 15 percent of the total value of its assets in high-yield
bonds.

Risks
There are a number of risk factors to be considered when investing in Real
Estate Securities VP. Derivatives may experience greater price swings than other
securities and may be less liquid than other securities. Risks involved in
futures contracts include, but are not limited to: transactions to close out
futures contracts may not be able to be effected at favorable prices; possible
reduction in a fund's total return and yield; possible reduction the value of
the futures instrument, and potential losses in excess of the amount invested in
the futures contracts themselves. Writing call options involves the risk of not
being able to effect closing transactions at favorable prices or to participate
in the appreciation of the underlying securities. Purchasing put options
involves the risk of losing the entire purchase price of the option. High-yield
bonds have additional risks associated with them, including but not limited to:
lack of liquidity; an unpredictable secondary market and a higher risk of
default. Special consideration to an investment in real estate include those
risks associated with the direct ownership of real estate: declines in the value
of real estate, risks related to general and local economic conditions,
over-building and increased competition, increases in property taxes and
operating expenses, changes in zoning laws and other risks particular to this
market. The value of securities of companies which service the real estate
industry may also be affected by such risks.

Investment Adviser: Aeltus Investment Management, Inc.

Aetna Variable Portfolios, Inc.--Aetna Small Company VP (formerly Aetna
Variable Small Company Portfolio)

Investment Objective
Seeks growth of capital primarily through investment in a diversified
portfolio of common stocks and securities convertible into common stocks of
companies with smaller market capitalizations.

Policies
Normally invests at least 65 percent of its total assets in the common
stock of companies with equity market capitalizations at the time of purchase of
$1 billion or less. May also invest in convertible and nonconvertible preferred
stock. The securities of small capitalization companies may be in an early
developmental stage or older companies entering a new stage of growth due to
management changes, new technology, products, or markets. Such companies may
also be undervalued due to poor economic conditions, market decline, or actual
or unanticipated unfavorable developments affecting the companies. May invest in
lower-risk derivatives for hedging and other investment purposes.

Risks
Equity securities are subject to a decline in the stock market or in the
value of the company. Although securities of small capitalization companies tend
to offer greater potential for growth than securities of larger, more
established issuers, there are additional risks associated with them. These
include: limited marketability, more abrupt or erratic market movements than
securities of larger capitalization companies, and less publicly available
information about the issuer. These companies may also be dependent on
relatively few products or services, have limited financial resources and lack
of management depth, and may have less of a track record or historical pattern
of performance. Derivatives may experience greater price swings and may be less
liquid than other securities.

Investment Adviser: Aeltus Investment Management, Inc.

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Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP
(formerly Aetna Variable Capital Appreciation Portfolio)

Investment Objective
Seeks growth of capital primarily through investment in a diversified
portfolio of common stocks and securities convertible into common stock.

Policies
Normally invests at least 65 percent of its net assets in common stocks.
May also invest in convertible and non-convertible preferred stocks. The
Portfolio will use a value oriented approach to stock selection. The Portfolio
may invest up to 25 percent of its total assets in foreign securities, buy and
sell put and call options on stock indices and on individual stocks, purchase
futures contracts, options contracts, engage in currency hedging and purchase
securities on a "when-issued," delayed-delivery or forward-commitment basis.

Risks
Equity securities are subject to a decline in the stock market or in the
value of the issuer, and preferred stocks have price risk and some interest
rate and credit risk. The value of debt securities may be affected by changes
in general interest rates and in the creditworthiness of the issuer.
Investments in securities of foreign issuers or securities denominated in
foreign currencies involve risks not present in domestic markets. Such risks
include: currency fluctuations and related currency conversion costs; less
liquidity; price or income volatility; less government supervision and
regulation of foreign stock exchanges, brokers and listed companies; adverse
foreign political and economic developments; different accounting procedures
and auditing standards; and less publicly available information about foreign
issuers.

Investment Adviser: Aeltus Investment Management, Inc.

Calvert Social Balanced Portfolio (formerly Calvert Responsibly
Invested Balanced Portfolio)

Investment Objective
Seeks to achieve a total return above the rate of inflation through an
actively managed, nondiversified portfolio of common and preferred stocks,
bonds and money market instruments which offer income and capital growth
opportunity and which satisfy the social criteria established for the
Portfolio.

Policies
The Portfolio may purchase both common and preferred stocks. Although
there is no predetermined percentage of assets allocated to stocks, bonds, or
money market instruments, the Portfolio will invest a least 25 percent of its
assets in senior fixed income securities. The Portfolio normally invests in
investment-grade bonds rated in one of the four highest rating categories by
Standard & Poor's Corporation or by Moody's Investors Service, Inc. or, if not
rated, that are determined by the Portfolio's investment adviser to be of
comparable quality. The Portfolio may invest up to 10 percent of its assets in
foreign securities.

Risks
Since the Portfolio is nondiversified, the value of the shares may be more
susceptible to any single economic, political, or regulatory event than the
shares of a diversified portfolio. Fixed income investments are subject to
interest rate risk. There are also risks involved in investing in foreign
securities. These include currency risks, less publicly available information
about foreign companies, different audit and financial reporting standards, and
less government supervision and regulation.

Investment Adviser: Calvert Asset Management Company, Inc.

