PRICE T ROWE VARIABLE ANNUITY ACCOUNT, 485APOS, 1999-02-18

PRICE T ROWE VARIABLE ANNUITY ACCOUNT
485APOS, 1999-02-18

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<PAGE>
File No. 33-83238
File No. 811-8724
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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
Pre-Effective Amendment No. [_]
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Post-Effective Amendment No. 8 [X]
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 9 [X]
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(Check appropriate box or boxes)

T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
(Exact Name of Registrant)

Security Benefit Life Insurance Company
(Name of Depositor)

700 Harrison Street, Topeka, Kansas 66636-0001
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, Including Area Code:
(785) 431-3000

Copies to:

Amy J. Lee Jeffrey S. Puretz, Esq.
Associate General Counsel and Vice President Dechert Price & Rhoads
Security Benefit Group, Inc. 1500 K Street, N.W.
700 Harrison Street, Topeka, KS 66636-0001 Washington, DC 20005
(Name and address of Agent for Service)

It is proposed that this filing will become effective:

[_] immediately upon filing pursuant to paragraph (b) of Rule 485
[_] on May 1, 1999, pursuant to paragraph (b) of Rule 485
[_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[X] on May 1, 1999, pursuant to paragraph (a)(1) of Rule 485
[_] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[_] on May 1, 1999, pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of securities being registered: Interests in a separate account under
individual flexible premium deferred variable annuity contracts and individual
single premium immediate variable annuity contracts.
<PAGE>
VARIABLE ANNUITY PROSPECTUS
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T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
An Individual Flexible Premium
Deferred Variable Annuity Contract
May 1, 1999

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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
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------

* THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

* THIS PROSPECTUS IS ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE T. ROWE
PRICE EQUITY SERIES, INC., THE T. ROWE PRICE FIXED INCOME SERIES, INC.
AND THE T. ROWE PRICE INTERNATIONAL SERIES, INC. YOU SHOULD READ THE
PROSPECTUSES CAREFULLY AND RETAIN THEM FOR FUTURE REFERENCE.

This Prospectus describes the T. Rowe Price No-Load Variable Annuity--a
flexible premium deferred variable annuity contract (the "Contract") issued
by Security Benefit Life Insurance Company (the "Company"). The Contract is
available for individuals as a non-tax qualified retirement plan. The
Contract is also available as an individual retirement annuity ("IRA")
qualified under Section 408, or a Roth IRA qualified under Section 408A, of
the Internal Revenue Code. The Contract is designed to give you flexibility
in planning for retirement and other financial goals.

You may allocate your purchase payments to one or more of the Subaccounts
that comprise a separate account of the Company called the T. Rowe Price
Variable Annuity Account, or to the Fixed Interest Account of the Company.
Each Subaccount invests in a corresponding Portfolio of the T. Rowe Price
Equity Series, Inc., the T. Rowe Price Fixed Income Series, Inc., or the T.
Rowe Price International Series, Inc. (the "Funds"). Each Portfolio is
listed under its respective Fund below.

T. ROWE PRICE EQUITY SERIES, INC.

T. Rowe Price New America Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FIXED INCOME SERIES, INC.

T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

The investments made by the Funds at any given time are not expected to be
the same as the investments made by other mutual funds sponsored by T. Rowe
Price Associates, Inc., including other mutual funds with investment
objectives and policies similar to those of the Funds. Different
performance will result due to differences in cash flows into and out of
the Fund, different fees and expenses and differences in portfolio size and
position.

Amounts that you allocate to the Subaccounts will vary based on investment
performance of the Subaccounts to which the Account Value is allocated. The
Company does not guarantee any minimum amount of Account Value in the
Subaccounts.

Amounts that you allocate to the Fixed Interest Account will accrue
interest at rates that are paid by the Company as described in "The Fixed
Interest Account," page 33. The Company guarantees Account Value in the
Fixed Interest Account.

When you are ready to begin receiving annuity payments, the Contract
provides several options for annuity payments (see "Annuity Options," page
28.)

You may return a Contract according to the terms of its Free-Look Right
(see "Free-Look Right," page 23). This Prospectus concisely sets forth
information about the Contract and the T. Rowe Price Variable Annuity
Account that you should know before purchasing the Contract. The "Statement
of Additional Information," dated May 1, 1999, which has been filed with
the Securities and Exchange Commission (the "SEC") contains certain
additional information. The Statement of Additional Information, as it may
be supplemented from time to time, is incorporated by reference into this
Prospectus and is available at no charge, by writing the T. Rowe Price
Variable Annuity Service Center, P.O. Box 750440, Topeka, Kansas
66675-0440, or by calling 1-800-469-6587. The table of contents of the
Statement of Additional Information is set forth on page 47 of this
Prospectus.

Date: May 1, 1999
<PAGE>
CONTENTS
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* YOU MAY NOT BE ABLE TO PURCHASE THE CONTRACT IN YOUR STATE. YOU SHOULD
NOT CONSIDER THIS PROSPECTUS TO BE AN OFFERING IF THE CONTRACT MAY NOT
BE LAWFULLY OFFERED IN YOUR STATE. YOU SHOULD ONLY RELY UPON INFORMATION
CONTAINED IN THIS PROSPECTUS OR THAT WE HAVE REFERRED YOU TO. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.

Definitions 5
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Summary 7
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Expense Table 9
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Condensed Financial Information 12
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Information About the Company, the Separate Account, and the Funds 13
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The Contract 16
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Charges and Deductions 24
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Annuity Payments 26
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The Fixed Interest Account 33
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More About the Contract 35
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Federal Tax Matters 36
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Other Information 43
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Performance Information 46
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Additional Information 46
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<PAGE>
DEFINITIONS
- --------------------------------------------------------------------------------

* VARIOUS TERMS COMMONLY USED IN THIS PROSPECTUS ARE DEFINED AS FOLLOWS:

ACCOUNT VALUE The total value of a Contract, which includes amounts
allocated to the Subaccounts and the Fixed Interest Account. The Company
determines Account Value as of each Valuation Date prior to the Annuity
Payout Date and on and after the Annuity Payout Date under Annuity Options
5 through 7. Account Value is also determined under Option 9 during the
Liquidity Period.

ACCUMULATION PERIOD The period commencing on the Contract Date and ending
on the Annuity Payout Date or, if earlier, when the Contract is terminated
through a full withdrawal, payment of charges, or payment of the death
benefit proceeds.

ACCUMULATION UNIT A unit of measure used to calculate Account Value.

ANNUITANT The person or persons on whose life annuity payments depend under
Annuity Options 1 through 4 and 9. If Joint Annuitants are named in the
Contract, "Annuitant" means both Annuitants unless otherwise stated. The
Annuitant receives Annuity Payments during the Annuity Period.

ANNUITY A series of periodic income payments made by the Company to an
Annuitant, Joint Annuitant, or Beneficiary during the period specified in
the Annuity Option.

ANNUITY OPTIONS or OPTIONS Options under the Contract that prescribe the
provisions under which a series of Annuity Payments are made.

ANNUITY PAYMENTS Payments made beginning on the Annuity Payout Date
according to the provisions of the Annuity Option selected. Annuity
Payments are made on the same day of each month, on a monthly, quarterly,
semiannual or annual basis depending upon the Annuity Option selected.

ANNUITY PERIOD The period beginning on the Annuity Payout Date during which
annuity payments are made.

ANNUITY PAYOUT DATE The date when Annuity Payments are scheduled to begin.

AUTOMATIC INVESTMENT PROGRAM A program pursuant to which purchase payments
are automatically paid from your checking account on a specified day of the
month, on a monthly, quarterly, semiannual or annual basis, or a salary
reduction arrangement.

CONTRACT DATE The date shown as the Contract Date in a Contract. Annual
Contract anniversaries are measured from the Contract Date. It is usually
the date that the initial purchase payment is credited to the Contract.

CONTRACTOWNER or OWNER The person entitled to the ownership rights under
the Contract and in whose name the Contract is issued.

CONTRACT YEAR Each 12-month period measured from the Contract Date.

DESIGNATED BENEFICIARY The person having the right to the death benefit, if
any, payable upon the death of the Owner or the Joint Owner during the
Accumulation Period or the death of the Annuitant during the Annuity
Period. The Designated Beneficiary is the first person on the following
list who is alive on the date of death of the Owner or the Joint Owner: the
Owner; the Joint Owner; the Primary Beneficiary; the Secondary Beneficiary;
the Annuitant; or if none of the above is alive, the Owner's Estate.

FIXED INTEREST ACCOUNT An account that is part of the Company's General
Account in which all or a portion of the Account Value may be held for
accumulation at fixed rates of interest (which may not be less than 3%)
declared by the Company periodically at its discretion.

FLOOR PAYMENT Annuity Payments under Option 9 are guaranteed never to be
less than the Floor Payment, which is equal to 80% of the amount of the
initial Annuity Payment, adjusted for withdrawals.

FUNDS T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series,
Inc., and T. Rowe Price International Series, Inc. The Funds are
diversified, open-end management investment companies commonly referred to
as mutual funds.

GENERAL ACCOUNT All assets of the Company other than those allocated to the
Separate Account or to any other separate account of the Company.

LIQUIDITY PERIOD Under Annuity Option 9, the Liquidity Period is the period
of time during which the Owner may withdraw Account Value. The Liquidity
Period is a five-year period beginning on the Annuity Payout Date.

PAYMENT UNIT A unit of measure used to calculate Annuity Payments under
Options 1 through 4, 8 and 9.

PURCHASE PAYMENT The amounts paid to the Company as consideration for the
Contract.

SEPARATE ACCOUNT The T. Rowe Price Variable Annuity Account, a separate
account of the Company. Account Value may be allocated to Subaccounts of
the Separate Account for variable accumulation.

SUBACCOUNT A division of the Separate Account of the Company which invests
in a separate Portfolio of one of the Funds. Currently, seven Subaccounts
are available under the Contract.

T. ROWE PRICE VARIABLE ANNUITY SERVICE CENTER P.O. Box 750440, Topeka,
Kansas 66675-0440, 1-800-469-6587.

VALUATION DATE Each date on which the Separate Account is valued, which
currently includes each day that the T. Rowe Price Variable Annuity Service
Center and the New York Stock Exchange are both open for trading. The T.
Rowe Price Variable Annuity Service Center and the New York Stock Exchange
are closed on weekends and on the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

VALUATION PERIOD A period used in measuring the investment experience of
each Subaccount. The Valuation Period begins at the close of one Valuation
Date and ends at the close of the next succeeding Valuation Date.

WITHDRAWAL VALUE The amount a Contractowner receives upon full withdrawal
of the Contract, which is equal to Account Value less any premium taxes due
and paid by the Company and for withdrawals under Option 9, any withdrawal
charge. The Withdrawal Value under Option 8 is the present value of future
annuity payments commuted at the assumed interest rate less any premium
taxes due and paid by the Company.
<PAGE>
SUMMARY
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This summary provides a brief overview of the more significant aspects of
the Contract. Further detail is provided in this Prospectus, the Statement
of Additional Information, and the Contract. Unless the context indicates
otherwise, the discussion in this summary and the remainder of the
Prospectus relate to the portion of the Contract involving the Separate
Account. The Fixed Interest Account is briefly described under "The Fixed
Interest Account," page 33 and in the Contract.

PURPOSE OF THE CONTRACT

The flexible premium deferred variable annuity contract ("Contract")
described in this Prospectus is designed to give you flexibility in
planning for retirement and other financial goals.

You may purchase the Contract as a non-tax qualified retirement plan for an
individual ("Non-Qualified Plan"). If you are eligible, you may also
purchase the Contract as an individual retirement annuity ("IRA") qualified
under Section 408, or a Roth IRA qualified under Section 408A, of the
Internal Revenue Code of 1986, as amended ("Qualified Plan"). See the
discussion of IRAs and Roth IRAs under "Section 408 and Section 408A," page
41.

THE SEPARATE ACCOUNT AND THE FUNDS

You may allocate your purchase payments to the T. Rowe Price Variable
Annuity Account (the "Separate Account"). See "Separate Account," page 14.
The Separate Account is currently divided into seven divisions referred to
as Subaccounts. Each Subaccount invests exclusively in shares of a specific
Portfolio of one of the Funds. Each of the Funds' Portfolios has a
different investment objective or objectives. Each Portfolio is listed
under its respective Fund below.

T. ROWE PRICE EQUITY SERIES, INC.

T. Rowe Price New America Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FIXED INCOME SERIES, INC.

T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE INTERNATIONAL SERIES, INC

T. Rowe Price International Stock Portfolio

Amounts that you allocate to the Subaccounts will increase or decrease in
dollar value depending on the investment performance of the corresponding
Portfolio in which such Subaccount invests. The Contractowner bears the
investment risk for amounts allocated to a Subaccount. Not all of the
Subaccounts are available under each Annuity Option.

FIXED INTEREST ACCOUNT

You may allocate all or part of your purchase payments to the Fixed
Interest Account, which is part of the Company's General Account. Amounts
that you allocate to the Fixed Interest Account earn interest at rates
determined at the discretion of the Company and that are guaranteed to be
at least an effective annual rate of 3%. See "The Fixed Interest Account,"
page 33.

PURCHASE PAYMENTS

If you are purchasing a Contract as a Non-Qualified Plan, the minimum
initial purchase payment is $10,000 ($5,000 if made pursuant to an
Automatic Investment Program). If you are purchasing a Contract as a
Qualified Plan, the minimum initial purchase payment is $2,000 ($25 if made
pursuant to an Automatic Investment Program). Thereafter, you may choose
the amount and frequency of purchase payments, except that the minimum
subsequent purchase payment is $1,000 ($200 if made pursuant to an
Automatic Investment Program) for a Non-Qualified Plan or $500 ($25 if made
pursuant to an Automatic Investment Program) for a Qualified Plan. See
"Purchase Payments," page 17.

CONTRACT BENEFITS

You may exchange Account Value among the Subaccounts and to and from the
Fixed Interest Account, subject to certain restrictions as described in
"The Contract," page 16, "Annuity Payments," page 26 and "The Fixed
Interest Account," page 33.

At any time before the Annuity Payout Date, you may surrender your Contract
for its Withdrawal Value and may make partial withdrawals, including
systematic withdrawals, from Account Value. On or after the Annuity Payout
Date, you may withdraw your Account Value under Annuity Options 5 through 8
and during the Liquidity Period under Option 9. Withdrawals under Option 9
are subject to a withdrawal charge as discussed below. Withdrawals of
Account Value allocated to the Fixed Interest Account are subject to
certain restrictions described in "The Fixed Interest Account," page 33.
See "Full and Partial Withdrawals," page 21, "Annuity Payments," page 26
and "Federal Tax Matters," page 36 for more information about withdrawals,
including the 10% penalty tax that may be imposed upon full and partial
withdrawals (including systematic withdrawals) made prior to the Owner
attaining age 59 1/2.

The Contract provides for a death benefit upon the death of the Owner prior
to the Annuity Start Date. See "Death Benefit," page 23 for more
information. The Contract provides for several Annuity Options on either a
variable basis, a fixed basis, or both. The Company guarantees Annuity
Payments under the fixed Annuity Options. See "Annuity Payments," page 26.

FREE-LOOK RIGHT

You may return the Contract within the Free-Look Period, which is generally
a 10-day period beginning when you receive the Contract. In this event, the
Company will refund to you the amount of purchase payments allocated to the
Fixed Interest Account plus the Account Value in the Subaccounts. The
Company will refund purchase payments allocated to the Subaccounts rather
than the Account Value in those states and circumstances in which it is
required to do so. See "Free-Look Right," page 23.

CHARGES AND DEDUCTIONS

The Company does not deduct a sales load from purchase payments. The
Company will deduct certain charges in connection with the Contract as
described below.

* MORTALITY AND EXPENSE RISK CHARGE The Company deducts a daily charge
from the assets of each Subaccount for mortality and expense risks equal
to an annual rate of .55% (1.40% under Annuity Option 9) of each
Subaccount's average daily net assets. See "Mortality and Expense Risk
Charge," page 24.

* PREMIUM TAX CHARGE The Company assesses a premium tax charge to
reimburse itself for any premium taxes that it incurs with respect to
this Contract. This charge will usually be deducted when Annuity
Payments begin or upon full withdrawal if the Company incurs a premium
tax. Partial withdrawals, including systematic withdrawals, may be
subject to a premium tax charge if a premium tax is incurred on the
withdrawal by the Company and is not refundable. The Company reserves
the right to deduct such taxes when due or anytime thereafter. Premium
tax rates currently range from 0% to 3.5%. See "Premium Tax Charge,"
page 25.

* WITHDRAWAL CHARGE If you withdraw Account Value during the Liquidity
Period under Option 9, the withdrawal is subject to a withdrawal charge.
The charge is based upon the year in which the withdrawal is made as
measured from the Annuity Payout Date. The withdrawal charge, which
ranges from 5% in the first year to 1% in the fifth year, is applied to
the amount of the withdrawal. Withdrawals after the fifth year from the
Annuity Payout Date are not permitted under Option 9. See "Contract
Withdrawal Charge," page 25.

* OTHER EXPENSES The Company pays the operating expenses of the Separate
Account. Investment management fees and operating expenses of the Funds
are paid by the Funds and are reflected in the net asset value of Fund
shares. For a description of these charges and expenses, see the
prospectus for the Funds.

CONTACTING THE COMPANY

You should direct all written requests, notices, and forms required by the
Contract, and any questions or inquiries to the T. Rowe Price Variable
Annuity Service Center, P.O. Box 750440, Topeka, Kansas 66675-0440,
1-800-469-6587.

EXPENSE TABLE
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The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly and indirectly if you
allocate Account Value to the Subaccounts. The table reflects any
contractual charges, expenses of the Separate Account, and charges and
expenses of the Funds. The table does not reflect premium taxes that may be
imposed by various jurisdictions. See "Premium Tax Charge," page 25. The
information contained in the table is not applicable to amounts allocated
to the Fixed Interest Account.

For a complete description of a Contract's costs and expenses, see "Charges
and Deductions," page 24. For a more complete description of each Fund's
costs and expenses, see the Funds' prospectus, which accompanies this
Prospectus.

TABLE 1
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CONTRACTOWNER TRANSACTION EXPENSES All Other Options Option 9
Withdrawal Charge Under Option 9
(as a percentage of amount surrendered) None 5%(1)

CONTRACTUAL EXPENSES
Sales Load on Purchase Payments None None
Annual Maintenance Fee None None

ANNUAL SEPARATE ACCOUNT EXPENSES
Annual Mortality and Expense Risk Charge
(as a percentage of each Subaccount's
average daily net assets) .55% 1.40%
Total Annual Separate Account Expenses .55% 1.40%

ANNUAL PORTFOLIO EXPENSES (AS A PERCENTAGE OF EACH PORTFOLIO'S
AVERAGE DAILY NET ASSETS)

TOTAL
MANAGEMENT OTHER PORTFOLIO
FEE(2) EXPENSES EXPENSES

T. Rowe Price New America
Growth Portfolio .85% 0% .85%

T. Rowe Price International
Stock Portfolio 1.05% 0% 1.05%

T. Rowe Price Mid-Cap
Growth Portfolio .85% 0% .85%

T. Rowe Price Equity
Income Portfolio .85% 0% .85%

T. Rowe Price Personal
Strategy Balanced Portfolio .90% 0% .90%

T. Rowe Price Limited-Term
Bond Portfolio .70% 0% .70%

T. Rowe Price Prime
Reserve Portfolio .55% 0% .55%
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1 The withdrawal charge, which ranges from 5% in the first year to 1% in
the fifth year, is imposed only upon withdrawals during the Liquidity
Period under Option 9. The withdrawal charge is based upon the year in
which the withdrawal is made as measured from the Annuity Payout Date.

2 The management fee includes the ordinary expenses of operating the
Funds.

EXAMPLES

The examples presented below show expenses that you would pay at the end of
one, three, five, or ten years. The examples show expenses based upon an
allocation of $1,000 to each of the Subaccounts and a hypothetical annual
return of 5%.

You should not consider the examples below a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown.
The 5% return assumed in the examples is hypothetical and should not be
considered a representation of past or future actual returns, which may be
greater or lesser than the assumed amount.

EXAMPLE - You would pay the expenses shown below during the Accumulation
Period and during the Annuity Period (unless Option 9 were selected):

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1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $14 $44 $77 $168
International Stock Subaccount $16 $50 $87 $190
Mid-Cap Growth Subaccount $14 $44 $77 $168
Equity Income Subaccount $14 $44 $77 $168
Personal Strategy
Balanced Subaccount $15 $46 $79 $174
Limited-Term Bond Subaccount $13 $40 $69 $151
Prime Reserve Subaccount $11 $35 $61 $134
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EXAMPLE - You would pay the expenses shown below during the Annuity Period
assuming (1) selection of Option 9, and (2) no withdrawals:

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1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $23 $70 $120 $258
International Stock Subaccount $25 $76 $131 $279
Mid-Cap Growth Subaccount $23 $70 $120 $258
Equity Income Subaccount $23 $70 $120 $258
Personal Strategy
Balanced Subaccount $23 $72 $123 $264
Limited-Term Bond Subaccount $21 $66 $113 $243
Prime Reserve Subaccount $20 $61 $105 $227
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EXAMPLE - You would pay the expenses shown below during the Annuity Period
assuming (1) selection of Option 9, and (2) a full withdrawal at the end of
each time period:

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1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $74 $103 $132 $258
International Stock Subaccount $76 $108 $142 $279
Mid-Cap Growth Subaccount $74 $103 $132 $258
Equity Income Subaccount $74 $103 $132 $258
Personal Strategy
Balanced Subaccount $75 $104 $134 $264
Limited-Term Bond Subaccount $73 $98 $124 $243
Prime Reserve Subaccount $71 $94 $117 $227
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<PAGE>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

The following condensed financial information presents accumulation unit
values for the years ended December 31, 1998, 1997 and 1996, and the period
April 1, 1995 (date of inception), through December 31, 1995, as well as
ending accumulation units outstanding under each Subaccount.

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1995 1996 1997 1998
NEW AMERICA GROWTH SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $13.40 $16.00 $19.28
End of period $13.40 $16.00 $19.28
Accumulation units:
Outstanding at the end of period 333,934 1,596,903 2,030,514

INTERNATIONAL STOCK SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $11.19 $12.77 $13.09
End of period $11.19 $12.77 $13.09
Accumulation units:
Outstanding at the end of period 218,427 1,124,821 1,562,428

EQUITY INCOME SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $12.37 $14.70 $18.84
End of period $12.37 $14.70 $18.84
Accumulation units:
Outstanding at the end of period 365,712 1,902,935 3,450,047

PERSONAL STRATEGY BALANCED SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $11.90 $13.51 $15.86
End of period $11.90 $13.51 $15.86
Accumulation units:
Outstanding at the end of period 148,349 599,843 983,602

LIMITED TERM-BOND SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $10.64 $10.93 $11.60
End of period $10.64 $10.93 $11.60
Accumulation units:
Outstanding at the end of period 86,891 445,079 626,694

MID-CAP GROWTH SUBACCOUNT*
Accumulation unit value:
Beginning of period $10.00 $11.82
End of period $11.82
Accumulation units:
Outstanding at the end of period 1,100,979

PRIME RESERVE SUBACCOUNT*
Accumulation unit value:
Beginning of period $10.00 $10.48
End of period $10.48
Accumulation units:
Outstanding at the end of period 769,829
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*The Mid-Cap Growth and Prime Reserve Subaccounts commenced operations on
January 2, 1997.
<PAGE>
INFORMATION ABOUT THE COMPANY, THE SEPARATE ACCOUNT, AND THE FUNDS
- --------------------------------------------------------------------------------

SECURITY BENEFIT LIFE INSURANCE COMPANY

The Company is a life insurance company organized under the laws of the
State of Kansas. It was organized originally as a fraternal benefit society
and commenced business February 22, 1892. It became a mutual life insurance
company under its present name on January 2, 1950. On July 31, 1998, the
Company converted from a mutual life insurance company to a stock life
insurance company ultimately controlled by Security Benefit Mutual Holding
Company, a Kansas mutual holding company. Membership interests of persons
who were Contractowners as of July 31, 1998 became membership interests in
Security Benefit Mutual Holding Company as of that date, and persons who
acquire policies from the Company after that date automatically become
members in the mutual holding company.

The Company offers a complete line of life insurance policies and annuity
contracts, as well as financial and retirement services. It is admitted to
do business in the District of Columbia, and in all states except New York.
As of the end of 1998, Security Benefit had total assets of approximately
$7.4 billion. Together with its subsidiaries, Security Benefit has total
funds under management of approximately $8.8 billion.

YEAR 2000 COMPLIANCE

Like other insurance companies, as well as other financial and business
organizations around the world, the Company could be adversely affected if
the computer systems used by the Company in performing its administrative
functions do not properly process and calculate date-related information
and data before, during, and after January 1, 2000. Some computer software
and hardware systems currently cannot distinguish between the year 2000 and
the year 1900 or some other date because of the way date fields were
encoded. This is commonly known as the "Year 2000 Problem." If not
addressed, the Year 2000 Problem could impact (i) the administrative
services provided by the Company with respect to the Contract, and (ii) the
management services provided to the Funds by T. Rowe Price, as well as
transfer agency, accounting, custody, distribution, and other services
provided to the Funds. For more information on T. Rowe Price Year 2000
compliance efforts, see the Funds' prospectus, which accompanies this
Prospectus.

The Company has adopted a plan to be "Year 2000 Compliant" with respect to
both its internally built systems as well as systems provided by external
vendors. We consider a system Year 2000 Compliant when it is able to
correctly process, provide, and/or receive data before, during and after
the Year 2000. The Company's overall approach to addressing the Year 2000
issue is as follows: (1) to inventory its internal and external hardware,
software, telecommunications and data transmissions to customers, and
conduct a risk assessment with respect to the impact that a failure on any
such system would have on its business operations; (2) to modify or replace
its internal systems and obtain vendor certifications of Year 2000
compliance for systems provided by vendors or replace such systems that are
not Year 2000 Compliant; and (3) to implement and test its systems for Year
2000 compliance. The Company has completed the inventory of its internal
and external systems and has made substantial progress toward completing
the modification/replacement of its internal systems as well as towards
obtaining Year 2000 Compliant certifications from its external vendors.
Overall systems testing commenced in early 1998 and will extend into the
first six months of 1999.

Although the Company has taken steps to ensure that its systems will
function properly before, during, and after the Year 2000, external vendors
provide its key operating systems and information sources, which creates
uncertainty to the extent the Company is relying on the assurance of such
vendors as to whether its systems will be Year 2000 Compliant. The costs or
consequences of incomplete or untimely resolution of the Year 2000 issue
are unknown to the Company at this time but could have a material adverse
impact on the operations of the Separate Account and administration of the
Contract.

The Year 2000 Problem is also expected to impact companies, which may
include issuers of portfolio securities held by the Funds, to varying
degrees based upon various factors, including, but not limited to, the
company's industry sector and degree of technological sophistication. The
Company is unable to predict what impact, if any, the Year 2000 Problem
will have on issuers of the portfolio securities held by the Funds.

PUBLISHED RATINGS

The Company may from time to time publish in advertisements, sales
literature, and reports to Owners, the ratings and other information
assigned to it by one or more independent rating organizations such as A.M.
Best Company and Standard & Poor's. The purpose of the ratings is to
reflect the financial strength and/or claims-paying ability of the Company
and should not be considered as bearing on the investment performance of
assets held in the Separate Account. Each year the A.M. Best Company
reviews the financial status of thousands of insurers, culminating in the
assignment of Best's Ratings. These ratings reflect their current opinion
of the relative financial strength and operating performance of an
insurance company in comparison to the norms of the life/health insurance
industry. In addition, the claims-paying ability of the Company as measured
by Standard & Poor's Insurance Ratings Services may be referred to in
advertisements or sales literature or in reports to Owners. These ratings
are opinions of an operating insurance company's financial capacity to meet
the obligations of its insurance and annuity policies in accordance with
their terms. Such ratings do not reflect the investment performance of the
Separate Account or the degree of risk associated with an investment in the
Separate Account.

SEPARATE ACCOUNT

T. ROWE PRICE VARIABLE ANNUITY ACCOUNT

The Company established the T. Rowe Price Variable Annuity Account as a
separate account under Kansas law on March 28, 1994. The Contract provides
that the income, gains, or losses of the Separate Account, whether or not
realized, are credited to or charged against the assets of the Separate
Account without regard to other income, gains, or losses of the Company.
K.S.A. 40-436 provides that assets in a separate account attributable to
the reserves and other liabilities under the contracts may not be charged
with liabilities arising from any other business that the insurance company
conducts if, and to the extent the contracts so provide. The Contract
contains such a provision. The Company owns the assets in the Separate
Account and is required to maintain sufficient assets in the Separate
Account to meet all Separate Account obligations under the Contract. The
Company may transfer to its General Account assets that exceed anticipated
obligations of the Separate Account. All obligations arising under the
Contracts are general corporate obligations of the Company. The Company may
invest its own assets in the Separate Account for other purposes, but not
to support contracts other than variable annuity contracts, and may
accumulate in the Separate Account proceeds from Contract charges and
investment results applicable to those assets.

The Separate Account is currently divided into seven Subaccounts. The
Contract provides that income, gains and losses, whether or not realized,
are credited to, or charged against, the assets of each Subaccount without
regard to the income, gains, or losses in the other Subaccounts. Each
Subaccount invests exclusively in shares of a specific Portfolio of one of
the Funds. The Company may in the future establish additional Subaccounts
of the Separate Account, which may invest in other Portfolios of the Funds
or in other securities, mutual funds, or investment vehicles. Under its
contract with the underwriter, T. Rowe Price Investment Services, Inc.
("Investment Services"), the Company cannot add new Subaccounts, or
substitute shares of another portfolio, without the consent of Investment
Services, unless (1) such change is necessary to comply with applicable
laws, (2) shares of any or all of the Portfolios should no longer be
available for investment, or (3) the Company receives an opinion from
counsel acceptable to Investment Services that substitution is in the best
interest of Contractowners and that further investment in shares of the
Portfolio(s) would cause undue risk to the Company. For more information
about the underwriter, see "Distribution of the Contract," page 45.

The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). Registration
with the SEC does not involve supervision by the SEC of the administration
or investment practices of the Separate Account or of the Company.

THE FUNDS

The T. Rowe Price Equity Series, Inc., the T. Rowe Price Fixed Income
Series, Inc., and the T. Rowe Price International Series, Inc. are
diversified, open-end management investment companies of the series type.
The Funds are registered with the SEC under the 1940 Act. Such registration
does not involve supervision by the SEC of the investments or investment
policy of the Funds. Together, the Funds currently have seven separate
Portfolios, each of which pursues different investment objectives and
policies.

In addition to the Separate Account, shares of the Funds are being sold to
variable life insurance and variable annuity separate accounts of other
insurance companies, including insurance companies affiliated with the
Company. In the future, it may be disadvantageous for variable annuity
separate accounts of other life insurance companies, or for both variable
life insurance separate accounts and variable annuity separate accounts, to
invest simultaneously in the Funds. Currently neither the Company nor the
Funds foresee any such disadvantages to either variable annuity owners or
variable life insurance owners. The management of the Funds intends to
monitor events in order to identify any material conflicts between or among
variable annuity owners and variable life insurance owners and to determine
what action, if any, should be taken in response. In addition, if the
Company believes that any Fund's response to any of those events or
conflicts insufficiently protects Owners, it will take appropriate action
on its own. For more information see the Funds' prospectus.

A summary of the investment objective of each Portfolio of the Funds is set
forth below. There can be no assurance that any Portfolio will achieve its
objective. More detailed information is contained in the accompanying
prospectus of the Funds, including information on the risks associated with
the investments and investment techniques of each Portfolio.

THE FUNDS' PROSPECTUS ACCOMPANIES THIS PROSPECTUS AND SHOULD BE READ
CAREFULLY BEFORE INVESTING.

T. ROWE PRICE NEW AMERICA GROWTH PORTFOLIO

The investment objective of the New America Growth Portfolio is long-term
growth of capital through investments primarily in the common stocks of
U.S. growth companies that operate in service industries.

T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO

The investment objective of the International Stock Portfolio is to seek
long-term growth of capital through investments primarily in common stocks
of established, non-U.S. companies.

T. ROWE PRICE MID-CAP GROWTH PORTFOLIO

The investment objective of the Mid-Cap Growth Portfolio is to provide
long-term capital appreciation by investing primarily in common stocks of
medium-sized growth companies.

T. ROWE PRICE EQUITY INCOME PORTFOLIO

The investment objective of the Equity Income Portfolio is to provide
substantial dividend income and also capital appreciation by investing
primarily in dividend-paying common stocks of established companies.

T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO

The investment objective of the Personal Strategy Balanced Portfolio is to
seek the highest total return over time consistent with an emphasis on both
capital appreciation and income.

T. ROWE PRICE LIMITED-TERM BOND PORTFOLIO

The investment objective of the Limited-Term Bond Portfolio is to seek a
high level of income consistent with moderate price fluctuation by
investing primarily in short- and intermediate-term investment grade debt
securities.

T. ROWE PRICE PRIME RESERVE PORTFOLIO (NOT AVAILABLE UNDER OPTION 9)

The investment objectives of the Prime Reserve Portfolio are preservation
of capital, liquidity, and, consistent with these, the highest possible
current income, by investing primarily in high-quality money market
securities.

THE INVESTMENT ADVISERS

T. Rowe Price Associates, Inc. ("T. Rowe Price"), located at 100 East Pratt
Street, Baltimore, Maryland 21202, serves as Investment Adviser to each
Portfolio, except the T. Rowe Price International Stock Portfolio. Rowe
Price-Fleming International, Inc. ("Price-Fleming"), an affiliate of T.
Rowe Price, serves as Investment Adviser to the T. Rowe Price International
Stock Portfolio. Price-Fleming's U.S. office is located at 100 East Pratt
Street, Baltimore, Maryland 21202. As Investment Adviser to the Portfolios,
T. Rowe Price and Price-Fleming are responsible for selection and
management of portfolio investments. T. Rowe Price and Price-Fleming are
registered with the SEC as investment advisers.

T. Rowe Price and Price-Fleming are not affiliated with the Company, and
the Company has no responsibility for the management or operations of the
Portfolios.

THE CONTRACT
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GENERAL

The Company issues the Contract offered by this Prospectus. It is a
flexible premium deferred variable annuity. To the extent that you allocate
all or a portion of your purchase payments to the Subaccounts, the Contract
is significantly different from a fixed annuity contract in that it is the
Owner who assumes the risk of investment gain or loss rather than the
Company. When you are ready to begin receiving annuity payments, the
Contract provides several Annuity Options under which the Company will pay
periodic annuity payments on a variable basis, a fixed basis, or both,
beginning on the Annuity Payout Date. The amount that will be available for
annuity payments will depend on the investment performance of the
Subaccounts to which you have allocated Account Value and the amount of
interest credited on Account Value that you have allocated to the Fixed
Interest Account.

APPLICATION FOR A CONTRACT

If you wish to purchase a Contract, you may submit an application and an
initial purchase payment to the Company, as well as any other form or
information that the Company may require. The initial purchase payment may
be made by check or, if you own shares of one or more Funds distributed by
Investment Services ("T. Rowe Price Funds"), you may elect on the
application to redeem shares of that fund(s) and forward the redemption
proceeds to the Company. Any such transaction shall be effected by
Investment Services, the distributor of the T. Rowe Price Funds and the
Contract. If you redeem fund shares, it is a sale of shares for tax
purposes, which may result in a taxable gain or loss. You may obtain an
application by contacting the T. Rowe Price Variable Annuity Service
Center. The Company reserves the right to reject an application or purchase
payment for any reason, subject to the Company's underwriting standards and
guidelines and any applicable state or federal law relating to
nondiscrimination.

