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T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
AN INDIVIDUAL FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY CONTRACT
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ISSUED BY: MAILING ADDRESS:
Security Benefit T. Rowe Price Variable
Life Insurance Company Annuity Service Center
700 SW Harrison Street P.O. Box 750440
Topeka, Kansas 66636-0001 Topeka, Kansas 66675-0440
1-800-888-2461 1-800-469-6587
SUPPLEMENT DATED JANUARY 20, 1998
TO PROSPECTUS DATED MAY 1, 1997
The following is added to the end of the Section "Security Benefit Life
Insurance Company" found on page 12:
In December 1997, the Company's Board of Directors approved a Plan of Conversion
("Plan") under which the Company would convert from a mutual life insurance
company to a stock life insurance company ultimately controlled by a
newly-formed mutual holding company to be named Security Benefit Mutual Holding
Company. Under the Plan, membership interests of current Contractowners would
become membership interests in Security Benefit Mutual Holding Company upon
conversion. After the conversion, persons who acquire policies from the Company
would automatically be members in the mutual holding company. The conversion
will not increase premiums or reduce Contract benefits, values, guarantees or
other obligations to Contractowners. The Plan is subject to approval by the
Insurance Commissioner of the State of Kansas and the Company's policyholders,
among other approvals and conditions. If the necessary approvals are obtained
and conditions met, the conversion could occur in the second quarter of 1998.
The Section "Tax Penalties" under "Federal Tax Matters - Qualified Plans" found
on page 39 is deleted in its entirety and replaced with the following:
* TAX PENALTIES
PREMATURE DISTRIBUTION TAX. Distributions from a Qualified Plan before the owner
reaches age 59 1/2 are generally subject to an additional tax equal to 10
percent of the taxable portion of the distribution. The 10 percent penalty tax
does not apply to distributions: (i) made on or after the death of the Owner;
(ii) attributable to the Owner's disability; (iii) which are part of a series of
substantially equal periodic payments made (at least annually) for the life (or
life expectancy) of the Owner or the joint lives (or joint life expectancies) of
the Owner and a designated beneficiary; (iv) made to pay for certain medical
expenses; (v) that are exempt withdrawals of an excess contribution; (vi) that
are rolled over or transferred in accordance with Code requirements; or (vii)
which, subject to certain restrictions, do not exceed the health insurance
premiums paid by unemployed individuals in certain cases. Starting January 1,
1998, there are two additional exceptions to the 10 percent penalty tax on
withdrawals from IRAs before age 59 1/2: withdrawals made to pay "qualified
higher education expenses" and certain "qualified first-time homebuyer
distributions."
MINIMUM DISTRIBUTION TAX. If the amount distributed from a Qualified Plan is
less than the minimum required distribution for the year, the Owner is subject
to a 50 percent tax on the amount that was not properly distributed.
EXCESS DISTRIBUTION/ACCUMULATION TAX. The penalty tax of 15 percent which was
imposed (in addition to any ordinary income tax) on large plan distributions and
the "excess retirement accumulations" of an individual has been repealed,
effective January 1, 1997.