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Fidelity Investments Variable Insurance Products Fund--Equity-Income Portfolio

Investment Objective
Seeks reasonable income by investing primarily in income-producing equity
securities. Also considers the potential for capital appreciation.

Policies
Seeks to achieve a yield that will beat that of the Standard & Poor's (S&P)
500 Index. The Portfolio normally invests at least 65 percent of its total
assets in income-producing equity securities. The Portfolio has the flexibility,
however, to invest the balance in all types of domestic and foreign securities,
including bonds. Portfolio managers do not expect to invest in debt securities
of companies that do not have proven earnings or credit.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. The value of
bonds fluctuates based on changes in interest rates and in the credit quality of
the issuer. Foreign securities, foreign currencies and securities issued by U.S.
entities with substantial foreign operations may involve additional risks. These
include political or economic risks, fluctuations in foreign currencies
withholding or other taxes, operational risks, increased regulatory burdens, and
less stringent investor protection and disclosure standards of foreign markets.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products Fund--Growth Portfolio

Investment Objective
Seeks capital appreciation by investing in common stock, although its
investments are not restricted to any one type of security.

Policies
The Portfolio may, however, pursue growth in larger companies that hold a
strong position in the market or industry. These may be found in mature or
declining industries. Companies that have strong growth potential often have new
products, technologies, distribution channels, or other opportunities.
Generally, these domestic and foreign companies tend to be small- and mid-sized
companies that have higher than average price/earnings (P/E) ratios. A high P/E
ratio means that the stock is more expensive than average relative to the
company's earnings. May not invest more than 50 percent of its assets in foreign
securities.

Risks
Stock values may fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. The market
prices of stocks with high P/E ratios may be particularly sensitive to economic
market or company news. Foreign securities, foreign currencies, and securities
issued by U.S. entities with substantial foreign operations may involve
additional risks. These include political or economic risks, fluctuations in
foreign currencies, withholding or other taxes, operational risks, increased
regulatory burdens, and less stringent investor protection and disclosure
standards of foreign markets.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products Fund--High Income Portfolio

Investment Objective
Seeks to obtain a high level of current income by investing primarily in
high-yielding, lower-rated, fixed income securities, while also considering
growth of capital.

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Policies
Invests primarily in all types of income-producing debt securities,
preferred stocks, and convertible securities. The Portfolio normally invests at
least 65 percent of its assets in these securities. If consistent with its
investment objectives, the Portfolio may also invest in common stocks, other
equity securities, and debt securities that are not currently paying interest
but that are expected to do so in the future. The Portfolio manager focuses on
assembling a portfolio of income-producing securities that it believes will
provide the best tradeoff between risk and return within the range of securities
that are eligible investments for the Portfolio. The Portfolio may invest up to
50 percent of its total assets in foreign securities.

Risks
Yield and share price change daily and are based on changes in interest
rates, market conditions, other economic and political news, and on the quality
and maturity of the Portfolio's investments. Lower quality debt securities (also
known as "junk bonds") are considered to have speculative characteristics and
involve greater risk of default or price changes. Foreign securities, foreign
currencies and securities issued by U.S. entities with substantial foreign
operations may involve additional risks. These include political or economic
risks, fluctuations in foreign currencies, withholding or other taxes,
operational risks, increased regulatory burdens, and less stringent investor
protection and disclosure standards of foreign markets.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products Fund--Overseas Portfolio

Investment Objective
Seeks long-term growth by investing mainly in foreign securities.

Policies
Normally invests at least 65 percent of the Portfolio's total assets in
securities of issuers whose principal activities are located outside the United
States. Expects to invest a majority of its assets in equity securities, but may
also invest in debt securities of any quality. Invests in securities of both
developed and emerging markets. May invest in the securities of any issuer,
including companies and other business organizations as well as governments and
government agencies. Will tend to focus on the equity securities of both large
and small companies. May invest in short-term debt securities and money market
instruments for cash management purposes. When allocating the Portfolio's
investments among countries and regions, the Portfolio managers consider the
size of the market in each country and region relative to the size of the
international market as a whole. May not invest more than 25 percent of its
total assets in any one industry.

Risks
Stock values fluctuate in response to the activities of individual
companies, and general market and economic conditions. International funds have
increased economic and political risks because they are exposed to events and
factors in the various world markets, especially in emerging markets. In
addition, changes in the value of foreign currencies can significantly affect
the Portfolio's share price. The Portfolio seeks to reduce investment risk by
diversifying its holdings among many companies and industries.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products
Fund II--Asset Manager Portfolio

Investment Objective
Seeks high total return with reduced risk over the long term by allocating
its assets among domestic and foreign stocks, bonds and short-term money market
instruments.

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Policies
Invests in a diverse range of stocks, bonds, short-term, and money market
instruments, issued in the United States and abroad. The stock class includes
equity securities of all types. The bond class includes all varieties of fixed
income instruments with maturities of more than three years. The short-term
instruments class includes all types of short-term instruments with remaining
maturities of three years or less. The Portfolio has a neutral mix which
represents the way investments generally will be allocated over the long term.
This mix will vary over short-term periods--within defined ranges--based on the
current outlook for the different markets. May invest up to 50 percent of its
total assets in foreign securities.