The maximum age of an Owner or Annuitant for which a Contract will be
issued is 85. If there are Joint Owners or Annuitants, the maximum issue
age will be determined by reference to the older Owner or Annuitant.

PURCHASE PAYMENTS

If you are purchasing a Contract as a Non-Qualified Plan, the minimum
initial purchase payment is $10,000 ($5,000 if made pursuant to an
Automatic Investment Program). If you are purchasing a Contract as a
Qualified Plan, the minimum initial purchase payment is $2,000 ($25 if made
pursuant to an Automatic Investment Program). Thereafter, you may choose
the amount and frequency of purchase payments, except that the minimum
subsequent purchase payment is $1,000 ($200 if made pursuant to an
Automatic Investment Program) for Non-Qualified Plans and $500 ($25 if made
pursuant to an Automatic Investment Program) for Qualified Plans. The
Company may reduce the minimum purchase payment requirements under certain
circumstances, such as for group or sponsored arrangements. Cumulative
purchase payments exceeding $1 million will not be accepted under a
Contract without prior approval of the Company.

The Company will apply the initial purchase payment not later than the end
of the second Valuation Date after the Valuation Date it is received at the
T. Rowe Price Variable Annuity Service Center; provided that the purchase
payment is preceded or accompanied by an application that contains
sufficient information to establish an account and properly credit such
purchase payment. If the Company does not receive a complete application,
the Company will notify you that it does not have the necessary information
to issue a Contract. If you do not provide the necessary information within
five Valuation Dates after the Valuation Date on which the Company first
receives the initial purchase payment or if the Company determines it
cannot otherwise issue the Contract, the Company will return the initial
purchase payment to you unless you consent to the Company retaining the
purchase payment until the application is made complete.

The Company will credit subsequent purchase payments as of the end of the
Valuation Period in which they are received at the T. Rowe Price Variable
Annuity Service Center. You may make purchase payments after the initial
purchase payment at any time prior to the Annuity Payout Date, so long as
the Owner is living. Subsequent purchase payments under a Qualified Plan
may be limited by the terms of the plan and provisions of the Internal
Revenue Code. Subsequent purchase payments may be paid under an Automatic
Investment Program or, if you own shares of one or more T. Rowe Price
Funds, you may direct Investment Services to redeem shares of that fund(s)
and forward the redemption proceeds to the Company as a subsequent purchase
payment. The minimum initial purchase payment must be paid before the
Company will accept an Automatic Investment Program. If you redeem fund
shares, it is a sale of shares for tax purposes, which may result in a
taxable gain or loss.

ALLOCATION OF PURCHASE PAYMENTS

In an application for a Contract, you select the Subaccounts or the Fixed
Interest Account to which purchase payments will be allocated. The
allocation must be a whole percentage. Purchase payments will be allocated
according to your instructions contained in the application or more recent
instructions received, if any, except that no purchase payment allocation
is permitted that would result in less than 5% of any payment being
allocated to any one Subaccount or the Fixed Interest Account. Available
allocation alternatives generally include the seven Subaccounts and the
Fixed Interest Account. The Prime Reserve Subaccount and the Fixed Interest
Account are not available under Option 9.

You may change the purchase payment allocation instructions by submitting a
proper written request to the T. Rowe Price Variable Annuity Service
Center. A proper change in allocation instructions will be effective upon
receipt at the T. Rowe Price Variable Annuity Service Center and will
continue in effect until subsequently changed. You may change your purchase
payment allocation instructions by telephone or by sending a request in
writing to the T. Rowe Price Variable Annuity Service Center. Changes in
the allocation of future purchase payments have no effect on existing
Account Value. You may, however, exchange Account Value among the
Subaccounts and the Fixed Interest Account as described in "Exchanges of
Account Value," page 20.

DOLLAR COST AVERAGING OPTION

Prior to the Annuity Payout Date, you may dollar cost average your Account
Value by authorizing the Company to make periodic exchanges of Account
Value from any one Subaccount to one or more of the other Subaccounts.
Dollar cost averaging is a systematic method of investing in which
securities are purchased at regular intervals in fixed dollar amounts so
that the cost of the securities gets averaged over time and possibly over
various market cycles. The option will result in the exchange of Account
Value from one Subaccount to one or more of the other Subaccounts. Amounts
exchanged under this option will be credited at the Subaccount's price as
of the end of the Valuation Dates on which the exchanges are effected.
Since the price of a Subaccount's Accumulation Units will vary, the amounts
allocated to a Subaccount will result in the crediting of a greater number
of units when the price is low and a lesser number of units when the price
is high. Similarly, the amounts exchanged from a Subaccount will result in
a debiting of a greater number of units when the Subaccount's price is low
and a lesser number of units when the price is high. Dollar cost averaging
does not guarantee profits, nor does it assure that you will not have
losses.

You may request a Dollar Cost Averaging Request form from the T. Rowe Price
Variable Annuity Service Center. On the form, you must designate whether
Account Value is to be exchanged on the basis of a specific dollar amount,
a fixed period or earnings only, the Subaccount or Subaccounts to and from
which the exchanges will be made, the desired frequency of the exchanges,
which may be on a monthly, quarterly, semiannual, or annual basis, and the
length of time during which the exchanges shall continue or the total
amount to be exchanged over time.

To elect the Dollar Cost Averaging Option, your Account Value must be at
least $5,000, ($2,000 for a Contract funding a Qualified Plan), and a
Dollar Cost Averaging Request in proper form must be received at the T.
Rowe Price Variable Annuity Service Center. The Company will not consider
the Dollar Cost Averaging Request form to be complete until the your
Account Value is at least the required amount. You may not have in effect
at the same time Dollar Cost Averaging and Asset Rebalancing Options.

After the Company has received a Dollar Cost Averaging Request in proper
form at the T. Rowe Price Variable Annuity Service Center, the Company will
exchange Account Value in the amounts you designate from the Subaccount
from which exchanges are to be made to the Subaccount or Subaccounts you
have chosen. The minimum amount that may be exchanged is $200 and the
minimum amount that may be allocated to any one Subaccount is $25. The
Company will effect each exchange on the date you specify or if no date is
specified, on the monthly, quarterly, semiannual, or annual anniversary,
whichever corresponds to the period selected, of the date of receipt at the
T. Rowe Price Variable Annuity Service Center of a Dollar Cost Averaging
Request in proper form. Exchanges will be made until the total amount
elected has been exchanged, or until Account Value in the Subaccount from
which exchanges are made has been depleted. Amounts periodically exchanged
under this option are not included in the six exchanges per Contract Year
that are allowed as discussed in "Exchanges of Account Value," page 20.

You may instruct the Company at any time to terminate the option by written
request to the T. Rowe Price Variable Annuity Service Center. In that
event, the Account Value in the Subaccount from which exchanges were being
made that has not been exchanged will remain in that Subaccount unless you
instruct us otherwise. If you wish to continue exchanging on a dollar cost
averaging basis after the expiration of the applicable period, the total
amount elected has been exchanged, or the Subaccount has been depleted, or
after the Dollar Cost Averaging Option has been canceled, you must complete
a new Dollar Cost Averaging Request and send it to the T. Rowe Price
Variable Annuity Service Center. The Contract must meet the $5,000 ($2,000
for a Contract funding a Qualified Plan) minimum required amount of Account
Value at that time. The Company may discontinue, modify, or suspend the
Dollar Cost Averaging Option at any time provided that, as required by its
contract with Investment Services, the Company first obtains the consent of
Investment Services.

Account Value also may be dollar cost averaged to or from the Fixed
Interest Account, subject to certain restrictions described under "The
Fixed Interest Account," page 33.

ASSET REBALANCING OPTION

Prior to the Annuity Payout Date, you may authorize the Company to
automatically exchange Account Value each quarter to maintain a particular
percentage allocation among the Subaccounts. The Account Value allocated to
each Subaccount will grow or decline in value at different rates during the
quarter, and Asset Rebalancing automatically reallocates the Account Value
in the Subaccounts each quarter to the allocation you select. Asset
Rebalancing is intended to exchange Account Value from those Subaccounts
that have increased in value to those Subaccounts that have declined in
value. Over time, this method of investing may help you to buy low and sell
high, although there can be no assurance of this. This investment method
does not guarantee profits, nor does it assure that you will not have
losses.

To elect the Asset Rebalancing Option, the Account Value must be at least
$10,000 ($2,000 for a Contract funding a Qualified Plan) and an Asset
Rebalancing Request in proper form must be received at the T. Rowe Price
Variable Annuity Service Center. You may not have in effect at the same
time Dollar Cost Averaging and Asset Rebalancing Options. An Asset
Rebalancing Request form is available upon request. On the form, you must
indicate the applicable Subaccounts and the percentage of Account Value
which should be allocated to each of the applicable Subaccounts each
quarter under the Asset Rebalancing Option. If the Asset Rebalancing Option
is elected, all Account Value allocated to the Subaccounts must be included
in the Asset Rebalancing Option.

This option will result in the exchange of Account Value to one or more of
the Subaccounts on the date you specify or, if no date is specified, on the
date of the Company's receipt of the Asset Rebalancing Request in proper
form and on each quarterly anniversary of the applicable date thereafter.
The amounts exchanged will be credited at the price of the Subaccount as of
the end of the Valuation Dates on which the exchanges are effected. Amounts
periodically exchanged under this option are not included in the six
exchanges per Contract Year that are allowed as discussed below.

You may instruct the Company at any time to terminate this option by
written request to the T. Rowe Price Variable Annuity Service Center. This
option will terminate automatically in the event that you exchange Account
Value by written request or telephone instructions. In either event, the
Account Value in the Subaccounts that has not been exchanged will remain in
those Subaccounts regardless of the percentage allocation unless you
instruct us otherwise. If you wish to resume Asset Rebalancing after it has
been canceled, you must complete a new Asset Rebalancing Request form and
send it to the T. Rowe Price Variable Annuity Service Center. The Account
Value at the time the request is made must be at least $10,000 ($2,000 for
a Contract funding a Qualified Plan). The Company may discontinue, modify,
or suspend the Asset Rebalancing Option at any time provided that, as
required by its contract with Investment Services, the Company first
obtains the consent of Investment Services.

Account Value allocated to the Fixed Interest Account may be included in
Asset Rebalancing, subject to certain restrictions described under "The
Fixed Interest Account," page 33.

EXCHANGES OF ACCOUNT VALUE

Prior to the Annuity Payout Date, you may exchange Account Value among the
Subaccounts upon proper written request to the T. Rowe Price Variable
Annuity Service Center. You may exchange Account Value (other than
exchanges in connection with the Dollar Cost Averaging or Asset Rebalancing
Options) by telephone if an Authorization for Telephone Requests form has
been properly completed, signed, and filed at the T. Rowe Price Variable
Annuity Service Center. Up to six exchanges are allowed in any Contract
Year. The minimum exchange amount is $500 ($200 under the Dollar Cost
Averaging Option), or the amount remaining in a given Subaccount.

You may also exchange Account Value between the Subaccounts and the Fixed
Interest Account; however, exchanges from the Fixed Interest Account to the
Subaccounts are restricted as described in "The Fixed Interest Account,"
page 33. For a discussion of exchanges after the Annuity Payout Date, see
"Annuity Payments," page 26.

The Company reserves the right at a future date, to waive or limit the
number of exchanges permitted each Contract Year, to suspend exchanges, to
limit the amount of Account Value that may be subject to exchanges and the
amount remaining in an account after an exchange, to impose conditions on
the right to exchange and to discontinue telephone exchanges provided that,
as required by its contract with Investment Services, the Company first
obtains the consent of Investment Services.

ACCOUNT VALUE

The Account Value is the sum of the amounts under the Contract held in each
Subaccount and the Fixed Interest Account. Account Value is determined as
of any Valuation Date during the Accumulation Period, during the Annuity
Period under Annuity Options 5 through 7 and during the Liquidity Period
under Option 9.

On each Valuation Date, the portion of the Account Value allocated to any
particular Subaccount will be adjusted to reflect the investment experience
of that Subaccount for that date. See "Determination of Account Value,"
below. No minimum amount of Account Value is guaranteed. You bear the
entire investment risk relating to the investment performance of Account
Value allocated to the Subaccounts.

DETERMINATION OF ACCOUNT VALUE

Account Value will vary to a degree that depends upon several factors,
including investment performance of the Subaccounts to which you have
allocated Account Value, payment of subsequent purchase payments, partial
withdrawals, annuity payments under Options 5 through 7 and during the
Liquidity Period, Option 9, and the charges assessed in connection with the
Contract. The amounts allocated to the Subaccounts will be invested in
shares of the corresponding Portfolios of the Funds. The investment
performance of the Subaccounts will reflect increases or decreases in the
net asset value per share of the corresponding Portfolios and any dividends
or distributions declared by the corresponding Portfolios. Any dividends or
distributions from any Portfolio will be automatically reinvested in shares
of the same Portfolio, unless the Company, on behalf of the Separate
Account, elects otherwise.

Assets in the Subaccounts are divided into Accumulation Units, which are
accounting units of measure used to calculate the value of a
Contractowner's interest in a Subaccount. When you allocate purchase
payments to a Subaccount, your Contract is credited with Accumulation
Units. The number of Accumulation Units to be credited is determined by
dividing the dollar amount allocated to the particular Subaccount by the
price for the particular Subaccount as of the end of the Valuation Period
in which the purchase payment is credited. In addition, other transactions
including full or partial withdrawals, exchanges, annuity payments under
Options 5 through 7 and during the Liquidity Period, Option 9, and
assessment of premium taxes against the Contract, all affect the number of
Accumulation Units credited to a Contract. The number of units credited or
debited in connection with any such transaction is determined by dividing
the dollar amount of such transaction by the price of the affected
Subaccount. The price of each Subaccount is determined as of each Valuation
Date. The number of Accumulation Units credited to a Contract will not be
changed by any subsequent change in the value of an Accumulation Unit, but
the price of an Accumulation Unit may vary from Valuation Date to Valuation
Date depending upon the investment experience of the Subaccount and charges
against the Subaccount.

The price of each Subaccount's units initially was $10. Determination of
the price of a Subaccount takes into account the following: (1) the
investment performance of the Subaccount, which is based upon the
investment performance of the corresponding Portfolio of the Funds, (2) any
dividends or distributions paid by the corresponding Portfolio, (3) the
charges, if any, that may be assessed by the Company for taxes attributable
to the operation of the Subaccount, and (4) the mortality and expense risk
charge under the Contract.

FULL AND PARTIAL WITHDRAWALS

Prior to the Annuity Payout Date, you may surrender the Contract for its
Withdrawal Value or make a partial withdrawal of Account Value. A full or
partial withdrawal, including a systematic withdrawal, may be taken from
the Account Value at any time while the Owner is living, subject to
restrictions on partial withdrawals of Account Value from the Fixed
Interest Account and limitations under applicable law. Withdrawals after
the Annuity Payout Date are permitted only under Annuity Options 5 through
8 and, during the Liquidity Period, under Option 9. See "Annuity Payments,"
page 26. A full or partial withdrawal request will be effective as of the
end of the Valuation Period that a proper written request is received at
the T. Rowe Price Variable Annuity Service Center. A proper written request
must include the written consent of any effective assignee or irrevocable
Beneficiary, if applicable. You may direct Investment Services to apply the
proceeds of a full or partial withdrawal to the purchase of shares of one
or more of the T. Rowe Price Funds by so indicating in your written
withdrawal request.

The proceeds received upon a full withdrawal will be the Contract's
Withdrawal Value. The Withdrawal Value generally is equal to the Account
Value as of the end of the Valuation Period during which a proper
withdrawal request is received at the T. Rowe Price Variable Annuity
Service Center, less any premium taxes due and paid by the Company for
withdrawals and, under Option 9, any withdrawal charge. The Withdrawal
Value under Option 8 is the present value of future annuity payments
calculated using the assumed interest rate, less any premium taxes due and
paid by the Company. (See "Contract Withdrawal Charge," page 25 and
"Annuity Payments," page 26.)

You may request a partial withdrawal as a specified percentage or dollar
amount of Account Value. Each partial withdrawal must be for at least $500
except systematic withdrawals discussed below. A request for a partial
withdrawal will result in a payment by the Company in accordance with the
amount specified in the partial withdrawal request. Upon payment, the
Account Value will be reduced by an amount equal to the payment, any
applicable premium tax and any applicable withdrawal charge. If a partial
withdrawal is requested that would leave the Withdrawal Value in the
Contract less than $2,000, the Company reserves the right to treat the
partial withdrawal as a request for a full withdrawal.

The amount of a partial withdrawal will be deducted from the Account Value
in the Subaccounts and the Fixed Interest Account, according to your
instructions to the Company, subject to the restrictions on partial
withdrawals from the Fixed Interest Account. See "The Fixed Interest
Account," page 33. If you do not specify the allocation, the Company will
contact you for instructions, and the withdrawal will be effected as of the
end of the Valuation Period in which such instructions are obtained. A full
or partial withdrawal, including a systematic withdrawal, may be subject to
a premium tax charge to reimburse the Company for any tax on premiums on a
Contract that may be imposed by various states and municipalities. See
"Premium Tax Charge," page 25.

A full or partial withdrawal, including a systematic withdrawal, may result
in receipt of taxable income to the Owner and, if made prior to the Owner's
attaining age 59 1/2, may be subject to a 10% penalty tax. You should
carefully consider the tax consequences of a withdrawal under the Contract.
See "Federal Tax Matters," page 36.

SYSTEMATIC WITHDRAWALS

The Company currently offers a feature under which you may elect to receive
systematic withdrawals of Account Value by sending a properly completed
Systematic Withdrawal Request form to the T. Rowe Price Variable Annuity
Service Center. Systematic withdrawals are available only prior to the
Annuity Payout Date. You may direct Investment Services to apply the
proceeds of a systematic withdrawal to the purchase of shares of one or
more of the T. Rowe Price Funds by so indicating on the Systematic
Withdrawal Request form. A proper request must include the written consent
of any effective assignee or irrevocable Beneficiary, if applicable. You
may designate the systematic withdrawal amount as a percentage of Account
Value allocated to the Subaccounts and/or Fixed Interest Account, as a
specified dollar amount, as all earnings in the Contract, or as based upon
the life expectancy of the Owner or the Owner and a beneficiary, and the
desired frequency of the systematic withdrawals, which may be monthly,
quarterly, semiannually, or annually. You may stop or modify systematic
withdrawals upon proper written request to the T. Rowe Price Variable
Annuity Service Center at least 30 days in advance of the requested date of
termination or modification.

Each systematic withdrawal must be at least $100. Upon payment, your
Account Value will be reduced by an amount equal to the payment proceeds
plus any applicable premium taxes. Any systematic withdrawal that equals or
exceeds the Withdrawal Value will be treated as a full withdrawal. In no
event will payment of a systematic withdrawal exceed the Withdrawal Value.
The Contract will automatically terminate if a systematic withdrawal causes
the Contract's Withdrawal Value to equal zero.

The Company will effect each systematic withdrawal as of the end of the
Valuation Period during which the withdrawal is scheduled. The deduction
caused by the systematic withdrawal will be allocated to your Account Value
in the Subaccounts and the Fixed Interest Account based on your
instructions.

The Company may, at any time, discontinue, modify, or suspend systematic
withdrawals provided that, as required by its contract with Investment
Services, the Company first obtains the consent of Investment Services.
Systematic withdrawals from Account Value allocated to the Fixed Interest
Account must provide for payments over a period of not less than 36 months
as described under "The Fixed Interest Account," page 33. You should
consider carefully the tax consequences of a systematic withdrawal,
including the 10% penalty tax imposed on withdrawals made prior to the
Owner's attaining age 59 1/2. See "Federal Tax Matters," page 36.

FREE-LOOK RIGHT

You may return a Contract within the Free-Look Period, which is generally a
10-day period beginning when you receive the Contract. The returned
Contract will then be deemed void and the Company will refund any purchase
payments allocated to the Fixed Interest Account plus the Account Value in
the Subaccounts as of the end of the Valuation Period during which the
returned Contract is received by the Company. The Company will return
purchase payments allocated to the Subaccounts rather than Account Value in
those states and circumstances in which it is required to do so.

DEATH BENEFIT

If the Owner dies during the Accumulation Period, the Company will pay
the death benefit proceeds to the Designated Beneficiary upon receipt
of due proof of death and instructions regarding payment to the
Designated Beneficiary. If there are Joint Owners, the death benefit
proceeds will be payable upon receipt of due proof of death of either
Owner during the Accumulation Period and instructions regarding
payment. If the surviving spouse of the deceased Owner is the sole
Designated Beneficiary, such spouse may elect to continue the Contract
in force, subject to certain limitations. See "Distribution
Requirements," page 24. If the Owner is not a natural person, the death
benefit proceeds will be payable upon receipt of due proof of death of
the Annuitant during the Accumulation Period and instructions regarding
payment, and the amount of the death benefit is based on the age of the
oldest Annuitant on the date the Contract was issued. If the death of
an Owner occurs on or after the Annuity Payout Date, any death benefit
will be determined according to the terms of the Annuity Option. See
"Annuity Options," page 28.

The death benefit proceeds will be the death benefit reduced by any premium
taxes due or paid by the Company. If an Owner dies during the Accumulation
Period and the age of each Owner was 75 or younger on the date the Contract
was issued, the amount of the death benefit will be the greatest of (1) the
Account Value as of the end of the Valuation Period in which due proof of
death and instructions regarding payment are received at the T. Rowe Price
Variable Annuity Service Center, (2) the aggregate purchase payments
received less any reductions caused by previous withdrawals, or (3) the
stepped-up death benefit. The stepped-up death benefit is: (a) the highest
death benefit on any annual Contract anniversary that is both an exact
multiple of five and occurs prior to the oldest Owner attaining age 76,
plus (b) any purchase payments made since the applicable fifth annual
Contract anniversary, less (c) any withdrawals since the applicable
anniversary.

If an Owner dies during the Accumulation Period and the Contract was issued
to the Owner after age 75, the amount of the death benefit will be the
Account Value as of the end of the Valuation Period in which due proof of
death and instructions regarding payment are received at the T. Rowe Price
Variable Annuity Service Center.

Notwithstanding the foregoing, the death benefit for Contracts issued in
Florida, regardless of age at issue, is the greater of (1) the Account
Value as of the end of the Valuation Period in which due proof of death and
instructions regarding payment are received at the T. Rowe Price Variable
Annuity Service Center, or (2) the aggregate purchase payments received
less any reductions caused by previous withdrawals.

The Company will pay the death benefit proceeds to the Designated
Beneficiary in a single sum or under one of the Annuity Options, as elected
by the Designated Beneficiary. If the Designated Beneficiary is to receive
annuity payments under an Annuity Option, there may be limits under
applicable law on the amount and duration of payments that the Beneficiary
may receive, and requirements respecting timing of payments. A tax adviser
should be consulted in considering Annuity Options. See "Federal Tax
Matters," page 36 for a discussion of the tax consequences in the event of
death.

DISTRIBUTION REQUIREMENTS

For Contracts issued in connection with Non-Qualified Plans, if the
surviving spouse of the deceased Owner is the sole Designated Beneficiary,
such spouse may elect to continue the Contract in force until the earlier
of the surviving spouse's death or the Annuity Payout Date or to receive
the death benefit proceeds. For any Designated Beneficiary other than a
surviving spouse, only those options may be chosen that provide for
complete distribution of the Owner's interest in the Contract within five
years of the death of the Owner. If the Designated Beneficiary is a natural
person, that person alternatively can elect to begin receiving annuity
payments within one year of the Owner's death over a period not extending
beyond his or her life or life expectancy. If the Owner of the Contract is
not a natural person, these distribution rules are applicable upon the
death of or a change in the primary Annuitant.

For Contracts issued in connection with Qualified Plans, the terms of any
Qualified Plan and the Internal Revenue Code should be reviewed with
respect to limitations or restrictions on distributions following the death
of the Owner or Annuitant. Because the rules applicable to Qualified Plans
are extremely complex, a competent tax adviser should be consulted.

DEATH OF THE ANNUITANT

If the Annuitant dies prior to the Annuity Payout Date, and the Owner is a
natural person and is not the Annuitant, no death benefit proceeds will be
payable under the Contract. The Owner may name a new Annuitant within 30
days of the Annuitant's death. If a new Annuitant is not named, the Company
will designate the Owner as Annuitant. On the death of the Annuitant on or
after the Annuity Payout Date, any death benefit is determined under the
terms of the Annuity Option. See "Annuity Options," page 28.

CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------

MORTALITY AND EXPENSE RISK CHARGE

The Company deducts a daily charge from the assets of each Subaccount for
mortality and expense risks assumed by the Company under the Contracts. The
charge generally is equal to an annual rate of .55% of each Subaccount's
average daily net assets. This amount is intended to compensate the Company
for certain mortality and expense risks the Company assumes in offering and
administering the Contracts and in operating the Subaccounts. If Option 9
is selected, the mortality and expense risk charge is equal, during the
Annuity Period, to an annual rate of 1.40% of each Subaccount's average
daily net assets.

The expense risk borne by the Company is the risk that the Company's actual
expenses in issuing and administering the Contracts and operating the
Subaccounts will be more than the profit realized from the mortality and
expense risk charge. The mortality risk borne by the Company is the risk
that Annuitants, as a group, will live longer than the Company's actuarial
tables predict. In this event, the Company guarantees that annuity payments
will not be affected by a change in mortality experience that results in
the payment of greater annuity income than assumed under the Annuity
Options in the Contract. The Company assumes a mortality risk in connection
with the death benefit under the Contract. With respect to Option 9, the
Company also assumes the risks associated with providing the Floor Payment.
See "Option 9 - Life Income with Liquidity," page 29.

The Company may ultimately realize a profit from the mortality and expense
risk charge to the extent it is not needed to cover mortality and
administrative expenses, but the Company may realize a loss to the extent
the charge is not sufficient. The Company may use any profit derived from
this charge for any lawful purpose, including any promotional and
administrative expenses, including compensation paid by the Company to T.
Rowe Price Investment Services, Inc. or an affiliate thereof. The Company
pays Investment Services at the annual rate of .10% of each Subaccount's
average daily net assets for administrative services.

PREMIUM TAX CHARGE

Various states and municipalities impose a tax on premiums on annuity
contracts received by insurance companies. Whether or not a premium tax is
imposed will depend upon, among other things, the Owner's state of
residence, the Annuitant's state of residence, and the insurance tax laws
and the Company's status in a particular state. The Company assesses a
premium tax charge to reimburse itself for premium taxes that it incurs in
connection with a Contract. This charge will be deducted upon the Annuity
Payout Date, upon full or partial withdrawal, or upon payment of the death
benefit, if premium taxes are incurred at that time and are not refundable.
The Company reserves the right to deduct premium taxes when due or anytime
thereafter. Premium tax rates currently range from 0% to 3.5%, but are
subject to change by a governmental entity.

CONTRACT WITHDRAWAL CHARGE

The Company deducts a withdrawal charge from full or partial withdrawals
made during the Liquidity Period under Option 9. The charge is deducted
from the Subaccounts in the same proportion as the withdrawal is allocated.
The withdrawal charge is based upon the year in which the withdrawal is
made as measured from the Annuity Payout Date. The withdrawal charge, which
is set forth below, is applied to the amount of the withdrawal.

-------------------------------------- -------- -----------------------
YEAR FROM ANNUITY PAYOUT DATE WITHDRAWAL CHARGE
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 1%
-------------------------------------- -------- -----------------------

The withdrawal charge compensates the Company for the costs associated with
providing the Floor Payment under Option 9, including the costs of
reinsurance purchased by the Company to hedge against the Company's
potential losses from providing the Floor Payment.

OTHER CHARGES

The Company may charge the Separate Account or the Subaccounts for the
federal, state, or local taxes incurred by the Company that are
attributable to the Separate Account or the Subaccounts, or to the
operations of the Company with respect to the Contracts, or that are
attributable to payment of premiums or acquisition costs under the
Contracts. No such charge is currently assessed. See "Tax Status of the
Company and the Separate Account" and "Charge for the Company's Taxes,"
page 37.

GUARANTEE OF CERTAIN CHARGES

The Company guarantees that the charge for mortality and expense risks will
not exceed an annual rate of .55% of each Subaccount's average daily net
assets (1.40% of each Subaccount's average daily net assets under Option
9).

FUND EXPENSES

Each Subaccount purchases shares at the net asset value of the
corresponding Portfolio of the Funds. Each Portfolio's net asset value
reflects the investment management fee and any other expenses that are
deducted from the assets of the Fund. These fees and expenses are not
deducted from the Subaccount, but are paid from the assets of the
corresponding Portfolio. As a result, you indirectly bear a pro rata
portion of such fees and expenses. The management fees and other expenses,
if any, which are more fully described in the Funds' prospectus, are not
specified or fixed under the terms of the Contract, and the Company bears
no responsibility for such fees and expenses.

ANNUITY PAYMENTS
- --------------------------------------------------------------------------------

GENERAL

You may select the Annuity Payout Date at the time of application. You may
not defer the Annuity Payout Date beyond the Annuitant's 90th birthday,
although the terms of a Qualified Plan and the laws of certain states may
require you to begin receiving annuity payments at an earlier age. If you
do not select an Annuity Payout Date, the Annuity Payout Date will be the
later of the Annuitant's 70th birthday or the tenth annual Contract
Anniversary. See "Selection of an Option," page 30. If there are Joint
Annuitants, the birth date of the older Annuitant will be used to determine
the latest Annuity Payout Date.

On the Annuity Payout Date, the Account Value as of that date, less any
premium taxes, will be applied to provide an annuity under one of the
options described on page 28. Account Value is further reduced by an amount
equal to 1.8% of Account Value if you elect a fixed annuity under one of
Options 1 through 4 or 8. Each option, except Option 9, which is available
only as a variable annuity, is available either as a variable annuity
supported by the Subaccounts or as a fixed annuity supported by the Fixed
Interest Account. A combination variable and fixed annuity is also
available under Options 5 through 7. Your payment choices for each annuity
option are set forth in the table below.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
COMBINATION VARIABLE
ANNUITY OPTION VARIABLE ANNUITY FIXED ANNUITY AND FIXED ANNUITY
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Option 1 - Life Income X X
-------------------------------------------------------------------------------------------------------
Option 2 - Life Income with Period Certain X X
-------------------------------------------------------------------------------------------------------
Option 3 - Life Income with Installment X X
Refund
-------------------------------------------------------------------------------------------------------
Option 4 - Joint and Last Survivor X X
-------------------------------------------------------------------------------------------------------
Option 5 - Payments for a Specified Period X X X
-------------------------------------------------------------------------------------------------------
Option 6 - Payments of a Specified Amount X X X
-------------------------------------------------------------------------------------------------------
Option 7 - Age Recalculation X X X
-------------------------------------------------------------------------------------------------------
Option 8 - Period Certain X X
-------------------------------------------------------------------------------------------------------
Option 9 - Life Income with Liquidity X
-------------------------------------------------------------------------------------------------------
</TABLE>

Variable annuity payments will fluctuate with the investment performance of
the applicable Subaccounts while fixed annuity payments will not. Unless
you direct otherwise, Account Value allocated to the Subaccounts will be
applied to purchase a variable annuity and Account Value allocated to the
Fixed Interest Account will be applied to purchase a fixed annuity.

The Company will make annuity payments on a monthly, quarterly, semiannual,
or annual basis, except that under Option 9, Annuity Payments can be made
only on a monthly basis. No annuity payments will be made for less than
$100 except that there is no minimum payment amount with respect to annuity
payments under Option 9. You may direct Investment Services to apply the
proceeds of an annuity payment to shares of one or more of the T. Rowe
Price Funds by submitting a written request to the T. Rowe Price Variable
Annuity Service Center. If the frequency of payments selected would result
in payments of less than $100, the Company reserves the right to change the
frequency.

You may designate or change an Annuity Payout Date, Annuity Option and
Annuitant, provided proper written notice is received at the T. Rowe Price
Variable Annuity Service Center at least 30 days prior to the Annuity
Payout Date. The date selected as the new Annuity Payout Date must be at
least 30 days after the date written notice requesting a change of Annuity
Payout Date is received at the T. Rowe Price Variable Annuity Service
Center.

EXCHANGES AND WITHDRAWALS

During the Annuity Period, the Owner may exchange Account Value or Payment
Units among the Subaccounts upon proper written request to the T. Rowe
Price Variable Annuity Service Center. Up to six exchanges are allowed in
any Contract Year. Exchanges of Account Value or Payment Units during the
Annuity Period will result in future annuity payments based upon the
performance of the Subaccounts to which the exchange is made. Because
Option 9 provides for level monthly payments that reset only annually, an
exchange under Option 9 will not affect the amount of the annuity payment
until the next annual reset date.

The Owner may exchange Payment Units under Options 1 through 4 and 8 and
may exchange Account Value among the Subaccounts and the Fixed Interest
Account under Options 5 through 7, subject to the restrictions on exchanges
from the Fixed Interest Account described under the "Fixed Interest
Account," page 33. Under Option 9, the Owner may exchange Account Value
among the Subaccounts during the Liquidity Period and may exchange Payment
Units after the Liquidity Period. An exchange of Account Value under Option
9 will automatically effect a corresponding exchange of Payment Units. The
minimum amount of Account Value that may be exchanged is $500 or, if less,
the amount remaining in the Fixed Interest Account or Subaccount.

Once annuity payments have commenced, an Annuitant or Owner cannot change
the Annuity Option and generally cannot surrender his or her annuity for
the Withdrawal Value. Full and partial withdrawals of Account Value are
available, however, during the Annuity Period under Options 5 through 7,
subject to the restrictions on withdrawals from the Fixed Interest Account,
and under Option 9 during the Liquidity Period. Withdrawals during the
Liquidity Period under Option 9 are subject to a withdrawal charge as
discussed under "Contract Withdrawal Charge," page 25. An Owner may elect
to withdraw the present value of annuity payments, commuted at the assumed
interest rate, if a variable annuity under Option 8 is selected. Partial
withdrawals during the Annuity Period will reduce the amount of future
annuity payments.

Under Option 9, upon a partial withdrawal of Account Value, the amount of
the annuity payment, Floor Payment and number of Payment Units used to
calculate the annuity payment will be reduced. The amount of the annuity
payment and the Payment Units for each Subaccount is reduced in the same
proportion as the withdrawal reduces Account Value allocated to that
Subaccount as of the date of the withdrawal. An example of a partial
withdrawal under Option 9 is set forth below.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
SUBACCOUNTS FROM WHICH ACCOUNT VALUE ON WITHDRAWAL AMOUNT PERCENTAGE
ANNUITY PAYMENT IS MADE DATE OF WITHDRAWAL (INCLUDING WITHDRAWAL CHARGES) REDUCTION

<S> <C> <C> <C>
Equity Income $95,000 $0 0%
International Stock $25,000 $15,000 60%
Total $120,000 $15,000 12.5%
-----------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
PRIOR TO PARTIAL WITHDRAWAL AFTER PARTIAL WITHDRAWAL
----------------------------------- -------------------------------
AMOUNT OF AMOUNT OF
SUBACCOUNTS FROM WHICH ANNUITY PAYMENT FLOOR ANNUITY PAYMENT FLOOR
ANNUITY PAYMENT IS MADE PAYMENT UNITS PAYMENT PAYMENT UNITS PAYMENT(1)

<S> <C> <C> <C> <C> <C> <C>
Equity Income(2) $300 29.7914 N/A $300 29.7914 N/A
International Stock(3) $100 9.7847 N/A $40 3.9139 N/A
Total $400 $304 $340 $266
-----------------------------------------------------------------------------------------------------
</TABLE>
1 The Floor Payment is reduced by 12.5%, the percentage by which the
partial withdrawal reduced Account Value.

2 The Annuity Payment and Payment Units allocated to this Subaccount are
not reduced in this example, because no amount is withdrawn from
Account Value allocated to the Equity Income Subaccount.

3 The Annuity Payment and Payment Units allocated to this Subaccount are
reduced by 60%, the percentage by which the partial Withdrawal reduced
Account Value allocated to the International Stock Subaccount.

ANNUITY OPTIONS

The Contract provides for nine Annuity Options. Other Annuity Options may
be available upon request at the discretion of the Company. If no Annuity
Option has been selected, annuity payments will be made to the Annuitant
under Option 2 which shall be an annuity payable monthly during the
lifetime of the Annuitant with payments guaranteed to be made for 10 years.
The Annuity Options are set forth below.

OPTION 1 - LIFE INCOME Periodic annuity payments will be made during the
lifetime of the Annuitant. It is possible under this Option for an
Annuitant to receive only one annuity payment if the Annuitant's death
occurred prior to the due date of the second annuity payment, two if death
occurred prior to the due date of the third annuity payment, etc. THERE IS
NO MINIMUM NUMBER OF PAYMENTS GUARANTEED UNDER THIS OPTION. PAYMENTS CEASE
UPON THE DEATH OF THE ANNUITANT, REGARDLESS OF THE NUMBER OF PAYMENTS
RECEIVED.

OPTION 2 - LIFE INCOME WITH PERIOD CERTAIN OF 5, 10, 15, OR 20 YEARS
Periodic annuity payments will be made during the lifetime of the Annuitant
with the promise that if, at the death of the Annuitant, payments have been
made for less than a stated period, which may be 5, 10, 15, or 20 years, as
elected, annuity payments will be continued during the remainder of such
period to the Designated Beneficiary. UPON THE ANNUITANT'S DEATH AFTER THE
PERIOD CERTAIN, NO FURTHER ANNUITY PAYMENTS WILL BE MADE.

OPTION 3 - LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION Periodic
annuity payments will be made during the lifetime of the Annuitant with the
promise that, if at the death of the Annuitant, the number of payments that
has been made is less than the number determined by dividing the amount
applied under this Option by the amount of the first payment, annuity
payments will be continued to the Designated Beneficiary until that number
of annuity payments has been made.

OPTION 4 - JOINT AND LAST SURVIVOR Periodic annuity payments will be made
during the lifetime of the Annuitants. Annuity payments will be made as
long as either Annuitant is living. Upon the death of one Annuitant,
annuity payments continue to the surviving annuitant at the same or a
reduced level of 75%, 66 2/3% or 50% of annuity payments as elected by the
Owner at the time the Annuity Option is selected. With respect to fixed
annuity payments, the amount of the annuity payment and, with respect to
variable annuity payments, the number of Payment Units used to determine
the annuity payment is reduced as of the first annuity payment following
the Annuitant's death. It is possible under this Option for only one
annuity payment to be made if both Annuitants died prior to the second
annuity payment due date, two if both died prior to the third annuity
payment due date, etc. AS IN THE CASE OF OPTION 1, THERE IS NO MINIMUM
NUMBER OF PAYMENTS GUARANTEED UNDER THIS OPTION. PAYMENTS CEASE UPON THE
DEATH OF THE LAST SURVIVING ANNUITANT, REGARDLESS OF THE NUMBER OF PAYMENTS
RECEIVED.

OPTION 5 - PAYMENTS FOR SPECIFIED PERIOD Periodic annuity payments will be
made for a fixed period, which may be from 5 to 20 years, as elected by the
Owner. The amount of each annuity payment is determined by dividing Account
Value by the number of annuity payments remaining in the period. If, at the
death of the Annuitant, payments have been made for less than the selected
fixed period, the remaining unpaid payments will be paid to the Designated
Beneficiary.

OPTION 6 - PAYMENTS OF A SPECIFIED AMOUNT Periodic annuity payments of the
amount elected by the Owner will be made until Account Value is exhausted,
with the guarantee that, if, at the death of the Annuitant, all guaranteed
payments have not yet been made, the remaining unpaid payments will be paid
to the Designated Beneficiary. This Option is available only for Contracts
issued in connection with Non-Qualified Plans.

OPTION 7 - AGE RECALCULATION Periodic annuity payments will be made based
upon the Annuitant's life expectancy, or the joint life expectancy of the
Annuitant and a beneficiary, at the Annuitant's attained age (and the
beneficiary's attained or adjusted age, if applicable) each year. The
payments are computed by reference to government actuarial tables and are
made until Account Value is exhausted. Upon the Annuitant's death, any
Account Value will be paid to the Designated Beneficiary.

OPTION 8 - PERIOD CERTAIN Periodic annuity payments will be made for a
fixed period which may be 5, 10, 15 or 20 years. This option differs from
Option 5 in that annuity payments are calculated on the basis of Payment
Units. If the Annuitant dies prior to the end of the period certain, the
remaining guaranteed annuity payments will be made to the Designated
Beneficiary.

OPTION 9 - LIFE INCOME WITH LIQUIDITY Monthly annuity payments will be made
for the life of the Annuitant, or the Owner may elect annuity payments for
the life of the Annuitant and a Joint Annuitant, and in both cases with a
period certain of 15 years. The period certain may be for a period of less
than 15 years in the case of a Contract issued in connection with a
Qualified Plan, as the period certain in that case may not exceed the life
expectancy of the Annuitant or joint life expectancy of the Joint
Annuitants. Annuity payments under this option are guaranteed never to be
less than the Floor Payment which is equal to 80% of the initial annuity
payment; provided that the Floor Payment is adjusted in the event of a
withdrawal as discussed under "Exchanges and Withdrawals," page 27. The
amount of the annuity payment will remain level for 12 month intervals and
will reset on each anniversary of the Annuity Payout Date. Annuity payments
during the Liquidity Period are paid from Account Value and reduce the
amount of Account Value available for withdrawal. If during the Liquidity
Period Account Value allocated to a Subaccount is depleted, any shortfall
will be deducted proportionately from those Subaccounts that have Account
Value, and future annuity payments will be based upon the performance of
those Subaccounts.

If there are Joint Annuitants, annuity payments will be made as long as
either Annuitant is living. Upon the death of one Annuitant, annuity
payments continue to the surviving Annuitant at the same or a reduced level
of 75%, 66 2/3% or 50% of annuity payments as elected by the Owner at the
time the Annuity Option is selected. The number of Payment Units used to
calculate annuity payments is reduced (1) as of the annuity payment due at
the close of the period certain, or (2) if later, as of the first annuity
payment following the death of the Annuitant.

A death benefit is payable to the Designated Beneficiary upon the death of
the Annuitant or, if there are Joint Annuitants, upon the death of the last
Annuitant prior to the close of the period certain. The death benefit
during the Liquidity Period is the Account Value as of the end of the
Valuation Period during which due proof of death and instructions regarding
payment are received at the T. Rowe Price Variable Annuity Service Center.
The Designated Beneficiary may elect the death benefit in the event of
death during the remainder of the period certain, as follows: (1) a lump
sum equal to the present value, commuted at the assumed interest rate, of
the remaining guaranteed annuity payments as of the end of the Valuation
Period during which due proof of death and instructions regarding payment
are received at the T. Rowe Price Variable Annuity Service Center; or (2)
the remaining guaranteed annuity payments paid to the Designated
Beneficiary on a monthly basis.

If there are Joint Annuitants, upon the death of one Annuitant during the
Liquidity Period, the amount of annuity payments to the surviving Annuitant
may be increased as of the close of the Liquidity Period. Whether the
amount of the annuity payment will be increased is determined by applying
an amount equal to the present value of the future annuity payments based
upon the joint lives of the Annuitants, commuted at the assumed interest
rate, to a life income option with a period certain of ten years (or the
amount of time remaining in the period certain as of the close of the
Liquidity Period) to determine an annuity payment. If this annuity payment
is greater than the current annuity payment, the current payment would be
increased to that amount as of the close of the Liquidity Period. The
Payment Units and Floor Payment would be increased proportionately as of
that date.

SELECTION OF AN OPTION

You should carefully review the Annuity Options with your financial or tax
adviser. For Contracts used in connection with a Qualified Plan, reference
should be made to the terms of the particular plan and the requirements of
the Internal Revenue Code for pertinent limitations respecting annuity
payments and other matters. For instance, Qualified Plans generally require
that annuity payments begin no later than April 1 of the calendar year
following the year in which the Annuitant reaches age 70 1/2. In addition,
under Qualified Plans, the period elected for receipt of annuity payments
under Annuity Options (other than life income) generally may be no longer
than the joint life expectancy of the Annuitant and beneficiary in the year
that the Annuitant reaches age 70 1/2, and must be shorter than such joint
life expectancy if the beneficiary is not the Annuitant's spouse and is
more than 10 years younger than the Annuitant. For Non-Qualified Plans, the
Company does not allow annuity payments to be deferred beyond the
Annuitant's 90th birthday.

ANNUITY PAYMENTS

Annuity payments under Options 1 through 4, 8 and 9 are based upon annuity
rates that vary with the Annuity Option selected. In the case of Options 1
through 4 and 9 the annuity rates will vary based upon the age and sex of
the Annuitant, except that unisex rates are used where required by law. The
annuity rates reflect your life expectancy based upon your age and gender
as of the Annuity Payout Date unless unisex rates apply. The annuity rates
are based upon the 1983(a) Mortality Table and are adjusted to reflect an
assumed interest rate of 3.5% or 5%, compounded annually, as selected by
the Owner. See the table on page 31 for the basis of annuity rates. In the
case of Options 5, 6 and 7, annuity payments are based upon Account Value
without regard to annuity rates.

BASIS OF ANNUITY RATES

------------------------------------------------------
OPTIONS 1-4 AND 9 OPTION 8
Assumed Interest Rate Assumed Interest Rate
Mortality Table 1983(a)
------------------------------------------------------

The Company calculates variable annuity payments under Options 1 through 4,
8 and 9 using Payment Units. The value of a Payment Unit for each
Subaccount is determined as of each Valuation Date and was initially $1.00.
The Payment Unit value of a Subaccount as of any subsequent Valuation Date
is determined by adjusting the Payment Unit value on the previous Valuation
Date for (1) the interim performance of the corresponding Portfolio of the
Funds; (2) any dividends or distributions paid by the corresponding
Portfolio; (3) the mortality and expense risk charge; (4) the charges, if
any, that may be assessed by the Company for taxes attributable to the
operation of the Subaccount; and (5) the assumed interest rate.

The Company determines the number of Payment Units used to calculate each
variable annuity payment as of the Annuity Payout Date. As discussed above,
the Contract specifies annuity rates for Options 1 through 4, 8 and 9,
which are the guaranteed minimum dollar amount of monthly annuity payment
for each $1,000 of Account Value, less any applicable premium taxes, and
less 1.8% of such Account Value if a fixed annuity is selected, applied to
an Annuity Option. The Account Value as of the Annuity Payout Date, less
any applicable premium taxes, is divided by $1,000 and the result is
multiplied by the rate per $1,000 specified in the annuity tables to
determine the initial annuity payment for a variable annuity and the
guaranteed monthly annuity payment for a fixed annuity.

On the Annuity Payout Date, the Company divides the initial variable
annuity payment by the value as of that date of the Payment Unit for the
applicable Subaccount to determine the number of Payment Units to be used
in calculating subsequent annuity payments. If variable annuity payments
are allocated to more than one Subaccount, the number of Payment Units will
be determined by dividing the portion of the initial variable annuity
payment allocated to a Subaccount by the value of that Subaccount's Payment
Unit as of the Annuity Payout Date. The initial variable annuity payment is
allocated to the Subaccounts in the same proportion as the Account Value is
allocated as of the Annuity Payout Date. The number of Payment Units will
remain constant for subsequent annuity payments, unless the Owner exchanges
Payment Units among Subaccounts or makes a withdrawal under Option 8 or
during the Liquidity Period under Option 9.

Subsequent variable annuity payments are calculated by multiplying the
number of Payment Units allocated to a Subaccount by the value of the
Payment Unit as of the date of the annuity payment. If the annuity payment
is allocated to more than one Subaccount, the annuity payment is equal to
the sum of the payment amount determined for each Subaccount. Annuity
payments under Option 9 are reset only once each year on the 12-month
anniversary of the Annuity Payout Date. An example is set forth below of an
annuity payment calculation under Option 9, assuming purchase of a Contract
by a 60-year-old male with Account Value of $100,000.

--------------------------------------------------------------------------
Account Value $100,000
Premium Tax - 0 $100,000
-------- -------- =100
Proceeds Under the Contract $100,000 $1,000

Amount determined by reference to annuity table for a male,
age 60 under Option 9.......................................... $4.78

First Variable Annuity Payment (100 x $4.78)................... $478

<TABLE>
<CAPTION>
ALLOCATION OF FIRST VARIABLE PAYMENT UNIT NUMBER OF PAYMENT
ACCOUNT VALUE ANNUITY PAYMENT VALUE ON ANNUITY UNITS USED TO DETERMINE
SUBACCOUNT UNDER ALLOCATION PAYOUT DATE SUBSEQUENT PAYMENTS
THE CONTRACT

<S> <C> <C> <C> <C> <C> <C>
Equity Income 50% $239.00 / $1.51 = 158.2781
International Stock 50% 239.00 / 1.02 = 234.3137
------
$478.00
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF PAYMENT UNITS PAYMENT UNIT VALUE ON ANNUAL RESET AMOUNT OF SUBSEQUENT
SUBACCOUNT USED TO DETERMINE DATE ANNUITY PAYMENT
SUBSEQUENT PAYMENTS

<S> <C> <C> <C> <C> <C>
Equity Income 158.2781 x $1.60 = $253.24
International Stock 234.3137 x 1.10 = 257.74
</TABLE>

Subsequent Variable Annuity Payment............................ $510.98

<TABLE>
<CAPTION>
DATE OF AMOUNT OF DATE OF AMOUNT OF
ANNUITY PAYMENT ANNUITY PAYMENT ANNUITY PAYMENT ANNUITY PAYMENT

<S> <C> <C> <C> <C> <C>
Annuity Payout February 15 $478.00 September 15 $478.00
Date
March 15 478.00 October 15 478.00
April 15 478.00 November 15 478.00
May 15 478.00 December 15 478.00
June 15 478.00 January 15 478.00
July 15 478.00 Annual Reset February 15 510.98
Date
August 15 478.00
</TABLE>
--------------------------------------------------------------------------

ASSUMED INTEREST RATE

As discussed above, the annuity rates for Options 1 through 4, 8 and 9 are
based upon an assumed interest rate of 3.5% or 5%, compounded annually, as
you elect at the time the Annuity Option is selected. Variable annuity
payments generally increase or decrease from one annuity payment date to
the next based upon the performance of the applicable Subaccounts during
the interim period adjusted for the assumed interest rate. If the
performance of the Subaccounts is equal to the assumed interest rate,
annuity payments will remain constant. If the performance of the
Subaccounts is greater than the assumed interest rate, the amount of the
annuity payments will increase and if it is less than the assumed interest
rate, the amount of the annuity payments will decline. A higher assumed
interest rate, for example 5%, would mean a higher initial variable annuity
payment, but the amount of the annuity payments would increase more slowly
in a rising market (or the amount of the annuity payments would decline
more rapidly in a falling market). Conversely, a lower assumed interest
rate, for example 3.5%, would mean a lower initial variable annuity payment
and more rapidly rising annuity payment amounts in a rising market and more
slowly declining payment amounts in a falling market.

THE FIXED INTEREST ACCOUNT
- --------------------------------------------------------------------------------

You may allocate all or a portion of your purchase payments and exchange
Account Value to the Fixed Interest Account. Amounts allocated to the Fixed
Interest Account become part of the Company's General Account, which
supports the Company's insurance and annuity obligations. The Company's
General Account is subject to regulation and supervision by the Kansas
Department of Insurance and is also subject to the insurance laws and
regulations of other jurisdictions in which the Contract is distributed. In
reliance on certain exemptive and exclusionary provisions, interests in the
Fixed Interest Account have not been registered as securities under the
Securities Act of 1933 (the "1933 Act") and the Fixed Interest Account has
not been registered as an investment company under the Investment Company
Act of 1940 (the "1940 Act"). Accordingly, neither the Fixed Interest
Account nor any interests therein are generally subject to the provisions
of the 1933 Act or the 1940 Act. The Company has been advised that the
staff of the SEC has not reviewed the disclosure in this Prospectus
relating to the Fixed Interest Account. This disclosure, however, may be
subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements
made in the Prospectus. This Prospectus is generally intended to serve as a
disclosure document only for aspects of a Contract involving the Separate
Account and contains only selected information regarding the Fixed Interest
Account. For more information regarding the Fixed Interest Account, see
"The Contract," page 16.

Amounts allocated to the Fixed Interest Account become part of the General
Account of the Company, which consists of all assets owned by the Company
other than those in the Separate Account and other separate accounts of the
Company. Subject to applicable law, the Company has sole discretion over
the investment of the assets of its General Account.

INTEREST

Account Value allocated to the Fixed Interest Account earns interest at a
fixed rate or rates that are paid by the Company. The Account Value in the
Fixed Interest Account earns interest at an interest rate that is
guaranteed to be at least an annual effective rate of 3% which will accrue
daily ("Guaranteed Rate"). Such interest will be paid regardless of the
actual investment experience of the Company's General Account. In addition,
the Company may in its discretion pay interest at a rate ("Current Rate")
that exceeds the Guaranteed Rate. The Company will determine the Current
Rate, if any, from time to time.

Account Value allocated or exchanged to the Fixed Interest Account will
earn interest at the Current Rate, if any, in effect on the date such
portion of Account Value is allocated or exchanged to the Fixed Interest
Account. The Current Rate paid on any such portion of Account Value
allocated or exchanged to the Fixed Interest Account will be guaranteed for
rolling periods of one or more years (each a "Guarantee Period"). The
Company currently offers only Guarantee Periods of one year. Upon
expiration of any Guarantee Period, a new Guarantee Period of the same
duration begins with respect to that portion of Account Value, which will
earn interest at the Current Rate, if any, declared by the Company on the
first day of the new Guarantee Period.

Account Value allocated or exchanged to the Fixed Interest Account at one
point in time may be credited with a different Current Rate than amounts
allocated or exchanged to the Fixed Interest Account at another point in
time. For example, amounts allocated to the Fixed Interest Account in June
may be credited with a different Current Rate than amounts allocated to the
Fixed Interest Account in July. In addition, if Guarantee Periods of
different durations are offered, Account Value allocated or exchanged to
the Fixed Interest Account for a Guarantee Period of one duration may be
credited with a different Current Rate than amounts allocated or exchanged
to the Fixed Interest Account for a Guarantee Period of a different
duration. Therefore, at any time, various portions of your Account Value in
the Fixed Interest Account may be earning interest at different Current
Rates depending upon the point in time such portions were allocated or
exchanged to the Fixed Interest Account and the duration of the Guarantee
Period. The Company bears the investment risk for the Account Value
allocated to the Fixed Interest Account and for paying interest at the
Guaranteed Rate on amounts allocated to the Fixed Interest Account.

For purposes of determining the interest rates to be credited on Account
Value in the Fixed Interest Account, withdrawals or exchanges from the
Fixed Interest Account will be deemed to be taken first from any portion of
Account Value allocated to the Fixed Interest Account for which the
Guarantee Period expires during the calendar month in which the withdrawal
or exchange is effected, then in the order beginning with that portion of
such Account Value which has the longest amount of time remaining before
the end of its Guarantee Period and ending with that portion which has the
least amount of time remaining before the end of its Guarantee Period. For
more information about exchanges and withdrawals from the Fixed Interest
Account, see "Exchanges and Withdrawals" below.

DEATH BENEFIT

The death benefit under the Contract will be determined in the same fashion
for a Contract that has Account Value in the Fixed Interest Account as for
a Contract that has Account Value allocated to the Subaccounts. See "Death
Benefit," page 23.

CONTRACT CHARGES

Premium taxes will be the same for Contractowners who allocate purchase
payments or exchange Account Value to the Fixed Interest Account as for
those who allocate purchase payments to the Subaccounts. The charge for
mortality and expense risks will not be assessed against the Fixed Interest
Account, and any amounts that the Company pays for income taxes allocable
to the Subaccounts will not be charged against the Fixed Interest Account.
In addition, the investment management fees and any other expenses paid by
the Funds will not be paid directly or indirectly by Contractowners to the
extent the Account Value is allocated to the Fixed Interest Account;
however, such Contractowners will not participate in the investment
experience of the Subaccounts.

EXCHANGES AND WITHDRAWALS

Amounts may be exchanged from the Subaccounts to the Fixed Interest Account
and from the Fixed Interest Account to the Subaccounts, subject to the
following limitations. Exchanges from the Fixed Interest Account are
allowed only (1) from Account Value, the Guarantee Period of which expires
during the calendar month in which the exchange is effected, (2) pursuant
to the Dollar Cost Averaging Option provided that such exchanges are
scheduled to be made over a period of not less than one year, and (3)
pursuant to the Asset Rebalancing Option, provided that upon receipt of the
Asset Rebalancing Request, Account Value is allocated among the Fixed
Interest Account and the Subaccounts in the percentages selected by the
Contractowner without violating the restrictions on exchanges from the
Fixed Interest Account set forth in (1) above. Accordingly, a Contractowner
who desires to implement the Asset Rebalancing Option should do so at a
time when Account Value may be exchanged from the Fixed Interest Account to
the Subaccounts in the percentages selected by the Contractowner without
violating the restrictions on exchanges from the Fixed Interest Account.
Once an Asset Rebalancing Option is implemented, the restrictions on
exchanges will not apply to exchanges made pursuant to the Option. Up to
six exchanges are allowed in any Contract Year and exchanges pursuant to
the Dollar Cost Averaging and Asset Rebalancing Options are not included in
the six exchanges allowed per Contract Year. The minimum exchange amount is
$500 ($200 under the Dollar Cost Averaging Option) or the amount remaining
in the Fixed Interest Account. The Company reserves the right to waive or
limit the number of exchanges permitted each Contract Year, to suspend
exchanges, to limit the amount that may be subject to exchanges and the
amount remaining in an account after an exchange, and to impose conditions
on the right to exchange.

If Account Value is being exchanged from the Fixed Interest Account
pursuant to the Dollar Cost Averaging or Asset Rebalancing Option or
withdrawn from the Fixed Interest Account pursuant to systematic
withdrawals, any purchase payment allocated to, or Account Value exchanged
to or from, the Fixed Interest Account will automatically terminate such
Dollar Cost Averaging or Asset Rebalancing Option or systematic
withdrawals, and any withdrawal from the Fixed Interest Account or the
Subaccounts will automatically terminate the Asset Rebalancing Option. In
the event of automatic termination of any of the foregoing options, the
Company shall so notify the Contractowner, and the Contractowner may
reestablish Dollar Cost Averaging, Asset Rebalancing, or systematic
withdrawals by sending a written request to the Company, provided that the
Owner's Account Value at that time meets any minimum amount required for
the Dollar Cost Averaging or Asset Rebalancing Option.

The Contractowner may also make full withdrawals to the same extent as a
Contractowner who has allocated Account Value to the Subaccounts. A
Contractowner may make a partial withdrawal from the Fixed Interest Account
only (1) from Account Value, the Guarantee Period of which expires during
the calendar month in which the partial withdrawal is effected, (2)
pursuant to systematic withdrawals, and (3) once per Contract Year in an
amount up to the greater of $5,000 or 10% of Account Value allocated to the
Fixed Interest Account at the time of the partial withdrawal. Systematic
withdrawals from Account Value allocated to the Fixed Interest Account must
provide for payments over a period of not less than 36 months. See "Full
and Partial Withdrawals," page 21 and "Systematic Withdrawals," page 22.

PAYMENTS FROM THE FIXED INTEREST ACCOUNT

As required by most states, the Company reserves the right to delay for up
to six months after a written request in proper form is received at the T.
Rowe Price Variable Annuity Service Center, full and partial withdrawals
and exchanges from the Fixed Interest Account. During the period of
deferral, interest at the applicable interest rate or rates will continue
to be credited to the amounts allocated to the Fixed Interest Account. The
Company does not expect to delay payments from the Fixed Interest Account
and will notify you if there will be a delay.

MORE ABOUT THE CONTRACT
- --------------------------------------------------------------------------------

OWNERSHIP

The Contractowner is the person named as such in the application or in any
later change shown in the Company's records. While living, the
Contractowner alone has the right to receive all benefits and exercise all
rights that the Contract grants or the Company allows. The Owner may be an
entity that is not a living person, such as a trust or corporation,
referred to herein as "Non-Natural Persons." See "Federal Tax Matters,"
page 36.

JOINT OWNERS. The Joint Owners will be joint tenants with rights of
survivorship and upon the death of an Owner, the surviving Owner shall be
the sole Owner. Any Contract transaction requires the signature of all
persons named jointly. Joint Owners are permitted only on a Contract issued
pursuant to a Non-Qualified Plan.

DESIGNATION AND CHANGE OF BENEFICIARY

The Beneficiary is the individual named as such in the application or any
later change shown in the Company's records. The Contractowner may change
the Beneficiary at any time while the Contract is in force by written
request on a form provided by the Company and received by the Company at
the T. Rowe Price Variable Annuity Service Center. The change will not be
binding on the Company until it is received and recorded at the T. Rowe
Price Variable Annuity Service Center. The change will be effective as of
the date this form is signed subject to any payments made or other actions
taken by the Company before the change is received and recorded. A
Secondary Beneficiary may be designated. The Owner may designate a
permanent Beneficiary whose rights under the Contract cannot be changed
without the Beneficiary's consent.

PARTICIPATING

The Contract is participating and will share in the surplus earnings of the
Company. However, the current dividend scale is zero, and the Company does
not anticipate that dividends will be paid.

PAYMENTS FROM THE SEPARATE ACCOUNT

The Company will pay any full or partial withdrawal benefit or death
benefit proceeds from Account Value allocated to the Subaccounts, and will
effect an exchange between Subaccounts or from a Subaccount to the Fixed
Interest Account within seven days from the Valuation Date a proper request
is received at the T. Rowe Price Variable Annuity Service Center. However,
the Company can postpone the calculation or payment of such a payment or
exchange of amounts from the Subaccounts to the extent permitted under
applicable law, for any period: (a) during which the New York Stock
Exchange is closed other than customary weekend and holiday closings, (b)
during which trading on the New York Stock Exchange is restricted as
determined by the SEC, or (c) during which an emergency, as determined by
the SEC, exists as a result of which (i) disposal of securities held by the
Separate Account is not reasonably practicable, or (ii) it is not
reasonably practicable to determine the value of the assets of the Separate
Account.

PROOF OF AGE AND SURVIVAL

The Company may require proof of age or survival of any person on whose
life annuity payments depend.

MISSTATEMENTS

If the age or sex of an Annuitant or age of an Owner has been misstated,
the correct amount paid or payable by the Company under the Contract shall
be such as the Account Value would have provided for the correct age or sex
(unless unisex rates apply).

FEDERAL TAX MATTERS
- --------------------------------------------------------------------------------

INTRODUCTION

The Contract described in this Prospectus is designed for use by
individuals in retirement plans which may or may not be Qualified Plans
under the provisions of the Internal Revenue Code ("Code").

The ultimate effect of federal income taxes on the amounts held under a
Contract, on annuity payments, and on the economic benefits to the Owner,
the Annuitant, and the Beneficiary or other payee will depend upon the type
of retirement plan for which the Contract is purchased, the tax and
employment status of the individuals involved, and a number of other
factors. The discussion of the federal income tax considerations relating
to a contract contained herein and in the Statement of Additional
Information is general in nature and is not intended to be an exhaustive
discussion of all questions that might arise in connection with a Contract.
It is based upon the Company's understanding of the present federal income
tax laws as currently interpreted by the Internal Revenue Service ("IRS"),
and is not intended as tax advice. No representation is made regarding the
likelihood of continuation of the present federal income tax laws or of the
current interpretations by the IRS or the courts. Future legislation may
affect annuity contracts adversely. Moreover, no attempt has been made to
consider any applicable state or other laws. Because of the inherent
complexity of the tax laws and the fact that tax results will vary
according to the particular circumstances of the individual involved and,
if applicable, the Qualified Plan, a person should consult a qualified tax
adviser regarding the purchase of a Contract, the selection of an Annuity
Option under a Contract, the receipt of annuity payments under a Contract,
or any other transaction involving a Contract (including an exchange). THE
COMPANY DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF, OR TAX
CONSEQUENCES ARISING FROM, ANY CONTRACT OR ANY TRANSACTION INVOLVING THE
CONTRACT.

TAX STATUS OF THE COMPANY AND THE SEPARATE ACCOUNT

GENERAL

The Company intends to be taxed as a life insurance company under Part I,
Subchapter L of the Code. Because the operations of the Separate Account
form a part of the Company, the Company will be responsible for any federal
income taxes that become payable with respect to the income of the Separate
Account and its Subaccounts.

CHARGE FOR THE COMPANY'S TAXES

A charge may be made against the Separate Account for any federal taxes
incurred by the Company that are attributable to the Separate Account, the
Subaccounts, or to the operations of the Company with respect to the
Contracts or attributable to payments, premiums, or acquisition costs under
the Contracts. The Company will review the question of a charge to the
Separate Account, the Subaccounts, or the Contracts for the Company's
federal taxes periodically. Charges may become necessary if, among other
reasons, the tax treatment of the Company or of income and expenses under
the Contracts is ultimately determined to be other than what the Company
currently believes it to be, if there are changes made in the federal
income tax treatment of variable annuities at the insurance company level,
or if there is a change in the Company's tax status.

Under current laws, the Company may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are
not significant. If there is a material change in applicable state or local
tax laws, the Company reserves the right to charge the Separate Account or
the Subaccounts for such taxes, if any, attributable to the Separate
Account or Subaccounts.

DIVERSIFICATION STANDARDS

Each of the Portfolios will be required to adhere to regulations adopted by
the Treasury Department pursuant to Section 817(h) of the Code prescribing
asset diversification requirements for investment companies whose shares
are sold to insurance company separate accounts funding variable contracts.
Pursuant to these regulations, on the last day of each calendar quarter (or
on any day within 30 days thereafter), no more than 55% of the total assets
of a Portfolio may be represented by any one investment, no more than 70%
may be represented by any two investments, no more than 80% may be
represented by any three investments, and no more than 90% may be
represented by any four investments. For purposes of Section 817(h),
securities of a single issuer generally are treated as one investment, but
obligations of the U.S. Treasury and each U.S. Governmental agency or
instrumentality generally are treated as securities of separate issuers.
The Separate Account, through the Portfolios, intends to comply with the
diversification requirements of Section 817(h).

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contractowner's gross income. The IRS has stated
in published rulings that a variable contractowner will be considered the
owner of separate account assets if the contractowner possesses incidents
of ownership in those assets, such as the ability to exercise investment
control over the assets. The Treasury Department also announced, in
connection with the issuance of regulations concerning diversification,
that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated
asset account may cause the investor (i.e., the policyowner), rather than
the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by
way of regulations or rulings on the "extent to which policyholders may
direct their investments to particular subaccounts without being treated as
owners of the underlying assets." As of the date of this Prospectus, no
such guidance has been issued.

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 policyowners were not owners of separate account
assets. For example, the Contractowner has additional flexibility in
allocating purchase payments and Contract Values. These differences could
result in a Contractowner being treated as the owner of a pro rata portion
of the assets of the Separate Account. In addition, the Company does not
know what standards will be set forth, if any, in the regulations or
rulings which the Treasury Department has stated it expects to issue. The
Company therefore reserves the right to modify the Contract, as deemed
appropriate by the Company, to attempt to prevent a Contractowner from
being considered the owner of a pro rata share of the assets of the
Separate Account. Moreover, in the event that regulations or rulings are
adopted, there can be no assurance that the Portfolios will be able to
operate as currently described in the Prospectus, or that the Funds will
not have to change any Portfolio's investment objective or investment
policies.

INCOME TAXATION OF ANNUITIES IN GENERAL-NON-QUALIFIED PLANS

Section 72 of the Code governs the taxation of annuities. In general, a
Contractowner is not taxed on increases in value under an annuity contract
until some form of distribution is made under the contract. However, the
increase in value may be subject to tax currently under certain
circumstances. See "Contracts Owned by Non-Natural Person," page 40 and
"Diversification Standards," page 37. Withholding of federal income taxes
on all distributions may be required unless a recipient who is eligible
elects not to have any amounts withheld and properly notifies the Company
of that election.

* SURRENDERS OR WITHDRAWALS PRIOR TO THE ANNUITY PAYOUT DATE Code Section
72 provides that amounts received upon a total or partial withdrawal
(including systematic withdrawals) from a Contract prior to the Annuity
Payout Date generally will be treated as gross income to the extent that
the cash value of the Contract (determined without regard to any
surrender charge in the case of a partial withdrawal) exceeds the
"investment in the contract." The "investment in the contract" is that
portion, if any, of purchase payments paid under a Contract less any
distributions received previously under the Contract that are excluded
from the recipient's gross income. The taxable portion is taxed at
ordinary income tax rates. For purposes of this rule, a pledge or
assignment of a Contract is treated as a payment received on account of
a partial withdrawal of a Contract. Similarly, loans under a Contract
are generally treated as distributions under the Contract.

* SURRENDERS OR WITHDRAWALS ON OR AFTER THE ANNUITY PAYOUT DATE Upon a
complete surrender, the receipt is taxable to the extent that the cash
value of the Contract exceeds the investment in the Contract. The
taxable portion of such payments will be taxed at ordinary income tax
rates. For fixed annuity payments, the taxable portion of each payment
generally is determined by using a formula known as the "exclusion
ratio," which establishes the ratio that the investment in the Contract
bears to the total expected amount of annuity payments for the term of
the Contract. That ratio is then applied to each payment to determine
the non-taxable portion of the payment. The remaining portion of each
payment is taxed at ordinary income rates. For variable annuity
payments, the taxable portion of each payment is determined by using a
formula known as the "excludable amount," which establishes the
non-taxable portion of each payment. The non-taxable portion is a fixed
dollar amount for each payment, determined by dividing the investment in
the Contract by the number of payments to be made. The remainder of each
variable annuity payment is taxable. Once the excludable portion of
annuity payments to date equals the investment in the Contract, the
balance of the annuity payments will be fully taxable.

* PENALTY TAX ON CERTAIN SURRENDERS AND WITHDRAWALS With respect to
amounts withdrawn or distributed before the taxpayer reaches age 59 1/2,
a penalty tax is generally imposed equal to 10% of the portion of such
amount which is includible in gross income. However, the penalty tax is
not applicable to withdrawals: (i) made on or after the death of the
owner (or where the owner is not an individual, the death of the
"primary annuitant," who is defined as the individual the events in
whose life are of primary importance in affecting the timing and amount
of the payout under the Contract); (ii) attributable to the taxpayer's
becoming totally disabled within the meaning of Code Section 72(m)(7);
(iii) which are part of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the taxpayer, or the joint lives (or joint life
expectancies) of the taxpayer and his or her beneficiary; (iv) from
certain qualified plans; (v) under a so-called qualified funding asset
(as defined in Code Section 130(d)); (vi) under an immediate annuity
contract; or (vii) which are purchased by an employer on termination of
certain types of qualified plans and which are held by the employer
until the employee separates from service.