Risks
The Portfolio seeks to reduce its overall risk by diversifying among
different types of investments, but aggressively invests in a wide variety of
security types, including stocks and bonds issued in developed and developing
countries. Stock values fluctuate in response to the activities of individual
companies and general market and economic conditions. The value of bonds and
short-term instruments fluctuates based on changes in interest rates and in the
credit quality of the issuer. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products Fund II--Contrafund Portfolio

Investment Objective
Seeks maximum total return over the long term by investing mainly in
securities of companies whose value the investment adviser believes is not
fully recognized by the public.

Policies
Usually invests in common stock and securities convertible into common
stock, but may invest in any type of security that may produce capital
appreciation. Seeks companies that are: 1) unpopular, but that may improve due
to developments such as a change in management, a new product line, or an
improved balance sheet; or 2) recently popular, but temporarily out of favor
due to short-term or one-time factors; or, undervalued compared to other
companies in the same industry. May not invest more than 25 percent of its
total assets in any one industry.

Risks
Stock values may fluctuate in response to the activities of an individual
company or general market and economic conditions. The Portfolio's strategy can
lead to investments in small- and medium-sized companies, which carry more risk
than larger ones. Generally, such companies rely on limited product lines and
markets, financial resources or other factors. This may make them more
susceptible to downturns. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks. These include political or economic risks,
fluctuations in foreign currencies, withholding or other taxes, operational
risks, increased regulatory burdens, and less stringent investor protection and
disclosure standards of foreign markets. Seeks to manage risk by diversifying
its holdings among many companies and industries.

Investment Adviser: Fidelity Management & Research Company

Fidelity Investments Variable Insurance Products Fund II--Index 500 Portfolio

Investment Objective
Seeks to provide investment results that correspond to the total return of
common stocks publicly traded in the United States by duplicating the
composition and total return of the Standard & Poor's Composite Index of 500
Stocks (S&P 500).

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Policies
Normally invests at least 80 percent (65 percent if Portfolio assets are
below $20 million) of the Portfolio's assets in equity securities of companies
that comprise the S&P 500. In seeking a 98 percent or better long-term
correlation of the Portfolio's total return to that of the S&P 500, The
investment adviser employs a "passive" or "indexing" approach and tries to
allocate its assets similarly to those of the index. The Portfolio's composition
may not always be identical to that of the index. If extraordinary circumstances
warrant, the investment adviser may exclude a stock held in the S&P 500 and
include a similar stock in its place if doing so will help the Portfolio achieve
its objective. The investment adviser monitors the correlation between the
performance of the Portfolio and the S&P 500 on a regular basis. Although the
Portfolio focuses on common stocks, it may invest in other equity securities and
other types of instruments. The Portfolio may invest up to 50 percent of its
assets in foreign securities.

Risks
Stock values fluctuate in response to the activities of individual
companies, and general market and economic conditions. Foreign securities,
foreign currencies, and securities issued by U.S. entities with substantial
foreign operations may involve additional risks and considerations. These
include risks related to political or economic conditions in foreign countries,
fluctuations in foreign debt currencies, withholding or other taxes, operational
risks, increased regulatory burdens, and potentially less stringent investor
protection and disclosure standards of foreign markets.

Investment Adviser: Fidelity Management & Research Company; Subadviser:
Bankers Trust Company

Janus Aspen Series--Aggressive Growth Portfolio

Investment Objective
Seeks long-term growth of capital.

Policies
A nondiversified portfolio that invests primarily in common stocks of
foreign and domestic companies selected for their growth potential. Normally
invests at least 50 percent of its equity assets in securities issued by
medium-sized companies--those whose market capitalizations fall within the range
of companies in the Standard and Poor's (S&P) Mid Cap 400 Index. May invest, to
a lesser degree, in other types of securities including preferred stocks,
warrants, convertible securities, and debt securities. May invest up to 35
percent of its net assets in high-yield/high-risk debt securities ("junk
bonds"). May at times hold substantial positions in cash equivalents or
interest-bearing securities.

Risks
Stock values may fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Smaller or newer issuers are
more likely to realize more substantial growth as well as suffer more
significant losses than larger or more established issuers. Investments in such
companies can be both more volatile and more speculative. Investments in foreign
securities, including those of foreign governments, involve greater risks than
investing in comparable domestic securities. These risks include currency,
political, economic, regulatory, and market risk factors. High-yield/high-risk
securities are generally more dependent on the ability of the issuer to meet
interest and principal payments (i.e., credit risk). Issuers of high-yield
securities may not be as strong financially as those issuing bonds with higher
credit ratings. They are more vulnerable to real or perceived economic changes,
political changes or other adverse developments.

Investment Adviser: Janus Capital Corporation

Janus Aspen Series--Balanced Portfolio

Investment Objective
Seeks long-term capital growth, consistent with preservation of capital and
balanced by current income.

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Policies
Normally invests 40-60 percent of its assets in securities selected
primarily for their growth potential and 40-60 percent of its assets in
securities selected primarily for their income potential. Invests in common
stocks of domestic and foreign companies. May invest to a lesser degree in other
types of securities including preferred stocks, warrants, convertible
securities, and debt securities when the portfolio manager perceives an
opportunity for capital growth. Assets may shift between the growth and income
components of the Portfolio based on the portfolio manager's analysis of
relevant market financial and economic conditions. The portfolio manager
generally takes a "bottom up" approach to building the Portfolio, seeking to
identify individual companies with earnings growth potential that may not be
recognized by the market at large.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Investments
in foreign securities, including those of foreign governments, involve greater
risks than investing in comparable domestic securities. These risks include
currency, political, economic, regulatory and market risk factors. Risk is
reduced through diversification.

Investment Adviser: Janus Capital Corporation

Janus Aspen Series--Flexible Income Portfolio

Investment Objective
Seeks to obtain maximum total return, consistent with the preservation of
capital.

Policies
The Portfolio invests at least 80 percent of its assets in income-producing
securities which may include: corporate bonds and notes, preferred stock,
income-producing common stocks, debt securities convertible or exchangeable into
equity securities, and debt securities with the right to acquire equity
securities as evidenced by warrants attached to or acquired with the securities.
May invest to a lesser degree in common stocks, other equity securities, or debt
securities not currently paying dividends or interest. May purchase securities
of any maturity and quality. Average maturity and quality of its portfolio may
vary substantially. May invest without limit in foreign securities, including
those of corporate and government issuers, as well as in high-yield/high-risk
securities. May have substantial holdings of such securities, as well as in
high-yield/high-risk securities (or "junk bonds") which are debt securities
rated below investment grade by the primary rating agencies such as Standard &
Poor's and Moody's.

Risks
Foreign investing involves risks that are different in some respects from
investments in securities of U.S. issuers including: economic/political
volatility; less government regulation and supervision of foreign stock
exchanges, brokers and listed companies; and price, interest rate and currency
risk. The value of lower-quality securities generally depends more on the
ability of the issuer to meet interest and principal payments than is true for
higher-quality securities. Issuers of high-yield securities are more vulnerable
to real or perceived economic and political changes or adverse developments
specific to the issuer. In the event of a default, the Portfolio would
experience a reduction of its income and a decline in the market value of the
defaulted securities.

Investment Adviser: Janus Capital Corporation

Janus Aspen Series--Growth Portfolio

Investment Objective
Seeks long-term growth of capital in a manner consistent with the
preservation of capital.

Policies
Invests in common stocks of companies of any size, although it generally
invests in larger, more established issuers. Invests primarily in stocks of
domestic and foreign companies selected for their growth potential. May at times
hold substantial positions in cash equivalents or interest bearing securities.
May invest to a lesser degree in other

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types of securities including preferred stocks, warrants, convertible
securities, and debt securities when its portfolio manager perceives an
opportunity for capital growth. Using a "bottom up" approach to building the
Portfolio, the portfolio manager seeks to identify individual companies with
earnings growth potential that may not be recognized by the market at large.
Securities are generally selected without regard to any defined industry
sector. Securities are selected solely for their capital growth potential;
investment income is not a consideration.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Smaller or newer issuers are
more likely to realize more substantial growth as well as suffer more
significant losses than larger or more established issuers. Investments in such
companies can be both more volatile and more speculative. Investments in foreign
securities, including those of foreign governments, involve greater risks than
investing in comparable domestic securities. These risks include currency,
political, economic, regulatory and market risk factors. Risk is reduced through
diversification.

Investment Adviser: Janus Capital Corporation

Janus Aspen Series--Worldwide Growth Portfolio

Investment Objective
Seeks long-term growth of capital in a manner consistent with the
preservation of capital.

Policies
A diversified portfolio that invests primarily in common stocks of foreign
and domestic issuers. Invests worldwide in companies and organizations of any
size, regardless of country of organization or place of principal business
activity. Normally invests in issuers from at least five different countries,
including the United States. May at times invest in fewer than five countries or
even in a single country. May hold substantial positions in cash equivalents or
interest-bearing securities. May invest to a lesser degree in other types of
securities, including preferred stocks, warrants, convertible securities, and
debt securities, when the portfolio manager perceives an opportunity for growth.
May invest up to 35 percent of net assets in high-yield/high-risk securities
(also called "junk bonds"). May invest without limit in foreign equity and debt
securities.

Risks
Stock values may fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Investment in foreign
securities, including those of foreign governments, involve greater risks than
investing in comparable domestic securities. These include currency, political,
economic, regulatory and market risk factors. High-yield/high-risk securities
are generally more dependent on the ability of the issuer to meet interest and
principal payments (i.e., credit risk). Issuers of high-yield securities may not
be as strong financially as those issuing bonds with higher credit ratings. They
are more vulnerable to real or perceived economic changes, political changes or
other adverse developments.

Investment Adviser: Janus Capital Corporation

MFS Total Return Series

Investment Objective
Seeks to provide above average income (compared to a portfolio invested
entirely in equity securities) consistent with the prudent employment of
capital. Its secondary objective is to provide a reasonable opportunity for
growth of capital and income.

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Policies
Under normal market conditions, at least 25 percent of the Series' assets
will be invested in fixed income securities, and at least 40 percent (but no
more than 75 percent) of the Series' assets will be invested in equity
securities. The Series invests in a broad list of securities, including
short-term obligations. The list may be diversified not only by companies and
industries, but also by type of security. May vary the percentage of assets
invested in any one type of security depending on the Adviser's interpretation
of economic and money market conditions, fiscal and monetary policy, and
underlying security values. The Series debt investment may consist of both
investment grade securities and securities that are lower rated or unrated
categories (commonly known as "junk bonds"). May hold up to 20 percent of its
assets in foreign securities (including emerging market securities and Brady
Bonds) which are not traded on a U.S. exchange.