If the penalty tax does not apply to a surrender or withdrawal as a
result of the application of item (iii) above, and the series of
payments are subsequently modified (other than by reason of death or
disability), the tax for the first year in which the modification occurs
will be increased by an amount (determined by the regulations) equal to
the tax that would have been imposed but for item (iii) above, plus
interest for the deferral period, if the modification takes place (a)
before the close of the period which is five years from the date of the
first payment and after the taxpayer attains age 59 1/2, or (b) before
the taxpayer reaches age 59 1/2.

ADDITIONAL CONSIDERATIONS

* DISTRIBUTION-AT-DEATH RULES In order to be treated as an annuity
contract, a Contract must provide the following two distribution rules:
(a) if any owner dies on or after the Annuity Payout Date, and before
the entire interest in the Contract has been distributed, the remainder
of the owner's interest will be distributed at least as quickly as the
method in effect on the owner's death; and (b) if any owner dies before
the Annuity Payout Date, the entire interest in the Contract must
generally be distributed within five years after the date of death, or,
if payable to a designated beneficiary, must be annuitized over the life
of that designated beneficiary or over a period not extending beyond the
life expectancy of that beneficiary, commencing within one year after
the date of death of the owner. If the sole designated beneficiary is
the spouse of the deceased owner, the Contract (together with the
deferral of tax on the accrued and future income thereunder) may be
continued in the name of the spouse as owner.

Generally, for purposes of determining when distributions must begin
under the foregoing rules, where an owner is not an individual, the
primary annuitant is considered the owner. In that case, a change in the
primary annuitant will be treated as the death of the owner. Finally, in
the case of joint owners, the distribution-at-death rules will be
applied by treating the death of the first owner as the one to be taken
into account in determining generally when distributions must commence,
unless the sole Beneficiary is the deceased owner's spouse.

* GIFT OF ANNUITY CONTRACTS Generally, gifts of Non-Qualified Plan
Contracts prior to the Annuity Payout Date will trigger tax on the gain
on the Contract, with the donee getting a stepped-up basis for the
amount included in the donor's income. The 10% penalty tax and gift tax
also may be applicable. This provision does not apply to transfers
between spouses or incident to a divorce.

* CONTRACTS OWNED BY NON-NATURAL PERSONS If the Contract is held by a
non-natural person (for example, a corporation), the income on that
Contract (generally the increase in net surrender value less the
purchase payments) is includible in taxable income each year. The rule
does not apply where the Contract is acquired by the estate of a
decedent, where the Contract is held by certain types of retirement
plans, where the Contract is a qualified funding asset for structured
settlements, where the Contract is purchased on behalf of an employee
upon termination of a qualified plan, and in the case of a so-called
immediate annuity. An annuity contract held by a trust or other entity
as agent for a natural person is considered held by a natural person.

* MULTIPLE CONTRACT RULE For purposes of determining the amount of any
distribution under Code Section 72(e) (amounts not received as
annuities) that is includible in gross income, all Non-Qualified annuity
contracts issued by the same insurer to the same Contractowner during
any calendar year are to be aggregated and treated as one contract.
Thus, any amount received under any such contract prior to the
contract's Annuity Payout Date, such as a partial withdrawal, dividend,
or loan, will be taxable (and possibly subject to the 10% penalty tax)
to the extent of the combined income in all such contracts.

In addition, the Treasury Department has broad regulatory authority in
applying this provision to prevent avoidance of the purposes of this
rule. It is possible that, under this authority, the Treasury Department
may apply this rule to amounts that are paid as annuities (on and after
the Annuity Payout Date) under annuity contracts issued by the same
company to the same owner during any calendar year. In this case,
annuity payments could be fully taxable (and possibly subject to the 10%
penalty tax) to the extent of the combined income in all such contracts
and regardless of whether any amount would otherwise have been excluded
from income because of the "exclusion ratio" under the contract.

* POSSIBLE TAX CHANGES In recent years, legislation has been proposed that
would have adversely modified the federal taxation of certain annuities,
and President Clinton's fiscal-year 1999 Budget proposal includes a
provision that, if adopted, would impose new taxes on owners of variable
annuities. There is always the possibility that the tax treatment of
annuities could change by legislation or other means (such as IRS
regulations, revenue rulings, and judicial decisions). Moreover,
although unlikely, it is also possible that any legislative change could
be retroactive (that is, effective prior to the date of such change).

* TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT A transfer of
ownership of a Contract, the designation of an Annuitant, Payee, or
other Beneficiary who is not also the Owner, the selection of certain
Annuity Payout Dates or the exchange of a Contract may result in certain
tax consequences to the Owner that are not discussed herein. An Owner
contemplating any such transfer, assignment, selection, or exchange
should contact a qualified tax adviser with respect to the potential
effects of such a transaction.

QUALIFIED PLANS

The Contract may be used as a Qualified Plan that meets the requirements of
an individual retirement annuity ("IRA") under Section 408 of the Code. No
attempt is made herein to provide more than general information about the
use of the Contract as a Qualified Plan. Contractowners, Annuitants, and
Beneficiaries are cautioned that the rights of any person to any benefits
under such Qualified Plans may be limited by applicable law, regardless of
the terms and conditions of the Contract issued in connection therewith.

The amount that may be contributed to a Qualified Plan is subject to
limitations under the Code. In addition, early distributions from Qualified
Plans may be subject to penalty taxes. Furthermore, distributions from most
Qualified Plans are subject to certain minimum distribution rules. Failure
to comply with these rules could result in disqualification of the Plan or
subject the Owner or Annuitant to penalty taxes. As a result, the minimum
distribution rules may limit the availability of certain Annuity Options to
certain Annuitants and their beneficiaries. These rules and requirements
may not be incorporated into our Contract administration procedures.
Therefore, Contractowners, Annuitants, and Beneficiaries are responsible
for determining that contributions, distributions, and other transactions
with respect to the Contracts comply with applicable law.

THE FOLLOWING IS A BRIEF DESCRIPTION OF QUALIFIED PLANS AND THE USE OF THE
CONTRACT THEREWITH:

* SECTION 408 AND SECTION 408A

INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits
eligible individuals to establish individual retirement programs through
the purchase of Individual Retirement Annuities ("traditional IRAs").
The Contract may be purchased as an IRA. The IRAs described in this
paragraph are called "traditional IRAs" to distinguish them from "Roth
IRAs" which became available in 1998. Roth IRAs are described below.

IRAs are subject to limitations on the amount that may be contributed,
the persons who may be eligible, and on the time when distributions must
commence. Depending upon the circumstances of the individual,
contributions to a traditional IRA may be made on a deductible or
nondeductible basis. IRAs may not be transferred, sold, assigned,
discounted, or pledged as collateral for a loan or other obligation. The
annual premium for an IRA may not be fixed and may not exceed $2,000.
Any refund of premium must be applied to the payment of future premiums
or the purchase of additional benefits.

Sale of the Contracts for use with IRAs may be subject to special
requirements imposed by the Internal Revenue Service. Purchasers of the
Contracts for such purposes will be provided with such supplementary
information as may be required by the Internal Revenue Service and will
have the right to revoke the Contract under certain circumstances. See
the IRA Disclosure Statement which accompanies this Prospectus.

An individual's interest in a traditional IRA must generally be
distributed or begin to be distributed not later than April 1 of the
calendar year following the calendar year in which the individual
reaches age 70 1/2 ("required beginning date"). The Contractowner's
retirement date, if any, will not affect his or her required beginning
date. Periodic distributions must not extend beyond the life of the
individual or the lives of the individual and a designated beneficiary
(or over a period extending beyond the life expectancy of the individual
or the joint life expectancy of the individual and a designated
beneficiary).

If an individual dies before reaching his or her required beginning
date, the individual's entire interest must generally be distributed
within five years of the individual's death. However, the five-year rule
will be deemed satisfied if distributions begin before the close of the
calendar year following the individual's death to a designated
beneficiary and are made over the life of the beneficiary (or over a
period not extending beyond the life expectancy of the beneficiary). If
the designated beneficiary is the individual's surviving spouse,
distributions may be delayed until the individual would have reached age
70 1/2.

If an individual dies after reaching his or her required beginning date,
the individual's interest must generally be distributed at least as
rapidly as under the method of distribution in effect at the time of the
individual's death.

Distributions from IRAs are generally taxed under Code Section 72. Under
these rules, a portion of each distribution may be excludable from
income. The amount excludable from the individual's income is the amount
of the distribution which bears the same ratio as the individual's
nondeductible contributions bear to the expected return under the IRA.

The Internal Revenue Service has not reviewed the Contract for
qualification as an IRA, and has not addressed in a ruling of general
applicability whether a death benefit provision such as the provision in
the Contract comports with IRA qualification requirements.

ROTH IRAS. Section 408A of the Code permits eligible individuals to
establish a Roth IRA, a new type of IRA which became available in 1998.
The Contract may be purchased as a Roth IRA. Contributions to a Roth IRA
are not deductible, but withdrawals that meet certain requirements are
not subject to federal income tax. Sale of the contract for use with
Roth IRAs may be subject to special requirements imposed by the Internal
Revenue Service. Purchasers of the Contract for such purposes will be
provided with such supplementary information as may be required by the
Internal Revenue Service or other appropriate agency, and will have the
right to revoke the Contract under certain requirements. Unlike a
traditional IRA, Roth IRAs are not subject to minimum required
distribution rules during the Contractowner's life time. Generally,
however, the amount in a remaining Roth IRA must be distributed by the
end of the fifth year after the death of the Contractowner.

The Internal Revenue Service has not reviewed the Contract for
qualification as a Roth IRA and has not addressed in a ruling of general
applicability whether a death benefit provision such as the provision in
the Contract comports with Roth IRA qualification requirements.

* 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% of the taxable portion of the distribution. The 10% 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% 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% tax on the amount that was not properly
distributed.

EXCESS DISTRIBUTION/ACCUMULATION TAX. The penalty tax of 15% 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.

* WITHHOLDING

Periodic distributions (e.g., annuities and installment payments) from a
Qualified Plan that will last for a period of 10 or more years are
generally subject to voluntary income tax withholding. The amount
withheld on such periodic distributions is determined at the rate
applicable to wages. The recipient of a periodic distribution may
generally elect not to have withholding apply.

Nonperiodic distributions (e.g., lump sums and annuities or installment
payments of less than 10 years) from an IRA are subject to income tax
withholding at a flat 10% rate. The recipient of such a distribution may
elect not to have withholding apply.

The above description of the federal income tax consequences applicable
to Qualified Plans which may be funded by the Contract offered by this
Prospectus is only a brief summary and is not intended as tax advice.
The rules governing the provisions of Qualified Plans are extremely
complex and often difficult to comprehend. Anything less than full
compliance with the applicable rules, all of which are subject to
change, may have adverse tax consequences. A prospective Contractowner
considering adoption of a Qualified Plan and purchase of a Contract in
connection therewith should first consult a qualified and competent tax
adviser, with regard to the suitability of the Contract as an investment
vehicle for the Qualified Plan.

OTHER INFORMATION
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VOTING OF FUND SHARES

The Company is the legal owner of the shares of the Funds held by the
Subaccounts. The Company will exercise voting rights attributable to the
shares of each Portfolio of the Funds held in the Subaccounts at any
regular and special meetings of the shareholders of the Funds on matters
requiring shareholder voting under the 1940 Act. In accordance with its
view of presently applicable law, the Company will exercise these voting
rights based on instructions received from persons having the voting
interest in corresponding Subaccounts. However, if the 1940 Act or any
regulations thereunder should be amended, or if the present interpretation
thereof should change, and as a result the Company determines that it is
permitted to vote the shares of the Funds in its own right, it may elect to
do so.

The person having the voting interest under a Contract is the Owner. Unless
otherwise required by applicable law, the number of shares of a particular
Portfolio as to which voting instructions may be given to the Company is
determined by dividing a Contractowner's Account Value in a Subaccount on a
particular date by the net asset value per share of that Portfolio as of
the same date. Fractional votes will be counted. The number of votes as to
which voting instructions may be given will be determined as of the date
coincident with the date established by the Fund for determining
shareholders eligible to vote at the meeting of the Fund. If required by
the SEC, the Company reserves the right to determine in a different fashion
the voting rights attributable to the shares of the Funds. Voting
instructions may be cast in person or by proxy.

Voting rights attributable to the Contractowner's Account Value in a
Subaccount for which no timely voting instructions are received will be
voted by the Company in the same proportion as the voting instructions that
are received in a timely manner for all Contracts participating in that
Subaccount. The Company will also exercise the voting rights from assets in
each Subaccount that are not otherwise attributable to Contractowners, if
any, in the same proportion as the voting instructions that are received in
a timely manner for all Contracts participating in that Subaccount.

SUBSTITUTION OF INVESTMENTS

The Company reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, substitutions for, or
combinations of the securities that are held by the Separate Account or any
Subaccount or that the Separate Account or any Subaccount may purchase. If
shares of any or all of the Portfolios of the Funds should no longer be
available for investment, or if the Company receives an opinion from
counsel acceptable to Investment Services that substitution is in the best
interest of Contractowners and that further investment in shares of the
Portfolio(s) would cause undue risk to the Company, the Company may
substitute shares of another Portfolio of the Funds or of a different fund
for shares already purchased, or to be purchased in the future under the
Contract. The Company may also purchase, through the Subaccount, other
securities for other classes of contracts, or permit a conversion between
classes of contracts on the basis of requests made by Owners.

In connection with a substitution of any shares attributable to an Owner's
interest in a Subaccount or the Separate Account, the Company will, to the
extent required under applicable law, provide notice, seek Owner approval,
seek prior approval of the SEC, and comply with the filing or other
procedures established by applicable state insurance regulators.

The Company also reserves the right to establish additional Subaccounts of
the Separate Account that would invest in a new Portfolio of one of the
Funds or in shares of another investment company, a series thereof, or
other suitable investment vehicle. New Subaccounts may be established by
the Company with the consent of Investment Services, and any new Subaccount
will be made available to existing Owners on a basis to be determined by
the Company and Investment Services. The Company may also eliminate or
combine one or more Subaccounts if marketing, tax, or investment conditions
so warrant.

Subject to compliance with applicable law, the Company may transfer assets
to the General Account with the consent of Investment Services. The Company
also reserves the right, subject to any required regulatory approvals, to
transfer assets of any Subaccount of the Separate Account to another
separate account or Subaccount with the consent of Investment Services.

In the event of any such substitution or change, the Company may, by
appropriate endorsement, make such changes in these and other contracts as
may be necessary or appropriate to reflect such substitution or change. If
deemed by the Company to be in the best interests of persons having voting
rights under the Contracts, the Separate Account may be operated as a
management investment company under the 1940 Act or any other form
permitted by law; it may be deregistered under that Act in the event such
registration is no longer required; or it may be combined with other
separate accounts of the Company or an affiliate thereof. Subject to
compliance with applicable law, the Company also may combine one or more
Subaccounts and may establish a committee, board, or other group to manage
one or more aspects of the operation of the Separate Account.

CHANGES TO COMPLY WITH LAW AND AMENDMENTS

The Company reserves the right, without the consent of Owners, to suspend
sales of the Contract as presently offered and to make any change to the
provisions of the Contracts to comply with, or give Owners the benefit of,
any federal or state statute, rule, or regulation, including but not
limited to requirements for annuity contracts and retirement plans under
the Internal Revenue Code and regulations thereunder or any state statute
or regulation. The Company also reserves the right to limit the amount and
frequency of subsequent purchase payments.

REPORTS TO OWNERS

A statement will be sent annually to each Contractowner setting forth a
summary of the transactions that occurred during the year, and indicating
the Account Value as of the end of each year. In addition, the statement
will indicate the allocation of Account Value among the Fixed Interest
Account and the Subaccounts and any other information required by law.
Confirmations will also be sent out upon purchase payments, exchanges, and
full and partial withdrawals. Certain transactions will be confirmed
quarterly. These transactions include exchanges under the Dollar Cost
Averaging and Asset Rebalancing Options, purchase payments made under an
Automatic Investment Program, systematic withdrawals, and annuity payments.

Each Contractowner will also receive an annual and semiannual report
containing financial statements for the Portfolios, which will include a
list of the portfolio securities of the Portfolios, as required by the 1940
Act, and/or such other reports as may be required by federal securities
laws.

TELEPHONE EXCHANGE PRIVILEGES

You may request an exchange of Account Value by telephone if an
Authorization for Telephone Requests form ("Telephone Authorization") has
been completed, signed, and filed at the T. Rowe Price Variable Annuity
Service Center. The Company has established procedures to confirm that
instructions communicated by telephone are genuine and will not be liable
for any losses due to fraudulent or unauthorized instructions, provided
that it complies with its procedures. The Company's procedures require that
any person requesting an exchange by telephone provide the account number
and the Owner's tax identification number and such instructions must be
received on a recorded line. The Company reserves the right to deny any
telephone exchange request. If all telephone lines are busy (which might
occur, for example, during periods of substantial market fluctuations),
Contractowners might not be able to request exchanges by telephone and
would have to submit written requests.

By authorizing telephone exchanges, a Contractowner authorizes the Company
to accept and act upon telephonic instructions for exchanges involving the
Contractowner's Contract, and agrees that neither the Company, nor any of
its affiliates, nor the Funds, nor any of their directors, trustees,
officers, employees, or agents, will be liable for any loss, damages, cost,
or expense (including attorney's fees) arising out of any requests effected
in accordance with the Telephone Authorization and believed by the Company
to be genuine, provided that the Company has complied with its procedures.
As a result of this policy on telephone requests, the Contractowner will
bear the risk of loss arising from the telephone exchange privileges. The
Company may discontinue, modify, or suspend telephone exchange privileges
at any time.

DISTRIBUTION OF THE CONTRACT

T. Rowe Price Investment Services, Inc. ("Investment Services"), is the
distributor of the Contracts. Investment Services also acts as the
distributor of certain mutual funds advised by T. Rowe Price and
Price-Fleming. Investment Services is registered with the SEC as a
broker-dealer under the Securities Exchange Act of 1934, and in all 50
states, the District of Columbia, and Puerto Rico. Investment Services is a
member of the National Association of Securities Dealers, Inc. Investment
Services is a wholly owned subsidiary of T. Rowe Price and is an affiliate
of the Funds.

LEGAL PROCEEDINGS

There are no legal proceedings pending to which the Separate Account is a
party, or which would materially affect the Separate Account.

LEGAL MATTERS

Legal matters in connection with the issue and sale of the Contracts
described in this Prospectus, the Company's authority to issue the
Contracts under Kansas law, and the validity of the forms of the Contracts
under Kansas law have been passed upon by Amy J. Lee, Esq., the Company's
Associate General Counsel.

Legal matters relating to the federal securities and federal income tax
laws have been passed upon by Dechert Price & Rhoads, Washington, D.C.

PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

Performance information for the Subaccounts of the Separate Account,
including the yield and total return of all Subaccounts may appear in
advertisements, reports, and promotional literature to current or
prospective Owners.

Current yield for the Prime Reserve Subaccount will be based on investment
income received by a hypothetical investment over a given seven-day period
(less expenses accrued during the period), and then "annualized" (i.e.,
assuming that the seven-day yield would be received for 52 weeks, stated in
terms of an annual percentage return on the investment). "Effective yield"
for the Prime Reserve Subaccount is calculated in a manner similar to that
used to calculate yield but reflects the compounding effect of earnings.

For the other Subaccounts, quotations of yield will be based on all
investment income per Accumulation Unit earned during a given 30-day
period, less expenses accrued during the period ("net investment income"),
and will be computed by dividing net investment income by the value of an
Accumulation Unit on the last day of the period. Quotations of average
annual total return for any Subaccount will be expressed in terms of the
average annual compounded rate of return on a hypothetical investment in a
Contract over a period of 1, 5, and 10 years (or, if less, up to the life
of the Subaccount), and will reflect the deduction of the mortality and
expense risk charge and may simultaneously be shown for other periods.
Where the Portfolio in which a Subaccount invests was established prior to
inception of the Subaccount, quotations of total return may include
quotations for periods beginning prior to the Subaccount's date of
inception. Such quotations of total return are based upon the performance
of the Subaccount's corresponding Portfolio adjusted to reflect deduction
of the mortality and expense risk charge.

Performance information for any Subaccount reflects only the performance of
a hypothetical Contract under which Account Value is allocated to a
Subaccount during a particular time period on which the calculations are
based. Performance information should be considered in light of the
investment objectives and policies, characteristics, and quality of the
Portfolio in which the Subaccount invests, and the market conditions during
the given time period, and should not be considered as a representation of
what may be achieved in the future. For a description of the methods used
to determine yield and total return for the Subaccounts and the usage of
other performance related information, see the Statement of Additional
Information.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

REGISTRATION STATEMENT

A Registration Statement under the 1933 Act has been filed with the SEC
relating to the offering described in this Prospectus. This Prospectus has
been filed as a part of the Registration Statement and does not contain all
of the information set forth in the Registration Statement and exhibits
thereto, and reference is made to such Registration Statement and exhibits
for further information relating to the Company and the Contract.
Statements contained in this Prospectus, as to the content of the Contract
and other legal instruments, are summaries. For a complete statement of the
terms thereof, reference is made to the instruments filed as exhibits to
the Registration Statement. The Registration Statement and the exhibits
thereto may be inspected and copied at the SEC's office, located at 450
Fifth Street, N.W., Washington, D.C.

FINANCIAL STATEMENTS

The consolidated financial statements of the Company at December 31, 1998
and 1997, and for each of the three years in the period ended December 31,
1998, and the financial statements of the Separate Account as of December
31, 1998, and for the years ended December 31, 1998 and 1997, are included
in the Statement of Additional Information.

STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information contains more specific information
and financial statements relating to the Company and the Separate Account.
The Table of Contents of the Statement of Additional Information is set
forth below.

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

General Information and History 1
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Distribution of the Contract 1
--------------------------------------------------------------------
Limits on Premiums Paid Under Tax-Qualified Retirement Plans 1
--------------------------------------------------------------------
Experts 2
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Performance Information 2
--------------------------------------------------------------------
Financial Statements 4
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<PAGE>
IRA DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------

This Disclosure Statement describes the statutory and regulatory provisions
applicable to the operation of Individual Retirement Annuities. Internal
Revenue Service regulations require that this be given to each person
desiring to establish an Individual Retirement Annuity. Further information
can be obtained from any district office of the Internal Revenue Service.

RIGHT TO REVOKE

You may revoke your Individual Retirement Annuity within seven days of the
date your first purchase payment is received by Security Benefit Life
Insurance Company. To revoke your Individual Retirement Annuity and receive
a refund of the entire amount you paid, you must mail or deliver a written
notice of revocation, signed exactly as your signature appears on your
variable annuity application to: T. Rowe Price Variable Annuity Service
Center, P.O. Box 750440, Topeka, KS 66675-0440, 1-800-888-2461.

If you send your revocation notice by First Class Mail, we will consider
that you have notified us as of the date of the postmark on the envelope.
If you send it by Certified or Registered Mail, you will have notified us
as of the certification or registration date on the label. In either case,
the revocation notice must be properly addressed and mailed, with postage
prepaid. Upon receipt of a timely revocation notice, the entire amount of
your contribution will be returned to you without adjustment for sales
commissions, administrative fees, or market value fluctuation.

WHAT ARE THE STATUTORY REQUIREMENTS?

An Individual Retirement Annuity contract must meet the following
requirements:

1. The amount in your Individual Retirement Annuity must be fully vested
at all times.

2. The contract must provide that you cannot transfer it to someone else.

3. The contract must have flexible premiums.

4. You must start receiving distributions by April 1 of the year following
the year in which you reach age 70 1/2 (see "Required Minimum
Distributions").

5. The contract must provide that you cannot contribute more than $2,000
for any year. (This requirement does not apply to rollovers. See
"Rollovers and Direct Transfers.")

6. The contract must provide that any refund of premium will be applied
before the close of the calendar year following the year of refund
toward the payment of future premiums or the purchase of additional
benefits.

The Individual Retirement Annuity contract contains the provisions
described above. The contract has not, however, been approved as to form by
the Internal Revenue Service.

ROLLOVERS AND DIRECT TRANSFERS

1. A rollover is a tax-free transfer of cash or other assets from one
retirement program to another. There are two kinds of rollover
payments. In one, you transfer amounts from one Individual Retirement
Annuity or Individual Retirement Account (collectively referred to
herein as an "IRA") to another. With the other, you transfer amounts
from a qualified employee benefit plan or tax-sheltered annuity to an
IRA. While you may make rollover contributions to the Individual
Retirement Annuity, you cannot deduct them on your tax return.

2. You must complete a tax-free rollover by the 60th day after the date
you receive the distribution from your IRA or other qualified employee
benefit plan.

3. A rollover distribution from an IRA may be made to you only once a
year. The one-year period begins on the date you receive the IRA
distribution, not on the date you roll it over (reinvest it) into
another IRA.

4. A direct transfer of funds in an IRA from one trustee or insurance
company to another is not a rollover. It is a transfer that is not
affected by the one-year waiting period.

5. All or part of the premium for the contract may be paid from an IRA
rollover, qualified pension or profit-sharing plan or tax-sheltered
annuity rollover, or from a direct transfer from another IRA. The
proceeds from this contract may be used as a rollover contribution to
another IRA.

ALLOWANCE OF DEDUCTION

1. In general, the amount you can contribute each year to the Annuity
contract is the lesser of $2,000 or your taxable compensation for the
year. If you have more than one IRA, the limit applies to the total
contributions made to your IRAs for the year. Wages, salaries, tips,
professional fees, bonuses, and other amounts you receive for providing
personal services are compensation. If you own and operate your own
business as a sole proprietor, your net earnings reduced by your
deductible contributions on your behalf to self-employed retirement
plans is compensation. If you are an active partner in a partnership
and provide services to the partnership, your share of partnership
income reduced by deductible contributions made on your behalf to
qualified retirement plans is compensation. All taxable alimony and
separate maintenance payments received under a decree of divorce or
separate maintenance are compensation.

2. Generally, if you are not covered by a qualified retirement plan, the
amount you can deduct in a year for contributions to your IRA is the
lesser of $2,000 or your taxable compensation for the year. However, if
you are not covered by a qualified retirement plan, but your spouse is,
the amount you may deduct for IRA contributions will be phased out if
your joint adjusted gross income ("AGI") is between $150,000 and
$160,000.

3. If you are covered by a qualified retirement plan, the amount of IRA
contributions you may deduct in a year may be reduced or eliminated
based on your AGI for the year. The AGI level at which a single
taxpayer's deduction for 1998 is affected, $30,000, will increase
annually to $50,000 in 2005. The AGI level at which a married
taxpayer's deduction for 1998 is affected, $50,000, will increase
annually to $80,000 in 2007.

4. Contributions to your IRA can be made at any time. If you make a
contribution between January 1 and April 15, however, you may elect to
treat the contribution as made either in that year or in the preceding
year. You may file a tax return claiming a deduction for your IRA
contribution before the contribution is actually made. You must,
however, make the contribution by the due date of your return not
including extensions.

5. You cannot make a contribution other than a rollover contribution to
your IRA for the year in which you reach age 70 1/2 or thereafter.

6. If both you and your spouse have compensation, you can each set up your
own IRA. The contribution for each of you is figured separately and
depends on how much each earns. Both of you cannot participate in the
same IRA account or contract.

7. If you and your spouse file a joint federal income tax return, each of
you may contribute up to $2,000 to your own IRA annually if your joint
income is $4,000 or more. The maximum amount the higher compensated
spouse may contribute for the year is the lesser of $2,000 or 100% of
that spouse's compensation. The maximum the lower-compensated spouse
may contribute is the lesser of (i) $2,000 or (ii) 100% of that
spouse's compensation plus the amount by which the higher compensated
spouse's compensation exceeds the amount the higher compensated spouse
contributes to his or her IRA.

SEP-IRAS

If you are participating in a Simplified Employee Pension Plan (SEP), the
contributions made by your employer into your IRA after 1986 are excluded
from your income. If the SEP contains a salary reduction arrangement, you
may elect to reduce your salary by up to the lesser of 15% of compensation
or $9,500 (indexed annually) and have that amount contributed to your
SEP-IRA. The maximum SEP contributions, including salary reduction amounts
and employer contributions to your account in any year is generally limited
to the lesser of $30,000 (indexed) or 15% of your total compensation from
such employer for that year. Employers that have established salary
reduction SEPs before 1997 may continue to maintain and contribute to them.
However, no new salary reduction SEPs may be established after 1996.
Instead, eligible employers may establish SIMPLE IRA programs for years
after 1996, which permit salary reduction contributions. This IRA may not
be used in connection with a SIMPLE plan.

If an IRA is being used in connection with a SEP, contributions must bear a
uniform relationship to the total compensation (not in excess of the first
$160,000 indexed) of each employee participating under the SEP. If you are
a participant in a SEP, you will be considered to be an active participant
in an employee pension plan for purposes of your deductible contribution
limits for your IRA (see "Allowance of Deduction" section). For further
information concerning participation and contributions, please refer to IRS
Form 5305-SEP (which must be completed and executed by your employer in
order to establish a SEP).

TAX STATUS OF THE CONTRACT AND DISTRIBUTIONS

1. Earnings of your Individual Retirement Annuity contract are not taxed
until they are distributed to you.

2. In general, taxable distributions are included in your gross income in
the year you receive them.

3. Distributions are non-taxable to the extent they represent a return of
non-deductible contributions. The non-taxable percentage of a
distribution is determined by dividing your total undistributed,
non-deductible IRA contributions by the value of all your IRAs
(including SEPs and rollovers).

4. You cannot choose the special five-year or ten-year averaging that may
apply to lump sum distributions from qualified employer plans.

Amounts held in IRAs are generally subject to the imposition of federal
estate taxes. In addition, if you elect to have all or any part of your
account payable to a beneficiary (or beneficiaries) upon your death, the
election generally will not subject you to any gift tax liability.

REQUIRED MINIMUM DISTRIBUTIONS

You must start receiving minimum distributions from your Individual
Retirement Annuity starting with the year you reach age 70 1/2 .
Ordinarily, the required minimum distribution for a particular year must be
received by December 31 of that year. However, you may delay the required
minimum distribution for the year you reach age 70 1/2 until April 1 of the
following year (your "required beginning date").

Figure your required minimum distribution for each year by dividing the
value of your Individual Retirement Annuity on December 31 of the preceding
year by the applicable life expectancy. The applicable life expectancy is
your remaining life expectancy or the remaining joint life and last
survivor expectancy of you and your designated beneficiary. If a designated
beneficiary is more than 10 years younger than you, that beneficiary is
assumed to be exactly 10 years younger. Life expectancies are determined
using the expected return multiple tables shown in IRS Publication 590
"Individual Retirement Arrangements." To obtain a free copy of IRS
Publication 590 and other IRA forms, write the IRS Forms Distribution
Center for your area as shown in your income tax return instructions.

Annuity payments which begin by April 1 of the year following the year you
reach age 70 1/2 satisfy the minimum distribution requirement if they
provide for non-increasing payments over your life or the lives of you and
your spouse, provided that, if installments are guaranteed, the maximum
guaranty period may be less than the applicable life expectancy.

If you have more than one IRA, you must determine the required minimum
distribution separately for each IRA; however, you can take the actual
distribution of these amounts from any one or more of your IRAs.

If the actual distribution from your IRA is less than the minimum amount
that should be distributed in accordance with the rules set forth above,
the difference is an excess accumulation. There is a 50% excise tax on any
excess accumulations.

If you die after your required beginning date, your entire remaining
account balance must be distributed to your designated beneficiary at least
as rapidly as under the method of distribution in effect on your date of
death.

If you die before your required beginning date, the general rule is that
your entire balance must be distributed within five (5) years of your
death. However, if the balance of your IRA account is payable to your
designated beneficiary, your designated beneficiary may elect that the
amount be paid in substantially equal installments over a fixed period not
exceeding the designated beneficiary's life expectancy, beginning no later
than December 31 of the year following the year in which you died. If your
spouse is your designated beneficiary, such distribution need not commence
until December 31 of the year during which you would have attained 70 1/2
had you survived. Alternatively, if your designated beneficiary is your
spouse, he or she may elect to treat your IRA as his or her own IRA.

WHAT HAPPENS IF EXCESS CONTRIBUTIONS ARE MADE TO MY INDIVIDUAL RETIREMENT
ANNUITY?

1. You must pay a 6% excise tax each year on excess contributions that
remain in your Individual Retirement Annuity. Generally, an excess
contribution is the amount contributed to your Individual Retirement
Annuity that is above the maximum amount you can contribute for the
year. The excess is taxed in the year contributed and each year after
that until you correct it.

2. You will not have to pay the 6% excise tax if you withdraw the excess
amount by the date your tax return is due, including extensions, for
the year of the contribution. You do not have to include in your gross
income an excess contribution that you withdraw from your Individual
Retirement Annuity before your tax return is due if the income earned
on the excess was also withdrawn and no deduction was allowed for the
excess contribution.

ARE THERE ANY PENALTIES FOR PREMATURE DISTRIBUTIONS?

There is an additional tax on premature distributions equal to 10% of the
amount of the premature distribution that you must include in your gross
income. Premature distributions are generally amounts you withdraw from
your IRA before you are age 59 1/2. However, the tax on premature
distributions does not apply:

1. To distributions that are rolled over tax free to another IRA, a
qualified employee benefit plan, or a tax-sheltered annuity.

2. To a series of substantially equal periodic payments made over your
life or life expectancy, or the joint life or life expectancy of you
and your beneficiary.

3. To amounts distributed to a beneficiary, or the individual's estate, on
or after the death of the individual.

4. If you are permanently disabled. You are considered disabled if you
cannot do any substantial gainful activity because of your physical or
mental condition. A physician must determine that the condition has
lasted or can be expected to last continuously for 12 months or more or
that the condition can be expected to lead to death.

5. To a distribution which does not exceed the amount of your medical
expenses that could be deducted for the year (generally speaking,
medical expenses paid during a year are deductible to the extent they
exceed 7 1/2% of your adjusted gross income for the year).

6. To a distribution (subject to certain restrictions) that does not
exceed the premiums you paid for health insurance coverage for
yourself, your spouse, and dependents if you have been unemployed and
received unemployment compensation for at least 12 weeks.

7. To a "qualified first-time homebuyer distribution," within the meaning
of Code 72(t)(8), up to a $10,000 lifetime limit.

8. To a distribution for post-secondary education costs for you, your
spouse, or any child or grandchild of you or your spouse (i.e.,
"qualified higher education expenses").

IRA EXCISE TAX REPORTING

Use Form 5329, Return for Individual Retirement Arrangement Taxes, to
report the excise taxes on excess contributions, premature distributions,
and excess accumulations. If you do not owe any IRA excise taxes, you do
not need Form 5329. Further information can be obtained from any district
office of the Internal Revenue Service.

BORROWING

If you borrow money under your Individual Retirement Annuity contract or
use it as security for a loan, you must include in gross income the fair
market value of the Individual Retirement Annuity contract as of the first
day of your tax year, and the penalty tax on premature distributions may
apply. (Note: This contract does not allow borrowings under it, nor may it
be assigned or pledged as collateral for a loan.)

FINANCIAL INFORMATION

Contributions to your Individual Retirement Annuity contract are not
subject to sales charges. A mortality and expense risk charge of .55% on an
annual basis is deducted as described in the attached variable annuity
prospectus. (This charge is not deducted with respect to contract value
allocated to the fixed interest account option.) See the accompanying
prospectus for the underlying mutual funds for information about the
charges associated with the funds. Contractowners who allocate contract
value to the Subaccounts bear a pro rata share of the fees and expenses of
the underlying funds. The growth in value of the Individual Retirement
Annuity contract is neither guaranteed, nor projected, but is based upon
the investment experience of the underlying mutual fund portfolios that
correspond to the Subaccounts to which you have allocated contract value.
<PAGE>
ROTH INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------

This Disclosure Statement describes the statutory and regulatory provisions
applicable to the operation of Roth IRAs. Internal Revenue Service
regulations require that this be given to each person desiring to establish
a Roth IRA. Further information can be obtained from any district office of
the Internal Revenue Service.

YOUR RIGHT TO REVOKE

You may revoke your Roth IRA within seven days of the date your first
purchase payment is received by Security Benefit Life Insurance Company. To
revoke your Roth IRA and receive a refund of the entire amount you paid,
you must mail or deliver a written notice of revocation, signed exactly as
your signature appears on your variable annuity application, to: T. Rowe
Price Variable Annuity Service Center, P.O. Box 750440, Topeka, KS
66675-0440, 1-800-888-2461.

WHAT ARE THE REQUIREMENTS?

A Roth IRA contract must meet the following requirements:

1. The amount in your Roth IRA must be fully vested at all times.

2. The contract must provide that you cannot transfer it to someone else.

3. The contract must have flexible premiums.

4. If you die before your entire interest in the contract has been
distributed, your beneficiary may need to receive distributions within
a specified time frame (see "Required Minimum Distributions" below).

5. The contract must provide that you cannot contribute more than $2,000
for any year. This requirement does not apply to qualified rollover
contributions. (See "Rollovers and Direct Transfers" below).

The Roth IRA contract contains the provisions described above. The contract
has not, however, been approved as to form by the Internal Revenue Service.

ROLLOVERS AND DIRECT TRANSFERS

1. You may make a qualified rollover contribution to this contract from
another Roth IRA or from a traditional IRA, and such a contribution
will not count toward the annual limit on contributions to the
contract. You may make a qualified rollover contribution from a
traditional IRA only if your modified adjusted gross income for the
year in which the rollover will occur is $100,000 or less. The amount
distributed from your traditional IRA and rolled over will be subject
to federal income taxes, except to the extent such amounts relate to
nondeductible contributions. However, if the distribution occurs before
1999, the amount to be included in your taxable income will be evenly
divided over a four-year period.

2. You must complete a qualified rollover contribution by the 60th day
after the date you receive the distribution from your IRA.

3. A direct transfer of funds in a Roth IRA from one trustee or insurance
company to another does not constitute a rollover.

4. You may not make a rollover contribution from a qualified pension or
profit-sharing plan or tax-sheltered annuity to this Roth IRA, nor may
you make a direct transfer from another IRA to this Roth IRA. A
distribution from this Roth IRA may be used as a rollover contribution
to another Roth IRA. You may not transfer a Roth IRA to a traditional
IRA.

5. A rollover contribution from one IRA to another IRA, other than a
qualified rollover contribution from a traditional IRA to a Roth IRA,
may be made only once a year. The one-year period begins on the date
you receive the distribution from the first IRA, not on the date you
roll it over (reinvest it) into another IRA.

AMOUNT OF ANNUAL CONTRIBUTION

1. In general, the amount you can contribute each year to the contract is
the lesser of $2,000 or your taxable compensation for the year. If you
have more than one IRA (either a Roth IRA or a traditional IRA), the
limit applies to the total contributions made to your IRAs for the
year. Wages, salaries, tips, professional fees, bonuses and other
amounts you receive for providing personal services are compensation.
If you own and operate your own business as a sole proprietor, your net
earnings reduced by your deductible contributions on your behalf to
self-employed retirement plans is compensation. If you are an active
partner in a partnership and provide services to the partnership, your
share of partnership income reduced by deductible contributions made on
your behalf to qualified retirement plans is compensation. All taxable
alimony and separate maintenance payments received under a decree of
divorce or separate maintenance are compensation.

2. No amount you contribute to the contract will be deductible for federal
income tax purposes.

3. Contributions to your Roth IRA can be made at any time. If you make a
contribution between January 1 and April 15, however, you may elect to
treat the contribution as made either in that year or in the preceding
year.

4. If both you and your spouse have compensation you can each set up your
own Roth IRA. The contribution for each of you is figured separately
and depends on how much each earns. Both of you cannot participate in
the same Roth IRA or contract.

5. If you and your spouse file a joint federal income tax return, each of
you may contribute up to $2,000 to your own Roth IRA annually if your
joint income is $4,000 or more. The maximum amount the higher
compensated spouse may contribute for the year is the lesser of $2,000
or 100% of that spouse's compensation. The maximum the lower
compensated spouse may contribute is the lesser of (i) $2,000 or (ii)
100% of that spouse's compensation plus the amount by which the higher
compensated spouse's compensation exceeds the amount the higher
compensated spouse contributes to his or her Roth IRA.

6. Your maximum annual contribution amount shall be phased-out if you are
single and have an adjusted gross income between $95,000 and $110,000,
or if you are married and you and your spouse have a combined adjusted
gross income between $150,000 and $160,000 in accordance with Section
ss.408A(c)(3) of the Internal Revenue Code (the "Code").

TAX STATUS OF DISTRIBUTIONS

1. Since your contributions to the contract will be made with after-tax
dollars, when your contributions are distributed to you they will not
be subject to federal income tax. Distributions from the contract will
be considered as coming first from your contributions and then from the
earnings on your contributions. You will owe no federal income tax when
earnings on your contributions are distributed to you, provided they
are distributed in a "qualified distribution."

2. "Qualified distributions" from the contract will not be subject to
federal income tax or the additional 10% early withdrawal tax. To be
qualified, a distribution must:

(a) occur after the five-year period beginning on the first day of the
year you made your initial contribution to the contract, and

(b) must be:

(1) made on or after the date on which you attain age 59 1/2;

(2) made to a beneficiary (or your estate) on or after your
death;

(3) attributable to your being disabled; or

(4) a distribution to pay for "qualified first-time homebuyer
expenses" under Code ss.72(t)(8) up to $10,000.

3. You will owe federal income tax, and perhaps an additional 10% early
withdrawal tax, on the amount of earnings distributed to you in a
"nonqualified distribution."

4. Amounts held in Roth IRAs are generally subject to the imposition of
federal estate taxes. If you elect to have all or any part of your
account payable to a beneficiary (or beneficiaries) upon your death,
the election generally will not subject you to any gift tax liability.

5. Taxable distributions from a Roth IRA are not eligible for special
five-year or ten-year averaging that may apply to lump sum
distributions from qualified employer retirement plans.

REQUIRED MINIMUM DISTRIBUTIONS

1. You are not required to receive required minimum distributions from
your Roth IRA during your lifetime.

2. If you die before the entire balance in your Roth IRA has been
distributed, the general rule is that the entire balance must be
distributed within five (5) years of your death. However, if the
balance in your Roth IRA account is payable to your designated
beneficiary, you may elect or your designated beneficiary may elect
that the amount be paid in substantially equal installments over a
fixed period not exceeding the designated beneficiary's life
expectancy, beginning no later than December 31 of the year following
the year in which you died. If your spouse is the sole designated
beneficiary of your Roth IRA on your date of death, these rules do not
apply and the Roth IRA will be treated as your spouse's IRA, and no
distributions from the Roth IRA to your spouse will be required during
your spouse's lifetime.

3. Life expectancies are determined using the expected return multiple
tables shown in IRS Publication 590 "Individual Retirement
Arrangements." To obtain a free copy of IRS Publication 590, write the
IRS Forms Distribution Center for your area as shown in your income tax
return instructions.

4. If the actual distribution from your Roth IRA is less than the minimum
amount that should be distributed in accordance with the rules set
forth above, the difference is subject to a 50% excise tax.

WHAT HAPPENS IF EXCESS CONTRIBUTIONS ARE MADE TO MY ROTH IRA?

1. You must pay a 6% excise tax each year on excess contributions that
remain in your Roth IRA. Generally, an excess contribution is the
amount contributed to your Roth IRA that is above the maximum amount
you can contribute for the year. The excess is taxed in the year
contributed and each year after that until you correct it.

2. You will not have to pay the 6% excise tax if you withdraw the excess
amount by the date your tax return is due, including extensions, for
the year of the contribution.

ARE THERE ANY PENALTIES FOR PREMATURE DISTRIBUTIONS?

There is an additional tax on premature distributions which are part of a
nonqualified distribution equal to 10% of the amount of the premature
distribution that you must include in your gross income. (See the
discussion above on the "Tax Status of Distributions.") Premature
distributions are generally amounts you withdraw from your Roth IRA before
you are age 59 1/2. However, the tax on premature distributions does not
apply:

1. To distributions that constitute qualified rollover contributions to
another Roth IRA.

2. To a series of substantially equal periodic payments made over your
life or life expectancy, or the joint life expectancy of you and your
beneficiary.

3. To amounts distributed to a beneficiary, or your estate, on or after
your death.

6. To a distribution (subject to certain restrictions) that does not
exceed the premiums you paid for health insurance coverage for
yourself, your spouse and dependents if you have been unemployed and
received unemployment compensation for at least 12 weeks.

7. To a "qualified first-time homebuyer distribution," within the meaning
of Code ss.72(t)(8), up to $10,000.

8. To a distribution for post-secondary education costs for you, your
spouse or any child or grandchild of you or your spouse.

IRA EXCISE TAX REPORTING

Use Form 5329, Return for Individual Retirement Arrangement Taxes, to
report the excise taxes on excess contributions and premature
distributions. If you do not owe any excise taxes, you do not need Form
5329. Further information can be obtained from any district office of the
Internal Revenue Service.

TRANSACTIONS WITH YOUR ROTH IRA

If you engage in a so-called prohibited transaction with respect to your
Roth IRA, the IRA will lose its exemption from tax. In this event, you will
be taxed on the fair market value of the contract even if you do not
actually receive a distribution. In addition, if you are less than 59 1/2,
your taxes may be further increased by a penalty tax in an amount equal to
10% of the fair market value of the contract. These prohibited transactions
include borrowing money from your Roth IRA, using your Roth IRA account as
security for a loan or a number of other financial transactions with your
Roth IRA. If you pledge your Roth IRA as security for a loan, then the
amount or portion pledged is considered to be distributed to you and also
must be included in your gross income. (Note: This contract does not allow
borrowings under it, nor may it be assigned or pledged as collateral for a
loan.)

FINANCIAL INFORMATION

Contributions to your Roth IRA contract are not subject to sales charges. A
mortality and expense risk charge of .55% on an annual basis is deducted as
described in the attached variable annuity prospectus. (This charge is not
deducted with respect to contract value allocated to the fixed interest
account option.) See the accompanying prospectus for the underlying mutual
funds for information about the charges associated with the funds.
Contractowners who allocate contract value to the Subaccounts bear a pro
rata share of the fees and expenses of the underlying funds. The growth in
value of the Roth IRA contract is neither guaranteed, nor projected, but is
based upon the investment experience of the underlying mutual fund
portfolios that correspond to the Subaccounts to which you have allocated
contract value.

IMPORTANT: The discussion of the tax rules for Roth IRAs in this Disclosure
Statement is based upon the best available information. However, Roth IRAs
are new under the tax laws, and the IRS has not issued regulations or
rulings on the operation and the tax treatment of Roth IRAs. Therefore, you
should consult your tax advisor for the latest developments and for advice
about how maintaining a Roth IRA will affect your personal tax or financial
situation.
<PAGE>

VARIABLE ANNUITY PROSPECTUS
================================================================================

T. ROWE PRICE NO-LOAD IMMEDIATE VARIABLE ANNUITY
An Individual Single Premium
Immediate Variable Annuity Contract
May 1, 1999

- --------------------------------------------------------------------------------
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
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------

* THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

* THIS PROSPECTUS IS ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE T. ROWE
PRICE EQUITY SERIES, INC., THE T. ROWE PRICE FIXED INCOME SERIES, INC. AND
THE T. ROWE PRICE INTERNATIONAL SERIES, INC. YOU SHOULD READ THE
PROSPECTUSES CAREFULLY AND RETAIN THEM FOR FUTURE REFERENCE.

This Prospectus describes the T. Rowe Price No-Load Immediate Variable
Annuity--a single premium immediate variable annuity contract (the
"Contract") issued by Security Benefit Life Insurance Company (the
"Company"). The Contract is available for individuals as a non-tax qualified
retirement plan. The Contract is also available as an individual retirement
annuity ("IRA") qualified under Section 408, or a Roth IRA qualified under
Section 408A, of the Internal Revenue Code. The Contract is designed to give
you flexibility in receiving retirement income.

The Contract provides several options for annuity payments beginning on the
Annuity Payout Date. The Annuity Payout Date, which must be within 30 days of
the Contract Date, and Annuity Option are selected at the time of purchase.

The minimum initial Purchase Payment is $25,000. The Company does not accept
additional Purchase Payments. You may allocate the Purchase Payment to one or
more of the Subaccounts that comprise a separate account of the Company
called the T. Rowe Price Variable Annuity Account, or to the Fixed Interest
Account of the Company. Each Subaccount invests in a corresponding Portfolio
of the T. Rowe Price Equity Series, Inc., the T. Rowe Price Fixed Income
Series, Inc., or the T. Rowe Price International Series, Inc. (the "Funds").
Each Portfolio is listed under its respective Fund below.

T. ROWE PRICE EQUITY SERIES, INC.
T. Rowe Price New America Growth Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Personal Strategy Balanced Portfolio

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

The investments made by the Funds at any given time are not expected to be
the same as the investments made by other mutual funds sponsored by T. Rowe
Price Associates, Inc., including other mutual funds with investment
objectives and policies similar to those of the Funds. Different performance
will result due to differences in cash flows into and out of the Fund,
different fees and expenses and differences in portfolio size and position.

Your Annuity Payments, if supported by the Subaccounts, will vary based on
the investment performance of the Subaccounts to which you allocate the
Purchase Payment. No minimum amount of variable annuity payments is
guaranteed, except that Annuity Payments under Option 9 are guaranteed never
to fall below the Floor Payment. The Company guarantees the amount of fixed
Annuity Payments.

You may return a Contract according to the terms of its Free-Look Right (see
"Free-Look Right," page 19). This Prospectus concisely sets forth information
about the Contract and the T. Rowe Price Variable Annuity Account that you
should know before purchasing the Contract. The "Statement of Additional
Information," dated May 1, 1999, which has been filed with the Securities and
Exchange Commission (the "SEC"), contains certain additional information. The
Statement of Additional Information, as it may be supplemented from time to
time, is incorporated by reference into this Prospectus and is available at
no charge, by writing the T. Rowe Price Variable Annuity Service Center, P.O.
Box 750440, Topeka, Kansas 66675-0440, or by calling 1-800-469-6587. The
table of contents of the Statement of Additional Information is set forth on
page 44 of this Prospectus.

Date: May 1, 1999
<PAGE>
CONTENTS
- --------------------------------------------------------------------------------

* YOU MAY NOT BE ABLE TO PURCHASE THE CONTRACT IN YOUR STATE. YOU SHOULD NOT
CONSIDER THIS PROSPECTUS TO BE AN OFFERING IF THE CONTRACT MAY NOT BE
LAWFULLY OFFERED IN YOUR STATE. YOU SHOULD ONLY RELY UPON INFORMATION
CONTAINED IN THIS PROSPECTUS OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.

Definitions.............................................................. 5
Summary.................................................................. 7
Expense Table............................................................ 10
Condensed Financial Information.......................................... 13
Information About the Company, the Separate Account, and the Funds....... 14
The Contract............................................................. 17
Charges and Deductions................................................... 20
Annuity Payments......................................................... 22
The Fixed Interest Account............................................... 30
More About the Contract.................................................. 32
Federal Tax Matters...................................................... 33
Other Information........................................................ 40
Performance Information.................................................. 42
Additional Information................................................... 43
<PAGE>
DEFINITIONS
- --------------------------------------------------------------------------------

* VARIOUS TERMS COMMONLY USED IN THIS PROSPECTUS ARE DEFINED AS FOLLOWS:

ACCOUNT VALUE The total value of a Contract, which includes amounts allocated
to the Subaccounts and the Fixed Interest Account. The Company determines
Account Value as of each Valuation Date prior to the Annuity Payout Date and
on and after the Annuity Payout Date under Annuity Options 5 through 7.
Account Value is also determined under Option 9 during the Liquidity Period.

ACCUMULATION UNIT A unit of measure used to calculate Account Value.

ANNUITANT The Annuitant receives Annuity Payments during the Annuity Period
and is the person or persons on whose life Annuity Payments depend under
Annuity Options 1 through 4 and 9. If the Owner names Joint Annuitants in the
Contract, "Annuitant" means both Annuitants unless otherwise stated.

ANNUITY A series of periodic income payments made by the Company to an
Annuitant, Joint Annuitant, or Beneficiary during the period specified in the
Annuity Option.

ANNUITY OPTIONS or OPTIONS Options under the Contract that prescribe the
provisions under which a series of Annuity Payments or a death benefit, if
applicable, is paid.

ANNUITY PAYMENTS Payments made beginning on the Annuity Payout Date according
to the provisions of the Annuity Option selected. Annuity Payments are made
on the same day of each month, on a monthly, quarterly, semiannual or annual
basis, depending on the Annuity Option selected.

ANNUITY PERIOD The period beginning on the Annuity Payout Date during which
Annuity Payments are made.

ANNUITY PAYOUT DATE The date within 30 days of the Contract Date upon which
Annuity Payments are scheduled to begin.

CONTRACT DATE The date shown as the Contract Date in a Contract. Annual
Contract anniversaries are measured from the Contract Date. It is usually the
date that the initial Purchase Payment is credited to the Contract.

CONTRACTOWNER or OWNER The person entitled to the ownership rights under the
Contract and in whose name the Contract is issued. Any Owner must also be an
Annuitant.

CONTRACT YEAR Each 12-month period measured from the Contract Date.

DESIGNATED BENEFICIARY The person having the right to the death benefit, if
any, payable upon the death of the Annuitant during the Annuity Period. The
Designated Beneficiary is the first person on the following list who is alive
on the date of death of the Annuitant: the Primary Beneficiary; the Secondary
Beneficiary; or if none of the above is alive, the Owner's Estate.

FIXED INTEREST ACCOUNT An account that is part of the Company's General
Account to which the Purchase Payment may be allocated to purchase a fixed
annuity. Account Value allocated to the Fixed Interest Account under Options
5 through 7 will earn fixed rates of interest (which may not be less than 3%)
declared by the Company periodically at its discretion.

FLOOR PAYMENT Annuity Payments under Option 9 are guaranteed never to be less
than the Floor Payment, which is equal to 80% of the amount of the initial
Annuity Payment, adjusted for withdrawals.

FUNDS T. Rowe Price Equity Series, Inc., T. Rowe Price Fixed Income Series,
Inc., and T. Rowe Price International Series, Inc. The Funds are diversified,
open-end management investment companies commonly referred to as mutual
funds.

GENERAL ACCOUNT All assets of the Company other than those allocated to the
Separate Account or to any other separate account of the Company.

LIQUIDITY PERIOD Under Annuity Option 9, the Liquidity Period is the period
of time during which the Owner may withdraw Account Value. The Liquidity
Period is a period beginning on the Contract Date and ending on a date five
years from the Annuity Payout Date.

PAYMENT UNIT A unit of measure used to calculate Annuity Payments under
Options 1 through 4, 8 and 9.

PURCHASE PAYMENT The amount paid to the Company as consideration for the
Contract.

SEPARATE ACCOUNT The T. Rowe Price Variable Annuity Account, a separate
account of the Company. The Purchase Payment may be allocated to Subaccounts
of the Separate Account to support an Annuity Payment.

SUBACCOUNT A division of the Separate Account of the Company which invests in
a separate Portfolio of one of the Funds. Currently, seven Subaccounts are
available under the Contract depending upon the Annuity Option selected.

T. ROWE PRICE VARIABLE ANNUITY SERVICE CENTER P.O. Box 750440, Topeka, Kansas
66675-0440, 1-800-469-6587.

VALUATION DATE Each date on which the Separate Account is valued, which
currently includes each day that the T. Rowe Price Variable Annuity Service
Center and the New York Stock Exchange are both open for trading. The T. Rowe
Price Variable Annuity Service Center and the New York Stock Exchange are
closed on weekends and on the following holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

VALUATION PERIOD A period used in measuring the investment experience of each
Subaccount. The Valuation Period begins at the close of one Valuation Date
and ends at the close of the next succeeding Valuation Date.

WITHDRAWAL VALUE The amount a Contractowner receives upon full withdrawal of
the Contract, which is equal to Account Value less any premium taxes due and
paid by the Company and for withdrawals under Option 9, any withdrawal
charge. The Withdrawal Value under Option 8 is the present value of future
Annuity Payments calculated using the assumed interest rate less any premium
taxes due and paid by the Company.
<PAGE>
SUMMARY
- --------------------------------------------------------------------------------

This summary provides a brief overview of the more significant aspects of the
Contract. Further detail is provided in this Prospectus, the Statement of
Additional Information, and the Contract. Unless the context indicates
otherwise, the discussion in this summary and the remainder of the Prospectus
relates to the portion of the Contract involving the Separate Account. The
Fixed Interest Account is briefly described under "The Fixed Interest
Account," page 30 and in the Contract.

PURPOSE OF THE CONTRACT
The single premium immediate variable annuity contract (the "Contract")
described in this Prospectus provides several Options for Annuity Payments on
a variable basis, a fixed basis, or both. You may select an Annuity Option
that provides income for your lifetime or a specified period.

You may purchase the Contract as a non-tax qualified retirement plan for an
individual ("Non-Qualified Plan"). If you are eligible, you may also purchase
the Contract as an individual retirement annuity ("IRA") qualified under
Section 408, or a Roth IRA qualified under Section 408A, of the Internal
Revenue Code of 1986, as amended ("Qualified Plan"). An IRA may be purchased
with contributions rolled over from tax-qualified plans such as 403(b) plans,
401(k) plans, or individual retirement accounts. See the discussion of IRAs
and Roth IRAs under "Section 408 and Section 408A," page 37.

THE SEPARATE ACCOUNT AND THE FUNDS
You may allocate your Purchase Payment to the T. Rowe Price Variable Annuity
Account (the "Separate Account") to provide a variable annuity. See "Separate
Account," page 15. The Separate Account is currently divided into seven
divisions referred to as Subaccounts. Each Subaccount invests exclusively in
shares of a specific Portfolio of one of the Funds. Each of the Funds'
Portfolios has a different investment objective or objectives. Each Portfolio
is listed under its respective Fund below.

T. ROWE PRICE FIXED INCOME SERIES, INC.
T. Rowe Price Limited-Term Bond Portfolio
T. Rowe Price Prime Reserve Portfolio

T. ROWE PRICE INTERNATIONAL SERIES, INC.
T. Rowe Price International Stock Portfolio

Your Annuity Payments, if supported by a Subaccount, will increase or
decrease in dollar value depending on the investment performance of the
corresponding Portfolio in which such Subaccount invests. You bear the
investment risk for amounts allocated to a Subaccount. Not all of the
Subaccounts are available under each Annuity Option.

FIXED INTEREST ACCOUNT
You may allocate your Purchase Payment to the Fixed Interest Account to
provide a fixed annuity. The Fixed Interest Account is part of the Company's
General Account. Amounts allocated to the Fixed Interest Account earn
interest at rates determined at the discretion of the Company and that are
guaranteed to be at least an effective annual rate of 3%. See "The Fixed
Interest Account," page 30.

PURCHASE PAYMENT
The minimum Purchase Payment is $25,000. The Company does not accept
additional Purchase Payments under the Contract. A Purchase Payment exceeding
$1,000,000 will not be accepted under a Contract without prior approval of
the Company. See "Purchase Payments," page 18.

CONTRACT BENEFITS
The Contract provides for several Annuity Options on either a variable basis,
a fixed basis, or both. The Company guarantees payments under the fixed
Annuity Options. See "Annuity Payments," page 22. The Contract provides for a
death benefit upon the death of the Annuitant under certain of the Annuity
Options. See "Annuity Options," page 25 for more information.

You may exchange your interest in the Contract among the Subaccounts, subject
to certain restrictions as described in "The Contract," page 17, "Exchanges,"
page 23 and "The Fixed Interest Account," page 30. You may make up to six
exchanges in any Contract Year.

You may withdraw your Account Value under Annuity Options 5 through 8 and
during the Liquidity Period under Option 9. Withdrawals under Option 9 are
subject to a withdrawal charge as discussed below. Withdrawals of Account
Value allocated to the Fixed Interest Account are subject to certain
restrictions described in "The Fixed Interest Account," page 30. See "Full
and Partial Withdrawals," page 23, and "Federal Tax Matters," page 33 for
more information about withdrawals, including the 10% penalty tax that may be
imposed upon full and partial withdrawals made prior to the Owner attaining
age 59 1/2.

FREE-LOOK RIGHT
You may return the Contract within the Free-Look Period, which is generally a
10-day period beginning when you receive the Contract. In this event, the
Company will refund to you the amount of the Purchase Payment allocated to
the Fixed Interest Account plus the Account Value in the Subaccounts. The
Company will refund the amount of the Purchase Payment allocated to the
Subaccounts rather than the Account Value in those states and circumstances
in which it is required to do so. See "Free-Look Right," page 19.

CHARGES AND DEDUCTIONS
The Company does not deduct a sales load from the Purchase Payment. The
Company will deduct certain charges in connection with the Contract as
described below.

* MORTALITY AND EXPENSE RISK CHARGE The Company deducts a daily charge from
the assets of each Subaccount for mortality and expense risks equal to an
annual rate of 0.55% (1.40% under Annuity Option 9) of each Subaccount's
average daily net assets. See "Mortality and Expense Risk Charge," page
20.

* PREMIUM TAX CHARGE The Company assesses a premium tax charge to reimburse
itself for any premium taxes that it incurs with respect to this Contract.
This charge will be deducted from your Purchase Payment if the Company
incurs a premium tax. The Company reserves the right to deduct such taxes
when due or anytime thereafter. Premium tax rates currently range from 0%
to 3.5%. See "Premium Tax Charge," page 21.

* WITHDRAWAL CHARGE If you withdraw Account Value during the Liquidity
Period under Option 9, the withdrawal is subject to a withdrawal charge.
The charge is based upon the year in which the withdrawal is made as
measured from the Annuity Payout Date. The withdrawal charge, which ranges
from 5% in the first year to 1% in the fifth year, is applied to the
amount of the withdrawal. Withdrawals after the fifth year from the
Annuity Payout Date are not permitted under Option 9. See "Contract
Withdrawal Charge," page 21.

ANNUITY OPTIONS
The annuity options available under the Contract are described briefly below.
The Company may make other annuity options available upon request. See the
discussion under "Annuity Options," page 25 for more information.

* OPTION 1 - LIFE INCOME Periodic annuity payments will be made during your
lifetime.

* OPTION 2 - LIFE INCOME WITH PERIOD CERTAIN OF 5, 10, 15, OR 20 YEARS
Periodic annuity payments will be made during the longer of your lifetime
or a period of 5, 10, 15, or 20 years, as you elect at the time of
purchase.

* OPTION 3 - LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION Periodic
annuity payments will be made during your lifetime. If at your death, the
number of payments that has been made is less than the number determined
by dividing the amount applied under this Option by the amount of the
first payment, annuity payments will be continued to your Designated
Beneficiary until that number of annuity payments has been made.

* OPTION 4 - JOINT AND LAST SURVIVOR Periodic annuity payments will be made
during your lifetime and that of your joint Annuitant. Annuity payments
will be made as long as either of you is living. Upon the death of one
Annuitant, annuity payments will continue to the surviving annuitant at
the same or a reduced level of 75%, 66 2/3% or 50% of annuity payments as
you elect at the time of purchase.

* OPTION 5 - PAYMENTS FOR SPECIFIED PERIOD Periodic annuity payments will be
made for a fixed period, which may be from 5 to 20 years, as you elect at
the time of purchase.

* OPTION 6 - PAYMENTS OF A SPECIFIED AMOUNT Periodic annuity payments will
be made of such amount as you elect at the time of purchase until Account
Value is exhausted. This option is available only for Non-Qualified
Contracts.

* OPTION 7 - AGE RECALCULATION Periodic annuity payments will be made based
upon your life expectancy, or the joint life expectancy of you and a
beneficiary, at your attained age (and your beneficiary's attained or
adjusted age, if applicable) each year. The payments are computed by
reference to government actuarial tables , and will continue until Account
Value is exhausted. Upon your death, any Account Value will be paid to the
Designated Beneficiary.

* OPTION 8 - PERIOD CERTAIN Periodic annuity payments will be made for a
fixed period of 5, 10, 15 or 20 years as you elect at the time of
purchase. This option differs from Option 5 in that annuity payments are
calculated on the basis of Payment Units.

* OPTION 9 - LIFE INCOME WITH LIQUIDITY Monthly annuity payments will be
made during your lifetime, or you may elect annuity payments during your
lifetime and that of your Joint Annuitant. In both cases, annuity payments
will be made for at least a period of 15 years (or less where the Contract
is issued in connection with a Qualified Plan and the period certain would
exceed your life expectancy or the joint life expectancy of you and your
Joint Annuitant). Annuity payments under this option are guaranteed never
to be less than the Floor Payment which is equal to 80% of the initial
annuity payment. The Floor Payment is adjusted, however, in the event of a
withdrawal as discussed under "Exchanges and Withdrawals" on page 31. The
amount of the annuity payment under this option will remain level for 12
month intervals and will reset on each anniversary of the Annuity Payout
Date.

* LIQUIDITY PERIOD The Liquidity Period under Option 9 is the period that
begins on the Contract Date and ends on a date five years from the
Annuity Payout Date. You may withdraw Account Value only during the
Liquidity Period under Option 9. Withdrawals of Account Value are
subject to a withdrawal charge and will reduce the dollar amount of
future annuity payments. See the discussion under "Contract Withdrawal
Charge," page 21, and "Full and Partial Withdrawals," page 23.

CONTACTING THE COMPANY
You should direct all written requests, notices, and forms required by the
Contract, and any questions or inquiries to the T. Rowe Price Variable
Annuity Service Center, P.O. Box 750440, Topeka, Kansas 66675-0440,
1-800-469-6587.

EXPENSE TABLE
- --------------------------------------------------------------------------------

The purpose of this table is to assist you in understanding the various costs
and expenses that you will bear directly and indirectly if you allocate your
Purchase Payment to the Subaccounts. The table reflects any contractual
charges, expenses of the Separate Account, and charges and expenses of the
Funds. The table does not reflect premium taxes that may be imposed by
various jurisdictions. See "Premium Tax Charge," page 21. The information
contained in the table is not applicable to amounts allocated to the Fixed
Interest Account.

For a complete description of a Contract's costs and expenses, see "Charges
and Deductions," page 20. For a more complete description of each Fund's
costs and expenses, see the Funds' prospectus, which accompanies this
Prospectus.

TABLE 1
=============================================================================
All Other
Annuity
CONTRACTOWNER TRANSACTION EXPENSES Option 9 Options
Withdrawal Charge Under Option 9
(as a percentage of amount surrendered) 5%(1) None

CONTRACTUAL EXPENSES
Sales Load on Purchase Payments None None
Annual Maintenance Fee None None

ANNUAL SEPARATE ACCOUNT EXPENSES
Annual Mortality and Expense Risk Charge
(as a percentage of each Subaccount's
average daily net assets) 1.40% .55%
Total Annual Separate Account Expenses 1.40% .55%

ANNUAL PORTFOLIO EXPENSES(AS A PERCENTAGE OF EACH PORTFOLIO'S AVERAGE DAILY
NET ASSETS)
TOTAL
MANAGEMENT OTHER PORTFOLIO
FEE(2) EXPENSES EXPENSES
---------- -------- ---------
T. Rowe Price New America Growth Portfolio .85% 0% .85%
T. Rowe Price International Stock Portfolio 1.05% 0% 1.05%
T. Rowe Price Mid-Cap Growth Portfolio .85% 0% .85%
T. Rowe Price Equity Income Portfolio .85% 0% .85%
T. Rowe Price Personal Strategy Balanced Portfolio .90% 0% .90%
T. Rowe Price Limited-Term Bond Portfolio .70% 0% .70%
T. Rowe Price Prime Reserve Portfolio .55% 0% .55%
=============================================================================
1 The withdrawal charge, which ranges from 5% in the first year to 1% in the
fifth year, is imposed only upon withdrawals under Option 9 which are
permitted only during the Liquidity Period. The withdrawal charge is based
upon the year in which the withdrawal is made as measured from the Annuity
Payout Date.
2 The management fee includes the ordinary expenses of operating the Funds.

EXAMPLES
The examples presented below show expenses that you would pay at the end of
one, three, five, or ten years. The examples show expenses based upon an
allocation of $1,000 to each of the Subaccounts and a hypothetical annual
return of 5%.

You should not consider the examples below a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown. The 5%
return assumed in the examples is hypothetical and should not be considered a
representation of past or future actual returns, which may be greater or
lesser than the assumed amount.

EXAMPLE - You would pay the expenses shown below (unless Option 9 were
selected):

=============================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $14 $44 $77 $168
International Stock Subaccount $16 $50 $87 $190
Mid-Cap Growth Subaccount $14 $44 $77 $168
Equity Income Subaccount $14 $44 $77 $168
Personal Strategy Balanced Subaccount $15 $46 $79 $174
Limited-Term Bond Subaccount $13 $40 $69 $151
Prime Reserve Subaccount $11 $35 $61 $134
=============================================================================

EXAMPLE - You would pay the expenses shown below assuming (1) selection of
Option 9, and (2) no withdrawals:

=============================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $23 $70 $120 $258
International Stock Subaccount $25 $76 $131 $279
Mid-Cap Growth Subaccount $23 $70 $120 $258
Equity Income Subaccount $23 $70 $120 $258
Personal Strategy Balanced Subaccount $23 $72 $123 $264
Limited-Term Bond Subaccount $21 $66 $113 $243
Prime Reserve Subaccount $20 $61 $105 $227
=============================================================================

EXAMPLE - You would pay the expenses shown below assuming (1) selection of
Option 9, and (2) a full withdrawal at the end of each time period:

=============================================================================
1 YEAR 3 YEARS 5 YEARS 10 YEARS
New America Growth Subaccount $74 $103 $132 $258
International Stock Subaccount $76 $108 $142 $279
Mid-Cap Growth Subaccount $74 $103 $132 $258
Equity Income Subaccount $74 $103 $132 $258
Personal Strategy Balanced Subaccount $75 $104 $134 $264
Limited-Term Bond Subaccount $73 $98 $124 $243
Prime Reserve Subaccount $71 $94 $117 $227
=============================================================================

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

=============================================================================
1995 1996 1997 1998
NEW AMERICA GROWTH SUBACCOUNT
Accumulation unit value:
Beginning of period $10.00 $13.40 $16.00 $19.28
End of period $13.40 $16.00 $19.28
Accumulation units:
Outstanding at the end of period 333,934 1,596,903 2,030,514

MID-CAP GROWTH SUBACCOUNT*
Accumulation unit value:
Beginning of period $10.00 $11.82
End of period $11.82
Accumulation units:
Outstanding at the end of period 1,100,979

PRIME RESERVE SUBACCOUNT*
Accumulation unit value:
Beginning of period $10.00 $10.48
End of period $10.48
Accumulation units:
Outstanding at the end of period 769,829
=============================================================================
*The Mid-Cap Growth and Prime Reserve Subaccounts commenced operations on
January 2, 1997.