Risks
Investing in the securities of foreign issuers generally involves risks not
ordinarily associated with investing in securities of domestic issuers. These
include changes in currency rates, exchange control regulations, governmental
administration or economic or monetary policy (in the U.S. or abroad), or
circumstances in dealing between nations. Other considerations include limited
information about foreign issuers, higher brokerage costs, different accounting
standards, and thinner trading markets.

Investment Adviser: Massachusetts Financial Services Company ("MFS")

MFS World Governments Series

Investment Objective
Seeks not only preservation but also growth of capital, together with
moderate current income.

Policies
The Series seeks to achieve its investment objective through a
professionally managed, internationally diversified portfolio consisting
primarily in debt securities and, to a lesser extent, equity securities. Under
normal circumstances, the Series invests at least 80 percent of its assets in
debt securities. The Series may invest up to 100 percent (although it generally
expects to invest not more than 80 percent) of its net assets in foreign
securities. At least 65 percent of the Series' assets will be invested in at
least three different countries, one of which may be the U.S., except when the
Adviser believes that investing for temporary defensive purposes is appropriate.
U.S. assets will be invested in high-quality debt securities, and the remainder
of the assets will be diversified among countries where opportunities for total
return are expected to be most attractive. It is currently expected that
investments in foreign countries will be primarily in government securities to
minimize credit risks.

Risks
Investing in securities of foreign issuers generally involves risks not
ordinarily associated with investing in securities of domestic issuers. These
include changes in currency rates, exchange control regulations, governmental
administration or economic or monetary policy (in the U.S. or abroad), or
circumstances in dealing between nations. Other considerations include limited
information about foreign issuers, higher brokerage costs, different accounting
standards, and thinner trading markets.

Investment Adviser: Massachusetts Financial Services Company ("MFS")

Oppenheimer Aggressive Growth Fund
(formerly Oppenheimer Capital Appreciation Fund)

Investment Objective
Seeks to achieve capital appreciation by investing in "growth-type"
companies.

Policies
"Growth-type" 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. The Fund will invest no more

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than 25 percent of its total assets in foreign securities or in government
securities of any foreign country or in obligations of foreign banks.

Risks
Stock prices will fluctuate. Additional risk is present in growth-type
investments since the price of the security may decline if the anticipated
development fails to occur. Investing in small, unseasoned companies (those
that have been in operation for less than three years, counting the operations
of any predecessors) may have limited liquidity, and the prices of these
securities may be volatile. Foreign securities markets may be less liquid and
more volatile than markets in the U.S. Risks of foreign securities may include
foreign withholding taxation, changes in currency, less publicly available
information, and differences between domestic and foreign legal, auditing,
brokerage and economic standards.

Investment Adviser: OppenheimerFunds, Inc.

Oppenheimer Global Securities Fund

Investment Objective
Seeks long-term capital appreciation by investing a substantial portion of
its assets in securities of foreign issuers, "growth-type" companies, cyclical
industries and special situations which are considered to have appreciation
possibilities but which may be considered to be speculative.

Policies
Invests a substantial portion of its 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, and special investment situations which are
considered to have appreciation possibilities. May invest in foreign securities
and the relative amount of such investments will change from time to time.

Risks
Stock prices will fluctuate. Foreign securities markets may be less liquid
and more volatile than the markets in the U.S. Risks of foreign securities may
include foreign withholding taxation, changes in currency, less publicly
available information, and differences between domestic and foreign legal,
auditing brokerage and economic standards. Investments in small, unseasoned
companies (those that have been in operation for less than three years, counting
the operations of any predecessors) may have limited liquidity, and the prices
of these securities may be volatile.

Investment Adviser: OppenheimerFunds, Inc.

Oppenheimer Growth & Income Fund

Investment Objective
Seeks a high total return (which includes growth in the value of its
shares as well as current income) from equity and debt securities.

Policies
Invests primarily in equity and debt securities and focuses on all market
capitalization including small to medium capitalization companies. Equity
investments include common stocks, preferred stocks, convertible securities, and
warrants. Debt securities include bonds, participation interests, asset-backed
securities, private label mortgage backed securities and collateralized mortgage
obligations (CMOs), zero coupon securities, and U.S. Government obligations. The
proportion of equity and fixed income investments will vary based upon the
manager's evaluation of economic and market trends and perceived relative total
anticipated return from such types of investments. There is no minimum or
maximum percentage of assets that may, at any given time, be invested in either
type of investment. The Fund may invest in foreign securities without limit.

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Risks
Changes in overall market movements or interest rates, or factors affecting
a particular industry or issuer can affect the value of the Fund's 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; stocks with small- to
medium-size capitalization may fluctuate more than large capitalization stocks.
Foreign investments are subject to the risk of adverse currency fluctuation and
additional risks and expenses in comparison to U.S. investments.

Investment Adviser: OppenheimerFunds, Inc.

Oppenheimer Strategic Bond Fund

Investment Objective
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.

Policies
Invests principally in lower-rated, high-yield domestic debt securities
(commonly shown as "junk bonds"), U.S. Government securities, and 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 occasionally invest up to 100 percent of its total assets in any one
sector, if, in the manager's judgment, the Fund has the opportunity to seek 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's assets are shifted among the three sectors.