INFORMATION ABOUT THE COMPANY, THE SEPARATE ACCOUNT, AND THE FUNDS
- --------------------------------------------------------------------------------

SECURITY BENEFIT LIFE INSURANCE COMPANY
The Company is a life insurance company organized under the laws of the State
of Kansas. It was organized originally as a fraternal benefit society and
commenced business February 22, 1892. It became a mutual life insurance
company under its present name on January 2, 1950. On July 31, 1998, the
Company converted from a mutual life insurance company to a stock life
insurance company ultimately controlled by Security Benefit Mutual Holding
Company, a Kansas mutual holding company. Membership interests of persons who
were Contractowners as of July 31, 1998 became membership interests in
Security Benefit Mutual Holding Company as of that date, and persons who
acquire policies from the Company after that date automatically become
members in the mutual holding company.

The Company offers a complete line of life insurance policies and annuity
contracts, as well as financial and retirement services. It is admitted to do
business in the District of Columbia, and in all states except New York. As
of the end of 1998, The Company had total assets of approximately $7.4
billion. Together with its subsidiaries, The Company has total funds under
management of approximately $8.8 billion.

YEAR 2000 COMPLIANCE
Like other insurance companies, as well as other financial and business
organizations around the world, the Company could be adversely affected if
the computer systems used by the Company in performing its administrative
functions do not properly process and calculate date-related information and
data before, during, and after January 1, 2000. Some computer software and
hardware systems currently cannot distinguish between the year 2000 and the
year 1900 or some other date because of the way date fields were encoded.
This is commonly known as the "Year 2000 Problem." If not addressed, the Year
2000 Problem could impact (i) the administrative services provided by the
Company with respect to the Contract, and (ii) the management services
provided to the Funds by T. Rowe Price, as well as transfer agency,
accounting, custody, distribution, and other services provided to the Funds.
For more information on T. Rowe Price Year 2000 compliance efforts, see the
Funds' prospectus, which accompanies this Prospectus.

The Company has adopted a plan to be "Year 2000 Compliant" with respect to
both its internally built systems as well as systems provided by external
vendors. We consider a system Year 2000 Compliant when it is able to
correctly process, provide, and/or receive data before, during and after the
Year 2000. The Company's overall approach to addressing the Year 2000 issue
is as follows: (1) to inventory its internal and external hardware, software,
telecommunications and data transmissions to customers, and conduct a risk
assessment with respect to the impact that a failure on any such system would
have on its business operations; (2) to modify or replace its internal
systems and obtain vendor certifications of Year 2000 compliance for systems
provided by vendors or replace such systems that are not Year 2000 Compliant;
and (3) to implement and test its systems for Year 2000 compliance. The
Company has completed the inventory of its internal and external systems and
has made substantial progress toward completing the modification/replacement
of its internal systems as well as towards obtaining Year 2000 Compliant
certifications from its external vendors. Overall systems testing commenced
in early 1998 and will extend into the first six months of 1999.

Although the Company has taken steps to ensure that its systems will function
properly before, during, and after the Year 2000, external vendors provide
its key operating systems and information sources, which creates uncertainty
to the extent the Company is relying on the assurance of such vendors as to
whether its systems will be Year 2000 Compliant. The costs or consequences of
incomplete or untimely resolution of the Year 2000 issue are unknown to the
Company at this time but could have a material adverse impact on the
operations of the Separate Account and administration of the Contract.

The Year 2000 Problem is also expected to impact companies, which may include
issuers of portfolio securities held by the Funds, to varying degrees based
upon various factors, including, but not limited to, the company's industry
sector and degree of technological sophistication. The Company is unable to
predict what impact, if any, the Year 2000 Problem will have on issuers of
the portfolio securities held by the Funds.

PUBLISHED RATINGS
The Company may from time to time publish in advertisements, sales
literature, and reports to Owners, the ratings and other information assigned
to it by one or more independent rating organizations such as A.M. Best
Company and Standard & Poor's. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of the Company and should not
be considered as bearing on the investment performance of assets held in the
Separate Account. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
Ratings. These ratings reflect their current opinion of the relative
financial strength and operating performance of an insurance company in
comparison to the norms of the life/health insurance industry. In addition,
the claims-paying ability of the Company as measured by Standard & Poor's
Insurance Ratings Services may be referred to in advertisements or sales
literature or in reports to Owners. These ratings are opinions of an
operating insurance company's financial capacity to meet the obligations of
its insurance and annuity policies in accordance with their terms. Such
ratings do not reflect the investment performance of the Separate Account or
the degree of risk associated with an investment in the Separate Account.

SEPARATE ACCOUNT
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT

The Company established the T. Rowe Price Variable Annuity Account as a
separate account under Kansas law on March 28, 1994. The Contract provides
that income, gains, or losses of the Separate Account, whether or not
realized, are credited to or charged against the assets of the Separate
Account without regard to other income, gains, or losses of the Company.
K.S.A. 40-436 provides that assets in a separate account attributable to the
reserves and other liabilities under the contracts may not be charged with
liabilities arising from any other business that the insurance company
conducts if, and to the extent the contracts so provide. The Contract
contains such a provision. The Company owns the assets in the Separate
Account and is required to maintain sufficient assets in the Separate Account
to meet all Separate Account obligations under the Contract. The Company may
transfer to its General Account assets that exceed anticipated obligations of
the Separate Account. All obligations arising under the Contracts are general
corporate obligations of the Company. The Company may invest its own assets
in the Separate Account for other purposes, but not to support contracts
other than variable annuity contracts, and may accumulate in the Separate
Account proceeds from Contract charges and investment results applicable to
those assets.

The Separate Account is currently divided into seven Subaccounts. The
Contract provides that income, gains and losses, whether or not realized, are
credited to, or charged against, the assets of each Subaccount without regard
to the income, gains, or losses in the other Subaccounts. Each Subaccount
invests exclusively in shares of a specific Portfolio of one of the Funds.
The Company may in the future establish additional Subaccounts of the
Separate Account, which may invest in other Portfolios of the Funds or in
other securities, mutual funds, or investment vehicles. Under its contract
with the underwriter, T. Rowe Price Investment Services, Inc. ("Investment
Services"), the Company cannot add new Subaccounts, or substitute shares of
another portfolio, without the consent of Investment Services, unless (1)
such change is necessary to comply with applicable laws, (2) shares of any or
all of the Portfolios should no longer be available for investment, or (3)
the Company receives an opinion from counsel acceptable to Investment
Services that substitution is in the best interest of Contractowners and that
further investment in shares of the Portfolio(s) would cause undue risk to
the Company. For more information about the underwriter, see "Distribution of
the Contract," page 42.

The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). Registration with
the SEC does not involve supervision by the SEC of the administration or
investment practices of the Separate Account or of the Company.

THE FUNDS
The T. Rowe Price Equity Series, Inc., the T. Rowe Price Fixed Income Series,
Inc., and the T. Rowe Price International Series, Inc. are diversified,
open-end management investment companies of the series type. The Funds are
registered with the SEC under the 1940 Act. Such registration does not
involve supervision by the SEC of the investments or investment policy of the
Funds. Together, the Funds currently have seven separate Portfolios, each of
which pursues different investment objectives and policies.

In addition to the Separate Account, shares of the Funds are being sold to
variable life insurance and variable annuity separate accounts of other
insurance companies, including insurance companies affiliated with the
Company. In the future, it may be disadvantageous for variable annuity
separate accounts of other life insurance companies, or for both variable
life insurance separate accounts and variable annuity separate accounts, to
invest simultaneously in the Funds. Currently neither the Company nor the
Funds foresee any such disadvantages to either variable annuity owners or
variable life insurance owners. The management of the Funds intends to
monitor events in order to identify any material conflicts between or among
variable annuity owners and variable life insurance owners and to determine
what action, if any, should be taken in response. In addition, if the Company
believes that any Fund's response to any of those events or conflicts
insufficiently protects Owners, it will take appropriate action on its own.
For more information see the Funds' prospectus.

THE FUNDS' PROSPECTUS ACCOMPANIES THIS PROSPECTUS AND SHOULD BE READ
CAREFULLY BEFORE INVESTING.

T. ROWE PRICE NEW AMERICA GROWTH PORTFOLIO
The investment objective of the New America Growth Portfolio is long-term
growth of capital through investments primarily in the common stocks of
U.S. growth companies that operate in service industries.

T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
The investment objective of the International Stock Portfolio is to seek
long-term growth of capital through investments primarily in common stocks
of established, non-U.S. companies.

T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
The investment objective of the Mid-Cap Growth Portfolio is to provide
long-term capital appreciation by investing primarily in common stocks of
medium-sized growth companies.

T. ROWE PRICE EQUITY INCOME PORTFOLIO
The investment objective of the Equity Income Portfolio is to provide
substantial dividend income and also capital appreciation by investing
primarily in dividend-paying common stocks of established companies.

T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO
The investment objective of the Personal Strategy Balanced Portfolio is to
seek the highest total return over time consistent with an emphasis on both
capital appreciation and income.

T. ROWE PRICE LIMITED-TERM BOND PORTFOLIO
The investment objective of the Limited-Term Bond Portfolio is to seek a
high level of income consistent with moderate price fluctuation by
investing primarily in short- and intermediate-term investment grade debt
securities.

T. ROWE PRICE PRIME RESERVE PORTFOLIO (NOT AVAILABLE UNDER OPTION 9)
The investment objectives of the Prime Reserve Portfolio are preservation
of capital, liquidity, and, consistent with these, the highest possible
current income, by investing primarily in high-quality money market
securities.

THE INVESTMENT ADVISERS
T. Rowe Price Associates, Inc. ("T. Rowe Price"), located at 100 East Pratt
Street, Baltimore, Maryland 21202, serves as Investment Adviser to each
Portfolio, except the T. Rowe Price International Stock Portfolio. Rowe
Price-Fleming International, Inc. ("Price-Fleming"), an affiliate of T. Rowe
Price, serves as Investment Adviser to the T. Rowe Price International Stock
Portfolio. Price-Fleming's U.S. office is located at 100 East Pratt Street,
Baltimore, Maryland 21202. As Investment Adviser to the Portfolios, T. Rowe
Price and Price-Fleming are responsible for selection and management of
portfolio investments. T. Rowe Price and Price-Fleming are registered with
the SEC as investment advisers.

T. Rowe Price and Price-Fleming are not affiliated with the Company, and the
Company has no responsibility for the management or operations of the
Portfolios.

THE CONTRACT
- --------------------------------------------------------------------------------

GENERAL
The Company issues the Contract offered by this Prospectus. It is a single
premium immediate variable annuity. To the extent that all or a portion of
the Purchase Payment is allocated to the Subaccounts, the Contract is
significantly different from a fixed annuity contract in that it is the
Contractowner who assumes the risk of investment gain or loss rather than the
Company. The Contract provides several Annuity Options under which the
Company will pay periodic Annuity Payments on a variable basis, a fixed
basis, or both, beginning on the Annuity Payout Date. The amount of variable
Annuity Payments will depend on the investment performance of the Subaccounts
to which the Purchase Payment has been allocated. The Company guarantees the
amount of fixed Annuity Payments.

The Contract is available for purchase by an individual as a non-tax
qualified retirement plan ("Non-Qualified Plan"). The Contract is also
eligible for purchase as an individual retirement annuity ("IRA") qualified
under Section 408, or a Roth IRA qualified under Section 408A, of the
Internal Revenue Code ("Qualified Plan"). An IRA may be purchased with
contributions from tax-qualified plans such as 403(b) plans, 401(k) plans, or
individual retirement accounts. See the discussion of IRAs and Roth IRAs
under "Section 408 and Section 408A," page 37. Joint Owners are permitted
only on a Contract issued pursuant to a Non-Qualified Plan.

APPLICATION FOR A CONTRACT
If you wish to purchase a Contract, you may submit an application and the
Purchase Payment to the Company, as well as any other form or information
that the Company may require. The Purchase Payment may be made by check or,
if you own shares of one or more Funds distributed by Investment Services
("T. Rowe Price Funds"), you may elect on the application to redeem shares of
that fund(s) and forward the redemption proceeds to the Company. Any such
transaction shall be effected by Investment Services, the distributor of the
T. Rowe Price Funds and the Contract. If you redeem fund shares, it is a sale
of shares for tax purposes, which may result in a taxable gain or loss. You
may obtain an application by contacting the T. Rowe Price Variable Annuity
Service Center. The Company reserves the right to reject an application or
Purchase Payment for any reason, subject to the Company's underwriting
standards and guidelines and any applicable state or federal law relating to
nondiscrimination.

Any Owner must also be an Annuitant. The maximum age of an Owner or Annuitant
for which a Contract will be issued is 85. If there are Joint Owners or
Annuitants, the maximum issue age will be determined by reference to the
older Owner or Annuitant.

PURCHASE PAYMENTS
The minimum Purchase Payment for the purchase of a Contract is $25,000. The
Company will not accept additional Purchase Payments under the Contract. A
Purchase Payment exceeding $1 million will not be accepted without prior
approval of the Company.

The Company will apply the initial Purchase Payment not later than the end of
the second Valuation Date after the Valuation Date it is received at the T.
Rowe Price Variable Annuity Service Center; provided that the Purchase
Payment is preceded or accompanied by an application that contains sufficient
information to establish an account and properly credit such Purchase
Payment. If the Company does not receive a complete application, the Company
will notify you that it does not have the necessary information to issue a
Contract. If you do not provide the necessary information to the Company
within five Valuation Dates after the Valuation Date on which the Company
first receives the initial Purchase Payment or if the Company determines it
cannot otherwise issue the Contract, the Company will return the initial
Purchase Payment to you unless you consent to the Company retaining the
Purchase Payment until the application is made complete.

An application will be considered properly completed if it (1) includes all
information requested on the application, including election of an Annuity
Option, and (2) is accompanied by proof of the date of birth of the Annuitant
and any Joint Annuitant and the entire amount of the Purchase Payment.

ALLOCATION OF THE PURCHASE PAYMENT
In an application for a Contract, you select the Subaccounts or the Fixed
Interest Account to which the Purchase Payment will be allocated. The
allocation must be a whole percentage. The Purchase Payment will be allocated
according to your instructions contained in the application, except that no
Purchase Payment allocation is permitted that would result in less than 5% of
any payment being allocated to any one Subaccount or the Fixed Interest
Account. Available allocation alternatives generally include the seven
Subaccounts and the Fixed Interest Account. The Prime Reserve Subaccount and
the Fixed Interest Account are not available under Option 9.

ACCOUNT VALUE
The Account Value is the sum of the amounts under the Contract held in each
Subaccount and in the Fixed Interest Account. Account Value is determined as
of any Valuation Date prior to the Annuity Payout Date and on and after the
Annuity Payout Date under Annuity Options 5 through 7 and during the
Liquidity Period under Option 9. There is no Account Value under Options 1
through 4 and 8, or after the Liquidity Period, under Option 9.

On each Valuation Date, the portion of the Account Value allocated to any
particular Subaccount will be adjusted to reflect the investment experience
of that Subaccount for that date. See "Determination of Account Value,"
below. No minimum amount of Account Value is guaranteed. You bear the entire
investment risk relating to the investment performance of Account Value
allocated to the Subaccounts.

DETERMINATION OF ACCOUNT VALUE
The Account Value will vary to a degree that depends upon several factors,
including investment performance of the Subaccounts to which Account Value
has been allocated, partial withdrawals, the charges assessed in connection
with the Contract and Annuity Payments under Options 5 through 7 and during
the Liquidity Period, under Option 9. The amounts allocated to the
Subaccounts will be invested in shares of the corresponding Portfolios of the
Funds. The investment performance of the Subaccounts will reflect increases
or decreases in the net asset value per share of the corresponding Portfolios
and any dividends or distributions declared by the corresponding Portfolios.
Any dividends or distributions from any Portfolio will be automatically
reinvested in shares of the same Portfolio, unless the Company, on behalf of
the Separate Account, elects otherwise.

Assets in the Subaccounts are divided into Accumulation Units, which are
accounting units of measure used to calculate the value of a Contractowner's
interest in a Subaccount. When a Contractowner allocates all or part of the
Purchase Payment to a Subaccount, the Contract is credited with Accumulation
Units. The number of Accumulation Units to be credited is determined by
dividing the dollar amount allocated to the particular Subaccount by the
Accumulation Unit value for the particular Subaccount as of the end of the
Valuation Period in which the Purchase Payment is credited. In addition,
other transactions including full or partial withdrawals and any withdrawal
charge, exchanges, Annuity Payments under Options 5 through 7 and during the
Liquidity Period under Option 9, and assessment of premium taxes against the
Contract, all affect the number of Accumulation Units credited to a Contract.
The number of units credited or debited in connection with any such
transaction is determined by dividing the dollar amount of such transaction
by the Accumulation Unit value of the affected Subaccount. The Accumulation
Unit value of each Subaccount is determined as of each Valuation Date. The
number of Accumulation Units credited to a Contract will not be changed by
any subsequent change in the value of an Accumulation Unit, but the dollar
value of an Accumulation Unit may vary from Valuation Date to Valuation Date
depending upon the investment experience of the Subaccount and charges
against the Subaccount.

The Accumulation Unit value of each Subaccount's units initially was $10.
Determination of the unit value of a Subaccount takes into account the
following: (1) the investment performance of the Subaccount, which is based
upon the investment performance of the corresponding Portfolio of the Funds,
(2) any dividends or distributions paid by the corresponding Portfolio, (3)
the charges, if any, that may be assessed by the Company for taxes
attributable to the operation of the Subaccount, and (4) the mortality and
expense risk charge of the applicable Annuity Option under the Contract.

FREE-LOOK RIGHT
You may return a Contract within the Free-Look Period, which is generally a
10-day period beginning when you receive the Contract. The returned Contract
will then be deemed void and the Company will refund to you any part of the
Purchase Payment allocated to the Fixed Interest Account plus the Account
Value in the Subaccounts as of the end of the Valuation Period during which
the returned Contract is received by the Company. The Company will refund the
amount of the Purchase Payment allocated to the Subaccounts rather than
Account Value in those states and circumstances in which it is required to do
so.

DEATH BENEFIT
If the Owner dies prior to the Annuity Payout Date, the Company will pay the
death benefit proceeds upon receipt of due proof of death and instructions
regarding payment. If the Owner dies and there is no Joint Annuitant, the
death benefit proceeds will be payable to the Designated Beneficiary in an
amount equal to the Account Value as of the date due proof of death and
instructions regarding payment are received by the Company, less any premium
taxes due or paid by the Company, any partial withdrawals and any Annuity
Payments. If the Owner dies and there is a Joint Annuitant, the surviving
Joint Annuitant may elect to receive the death benefit proceeds described
above or elect a new Annuity Option. If the Owner is not a natural person,
the death benefit proceeds will be payable upon receipt of due proof of death
of the Annuitant prior to the Annuity Payout Date and instructions regarding
payment. If the death of an Owner occurs on or after the Annuity Payout Date,
any death benefit will be determined according to the terms of the Annuity
Option selected by the Owner. See "Annuity Options," page 25. See "Federal
Tax Matters," page 33 for a discussion of the tax consequences in the event
of death.

DISTRIBUTION REQUIREMENTS
For Contracts issued in connection with Non-Qualified Plans, if any Owner
dies prior to the Annuity Payout Date, the entire death benefit must be paid
within five years after the death of such Owner. If any Owner dies on or
after the Annuity Payout Date, Annuity Payments shall continue to be paid at
least as rapidly as under the method of payment being used as of the date of
the Owner's death. If the Owner of the Contract is not a natural person,
these distribution rules are applicable upon the death of or a change in the
primary Annuitant.

For Contracts issued in connection with Qualified Plans, the terms of any
Qualified Plan and the Internal Revenue Code should be reviewed with respect
to limitations or restrictions on distributions following the death of the
Owner or Annuitant. Because the rules applicable to Qualified Plans are
extremely complex, a competent tax adviser should be consulted.

CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------

MORTALITY AND EXPENSE RISK CHARGE
The Company deducts a daily charge from the assets of each Subaccount for
mortality and expense risks assumed by the Company under the Contracts. The
charge generally is equal to an annual rate of 0.55% of each Subaccount's
average daily net assets. This amount is intended to compensate the Company
for certain mortality and expense risks the Company assumes in offering and
administering the Contracts and in operating the Subaccounts. If Option 9 is
selected, the mortality and expense risk charge is equal to an annual rate of
1.40% of each Subaccount's average daily net assets.

The expense risk borne by the Company is the risk that the Company's actual
expenses in issuing and administering the Contracts and operating the
Subaccounts will be more than the profit realized from the mortality and
expense risk charge. The mortality risk borne by the Company is the risk that
Annuitants, as a group, will live longer than the Company's actuarial tables
predict. In this event, the Company guarantees that Annuity Payments will not
be affected by a change in mortality experience that results in the payment
of greater annuity income than assumed under the Annuity Options in the
Contract. With respect to Option 9, the Company also assumes the risks
associated with providing the Floor Payment. See "Option 9 - Life Income with
Liquidity," page 26.

The Company may ultimately realize a profit from the mortality and expense
risk charge to the extent it is not needed to cover mortality and
administrative expenses, but the Company may realize a loss to the extent the
charge is not sufficient. The Company may use any profit derived from this
charge for any lawful purpose, including any promotional and administrative
expenses, including compensation paid by the Company to T. Rowe Price
Investment Services, Inc. or an affiliate thereof, at the annual rate of
0.10% of each Subaccount's average daily net assets for administrative
services.

PREMIUM TAX CHARGE
Various states and municipalities impose a tax on premiums on annuity
contracts received by insurance companies. Whether or not a premium tax is
imposed will depend upon, among other things, the Owner's state of residence,
the Annuitant's state of residence, and the insurance tax laws and the
Company's status in a particular state. The Company assesses a premium tax
charge to reimburse itself for premium taxes that it incurs in connection
with a Contract. This charge will be deducted from the Purchase Payment if
premium tax is incurred. The Company reserves the right to deduct premium
taxes when due or anytime thereafter. Premium tax rates currently range from
0% to 3.5%, but are subject to change by a governmental entity.

CONTRACT WITHDRAWAL CHARGE
The Company deducts a withdrawal charge from full or partial withdrawals made
during the Liquidity Period under Option 9. The charge is deducted from the
Subaccounts in the same proportion as the withdrawal is allocated. The
withdrawal charge is based upon the year in which the withdrawal is made as
measured from the Annuity Payout Date. Withdrawals after the fifth year from
the Annuity Payout Date are not permitted under Option 9. The withdrawal
charge, which is set forth below, is applied to the amount of the withdrawal.

===============================================================
YEAR FROM ANNUITY PAYOUT DATE WITHDRAWAL CHARGE
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 1%
===============================================================

The withdrawal charge compensates the Company for the costs associated with
providing the Floor Payment under Option 9, including the costs of
reinsurance purchased by the Company to hedge against the Company's potential
losses from providing the Floor Payment.

OTHER CHARGES
The Company may charge the Separate Account or the Subaccounts for the
federal, state, or local taxes incurred by the Company that are attributable
to the Separate Account or the Subaccounts, or to the operations of the
Company with respect to the Contracts, or that are attributable to payment of
premiums or acquisition costs under the Contracts. No such charge is
currently assessed. See "Tax Status of the Company and the Separate Account"
and "Charge for the Company's Taxes," page 33.

GUARANTEE OF CERTAIN CHARGES
The Company guarantees that the charge for mortality and expense risks will
not exceed an annual rate of .55% of each Subaccount's average daily net
assets (1.40% of each Subaccount's average daily net assets under Option 9).

FUND EXPENSES
Each Subaccount purchases shares at the net asset value of the corresponding
Portfolio of the Funds. Each Portfolio's net asset value reflects the
investment management fee and any other expenses that are deducted from the
assets of the Fund. These fees and expenses are not deducted from the
Subaccount, but are paid from the assets of the corresponding Portfolio. As a
result, you indirectly bears a pro rata portion of such fees and expenses.
The management fees and other expenses, if any, which are more fully
described in the Funds' prospectus, are not specified or fixed under the
terms of the Contract, and the Company bears no responsibility for such fees
and expenses.

ANNUITY PAYMENTS
- --------------------------------------------------------------------------------

GENERAL
The Contractowner selects the Annuity Payout Date, which must be within 30
days of the Contract Date, at the time of purchase. If the Contractowner does
not select an Annuity Payout Date, the Annuity Payout Date will be a date one
month from the Contract Date. For example, if the Contract Date is February
28 and no Annuity Payout Date is selected, the Annuity Payout Date will be
March 28.

On the Annuity Payout Date, the Purchase Payment, less any applicable premium
taxes, will be applied to provide an annuity under one of the Options
described on page 25. The Purchase Payment is further reduced by an amount
equal to 1.8% of the Purchase Payment if you elect a fixed annuity under one
of Options 1 through 4 or 8. Each Option, except Option 9 which is available
only as a variable annuity, is available either as a variable annuity
supported by the Subaccounts or as a fixed annuity supported by the Fixed
Interest Account. A combination variable and fixed annuity is also available
under Options 5 through 7. Your payment choices for each Annuity Option are
set forth in the table below.

=============================================================================
COMBINATION
VARIABLE FIXED VARIABLE AND
ANNUITY OPTION ANNUITY ANNUITY FIXED ANNUITY

Option 1 - Life Income X X
Option 2 - Life Income with
Period Certain X X
Option 3 - Life Income with
Installment Refund X X
Option 4 - Joint and Last Survivor X X
Option 5 - Payments for a Specified
Period X X X
Option 6 - Payments of a Specified
Amount X X X
Option 7 - Age Recalculation X X X
Option 8 - Period Certain X X
Option 9 - Life Income with Liquidity X
=============================================================================

Variable Annuity Payments will fluctuate with the investment performance of
the applicable Subaccounts while fixed Annuity Payments will not. Any portion
of the net Purchase Payment under the Contract allocated to the Subaccounts
will be applied to purchase a variable annuity and any portion under the
Contract allocated to the Fixed Interest Account will be applied to purchase
a fixed annuity. The net Purchase Payment will be equal to the Purchase
Payment, reduced by any applicable premium taxes, and 1.8% of the Purchase
Payment if a fixed annuity under one of Options 1 through 4 or 8 is selected.

The Company will make Annuity Payments on a monthly, quarterly, semiannual,
or annual basis, except that under Option 9, Annuity Payments can be made
only on a monthly basis. No Annuity Payments will be made for less than $100
except that there is no minimum payment amount with respect to Annuity
Payments under Option 9. You may direct Investment Services to apply the
proceeds of an Annuity Payment to shares of one or more of the T. Rowe Price
Funds by submitting a written request to the T. Rowe Price Variable Annuity
Service Center. If the frequency of payments selected would result in
payments of less than $100, the Company reserves the right to change the
frequency.

An Owner may not change the Annuity Payout Date, Annuity Option or Annuitant
at any time after the Contract has been issued.

EXCHANGES
The Owner may exchange Account Value or Payment Units (depending upon the
Annuity Option selected) among the Subaccounts upon proper written request to
the T. Rowe Price Variable Annuity Service Center. Exchanges may be made by
telephone if telephone exchanges were elected in the application, or an
Authorization for Telephone Requests form has been properly completed, signed
and filed at the T. Rowe Price Variable Annuity Service Center. Up to six
exchanges are allowed in any Contract Year. The minimum amount of Account
Value that may be exchanged is $500 or, if less, the amount remaining in the
Fixed Interest Account or Subaccount. Exchanges of Account Value or Payment
Units will immediately affect the amount of future Annuity Payments, which
will be based upon the performance of the Subaccounts to which the exchange
is made. Because Option 9 provides for level monthly payments that reset only
annually, an exchange under Option 9 will not affect the amount of the
Annuity Payment until the next annual reset date.

The Owner may exchange Payment Units among Subaccounts under Options 1
through 4 and 8 and may exchange Account Value among the Subaccounts and the
Fixed Interest Account under Options 5 through 7, subject to the restrictions
on exchanges from the Fixed Interest Account described under the "Fixed
Interest Account," page 30. Under Option 9, the Owner may exchange only among
the Subaccounts (excluding the Prime Reserve Subaccount). Under Option 9,
Account Value may be exchanged during the Liquidity Period and Payment Units
may be exchanged after the Liquidity Period. An exchange of Account Value
during the Liquidity Period under Option 9 will automatically effect a
corresponding exchange of Payment Units.

The Company reserves the right at a future date, to waive or limit the number
of exchanges permitted each Contract Year, to suspend exchanges, to limit the
amount of Account Value that may be subject to exchanges and the amount
remaining in an account after an exchange, to impose conditions on the right
to exchange and to discontinue telephone exchanges provided that, as required
by its contract with Investment Services, the Company first obtains the
consent of Investment Services.

FULL AND PARTIAL WITHDRAWALS
Once the Contract has been issued, an Annuitant or Owner cannot change the
Annuity Option and generally cannot surrender his or her annuity and receive
a lump-sum settlement in return. Full and partial withdrawals of Account
Value are available, however, under Options 5 through 7, subject to the
restrictions on withdrawals from the Fixed Interest Account, and under Option
9 during the Liquidity Period. Withdrawals during the Liquidity Period under
Option 9 are subject to a withdrawal charge as discussed under "Contract
Withdrawal Charge," page 21. An Owner may elect to withdraw the present value
of Annuity Payments, commuted at the assumed interest rate, if a variable
annuity under Option 8 is selected. Partial withdrawals will reduce the
amount of future Annuity Payments. Under Option 9, upon a partial withdrawal
of Account Value, the amount of the Annuity Payment, Floor Payment and number
of Payment Units used to calculate the Annuity Payment will be reduced. The
amount of the Annuity Payment and the number of Payment Units for each
Subaccount is reduced in the same proportion as the withdrawal reduces
Account Value allocated to that Subaccount as of the date of the withdrawal.
The Floor Payment is reduced in the same proportion as the withdrawal reduces
overall Account Value as of the date of the withdrawal. An example of a
partial withdrawal under Option 9 is set forth below.

=============================================================================
SUBACCOUNTS FROM ACCOUNT VALUE WITHDRAWAL AMOUNT PERCENTAGE
WHICH ANNUITY ON DATE OF (INCLUDING WITHDRAWAL REDUCTION
PAYMENT IS MADE WITHDRAWAL CHARGES)

Equity Income $95,000 $0 0%
International Stock $25,000 $15,000 60%
Total $120,000 $15,000 12.5%
=============================================================================

=============================================================================
PRIOR TO PARTIAL WITHDRAWAL AFTER PARTIAL WITHDRAWAL
--------------------------- -----------------------------
SUBACCOUNTS FROM AMOUNT OF AMOUNT OF
WHICH ANNUITY ANNUITY PAYMENT FLOOR ANNUITY PAYMENT FLOOR
PAYMENT IS MADE PAYMENT UNITS PAYMENT PAYMENT UNITS PAYMENT(1)
---------------- --------- ------- ------- --------- ------- ----------
Equity Income(2) $300 29.7914 N/A $300 29.7914 N/A
International
Stock(3) $100 9.7847 N/A $40 3.9139 N/A
Total $400 $304 $340 $266
=============================================================================
1 The Floor Payment is reduced by 12.5%, the percentage by which the partial
Withdrawal reduced Account Value.

2 The Annuity Payment and Payment Units allocated to this Subaccount are not
reduced in this example, because no amount is withdrawn from Account Value
allocated to the Equity Income Subaccount.

A full or partial withdrawal request will be effective as of the end of the
Valuation Period that a proper written request is received by the Company at
the T. Rowe Price Variable Annuity Service Center. A proper written request
must include the written consent of any effective assignee or irrevocable
Beneficiary, if applicable. A Contractowner may direct Investment Services to
apply the proceeds of a full or partial withdrawal to the purchase of shares
of one or more of the T. Rowe Price Funds by so indicating in their written
withdrawal request.

The proceeds received upon a full withdrawal will be the Contract's
Withdrawal Value. The Withdrawal Value generally is equal to the Account
Value as of the end of the Valuation Period during which a proper withdrawal
request is received by the Company at the T. Rowe Price Variable Annuity
Service Center, less any premium taxes due and paid by the Company and, under
Option 9, any withdrawal charge. The Withdrawal Value under Option 8 is the
present value of future Annuity Payments calculated using the assumed
interest rate, less any premium taxes due and paid by the Company.

A partial withdrawal may be requested for a specified percentage or dollar
amount of Account Value. Each partial withdrawal must be for at least $500. A
request for a partial withdrawal will result in a payment by the Company in
accordance with the amount specified in the partial withdrawal request. Upon
payment, the Account Value will be reduced by an amount equal to the
withdrawal, any applicable premium tax and any applicable withdrawal charge.
If a partial withdrawal is requested that would leave the Withdrawal Value in
the Contract less than $10,000, or with respect to Option 8, Annuity Payments
after the withdrawal would be less than $100, the Company reserves the right
to treat the partial withdrawal as a request for a full withdrawal.

The amount of a partial withdrawal will be deducted from the Account Value in
the Subaccounts and the Fixed Interest Account, according to the
Contractowner's instructions to the Company, subject to the restrictions on
partial withdrawals from the Fixed Interest Account. See "The Fixed Interest
Account," page 30. If a Contractowner does not specify the allocation, the
Company will contact the Contractowner for instructions, and the withdrawal
will be effected as of the end of the Valuation Period in which such
instructions are obtained.

A full or partial withdrawal may result in receipt of taxable income to the
Owner and, if made prior to the Owner's attaining age 59 1/2, may be subject
to a 10% penalty tax. The tax consequences of a withdrawal under the Contract
should be carefully considered. See "Federal Tax Matters," page 33.

ANNUITY OPTIONS
The Contract provides for nine Annuity Options. Other Annuity Options may be
available upon request at the discretion of the Company. The Annuity Options
are set forth below.

OPTION 1 - LIFE INCOME Periodic Annuity Payments will be made during the
lifetime of the Annuitant. It is possible under this Option for an Annuitant
to receive only one Annuity Payment if the Annuitant's death occurred prior
to the due date of the second Annuity Payment, two if death occurred prior to
the due date of the third Annuity Payment, etc. THERE IS NO MINIMUM NUMBER OF
PAYMENTS GUARANTEED UNDER THIS OPTION. PAYMENTS CEASE UPON THE DEATH OF THE
ANNUITANT, REGARDLESS OF THE NUMBER OF PAYMENTS RECEIVED.

OPTION 2 - LIFE INCOME WITH PERIOD CERTAIN OF 5, 10, 15, OR 20 YEARS Periodic
Annuity Payments will be made during the lifetime of the Annuitant with the
promise that if, at the death of the Annuitant, payments have been made for
less than a stated period, which may be 5, 10, 15, or 20 years, as elected,
Annuity Payments will be continued during the remainder of such period to the
Designated Beneficiary. UPON THE ANNUITANT'S DEATH AFTER THE PERIOD CERTAIN,
NO FURTHER ANNUITY PAYMENTS WILL BE MADE.

OPTION 3 - LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION Periodic
Annuity Payments will be made during the lifetime of the Annuitant with the
promise that, if at the death of the Annuitant, the number of payments that
has been made is less than the number determined by dividing the amount
applied under this Option by the amount of the first Annuity Payment, Annuity
Payments will be continued to the Designated Beneficiary until that number of
Annuity Payments has been made.

OPTION 4 - JOINT AND LAST SURVIVOR Periodic Annuity Payments will be made
during the lifetime of the Annuitants. Annuity Payments will be made as long
as either Annuitant is living. Upon the death of one Annuitant, Annuity
Payments continue to the surviving Annuitant at the same or a reduced level
of 75%, 66 2/3% or 50% of Annuity Payments as elected by the Owner at the
time the Annuity Option is selected. With respect to fixed Annuity Payments,
the amount of the Annuity Payment and, with respect to variable Annuity
Payments, the number of Payment Units used to determine the Annuity Payment
is reduced as of the first Annuity Payment following the Annuitant's death.
In the event of the death of one Annuitant, the surviving Joint Annuitant has
the right to exercise all rights under the Contract, including the right to
make exchanges. It is possible under this Option for only one Annuity Payment
to be made if both Annuitants died prior to the second Annuity Payment due
date, two if both died prior to the third Annuity Payment due date, etc. AS
IN THE CASE OF OPTION 1, THERE IS NO MINIMUM NUMBER OF PAYMENTS GUARANTEED
UNDER THIS OPTION. PAYMENTS CEASE UPON THE DEATH OF THE LAST SURVIVING
ANNUITANT, REGARDLESS OF THE NUMBER OF PAYMENTS RECEIVED.

OPTION 5 - PAYMENTS FOR SPECIFIED PERIOD Periodic Annuity Payments will be
made for a fixed period, which may be from 5 to 20 years, as elected by the
Owner. The amount of each Annuity Payment is determined by dividing Account
Value by the number of Annuity Payments remaining in the period. If, at the
death of the Annuitant, payments have been made for less than the selected
fixed period, the remaining unpaid payments will be paid to the Designated
Beneficiary.

OPTION 6 - PAYMENTS OF A SPECIFIED AMOUNT Periodic Annuity Payments of the
amount elected by the Owner will be made until Account Value is exhausted,
with the guarantee that, if, at the death of the Annuitant, all guaranteed
payments have not yet been made, the remaining unpaid payments will be paid
to the Designated Beneficiary. This Option is available only for Contracts
issued in connection with Non-Qualified Plans.

OPTION 7 - AGE RECALCULATION Periodic Annuity Payments will be made based
upon the Annuitant's life expectancy, or the joint life expectancy of the
Annuitant and a beneficiary, at the Annuitant's attained age (and the
beneficiary's attained or adjusted age, if applicable) each year. The
payments are computed by reference to government actuarial tables, and are
made until Account Value is exhausted. Upon the Annuitant's death, any
Account Value will be paid to the Designated Beneficiary.

OPTION 8 - PERIOD CERTAIN Periodic Annuity Payments will be made for a fixed
period which may be 5, 10, 15 or 20 years. This option differs from Option 5
in that Annuity Payments are calculated on the basis of Payment Units. If the
Annuitant dies prior to the end of the period certain, the remaining
guaranteed Annuity Payments will be made to the Designated Beneficiary.

OPTION 9 - LIFE INCOME WITH LIQUIDITY Monthly Annuity Payments will be made
for the life of the Annuitant, or the Owner may elect Annuity Payments for
the life of the Annuitant and a Joint Annuitant, and in both cases with a
period certain of 15 years. The period certain may be for a period of less
than 15 years in the case of a Contract issued in connection with a Qualified
Plan, as the period certain in that case may not exceed the life expectancy
of the Annuitant or joint life expectancy of the Joint Annuitants. Annuity
Payments under this option are guaranteed never to be less than the Floor
Payment which is equal to 80% of the initial Annuity Payment; provided that
the Floor Payment is adjusted in the event of a withdrawal as discussed under
"Full and Partial Withdrawals," page 23. The amount of the Annuity Payment
will remain level for 12 month intervals and will reset on each anniversary
of the Annuity Payout Date. Annuity Payments during the Liquidity Period are
paid from Account Value and reduce the amount of Account Value available for
withdrawal. If during the Liquidity Period Account Value allocated to a
Subaccount is depleted, any shortfall will be deducted proportionately from
those Subaccounts that have Account Value, and future annuity payments will
be based upon the performance of those Subaccounts.

If there are Joint Annuitants, Annuity Payments will be made as long as
either Annuitant is living. Upon the death of one Annuitant, Annuity Payments
continue to the surviving Annuitant at the same or a reduced level of 75%, 66
2/3% or 50% of Annuity Payments as elected by the Owner at the time the
Annuity Option is selected. The number of Payment Units used to calculate
Annuity Payments is reduced (1) as of the Annuity Payment due at the close of
the period certain, or (2) if later, as of the first Annuity Payment
following the death of the Annuitant.

A death benefit is payable to the Designated Beneficiary upon the death of
the Annuitant or, if there are Joint Annuitants, upon the death of the last
Annuitant prior to the close of the period certain. The death benefit during
the Liquidity Period is the Account Value as of the end of the Valuation
Period during which due proof of death and instructions regarding payment are
received at the T. Rowe Price Variable Annuity Service Center. The Designated
Beneficiary may elect the death benefit in the event of death during the
remainder of the period certain, as follows: (1) a lump sum equal to the
present value, calculated using the assumed interest rate, of the remaining
guaranteed Annuity Payments as of the end of the Valuation Period during
which due proof of death and instructions regarding payment are received at
the T. Rowe Price Variable Annuity Service Center; or (2) the remaining
guaranteed Annuity Payments paid to the Designated Beneficiary on a monthly
basis.

If there are Joint Annuitants, upon the death of one Annuitant during the
Liquidity Period, the amount of Annuity Payments to the surviving Annuitant
may be increased as of the close of the Liquidity Period. Whether the amount
of the Annuity Payment will be increased is determined by applying an amount
equal to the present value of the future Annuity Payments based upon the
joint lives of the Annuitants, calculated using the assumed interest rate, to
a life income option with a period certain of ten years (or the amount of
time remaining in the period certain as of the close of the Liquidity Period)
to determine an Annuity Payment. If this Annuity Payment is greater than the
current Annuity Payment, the current payment would be increased to that
amount as of the close of the Liquidity Period. The Payment Units and Floor
Payment would be increased proportionately as of that date.

SELECTION OF AN OPTION
Contractowners should carefully review the Annuity Options with their
financial or tax advisers, and, for Contracts used in connection with a
Qualified Plan, reference should be made to the terms of the particular plan
and the requirements of the Internal Revenue Code for pertinent limitations
respecting Annuity Payments and other matters. For instance, Qualified Plans
generally require that Annuity Payments begin no later than April 1 of the
calendar year following the year in which the Annuitant reaches age 70 1/2.
In addition, under Qualified Plans, the period elected for receipt of Annuity
Payments under Annuity Options (other than life income) generally may be no
longer than the joint life expectancy of the Annuitant and beneficiary in the
year that the Annuitant reaches age 70 1/2, and must be shorter than such
joint life expectancy if the beneficiary is not the Annuitant's spouse and is
more than 10 years younger than the Annuitant.

ANNUITY PAYMENTS
Annuity Payments under Options 1 through 4, 8 and 9 are based upon annuity
rates that vary with the Annuity Option selected. In the case of Options 1
through 4 and 9 the annuity rates will vary based upon your age and sex,
except that unisex rates are used where required by law. The annuity rates
reflect your life expectancy as of the Annuity Payout Date and gender, unless
unisex rates apply. The annuity rates are based upon the 1983(a) mortality
table and are adjusted to reflect an assumed interest rate of 3.5% or 5%,
compounded annually, as selected by you. See the discussion under "Assumed
Interest Rate," below. See the table below for the basis of annuity rates. In
the case of Options 5, 6 and 7, Annuity Payments are based upon Account Value
without regard to annuity rates.

BASIS OF ANNUITY RATES

=========================================================
OPTIONS 1-4 AND 9 OPTION 8
----------------- --------
Assumed Interest Rate Assumed Interest Rate
Mortality Table 1983(a)
=========================================================

The Company calculates Variable Annuity Payments under Options 1 through 4, 8
and 9 using Payment Units. The value of a Payment Unit for each Subaccount is
determined as of each Valuation Date and initially was $1.00. The Payment
Unit value of a Subaccount as of any subsequent Valuation Date is determined
by adjusting the Payment Unit value on the previous Valuation Date for (1)
the interim performance of the corresponding Portfolio of the Funds; (2) any
dividends or distributions paid by the corresponding Portfolio; (3) the
mortality and expense risk charge; (4) the charges, if any, that may be
assessed by the Company for taxes attributable to the operation of the
Subaccount; and (5) the assumed interest rate.

The Company determines the number of Payment Units used to calculate each
variable Annuity Payment as of the Annuity Payout Date. As discussed above,
the Contract specifies annuity rates for Options 1 through 4, 8 and 9, which
are the guaranteed minimum dollar amount of monthly Annuity Payment for each
$1,000 of Purchase Payment, less any applicable premium taxes, and less a
charge equal to 1.8% of the Purchase Payment for a fixed annuity, applied to
an Annuity Option. The net Purchase Payment is divided by $1,000 and the
result is multiplied by the rate per $1,000 specified in the annuity tables
to determine the initial Annuity Payment for a variable annuity and the
guaranteed monthly Annuity Payment for a fixed annuity.

On the Annuity Payout Date, the Company divides the initial variable Annuity
Payment by the value of the Payment Unit as of that date for the applicable
Subaccount to determine the number of Payment Units to be used in calculating
subsequent Annuity Payments. If variable Annuity Payments are allocated to
more than one Subaccount, the number of Payment Units will be determined by
dividing the portion of the initial variable Annuity Payment allocated to a
Subaccount by the value of that Subaccount's Payment Unit as of the Annuity
Payout Date. The initial variable Annuity Payment is allocated to the
Subaccounts in the same proportion as the Purchase Payment is allocated. The
number of Payment Units will remain constant for subsequent Annuity Payments,
unless you exchange Payment Units among Subaccounts or make a withdrawal
under Option 8 or during the Liquidity Period under Option 9.

Subsequent variable Annuity Payments are calculated by multiplying the number
of Payment Units allocated to a Subaccount by the value of the Payment Unit
as of the date of the Annuity Payment. If the Annuity Payment is allocated to
more than one Subaccount, the Annuity Payment is equal to the sum of the
payment amount determined for each Subaccount. Annuity Payments under Option
9 are reset only once each year on the 12-month anniversary of the Annuity
Payout Date to reflect the investment performance of the Subaccount(s). An
example is set forth below of an Annuity Payment calculation under Option 9
assuming purchase of a Contract by a 60-year old male with a Purchase Payment
of $100,000 and no premium tax.

=============================================================================
Initial Purchase Payment $100,000 $100,000
Premium Tax - 0 --------
-------- = 100
Net Purchase Payment $100,000 $1,000

Amount determined by reference to annuity table
for a male, age 60 under Option 9.....................................$4.78

First Variable Annuity Payment (100 x $4.78).............................$478

ALLOCATION FIRST VARIABLE PAYMENT UNIT NUMBER OF
OF NET ANNUITY VALUE ON PAYMENT UNITS
PURCHASE PAYMENT ANNUITY USED TO DETERMINE
SUBACCOUNT PAYMENT ALLOCATION PAYOUT DATE SUBSEQUENT PAYMENTS
---------- ---------- -------------- ------------ -------------------
Equity Income 50% $239.00 / $1.51 = 158.2781
International
Stock 50% 239.00 / 1.02 = 234.3137
------
$478.00

NUMBER OF PAYMENT UNITS PAYMENT UNIT VALUE AMOUNT OF
USED TO DETERMINE ON ANNUAL RESET SUBSEQUENT ANNUITY
SUBACCOUNT SUBSEQUENT PAYMENTS DATE PAYMENT
---------- ----------------------- ------------------ ------------------
Equity Income 158.2781 x $1.60 = $253.24
International
Stock 234.3137 x 1.10 = 257.74
-------
Subsequent Variable Annuity Payment..............................$510.98

DATE OF AMOUNT OF
ANNUITY PAYMENT ANNUITY PAYMENT
--------------- ---------------
Annuity Payout Date February 15 $478.00
March 15 478.00
April 15 478.00
May 15 478.00
June 15 478.00
July 15 478.00
August 15 478.00
September 15 $478.00
October 15 478.00
November 15 478.00
December 15 478.00
January 15 478.00
Annual Reset Date February 15 510.98
=============================================================================

ASSUMED INTEREST RATE
As discussed above, the annuity rates for Options 1 through 4, 8 and 9 are
based upon an assumed interest rate of 3.5% or 5%, compounded annually, as
you elect at the time the Annuity Option is selected. Variable Annuity
Payments generally increase or decrease from one Annuity Payment date to the
next based upon the performance of the applicable Subaccounts during the
interim period adjusted for the assumed interest rate. If the performance of
the Subaccounts is equal to the assumed interest rate, Annuity Payments will
remain constant. If the performance of the Subaccounts is greater than the
assumed interest rate, the amount of the Annuity Payments will increase and
if it is less than the assumed interest rate, the amount of the Annuity
Payments will decline. A higher assumed interest rate, for example 5%, would
mean a higher initial Variable Annuity Payment, but the amount of the Annuity
Payments would increase more slowly in a rising market (or the amount of the
Annuity Payments would decline more rapidly in a falling market). Conversely,
a lower assumed interest rate, for example 3.5%, would mean a lower initial
variable Annuity Payment and more rapidly rising Annuity Payment amounts in a
rising market and more slowly declining Annuity Payment amounts in a falling
market.

THE FIXED INTEREST ACCOUNT
- --------------------------------------------------------------------------------

You may allocate your net Purchase Payment to the Fixed Interest Account to
purchase a fixed annuity under Annuity Options 1 through 4 and 8. Under
Annuity Options 5 through 7, all or a portion of the Purchase Payment may be
allocated to the Fixed Interest Account and Account Value allocated to the
Subaccounts under those Options may be exchanged to the Fixed Interest
Account. A fixed annuity is not available under Option 9. Amounts allocated
to the Fixed Interest Account become part of the Company's General Account,
which supports the Company's insurance and annuity obligations. The Company's
General Account is subject to regulation and supervision by the Kansas
Department of Insurance and is also subject to the insurance laws and
regulations of other jurisdictions in which the Contract is distributed. In
reliance on certain exemptive and exclusionary provisions, interests in the
Fixed Interest Account have not been registered as securities under the
Securities Act of 1933 (the "1933 Act") and the Fixed Interest Account has
not been registered as an investment company under the Investment Company Act
of 1940 (the "1940 Act"). Accordingly, neither the Fixed Interest Account nor
any interests therein are generally subject to the provisions of the 1933 Act
or the 1940 Act. The Company has been advised that the staff of the SEC has
not reviewed the disclosure in this Prospectus relating to the Fixed Interest
Account. This disclosure, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in the Prospectus. This Prospectus is
generally intended to serve as a disclosure document only for aspects of a
Contract involving the Separate Account and contains only selected
information regarding the Fixed Interest Account. For more information
regarding the Fixed Interest Account, see "The Contract," page 17.

Amounts allocated to the Fixed Interest Account become part of the General
Account of the Company, which consists of all assets owned by the Company
other than those in the Separate Account and other separate accounts of the
Company. Subject to applicable law, the Company has sole discretion over the
investment of the assets of its General Account.

INTEREST
Account Value allocated to the Fixed Interest Account earns interest at a
fixed rate or rates that are paid by the Company. The Account Value in the
Fixed Interest Account earns interest at an interest rate that is guaranteed
to be at least an annual effective rate of 3% which will accrue daily
("Guaranteed Rate"). Such interest will be paid regardless of the actual
investment experience of the Company's General Account. In addition, the
Company may in its discretion pay interest at a rate ("Current Rate") that
exceeds the Guaranteed Rate. The Company will determine the Current Rate, if
any, from time to time.

Account Value allocated or exchanged to the Fixed Interest Account will earn
interest at the Current Rate, if any, in effect on the date such portion of
Account Value is allocated or exchanged to the Fixed Interest Account. The
Current Rate paid on any such portion of Account Value allocated or exchanged
to the Fixed Interest Account will be guaranteed for rolling periods of one
or more years (each a "Guarantee Period"). The Company currently offers only
Guarantee Periods of one year. Upon expiration of any Guarantee Period, a new
Guarantee Period of the same duration begins with respect to that portion of
Account Value, which will earn interest at the Current Rate, if any, declared
by the Company on the first day of the new Guarantee Period.

Account Value allocated or exchanged to the Fixed Interest Account at one
point in time may be credited with a different Current Rate than amounts
allocated or exchanged to the Fixed Interest Account at another point in
time. For example, amounts allocated to the Fixed Interest Account in June
may be credited with a different Current Rate than amounts allocated to the
Fixed Interest Account in July. In addition, if Guarantee Periods of
different durations are offered, Account Value allocated or exchanged to the
Fixed Interest Account for a Guarantee Period of one duration may be credited
with a different Current Rate than amounts allocated or exchanged to the
Fixed Interest Account for a Guarantee Period of a different duration.
Therefore, at any time, various portions of a Contractowner's Account Value
in the Fixed Interest Account may be earning interest at different Current
Rates depending upon the point in time such portions were allocated or
exchanged to the Fixed Interest Account and the duration of the Guarantee
Period. The Company bears the investment risk for the Account Value allocated
to the Fixed Interest Account and for paying interest at the Guaranteed Rate
on amounts allocated to the Fixed Interest Account.

For purposes of determining the interest rates to be credited on Account
Value in the Fixed Interest Account, withdrawals or exchanges from the Fixed
Interest Account will be deemed to be taken first from any portion of Account
Value allocated to the Fixed Interest Account for which the Guarantee Period
expires during the calendar month in which the withdrawal or exchange is
effected, then in the order beginning with that portion of such Account Value
which has the longest amount of time remaining before the end of its
Guarantee Period and ending with that portion which has the least amount of
time remaining before the end of its Guarantee Period. For more information
about exchanges and withdrawals from the Fixed Interest Account, see
"Exchanges and Withdrawals" below.

DEATH BENEFIT
The death benefit under the Contract will be determined in the same fashion
for a Contract that is supported by the Fixed Interest Account as for a
Contract that is supported by the Subaccounts. See "Annuity Options," page
25.

CONTRACT CHARGES
Premium taxes will be the same for Contractowners who allocate the Purchase
Payment to the Fixed Interest Account as for those who allocate the Purchase
Payment to the Subaccounts. The charge for mortality and expense risks will
not be assessed against the Fixed Interest Account, and any amounts that the
Company pays for income taxes allocable to the Subaccounts will not be
charged against the Fixed Interest Account. In addition, the investment
management fees and any other expenses paid by the Funds will not be paid
directly or indirectly by Contractowners to the extent the Contract is
supported by the Fixed Interest Account; however, such Contractowners will
not participate in the investment experience of the Subaccounts.

EXCHANGES AND WITHDRAWALS
Under Annuity Options 5 through 7 only, Account Value may be exchanged from
the Subaccounts to the Fixed Interest Account and from the Fixed Interest
Account to the Subaccounts, subject to the following limitation. Exchanges
from the Fixed Interest Account are allowed only from the portion of Account
Value, for which the Guarantee Period expires during the calendar month in
which the exchange is effected. Up to six exchanges are allowed in any
Contract Year and the minimum exchange amount is $500 or the amount remaining
in the Fixed Interest Account. The Company reserves the right to waive or
limit the number of exchanges permitted each Contract Year, to suspend
exchanges, to limit the amount that may be subject to exchanges and the
amount remaining in an account after an exchange, and to impose conditions on
the right to exchange.

The Contractowner may make a full or partial withdrawal of Account Value
allocated to the Fixed Interest Account only under Annuity Options 5 through
7. A Contractowner may make a partial withdrawal from the Fixed Interest
Account only (1) from the portion of Account Value, for which the Guarantee
Period expires during the calendar month in which the partial withdrawal is
effected, and (2) once per Contract Year in an amount up to the greater of
$5,000 or 10% of Account Value allocated to the Fixed Interest Account at the
time of the partial withdrawal. See "Full and Partial Withdrawals," page 23.

PAYMENTS FROM THE FIXED INTEREST ACCOUNT
As required by most states, the Company reserves the right to delay for up to
six months after a written request in proper form is received by the Company
at the T. Rowe Price Variable Annuity Service Center, full and partial
withdrawals and exchanges from the Fixed Interest Account. During the period
of deferral, interest at the applicable interest rate or rates will continue
to be credited to the amounts allocated to the Fixed Interest Account. The
Company does not expect to delay payments from the Fixed Interest Account and
will notify you if there will be a delay.

MORE ABOUT THE CONTRACT
- --------------------------------------------------------------------------------

OWNERSHIP
The Contractowner is the person named as such in the application or in any
later change shown in the Company's records. While living, the Contractowner
alone has the right to receive all benefits and exercise all rights that the
Contract grants or the Company allows. The Owner may be an entity that is not
a living person, such as a trust or corporation, referred to herein as
"Non-Natural Persons." See "Federal Tax Matters," page 33.

JOINT OWNERS. The Joint Owners will be joint tenants with rights of
survivorship and upon the death of an Owner, the surviving Owner shall be the
sole Owner. Any Contract transaction requires the signature of all persons
named jointly. Joint Owners are permitted only if the Contract is issued
pursuant to a Non-Qualified Plan and the Joint Owner is an Annuitant.

DESIGNATION AND CHANGE OF BENEFICIARY
The Beneficiary is the individual named as such in the application or any
later change shown in the Company's records. The Contractowner may change the
Beneficiary at any time while the Contract is in force by written request on
a form provided by the Company and received by the Company at the T. Rowe
Price Variable Annuity Service Center. The change will not be binding on the
Company until it is received and recorded at the T. Rowe Price Variable
Annuity Service Center. The change will be effective as of the date the
Change of Beneficiary form is signed subject to any payments made or other
actions taken by the Company before the change is received and recorded. A
Secondary Beneficiary may be designated. The Owner may designate a permanent
Beneficiary whose rights under the Contract cannot be changed without the
Beneficiary's consent.

PARTICIPATING
The Contract is participating and will share in the surplus earnings of the
Company. However, the current dividend scale is zero, and the Company does
not anticipate that dividends will be paid.

PAYMENTS FROM THE SEPARATE ACCOUNT
The Company will pay any full or partial withdrawal benefit or death benefit
proceeds from Account Value allocated to the Subaccounts, and will effect an
exchange between Subaccounts or from a Subaccount to the Fixed Interest
Account within seven days from the Valuation Date a proper request is
received at the T. Rowe Price Variable Annuity Service Center. However, the
Company can postpone the calculation or payment of such a payment or exchange
of amounts from the Subaccounts to the extent permitted under applicable law,
for any period: (a) during which the New York Stock Exchange is closed other
than customary weekend and holiday closings, (b) during which trading on the
New York Stock Exchange is restricted as determined by the SEC, or (c) during
which an emergency, as determined by the SEC, exists as a result of which (i)
disposal of securities held by the Separate Account is not reasonably
practicable, or (ii) it is not reasonably practicable to determine the value
of the assets of the Separate Account.

PROOF OF AGE AND SURVIVAL
The Company may require proof of age or survival of any person on whose life
Annuity Payments depend.

MISSTATEMENTS
If the age or sex of an Annuitant has been misstated, the correct amount paid
or payable by the Company under the Contract shall be such as the Purchase
Payment under the Contract would have provided for the correct age or sex
(unless unisex rates apply).

FEDERAL TAX MATTERS
- --------------------------------------------------------------------------------

INTRODUCTION
The Contract described in this Prospectus is designed for use by individuals
in retirement plans which may or may not be Qualified Plans under the
provisions of the Internal Revenue Code ("Code").

The ultimate effect of federal income taxes on the amounts held under a
Contract, on Annuity Payments, and on the economic benefits to the Owner, the
Annuitant, and the Beneficiary or other payee will depend upon the type of
retirement plan for which the Contract is purchased, the tax and employment
status of the individuals involved, and a number of other factors. The
discussion of the federal income tax considerations relating to a contract
contained herein and in the Statement of Additional Information is general in
nature and is not intended to be an exhaustive discussion of all questions
that might arise in connection with a Contract. It is based upon the
Company's understanding of the present federal income tax laws as currently
interpreted by the Internal Revenue Service ("IRS"), and is not intended as
tax advice. No representation is made regarding the likelihood of
continuation of the present federal income tax laws or of the current
interpretations by the IRS or the courts. Future legislation may affect
annuity contracts adversely. Moreover, no attempt has been made to consider
any applicable state or other laws. Because of the inherent complexity of the
tax laws and the fact that tax results will vary according to the particular
circumstances of the individual involved and, if applicable, the Qualified
Plan, a person should consult a qualified tax adviser regarding the purchase
of a Contract, the selection of an Annuity Option under a Contract, the
receipt of Annuity Payments under a Contract, or any other transaction
involving a Contract (including an exchange). THE COMPANY DOES NOT MAKE ANY
GUARANTEE REGARDING THE TAX STATUS OF, OR TAX CONSEQUENCES ARISING FROM, ANY
CONTRACT OR ANY TRANSACTION INVOLVING THE CONTRACT.

TAX STATUS OF THE COMPANY AND THE SEPARATE ACCOUNT

GENERAL
The Company intends to be taxed as a life insurance company under Part I,
Subchapter L of the Code. Because the operations of the Separate Account form
a part of the Company, the Company will be responsible for any federal income
taxes that become payable with respect to the income of the Separate Account
and its Subaccounts.

CHARGE FOR THE COMPANY'S TAXES
A charge may be made against the Separate Account for any federal taxes
incurred by the Company that are attributable to the Separate Account, the
Subaccounts, or to the operations of the Company with respect to the
Contracts or attributable to payments, premiums, or acquisition costs under
the Contracts. The Company will review the question of a charge to the
Separate Account, the Subaccounts, or the Contracts for the Company's federal
taxes periodically. Charges may become necessary if, among other reasons, the
tax treatment of the Company or of income and expenses under the Contracts is
ultimately determined to be other than what the Company currently believes it
to be, if there are changes made in the federal income tax treatment of
variable annuities at the insurance company level, or if there is a change in
the Company's tax status.

Under current laws, the Company may incur state and local taxes (in addition
to premium taxes) in several states. At present, these taxes are not
significant. If there is a material change in applicable state or local tax
laws, the Company reserves the right to charge the Separate Account or the
Subaccounts for such taxes, if any, attributable to the Separate Account or
Subaccounts.

DIVERSIFICATION STANDARDS
Each of the Portfolios will be required to adhere to regulations adopted by
the Treasury Department pursuant to Section 817(h) of the Code prescribing
asset diversification requirements for investment companies whose shares are
sold to insurance company separate accounts funding variable contracts.
Pursuant to these regulations, on the last day of each calendar quarter (or
on any day within 30 days thereafter), no more than 55% of the total assets
of a Portfolio may be represented by any one investment, no more than 70% may
be represented by any two investments, no more than 80% may be represented by
any three investments, and no more than 90% may be represented by any four
investments. For purposes of Section 817(h), securities of a single issuer
generally are treated as one investment, but obligations of the U.S. Treasury
and each U.S. Governmental agency or instrumentality generally are treated as
securities of separate issuers. The Separate Account, through the Portfolios,
intends to comply with the diversification requirements of Section 817(h).

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable contractowner's gross income. The IRS has stated in published
rulings that a variable contractowner will be considered the owner of
separate account assets if the contractowner possesses incidents of ownership
in those assets, such as the ability to exercise investment control over the
assets. The Treasury Department also announced, in connection with the
issuance of regulations concerning diversification, that those regulations
"do not provide guidance concerning the circumstances in which investor
control of the investments of a segregated asset account may cause the
investor (i.e., the policyowner), rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
stated that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets." As of
the date of this Prospectus, no such guidance has been issued.

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 policyowners were not owners of separate account assets. For
example, the Contractowner has additional flexibility in allocating the
Purchase Payment and Account Values. These differences could result in a
Contractowner being treated as the owner of a pro rata portion of the assets
of the Separate Account. In addition, the Company does not know what
standards will be set forth, if any, in the regulations or rulings which the
Treasury Department has stated it expects to issue. The Company therefore
reserves the right to modify the Contract, as deemed appropriate by the
Company, to attempt to prevent a Contractowner from being considered the
owner of a pro rata share of the assets of the Separate Account. Moreover, in
the event that regulations or rulings are adopted, there can be no assurance
that the Portfolios will be able to operate as currently described in the
Prospectus, or that the Funds will not have to change any Portfolio's
investment objective or investment policies.

INCOME TAXATION OF ANNUITIES IN GENERAL-NON-QUALIFIED PLANS
Section 72 of the Code governs the taxation of annuities. In general, a
Contractowner is not taxed on increases in value under an annuity contract
until some form of distribution is made under the contract. However, the
increase in value may be subject to tax currently under certain
circumstances. See "Contracts Owned by Non-Natural Persons," page 36 and
"Diversification Standards," on page 34. Withholding of federal income taxes
on all distributions may be required unless a recipient who is eligible
elects not to have any amounts withheld and properly notifies the Company of
that election.

* SURRENDERS OR WITHDRAWALS PRIOR TO THE ANNUITY PAYOUT DATE Code Section 72
provides that amounts received upon a total or partial withdrawal from a
Contract prior to the Annuity Payout Date generally will be treated as
gross income to the extent that the cash value of the Contract (determined
without regard to any surrender charge in the case of a partial withdrawal)
exceeds the "investment in the contract." The "investment in the contract"
is that portion, if any, of Purchase Payments paid under a Contract less
any distributions received previously under the Contract that are excluded
from the recipient's gross income. The taxable portion is taxed at ordinary
income tax rates. For purposes of this rule, a pledge or assignment of a
Contract is treated as a payment received on account of a partial
withdrawal of a Contract. Similarly, loans under a Contract are generally
treated as distributions under the Contract.

* SURRENDERS OR WITHDRAWALS ON OR AFTER THE ANNUITY PAYOUT DATE Upon a
complete surrender, the receipt is taxable to the extent that the cash
value of the Contract exceeds the investment in the Contract. The taxable
portion of such payments will be taxed at ordinary income tax rates. For
fixed Annuity Payments, the taxable portion of each payment generally is
determined by using a formula known as the "exclusion ratio," which
establishes the ratio that the investment in the Contract bears to the
total expected amount of Annuity Payments for the term of the Contract.
That ratio is then applied to each payment to determine the non-taxable
portion of the payment. The remaining portion of each payment is taxed at
ordinary income rates. For variable Annuity Payments, the taxable portion
of each payment is determined by using a formula known as the "excludable
amount," which establishes the non-taxable portion of each payment. The
non-taxable portion is a fixed dollar amount for each payment, determined
by dividing the investment in the Contract by the number of payments to be
made. The remainder of each variable annuity payment is taxable. Once the
excludable portion of annuity payments to date equals the investment in the
Contract, the balance of the annuity payments will be fully taxable.

* PENALTY TAX ON CERTAIN SURRENDERS AND WITHDRAWALS With respect to amounts
withdrawn or distributed before the taxpayer reaches age 59 1/2, a penalty
tax is generally imposed equal to 10% of the portion of such amount which
is includible in gross income. However, the penalty tax is not applicable
to withdrawals: (i) made on or after the death of the owner (or where the
owner is not an individual, the death of the "primary annuitant," who is
defined as the individual the events in whose life are of primary
importance in affecting the timing and amount of the payout under the
Contract); (ii) attributable to the taxpayer's becoming totally disabled
within the meaning of Code Section 72(m)(7); (iii) which are part of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the taxpayer, or the
joint lives (or joint life expectancies) of the taxpayer and his or her
beneficiary; (iv) from certain qualified plans; (v) under a so-called
qualified funding asset (as defined in Code Section 130(d)); (vi) under an
immediate annuity contract; or (vii) which are purchased by an employer on
termination of certain types of qualified plans and which are held by the
employer until the employee separates from service.

If the penalty tax does not apply to a surrender or withdrawal as a result
of the application of item (iii) above, and the series of payments are
subsequently modified (other than by reason of death or disability), the
tax for the first year in which the modification occurs will be increased
by an amount (determined by the regulations) equal to the tax that would
have been imposed but for item (iii) above, plus interest for the deferral
period, if the modification takes place (a) before the close of the period
which is five years from the date of the first payment and after the
taxpayer attains age 59 1/2, or (b) before the taxpayer reaches age 59 1/2.

ADDITIONAL CONSIDERATIONS

* DISTRIBUTION-AT-DEATH RULES In order to be treated as an annuity contract,
a Contract must provide the following two distribution rules: (a) if any
owner dies on or after the Annuity Payout Date, and before the entire
interest in the Contract has been distributed, the remainder of the owner's
interest will be distributed at least as quickly as the method in effect on
the owner's death; and (b) if any owner dies before the Annuity Payout
Date, the entire interest in the Contract must generally be distributed
within five years after the date of death, or, if payable to a designated
beneficiary, must be annuitized over the life of that designated
beneficiary or over a period not extending beyond the life expectancy of
that beneficiary, commencing within one year after the date of death of the
owner. If the sole designated beneficiary is the spouse of the deceased
owner, the Contract (together with the deferral of tax on the accrued and
future income thereunder) may be continued in the name of the spouse as
owner.

Generally, for purposes of determining when distributions must begin under
the foregoing rules, where an owner is not an individual, the primary
annuitant is considered the owner. In that case, a change in the primary
annuitant will be treated as the death of the owner. Finally, in the case
of joint owners, the distribution-at-death rules will be applied by
treating the death of the first owner as the one to be taken into account
in determining generally when distributions must commence, unless the sole
Beneficiary is the deceased owner's spouse.

* GIFT OF ANNUITY CONTRACTS Generally, gifts of Non-Qualified Plan Contracts
prior to the Annuity Payout Date will trigger tax on the gain on the
Contract, with the donee getting a stepped-up basis for the amount included
in the donor's income. The 10% penalty tax and gift tax also may be
applicable. This provision does not apply to transfers between spouses or
incident to a divorce.

* CONTRACTS OWNED BY NON-NATURAL PERSONS If the Contract is held by a
non-natural person (for example, a corporation), the income on that
Contract (generally the increase in net surrender value less the Purchase
Payments) is includible in taxable income each year. The rule does not
apply where the Contract is acquired by the estate of a decedent, where the
Contract is held by certain types of retirement plans, where the Contract
is a qualified funding asset for structured settlements, where the Contract
is purchased on behalf of an employee upon termination of a qualified plan,
and in the case of a so-called immediate annuity. An annuity contract held
by a trust or other entity as agent for a natural person is considered held
by a natural person.

* MULTIPLE CONTRACT RULE For purposes of determining the amount of any
distribution under Code Section 72(e) (amounts not received as annuities)
that is includible in gross income, all Non-Qualified annuity contracts
issued by the same insurer to the same Contractowner during any calendar
year are to be aggregated and treated as one contract. Thus, any amount
received under any such contract prior to the contract's Annuity Payout
Date, such as a partial withdrawal, dividend, or loan, will be taxable (and
possibly subject to the 10% penalty tax) to the extent of the combined
income in all such contracts.