Risks
The higher yields and income sought by Strategic Bond Fund are generally
associated with securities in the lower-rating categories of the established
rating services. Such securities 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. Issuers of
lower-rated or unrated securities are generally not as financially secure or
creditworthy as issuers of higher-rated securities.

Investment Adviser: OppenheimerFunds, Inc.

Portfolio Partners MFS Emerging Equities Portfolio

Investment Objective
Seeks to provide long-term growth of capital. Dividend and interest income
from portfolio securities, if any, is incidental to the Portfolio's investment
objective.

Policies
Normally invests at least 80 percent of its assets in common stocks of
companies the subadviser believes are in an early phase of their life cycle, but
that have the potential to become major enterprises. Such companies would be
expected to show earnings growth over time well above the growth rate of the
overall economy and inflation and have the products, technologies, management
and market and other opportunities usually necessary to become more widely
recognized as growth companies. Emerging growth companies can be of any size.
The Portfolio may invest in larger or more established companies whose rates of
earnings growth are expected to accelerate because of special factors or basic
changes in the economic environment. Up to 25 percent of the Portfolio's net
assets may be invested in foreign issuers.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Investing in
emerging growth companies involves greater risk than is customarily associated
with investments in more established companies. Such companies may have limited
product lines, markets or

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financial resources and they may be dependent on one person's management. In
addition, there may be less research available on many promising small- and
medium-sized emerging growth companies, making it more difficult to find and
analyze these companies. The securities of these companies may have limited
marketability and may be subject to more abrupt or erratic market movements
than securities of larger, more established growth companies or the market
averages in general. Foreign investing involves risks that are different in
some respects from investments in the securities of U.S. issuers. Risks include
less availability of information about issuers or foreign markets, economic and
political volatility, and price, interest rate and currency risk.

Investment Adviser: Aetna Life Insurance and Annuity Company; Subadviser:
Massachusetts Financial Services Company

Portfolio Partners MFS Research Growth Portfolio

Investment Objective
Seeks long-term growth of capital and future income.

Policies
Invests at least 65 percent of its total assets in common stocks, or
securities convertible into common stocks, of companies believed to possess
better than average prospects for long-term growth. A smaller proportion of the
assets may be invested in bonds, short-term obligations, preferred stocks or
common stocks whose principal characteristic is income production rather than
growth. In the case of both growth stocks and income issues, emphasis is placed
on the selection of progressive, well-managed companies. The Portfolio may
invest up to 20 percent of its net assets in foreign securities, including
emerging market securities.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Investing in
securities of foreign issuers generally involves risks not ordinarily
associated with investing in securities of domestic issuers. These include less
availability of information about issuers or foreign markets, economic and
political volatility, and price, interest rate and currency risk.

Investment Adviser: Aetna Life Insurance and Annuity Company; Subadviser:
Massachusetts Financial Services Company

Portfolio Partners MFS Value Equity Portfolio

Investment Objectives
Seeks capital appreciation. Dividend income, if any, is a consideration
incidental to the Portfolio's objective of capital appreciation.

Policies
While the Portfolio's policy is to invest at least 65 percent of its total
assets in common stocks, it may seek appreciation other types of securities
(such as fixed-income, convertible bonds, convertible preferred stocks and
warrants) when relative values make such purchases appear attractive, either as
individual issues or as types of securities in certain economic environments.
The Portfolio may invest in high-yield fixed-income (below investment grade),
but will invest no more than 25 percent of its net assets in these securities.
The Portfolio may also invest up to 50 percent (but generally expects to invest
not more than 25 percent) of its net assets in foreign securities.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Lower-rated bonds have
speculated characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than in the case of higher-grade securities. Investing in
securities of foreign issuers generally involves risks not ordinarily
associated with investing in securities of domestic issuers. These include less
availability of

- --------------------------------------------------------------------------------
46
<PAGE>

information about issuers or foreign markets, economic and political
volatility, and price, interest rate and currency risk.

Investment Adviser: Aetna Life Insurance and Annuity Company; Subadviser:
Massachusetts Financial Services Company

Portfolio Partners Scudder International Growth Portfolio

Investment Objective
Seeks long-term growth of capital primarily through a diversified
portfolio of marketable foreign equity investments.

Policies
Invests in companies, wherever organized, that do business primarily
outside the United States. The Portfolio intends to diversify investments among
several countries and to have represented in its holdings business activities in
not less than three different countries. Does not intend to concentrate
investments in any particular industry. Invests primarily in equity securities
of established companies, listed on foreign exchanges, that the subadviser
believes have favorable characteristics. Although the Portfolio will consist
primarily of equity securities, it may also invest in fixed-income securities of
foreign governments and companies.

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Investing in foreign securities
may involve a greater degree of risk than investing in domestic securities.
Additional risk factors include the possibility of exchange rate fluctuations,
less publicly available information, more volatile markets, less securities
regulation and less favorable tax provisions.

Investment Adviser: Aetna Life Insurance and Annuity Company; Subadviser:
Scudder Kemper Investments, Inc.

Portfolio Partners T. Rowe Price Growth Equity Portfolio

Investment Objective
Seeks long-term growth of capital and, secondarily, to increase dividend
income by investing primarily in common stocks of well established growth
companies.

Policies
Under normal market conditions the Portfolio invests at least 65 percent of
its total assets in common stocks issued by a diversified group of growth
companies. The companies in which the Portfolio invests normally (but not
always) pay dividends, which are generally expected to rise in future years as
earnings increase. Most of its assets will be invested in U.S. common stocks.
However, the Portfolio may invest in foreign securities and convertible
securities and warrants, when the subadviser considers such investments
consistent with he Portfolio's investment objective and policies.

The Portfolio generally seeks to invest in securities of companies that
satisfy one or more of several criteria established by the subadviser. For
example, the subadviser generally seeks companies with superior growth in
earnings and cash flow; the ability to sustain earnings momentum even during
economic slowdowns by operating in so-called "fertile fields" (areas where
earnings and dividends can outpace inflation and the overall economy); and the
capability to expand even during times of slow growth. The subadviser generally
favors companies whose profits increase due to economic factors rather than
one-time events such as lower taxes. The Portfolio may engage in strategic
transactions, which may include the use of derivatives.

- --------------------------------------------------------------------------------
47

<PAGE>

Risks
Share prices will fluctuate in response to the activities of an individual
company or in response to general market and economic conditions. Historically,
common stocks have provided greater long-term returns and have entailed greater
short-term risks than other investment choices. Investments in foreign
securities, including those of foreign governments, involve greater risks than
investing in comparable domestic securities. These risks include currency,
political, economic, regulatory and market risk factors. Risk is reduced
through diversification.

Investment Adviser: Aetna Life Insurance and Annuity Company; Subadviser:
T. Rowe Price Associates, Inc.

- --------------------------------------------------------------------------------
48

<PAGE>

PROSPECTUS
================================================================================

The Contracts offered in connection with this Prospectus are the "Aetna
Marathon Plus" group and individual deferred variable annuity contracts
("Contracts") issued by Aetna Insurance Company of America (the "Company"). The
Contracts, offered only in those states authorized to sell, are available as (1)
nonqualified deferred annuity contracts; (2) Individual Retirement Annuities
("IRA") including Roth IRAs under Sections 408(b) and 408A of the Internal
Revenue Code (may be subject to approval by state regulatory agencies); or (3)
qualified contracts issued in connection with certain employer sponsored
retirement plans (may be subject to approval by the Company and state regulatory
agencies). Currently, the IRA is not available as a "SIMPLE IRA" as defined in
Section 408(p) of the Internal Revenue Code. In most states, group Contracts are
offered to certain broker-dealers or banks which have agreed to act as
Distributors of the Contracts. Individuals who have established accounts with
those broker-dealers or banks are eligible to participate in the Contract.
Individual Contracts are offered only in those states where the group Contracts
are not authorized for sale. (See "Purchase.")

In most states, the Contracts provide that Purchase Payments may be allocated to
the AICA Guaranteed Account (the "Guaranteed Account"), a credited interest
option, or to one or more of the Subaccounts of Variable Annuity Account I, a
separate account of the Company. In certain states, Purchase Payments may be
allocated to the Fixed Account when the Guaranteed Account is not available. The
Subaccounts invest directly in shares of the following Funds:

<TABLE>
<S> <C> <C> <C>
[bullet] Aetna Ascent VP (formerly Aetna Ascent Variable Portfolio) [bullet] Fidelity VIP High Income Portfolio
[bullet] Aetna Balanced VP, Inc. (formerly Aetna Investment Advisers [bullet] Fidelity VIP Overseas Portfolio
Fund, Inc.) [bullet] Fidelity VIP II Asset Manager Portfolio
[bullet] Aetna Income Shares d/b/a Aetna Bond VP [bullet] Fidelity VIP II Contrafund Portfolio
[bullet] Aetna Crossroads VP (formerly Aetna Crossroads Variable [bullet] Fidelity VIP II Index 500 Portfolio
Portfolio) [bullet] Janus Aspen Aggressive Growth Portfolio
[bullet] Aetna Growth VP (formerly Aetna Variable Growth [bullet] Janus Aspen Balanced Portfolio
Portfolio) [bullet] Janus Aspen Flexible Income Portfolio
[bullet] Aetna Variable Fund d/b/a Aetna Growth and Income VP [bullet] Janus Aspen Growth Portfolio
[bullet] Aetna Index Plus Large Cap VP (formerly Aetna Variable [bullet] Janus Aspen Worldwide Growth Portfolio
Index Plus Portfolio) [bullet] MFS Total Return Series
[bullet] Aetna International VP [bullet] MFS World Governments Series
[bullet] Aetna Legacy VP (formerly Aetna Legacy Variable Portfolio) [bullet] Oppenheimer Aggressive Growth Fund (formerly
[bullet] Aetna Variable Encore Fund d/b/a Aetna Money Market VP Oppenheimer Capital Appreciation Fund)
[bullet] Aetna Real Estate Securities VP [bullet] Oppenheimer Global Securities Fund
[bullet] Aetna Small Company VP (formerly Aetna Variable Small [bullet] Oppenheimer Growth & Income Fund
Company Portfolio) [bullet] Oppenheimer Strategic Bond Fund
[bullet] Aetna Value Opportunity VP (formerly Aetna Variable [bullet] Portfolio Partners MFS Emerging Equities Portfolio
Capital Appreciation Portfolio) [bullet] Portfolio Partners MFS Research Growth Portfolio
[bullet] Calvert Social Balanced Portfolio (formerly Calvert [bullet] Portfolio Partners MFS Value Equity Portfolio
Responsibly Invested Balanced Portfolio) [bullet] Portfolio Partners Scudder International Growth
[bullet] Fidelity VIP Equity-Income Portfolio Portfolio
[bullet] Fidelity VIP Growth Portfolio [bullet] Portfolio Partners T. Rowe Price Growth Equity
Portfolio
</TABLE>

Except as specifically mentioned, this Prospectus describes only investments
through the Separate Account. The Guaranteed Account is described in Appendix A
to this Prospectus, as well as in the Guaranteed Account's prospectus. The Fixed
Account is described in Appendix B to this Prospectus. The availability of the
Funds, the Guaranteed Account and the Fixed Account is subject to applicable
regulatory authorization; not all options may be available in all jurisdictions
or under all Contracts. (See "Investment Options.")

This Prospectus provides investors with the information about the Separate
Account that they should know before investing in the Contracts. Additional
information about the Separate Account is contained in a Statement of Additional
Information ("SAI") which is available at no charge. The SAI has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
The Table of Contents for the SAI is printed on page 24 of this Prospectus. An
SAI for this Prospectus and for any Fund Prospectus may be obtained by
indicating the request on your Application or by calling the number listed under
the "Inquiries" section of the Prospectus Summary.

THIS PROSPECTUS SHOULD BE READ IN CONJUNCTION WITH THE CURRENT PROSPECTUSES OF
THE FUNDS AND THE AICA GUARANTEED ACCOUNT. ALL PROSPECTUSES SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.

<PAGE>

THIS PROSPECTUS, THE STATEMENT OF ADDITIONAL INFORMATION AND OTHER INFORMATION
ABOUT THE SEPARATE ACCOUNT REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION CAN BE FOUND IN THE SEC'S WEB SITE AT http://www.sec.gov.

THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION ARE
DATED MAY 1, 1998.

<PAGE>

TABLE OF CONTENTS
================================================================================

<TABLE>
<S> <C>
DEFINITIONS.................................................... DEFINITIONS - 1
PROSPECTUS SUMMARY............................................. SUMMARY - 1
FEE TABLE...................................................... FEE TABLE - 1
THE COMPANY ................................................................ 1
VARIABLE ANNUITY ACCOUNT I ................................................. 1
INVESTMENT OPTIONS ......................................................... 1
The Funds ............................................................... 1
Credited Interest Option ................................................ 2
Fixed Account ........................................................... 2
PURCHASE ................................................................... 2
Contract Availability ................................................... 2
Purchasing Interests in the Contract .................................... 3
Purchase Payments ....................................................... 3
Contract Rights ......................................................... 3
Designations of Beneficiary and Annuitant ............................... 4
Right to Cancel ......................................................... 4
CHARGES AND DEDUCTIONS ..................................................... 5
Daily Deductions from the Separate Account .............................. 5
Mortality and Expense Risk Charge ..................................... 5
Administrative Charge ................................................. 5
Maintenance Fee ......................................................... 5
Deferred Sales Charge . ................................................. 5
Fund Expenses ........................................................... 7
Premium and Other Taxes ................................................. 7
CONTRACT VALUATION ......................................................... 7
Account Value ........................................................... 7
Accumulation Units ...................................................... 7
Net Investment Factor . ................................................. 7
TRANSFERS .................................................................. 8
Telephone Transfers ..................................................... 8
Dollar Cost Averaging Program ........................................... 8
Account Rebalancing Program ............................................. 9
WITHDRAWALS ................................................................ 9
SYSTEMATIC DISTRIBUTION OPTIONS ............................................ 10
DEATH BENEFIT DURING ACCUMULATION PERIOD ................................... 11
Death Benefit Amount .................................................... 11
Death Benefit Payment Options ........................................... 12
ANNUITY PERIOD ............................................................. 13
Annuity Period Elections ................................................ 13
Partial Annuitization . ................................................. 14
Annuity Options ......................................................... 14
Annuity Payments ........................................................ 14
</TABLE>

<PAGE>

<TABLE>
<S> <C>
Charges Deducted During the Annuity Period .............................. 15
Death Benefit Payable During the Annuity Period ......................... 15
TAX STATUS ................................................................. 15
Introduction ............................................................ 15
Taxation of the Company ................................................. 16
Tax Status of the Contract .............................................. 16
Taxation of Annuity Contracts ........................................... 18
Contracts Used with Certain Retirement Plans ............................ 20
MISCELLANEOUS .............................................................. 21
Distribution ............................................................ 21
Delay or Suspension of Payments ......................................... 22
Performance Reporting ................................................... 22
Voting Rights ........................................................... 22
Modification of the Contract ............................................ 22
Transfers of Ownership; Assignment ...................................... 23
Involuntary Terminations ................................................ 23
Legal Matters and Proceedings ........................................... 23
Year 2000 ............................................................... 23
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION ........................ 24
APPENDIX A--AICA GUARANTEED ACCOUNT ........................................ 25
APPENDIX B--FIXED ACCOUNT .................................................. 28
APPENDIX C--DESCRIPTION OF UNDERLYING FUNDS ................................ 29
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
PERSON TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE
OFFERING CONTAINED IN THIS PROSPECTUS EXCEPT AS OTHERWISE CONTAINED HEREIN.