In addition, the Treasury Department has broad regulatory authority in
applying this provision to prevent avoidance of the purposes of this rule.
It is possible that, under this authority, the Treasury Department may
apply this rule to amounts that are paid as annuities (on and after the
Annuity Payout Date) under annuity contracts issued by the same company to
the same owner during any calendar year. In this case, annuity payments
could be fully taxable (and possibly subject to the 10% penalty tax) to the
extent of the combined income in all such contracts and regardless of
whether any amount would otherwise have been excluded from income because
of the "exclusion ratio" under the contract.

* POSSIBLE TAX CHANGES In recent years, legislation has been proposed that
would have adversely modified the federal taxation of certain annuities,
and President Clinton's fiscal-year 1999 Budget proposal includes a
provision that, if adopted, would impose new taxes on owners of variable
annuities. There is always the possibility that the tax treatment of
annuities could change by legislation or other means (such as IRS
regulations, revenue rulings, and judicial decisions). Moreover, although
unlikely, it is also possible that any legislative change could be
retroactive (that is, effective prior to the date of such change).

* TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A CONTRACT A transfer of ownership
of a Contract, the designation of an Annuitant, Payee, or other Beneficiary
who is not also the Owner, the selection of certain Annuity Payout Dates or
the exchange of a Contract may result in certain tax consequences to the
Owner that are not discussed herein. An Owner contemplating any such
transfer, assignment, selection, or exchange should contact a qualified tax
adviser with respect to the potential effects of such a transaction.

QUALIFIED PLANS
The Contract may be used as a Qualified Plan that meets the requirements of
an individual retirement annuity ("IRA") under Section 408 of the Code. No
attempt is made herein to provide more than general information about the use
of the Contract as a Qualified Plan. Contractowners, Annuitants, and
Beneficiaries are cautioned that the rights of any person to any benefits
under such Qualified Plans may be limited by applicable law, regardless of
the terms and conditions of the Contract issued in connection therewith.

The amount that may be contributed to a Qualified Plan is subject to
limitations under the Code. In addition, early distributions from Qualified
Plans may be subject to penalty taxes. Furthermore, most Qualified Plans are
subject to certain minimum distribution rules. Failure to comply with these
rules could result in disqualification of the Plan or subject the Owner or
Annuitant to penalty taxes. As a result, the minimum distribution rules may
limit the availability of certain Annuity Options to certain Annuitants and
their beneficiaries. These rules and requirements may not be incorporated
into our Contract administration procedures. Therefore, Contractowners,
Annuitants, and Beneficiaries are responsible for determining that
contributions, distributions, and other transactions with respect to the
Contracts comply with applicable law.

THE FOLLOWING IS A BRIEF DESCRIPTION OF QUALIFIED PLANS AND THE USE OF THE
CONTRACT THEREWITH:

* SECTION 408 AND SECTION 408A

INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits eligible
individuals to establish individual retirement programs through the
purchase of Individual Retirement Annuities ("traditional IRAs"). The
Contract may be purchased as an IRA. The IRAs described in this paragraph
are called "traditional IRAs" to distinguish them from "Roth IRAs" which
became available in 1998. Roth IRAs are described below.

IRAs are subject to limitations on the amount that may be contributed, the
persons who may be eligible, and on the time when distributions must
commence. Depending upon the circumstances of the individual, contributions
to a traditional IRA may be made on a deductible or nondeductible basis.
IRAs may not be transferred, sold, assigned, discounted, or pledged as
collateral for a loan or other obligation. The annual premium for an IRA
may not be fixed and may not exceed $2,000. Any refund of premium must be
applied to the payment of future premiums or the purchase of additional
benefits.

Sale of the Contracts for use with IRAs may be subject to special
requirements imposed by the Internal Revenue Service. Purchasers of the
Contracts for such purposes will be provided with such supplementary
information as may be required by the Internal Revenue Service and will
have the right to revoke the Contract under certain circumstances. See the
IRA Disclosure Statement which accompanies this Prospectus.

An individual's interest in a traditional IRA must generally be distributed
or begin to be distributed not later than April 1 of the calendar year
following the calendar year in which the individual reaches age 70 1/2
("required beginning date"). The Contractowner's retirement date, if any,
will not affect his or her required beginning date. Periodic distributions
must not extend beyond the life of the individual or the lives of the
individual and a designated beneficiary (or over a period extending beyond
the life expectancy of the individual or the joint life expectancy of the
individual and a designated beneficiary).

If an individual dies before reaching his or her required beginning date,
the individual's entire interest must generally be distributed within five
years of the individual's death. However, the five-year rule will be deemed
satisfied if distributions begin before the close of the calendar year
following the year of the individual's death to a designated beneficiary
and are made over the life of the beneficiary (or over a period not
extending beyond the life expectancy of the beneficiary). If the designated
beneficiary is the individual's surviving spouse, distributions may be
delayed until the individual would have reached age 70 1/2.

If an individual dies after reaching his or her required beginning date,
the individual's interest must generally be distributed at least as rapidly
as under the method of distribution in effect at the time of the
individual's death.

Distributions from IRAs are generally taxed under Code Section 72. Under
these rules, a portion of each distribution may be excludable from income.
The amount excludable from the individual's income is the amount of the
distribution which bears the same ratio as the individual's nondeductible
contributions to all IRAs bear to the expected return under the IRAs.

ROTH IRAS. Section 408A of the Code permits eligible individuals to
establish a Roth IRA, a new type of IRA which became available in 1998. The
Contract may be purchased as a Roth IRA. Contributions to a Roth IRA are
not deductible, but withdrawals that meet certain requirements are not
subject to federal income tax. Sale of the contract for use with Roth IRAs
may be subject to special requirements imposed by the Internal Revenue
Service. Purchasers of the Contract for such purposes will be provided with
such supplementary information as may be required by the Internal Revenue
Service or other appropriate agency, and will have the right to revoke the
Contract under certain circumstances. Unlike a traditional IRA, Roth IRAs
are not subject to minimum required distribution rules during the
Contractowner's lifetime. Generally, however, upon the death of the
Contractowner, the amount in a remaining Roth IRA must be distributed in
the same manner as a traditional IRA as described above.

* 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% of the taxable portion of the distribution. The 10% 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% 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 all of your IRAs
is less than the minimum required distribution for the year, you are
subject to a 50% tax on the amount that was not properly distributed from
the IRAs.

* WITHHOLDING

Periodic distributions (e.g., annuities and installment payments) from a
Qualified Plan that will last for a period of 10 or more years are
generally subject to voluntary income tax withholding. The amount withheld
on such periodic distributions is determined at the rate applicable to
wages. The recipient of a periodic distribution may generally elect not to
have withholding apply.

The above description of the federal income tax consequences applicable to
Qualified Plans which may be funded by the Contract offered by this
Prospectus is only a brief summary and is not intended as tax advice. The
rules governing the provisions of Qualified Plans are extremely complex and
often difficult to comprehend. Anything less than full compliance with the
applicable rules, all of which are subject to change, may have adverse tax
consequences. A prospective Contractowner considering adoption of a
Qualified Plan and purchase of a Contract in connection therewith should
first consult a qualified and competent tax adviser, with regard to the
suitability of the Contract as an investment vehicle for the Qualified
Plan.

OTHER INFORMATION
- --------------------------------------------------------------------------------

VOTING OF FUND SHARES
The Company is the legal owner of the shares of the Funds held by the
Subaccounts. The Company will exercise voting rights attributable to the
shares of each Portfolio of the Funds held in the Subaccounts at any regular
and special meetings of the shareholders of the Funds on matters requiring
shareholder voting under the 1940 Act. In accordance with its view of
presently applicable law, the Company will exercise these voting rights based
on instructions received from persons having the voting interest in
corresponding Subaccounts. However, if the 1940 Act or any regulations
thereunder should be amended, or if the present interpretation thereof should
change, and as a result the Company determines that it is permitted to vote
the shares of the Funds in its own right, it may elect to do so.

The person having the voting interest under a Contract is the Owner. Unless
otherwise required by applicable law, the number of shares of a particular
Portfolio as to which voting instructions may be given to the Company is
determined by dividing the amount of the reserve maintained in a Subaccount
to meet the Company's obligations under the Contract as of the relevant date
by the net asset value per share of that Portfolio as of the same date.
Fractional votes will be counted. The number of votes as to which voting
instructions may be given will be determined as of the date coincident with
the date established by the Fund for determining shareholders eligible to
vote at the meeting of the Fund. If required by the SEC, the Company reserves
the right to determine in a different fashion the voting rights attributable
to the shares of the Funds. Voting instructions may be cast in person or by
proxy.

Voting rights attributable to the Contractowner's Account Value in a
Subaccount for which no timely voting instructions are received will be voted
by the Company in the same proportion as the voting instructions that are
received in a timely manner for all Contracts participating in that
Subaccount. The Company will also exercise the voting rights from assets in
each Subaccount that are not otherwise attributable to Contractowners, if
any, in the same proportion as the voting instructions that are received in a
timely manner for all Contracts participating in that Subaccount.

SUBSTITUTION OF INVESTMENTS
The Company reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from, substitutions for, or
combinations of the securities that are held by the Separate Account or any
Subaccount or that the Separate Account or any Subaccount may purchase. If
shares of any or all of the Portfolios of the Funds should no longer be
available for investment, or if the Company receives an opinion from counsel
acceptable to Investment Services that substitution is in the best interest
of Contractowners and that further investment in shares of the Portfolio(s)
would cause undue risk to the Company, the Company may substitute shares of
another Portfolio of the Funds or of a different fund for shares already
purchased, or to be purchased in the future under the Contract. The Company
may also purchase, through the Subaccount, other securities for other classes
of contracts, or permit a conversion between classes of contracts on the
basis of requests made by Owners.

The Company also reserves the right to establish additional Subaccounts of
the Separate Account that would invest in a new Portfolio of one of the Funds
or in shares of another investment company, a series thereof, or other
suitable investment vehicle. New Subaccounts may be established by the
Company with the consent of Investment Services, and any new Subaccount will
be made available to existing Owners on a basis to be determined by the
Company and Investment Services. The Company may also eliminate or combine
one or more Subaccounts if marketing, tax, or investment conditions so
warrant.

Subject to compliance with applicable law, the Company may transfer assets to
the General Account with the consent of Investment Services. The Company also
reserves the right, subject to any required regulatory approvals, to transfer
assets of any Subaccount of the Separate Account to another separate account
or Subaccount with the consent of Investment Services.

In the event of any such substitution or change, the Company may, by
appropriate endorsement, make such changes in these and other contracts as
may be necessary or appropriate to reflect such substitution or change. If
deemed by the Company to be in the best interests of persons having voting
rights under the Contracts, the Separate Account may be operated as a
management investment company under the 1940 Act or any other form permitted
by law; it may be deregistered under that Act in the event such registration
is no longer required; or it may be combined with other separate accounts of
the Company or an affiliate thereof. Subject to compliance with applicable
law, the Company also may combine one or more Subaccounts and may establish a
committee, board, or other group to manage one or more aspects of the
operation of the Separate Account.

CHANGES TO COMPLY WITH LAW AND AMENDMENTS
The Company reserves the right, without the consent of Owners, to suspend
sales of the Contract as presently offered and to make any change to the
provisions of the Contracts to comply with, or give Owners the benefit of,
any federal or state statute, rule, or regulation, including but not limited
to requirements for annuity contracts and retirement plans under the Internal
Revenue Code and regulations thereunder or any state statute or regulation.

REPORTS TO OWNERS
A statement will be sent annually to you setting forth a summary of the
transactions that occurred during the year, and indicating any Account Value
as of the end of each year. In addition, the statement will indicate the
allocation of Account Value among the Fixed Interest Account and the
Subaccounts and any other information required by law. Confirmations will
also be sent out upon the initial Purchase Payment, exchanges and full and
partial withdrawals. Annuity Payments will be confirmed quarterly.

You will also receive an annual and semiannual report containing financial
statements for the Portfolios, which will include a list of the portfolio
securities of the Portfolios, as required by the 1940 Act, and/or such other
reports as may be required by federal securities laws.

TELEPHONE EXCHANGE PRIVILEGES
You may request an exchange of Account Value or Payment Units by telephone if
you elected telephone exchanges in the application, or an Authorization for
Telephone Requests form ("Telephone Authorization") has been completed,
signed, and filed at the T. Rowe Price Variable Annuity Service Center. The
Company has established procedures to confirm that instructions communicated
by telephone are genuine and will not be liable for any losses due to
fraudulent or unauthorized instructions, provided that it complies with its
procedures. The Company's procedures require that any person requesting an
exchange by telephone provide the account number and the Owner's tax
identification number and such instructions must be received on a recorded
line. The Company reserves the right to deny any telephone exchange request.
If all telephone lines are busy (which might occur, for example, during
periods of substantial market fluctuations), Contractowners might not be able
to request exchanges by telephone and would have to submit written requests.

By authorizing telephone exchanges, a Contractowner authorizes the Company to
accept and act upon telephonic instructions for exchanges involving the
Contractowner's Contract, and agrees that neither the Company, nor any of its
affiliates, nor the Funds, nor any of their directors, trustees, officers,
employees, or agents, will be liable for any loss, damages, cost, or expense
(including attorney's fees) arising out of any requests effected in
accordance with the Telephone Authorization and believed by the Company to be
genuine, provided that the Company has complied with its procedures. As a
result of this policy on telephone requests, the Contractowner will bear the
risk of loss arising from the telephone exchange privileges. The Company may
discontinue, modify, or suspend telephone exchange privileges at any time.

DISTRIBUTION OF THE CONTRACT
T. Rowe Price Investment Services, Inc. ("Investment Services") is the
distributor of the Contracts. Investment Services also acts as the
distributor of certain mutual funds advised by T. Rowe Price and
Price-Fleming. Investment Services is registered with the SEC as a
broker-dealer under the Securities Exchange Act of 1934, and in all 50
states, the District of Columbia, and Puerto Rico. Investment Services is a
member of the National Association of Securities Dealers, Inc. Investment
Services is a wholly owned subsidiary of T. Rowe Price and is an affiliate of
the Funds.

LEGAL PROCEEDINGS
There are no legal proceedings pending to which the Separate Account is a
party, or which would materially affect the Separate Account.

LEGAL MATTERS
Legal matters in connection with the issue and sale of the Contracts
described in this Prospectus, the Company's authority to issue the Contracts
under Kansas law, and the validity of the forms of the Contracts under Kansas
law have been passed upon by Amy J. Lee, Esq., the Company's Associate
General Counsel.

Legal matters relating to the federal securities and federal income tax laws
have been passed upon by Dechert Price & Rhoads, Washington, D.C.

PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

For the other Subaccounts, quotations of yield will be based on all
investment income per Accumulation Unit earned during a given 30-day period,
less expenses accrued during the period ("net investment income"), and will
be computed by dividing net investment income by the value of an Accumulation
Unit on the last day of the period. Quotations of average annual total return
for any Subaccount will be expressed in terms of the average annual
compounded rate of return on a hypothetical investment in a Contract over a
period of 1, 5, and 10 years (or, if less, up to the life of the Subaccount),
and will reflect the deduction of the mortality and expense risk charge and
may simultaneously be shown for other periods. Where the Portfolio in which a
Subaccount invests was established prior to inception of the Subaccount,
quotations of total return may include quotations for periods beginning prior
to the Subaccount's date of inception. Such quotations of total return are
based upon the performance of the Subaccount's corresponding Portfolio
adjusted to reflect deduction of the mortality and expense risk charge.

Performance information for any Subaccount reflects only the performance of a
hypothetical Contract under which Account Value is allocated to a Subaccount
during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies, characteristics, and quality of the Portfolio in
which the Subaccount invests, and the market conditions during the given time
period, and should not be considered as a representation of what may be
achieved in the future. For a description of the methods used to determine
yield and total return for the Subaccounts and the usage of other performance
related information, see the Statement of Additional Information.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

REGISTRATION STATEMENT
A Registration Statement under the 1933 Act has been filed with the SEC
relating to the offering described in this Prospectus. This Prospectus has
been filed as a part of the Registration Statement and does not contain all
of the information set forth in the Registration Statement and exhibits
thereto, and reference is made to such Registration Statement and exhibits
for further information relating to the Company and the Contract. Statements
contained in this Prospectus, as to the content of the Contract and other
legal instruments, are summaries. For a complete statement of the terms
thereof, reference is made to the instruments filed as exhibits to the
Registration Statement. The Registration Statement and the exhibits thereto
may be inspected and copied at the SEC's office, located at 450 Fifth Street,
N.W., Washington, D.C.

FINANCIAL STATEMENTS
The consolidated financial statements of the Company at December 31, 1997 and
1996, and for each of the three years in the period ended December 31, 1997,
and the financial statements of the Separate Account as of December 31, 1997,
and for each of the two years in the period ended December 31, 1997, are
included in the Statement of Additional Information.

STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information
and financial statements relating to the Company and the Separate Account.
The Table of Contents of the Statement of Additional Information is set forth
below.

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

General Information and History.......................................... 1
Distribution of the Contract............................................. 1
Limits on Premiums Paid Under Tax-Qualified Retirement Plans............. 1
Experts.................................................................. 2
Performance Information.................................................. 2
Financial Statements..................................................... 4
<PAGE>
IRA DISCLOSURE STATEMENT
================================================================================

IRA DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------

RIGHT TO REVOKE
You may revoke your Individual Retirement Annuity within seven days of the
date your first Purchase Payment is received by Security Benefit Life
Insurance Company. To revoke your Individual Retirement Annuity and receive a
refund of the entire amount you paid, you must mail or deliver a written
notice of revocation, signed exactly as your signature appears on your
variable annuity application to: T. Rowe Price Variable Annuity Service
Center, P.O. Box 750440, Topeka, KS 66675-0440, 1-800-888-2461.

If you send your revocation notice by First Class Mail, we will consider that
you have notified us as of the date of the postmark on the envelope. If you
send it by Certified or Registered Mail, you will have notified us as of the
certification or registration date on the label. In either case, the
revocation notice must be properly addressed and mailed, with postage
prepaid. Upon receipt of a timely revocation notice, the entire amount of
your contribution will be returned to you without adjustment for sales
commissions, administrative fees, or market value fluctuation.

WHAT ARE THE STATUTORY REQUIREMENTS?

An Individual Retirement Annuity contract must meet the following
requirements:

1. The amount in your Individual Retirement Annuity must be fully vested at
all times.

2. The contract must provide that you cannot transfer it to someone else.

3. The contract must have flexible premiums.

4. You must start receiving distributions by April 1 of the year following
the year in which you reach age 70 1/2 (see "Required Minimum
Distributions").

5. The contract must provide that you cannot contribute more than $2,000 for
any year. (This requirement does not apply to rollovers. See "Rollovers
and Direct Transfers.")

6. The contract must provide that any refund of premium will be applied
before the close of the calendar year following the year of refund toward
the payment of future premiums or the purchase of additional benefits.

The Individual Retirement Annuity contract contains the provisions described
above. The contract has not, however, been approved as to form by the
Internal Revenue Service.

ROLLOVERS AND DIRECT TRANSFERS
1. A rollover is a tax-free transfer of cash or other assets from one
retirement program to another. There are two kinds of rollover payments.
In one, you transfer amounts from one Individual Retirement Annuity or
Individual Retirement Account (collectively referred to herein as an
"IRA") to another. With the other, you transfer amounts from a qualified
employee benefit plan or tax-sheltered annuity to an IRA. While you may
make rollover contributions to the Individual Retirement Annuity, you
cannot deduct them on your tax return.

2. You must complete a tax-free rollover by the 60th day after the date you
receive the distribution from your IRA or other qualified employee
benefit plan.

3. A rollover distribution from an IRA may be made to you only once a year.
The one-year period begins on the date you receive the IRA distribution,
not on the date you roll it over (reinvest it) into another IRA.

4. A direct transfer of funds in an IRA from one trustee or insurance
company to another is not a rollover. It is a transfer that is not
affected by the one-year waiting period.

ALLOWANCE OF DEDUCTION
1. In general, the amount you can contribute each year to the Annuity
contract is the lesser of $2,000 or your taxable compensation for the
year. If you have more than one IRA, the limit applies to the total
contributions made to your IRAs for the year. Wages, salaries, tips,
professional fees, bonuses, and other amounts you receive for providing
personal services are compensation. If you own and operate your own
business as a sole proprietor, your net earnings reduced by your
deductible contributions on your behalf to self-employed retirement plans
is compensation. If you are an active partner in a partnership and
provide services to the partnership, your share of partnership income
reduced by deductible contributions made on your behalf to qualified
retirement plans is compensation. All taxable alimony and separate
maintenance payments received under a decree of divorce or separate
maintenance are compensation.

3. If you are covered by a qualified retirement plan, the amount of IRA
contributions you may deduct in a year may be reduced or eliminated based
on your AGI for the year. The AGI level at which a single taxpayer's
deduction for 1998 is affected, $30,000, will increase annually to
$50,000 in 2005. The AGI level at which a married taxpayer's deduction
for 1998 is affected, $50,000, will increase annually to $80,000 in 2007.

4. Contributions to your IRA can be made at any time. If you make a
contribution between January 1 and April 15, however, you may elect to
treat the contribution as made either in that year or in the preceding
year. You may file a tax return claiming a deduction for your IRA
contribution before the contribution is actually made. You must, however,
make the contribution by the due date of your return not including
extensions.

5. You cannot make a contribution other than a rollover contribution to your
IRA for the year in which you reach age 70 1/2 or thereafter.

7. If you and your spouse file a joint federal income tax return, each of
you may contribute up to $2,000 to your own IRA annually if your joint
income is $4,000 or more. The maximum amount the higher compensated
spouse may contribute for the year is the lesser of $2,000 or 100% of
that spouse's compensation. The maximum the lower-compensated spouse may
contribute is the lesser of (i) $2,000 or (ii) 100% of that spouse's
compensation plus the amount by which the higher compensated spouse's
compensation exceeds the amount the higher compensated spouse contributes
to his or her IRA.

SEP-IRAS
If you are participating in a Simplified Employee Pension Plan (SEP), the
contributions made by your employer into your IRA after 1986 are excluded
from your income. If the SEP contains a salary reduction arrangement, you may
elect to reduce your salary by up to the lesser of 15% of compensation or
$9,500 (indexed annually) and have that amount contributed to your SEP-IRA.
The maximum SEP contributions, including salary reduction amounts and
employer contributions to your account in any year is generally limited to
the lesser of $30,000 (indexed) or 15% of your total compensation from such
employer for that year. Employers that have established salary reduction SEPs
before 1997 may continue to maintain and contribute to them. However, no new
salary reduction SEPs may be established after 1996. Instead, eligible
employers may establish SIMPLE IRA programs for years after 1996, which
permit salary reduction contributions. This IRA may not be used in connection
with a SIMPLE plan.

If an IRA is being used in connection with a SEP, contributions must bear a
uniform relationship to the total compensation (not in excess of the first
$160,000 indexed) of each employee participating under the SEP. If you are a
participant in a SEP, you will be considered to be an active participant in
an employee pension plan for purposes of your deductible contribution limits
for your IRA (see "Allowance of Deduction" section). For further information
concerning participation and contributions, please refer to IRS Form 5305-SEP
(which must be completed and executed by your employer in order to establish
a SEP).

TAX STATUS OF THE CONTRACT AND DISTRIBUTIONS
1. Earnings of your Individual Retirement Annuity contract are not taxed
until they are distributed to you.

2. In general, taxable distributions are included in your gross income in
the year you receive them.

4. You cannot choose the special five-year or ten-year averaging that may
apply to lump sum distributions from qualified employer plans.

REQUIRED MINIMUM DISTRIBUTIONS
You must start receiving minimum distributions from your Individual
Retirement Annuity starting with the year you reach age 70 1/2 . Ordinarily,
the required minimum distribution for a particular year must be received by
December 31 of that year. However, you may delay the required minimum
distribution for the year you reach age 70 1/2 until April 1 of the following
year (your "required beginning date").

Figure your required minimum distribution for each year by dividing the value
of your Individual Retirement Annuity on December 31 of the preceding year by
the applicable life expectancy. The applicable life expectancy is your
remaining life expectancy or the remaining joint life and last survivor
expectancy of you and your designated beneficiary. If a designated
beneficiary is more than 10 years younger than you, that beneficiary is
assumed to be exactly 10 years younger. Life expectancies are determined
using the expected return multiple tables shown in IRS Publication 590
"Individual Retirement Arrangements." To obtain a free copy of IRS
Publication 590 and other IRA forms, write the IRS Forms Distribution Center
for your area as shown in your income tax return instructions.

Annuity payments which begin by April 1 of the year following the year you
reach age 70 1/2 satisfy the minimum distribution requirement if they provide
for non-increasing payments over your life or the lives of you and your
spouse, provided that, if installments are guaranteed, the maximum guaranty
period may be less than the applicable life expectancy.

If the actual distribution from your IRA is less than the minimum amount that
should be distributed in accordance with the rules set forth above, the
difference is an excess accumulation. There is a 50% excise tax on any excess
accumulations.

If you die after your required beginning date, your entire remaining account
balance must be distributed to your designated beneficiary at least as
rapidly as under the method of distribution in effect on your date of death.

If you die before your required beginning date, the general rule is that your
entire balance must be distributed within five (5) years of your death.
However, if the balance of your IRA account is payable to your designated
beneficiary, your designated beneficiary may elect that the amount be paid in
substantially equal installments over a fixed period not exceeding the
designated beneficiary's life expectancy, beginning no later than December 31
of the year following the year in which you died. If your spouse is your
designated beneficiary, such distribution need not commence until December 31
of the year during which you would have attained 70 1/2 had you survived.
Alternatively, if your designated beneficiary is your spouse, he or she may
elect to treat your IRA as his or her own IRA.

WHAT HAPPENS IF EXCESS CONTRIBUTIONS ARE MADE TO MY INDIVIDUAL RETIREMENT
ANNUITY?
1. You must pay a 6% excise tax each year on excess contributions that
remain in your Individual Retirement Annuity. Generally, an excess
contribution is the amount contributed to your Individual Retirement
Annuity that is above the maximum amount you can contribute for the year.
The excess is taxed in the year contributed and each year after that
until you correct it.

2. You will not have to pay the 6% excise tax if you withdraw the excess
amount by the date your tax return is due, including extensions, for the
year of the contribution. You do not have to include in your gross income
an excess contribution that you withdraw from your Individual Retirement
Annuity before your tax return is due if the income earned on the excess
was also withdrawn and no deduction was allowed for the excess
contribution.

ARE THERE ANY PENALTIES FOR PREMATURE DISTRIBUTIONS?
There is an additional tax on premature distributions equal to 10% of the
amount of the premature distribution that you must include in your gross
income. Premature distributions are generally amounts you withdraw from your
IRA before you are age 59 1/2. However, the tax on premature distributions
does not apply:

1. To distributions that are rolled over tax free to another IRA, a
qualified employee benefit plan, or a tax-sheltered annuity.

2. To a series of substantially equal periodic payments made over your life
or life expectancy, or the joint life or life expectancy of you and your
beneficiary.

3. To amounts distributed to a beneficiary, or the individual's estate, on
or after the death of the individual.

5. To a distribution which does not exceed the amount of your medical
expenses that could be deducted for the year (generally speaking, medical
expenses paid during a year are deductible to the extent they exceed 7
1/2% of your adjusted gross income for the year).

6. To a distribution (subject to certain restrictions) that does not exceed
the premiums you paid for health insurance coverage for yourself, your
spouse, and dependents if you have been unemployed and received
unemployment compensation for at least 12 weeks.

7. To a "qualified first-time homebuyer distribution," within the meaning of
Code 72(t)(8), up to a $10,000 lifetime limit.

8. To a distribution for post-secondary education costs for you, your
spouse, or any child or grandchild of you or your spouse (i.e.,
"qualified higher education expenses").

IRA EXCISE TAX REPORTING
Use Form 5329, Return for Individual Retirement Arrangement Taxes, to report
the excise taxes on excess contributions, premature distributions, and excess
accumulations. If you do not owe any IRA excise taxes, you do not need Form
5329. Further information can be obtained from any district office of the
Internal Revenue Service.

BORROWING
If you borrow money under your Individual Retirement Annuity contract or use
it as security for a loan, you must include in gross income the fair market
value of the Individual Retirement Annuity contract as of the first day of
your tax year, and the penalty tax on premature distributions may apply.
(Note: This contract does not allow borrowings under it, nor may it be
assigned or pledged as collateral for a loan.)

FINANCIAL INFORMATION
Contributions to your Individual Retirement Annuity contract are not subject
to sales charges. A mortality and expense risk charge of .55% on an annual
basis is deducted as described in the attached variable annuity prospectus.
(This charge is not deducted with respect to contract value allocated to the
fixed interest account option.) See the accompanying prospectus for the
underlying mutual funds for information about the charges associated with the
funds. Contractowners who allocate contract value to the Subaccounts bear a
pro rata share of the fees and expenses of the underlying funds. The growth
in value of the Individual Retirement Annuity contract is neither guaranteed,
nor projected, but is based upon the investment experience of the underlying
mutual fund portfolios that correspond to the Subaccounts to which you have
allocated contract value.
<PAGE>
ROTH IRA DISCLOSURE STATEMENT
================================================================================

ROTH INDIVIDUAL RETIREMENT ANNUITY DISCLOSURE STATEMENT
- --------------------------------------------------------------------------------

This Disclosure Statement describes the statutory and regulatory provisions
applicable to the operation of Roth IRAs. Internal Revenue Service
regulations require that this be given to each person desiring to establish a
Roth IRA. Further information can be obtained from any district office of the
Internal Revenue Service.

YOUR RIGHT TO REVOKE
You may revoke your Roth IRA within seven days of the date your first
Purchase Payment is received by Security Benefit Life Insurance Company. To
revoke your Roth IRA and receive a refund of the entire amount you paid, you
must mail or deliver a written notice of revocation, signed exactly as your
signature appears on your variable annuity application, to: T. Rowe Price
Variable Annuity Service Center, P.O. Box 750440, Topeka, KS 66675-0440,
1-800-888-2461.

If you send your revocation notice by First Class Mail, we will consider that
you have notified us as of the date of the postmark on the envelope. If you
send it by Certified or Registered Mail, you will have notified us as of the
certification or registration date on the label. In either case, the
revocation notice must be properly addressed and mailed, with postage
prepaid. Upon receipt of a timely revocation notice, the entire amount of
your contribution will be returned to you without adjustment for sales
commissions, administrative fees or market value fluctuation.

WHAT ARE THE REQUIREMENTS?
A Roth IRA contract must meet the following requirements:

1. The amount in your Roth IRA must be fully vested at all times.

2. The contract must provide that you cannot transfer it to someone else.

3. The contract must have flexible premiums.

4. If you die before your entire interest in the contract has been
distributed, your beneficiary may need to receive distributions within a
specified time frame (see "Required Minimum Distributions" below).

5. The contract must provide that you cannot contribute more than $2,000 for
any year. This requirement does not apply to qualified rollover
contributions. (See "Rollovers and Direct Transfers" below).

6. The contract must provide that any refund of premium will be applied
before the close of the calendar year following the year of refund toward
the payment of future premiums or the purchase of additional benefits.

The Roth IRA contract contains the provisions described above. The contract
has not, however, been approved as to form by the Internal Revenue Service.

ROLLOVERS AND DIRECT TRANSFERS
1. You may make a qualified rollover contribution to this contract from
another Roth IRA or from a traditional IRA, and such a contribution will
not count toward the annual limit on contributions to the contract. You
may make a qualified rollover contribution from a traditional IRA only if
your modified adjusted gross income for the year in which the rollover
will occur is $100,000 or less. The amount distributed from your
traditional IRA and rolled over will be subject to federal income taxes,
except to the extent such amounts relate to nondeductible contributions.
However, if the distribution occurs before 1999, the amount to be
included in your taxable income will be evenly divided over a four-year
period.

2. You must complete a qualified rollover contribution by the 60th day after
the date you receive the distribution from your IRA.

3. A direct transfer of funds in a Roth IRA from one trustee or insurance
company to another does not constitute a rollover.

4. You may not make a rollover contribution from a qualified pension or
profit-sharing plan or tax-sheltered annuity to this Roth IRA, nor may
you make a direct transfer from another IRA to this Roth IRA. A
distribution from this Roth IRA may be used as a rollover contribution to
another Roth IRA. You may not transfer a Roth IRA to a traditional IRA.

5. A rollover contribution from one IRA to another IRA, other than a
qualified rollover contribution from a traditional IRA to a Roth IRA, may
be made only once a year. The one-year period begins on the date you
receive the distribution from the first IRA, not on the date you roll it
over (reinvest it) into another IRA.

AMOUNT OF ANNUAL CONTRIBUTION
1. In general, the amount you can contribute each year to the contract is
the lesser of $2,000 or your taxable compensation for the year. If you
have more than one IRA (either a Roth IRA or a traditional IRA), the
limit applies to the total contributions made to your IRAs for the year.
Wages, salaries, tips, professional fees, bonuses and other amounts you
receive for providing personal services are compensation. If you own and
operate your own business as a sole proprietor, your net earnings reduced
by your deductible contributions on your behalf to self-employed
retirement plans is compensation. If you are an active partner in a
partnership and provide services to the partnership, your share of
partnership income reduced by deductible contributions made on your
behalf to qualified retirement plans is compensation. All taxable alimony
and separate maintenance payments received under a decree of divorce or
separate maintenance are compensation.

2. No amount you contribute to the contract will be deductible for federal
income tax purposes.

4. If both you and your spouse have compensation you can each set up your
own Roth IRA. The contribution for each of you is figured separately and
depends on how much each earns. Both of you cannot participate in the
same Roth IRA or contract.

5. If you and your spouse file a joint federal income tax return, each of
you may contribute up to $2,000 to your own Roth IRA annually if your
joint income is $4,000 or more. The maximum amount the higher compensated
spouse may contribute for the year is the lesser of $2,000 or 100% of
that spouse's compensation. The maximum the lower compensated spouse may
contribute is the lesser of (i) $2,000 or (ii) 100% of that spouse's
compensation plus the amount by which the higher compensated spouse's
compensation exceeds the amount the higher compensated spouse contributes
to his or her Roth IRA.

6. Your maximum annual contribution amount shall be phased-out if you are
single and have an adjusted gross income between $95,000 and $110,000, or
if you are married and you and your spouse have a combined adjusted gross
income between $150,000 and $160,000 in accordance with Section
ss.408A(c)(3) of the Internal Revenue Code (the "Code").

TAX STATUS OF DISTRIBUTIONS
1. Since your contributions to the contract will be made with after-tax
dollars, when your contributions are distributed to you they will not be
subject to federal income tax. Distributions from the contract will be
considered as coming first from your contributions and then from the
earnings on your contributions. You will owe no federal income tax when
earnings on your contributions are distributed to you, provided they are
distributed in a "qualified distribution."

2. "Qualified distributions" from the contract will not be subject to
federal income tax or the additional 10% early withdrawal tax. To be
qualified, a distribution must:

(a) occur after the five-year period beginning on the first day of the
year you made your initial contribution to the contract, and

(b) must be:

(1) made on or after the date on which you attain age 59 1/2;

(2) made to a beneficiary (or your estate) on or after your death;

(3) attributable to your being disabled; or

(4) a distribution to pay for "qualified first-time homebuyer
expenses" under Codess.72(t)(8) up to $10,000.

3. You will owe federal income tax, and perhaps an additional 10% early
withdrawal tax, on the amount of earnings distributed to you in a
"nonqualified distribution."

4. Amounts held in Roth IRAs are generally subject to the imposition of
federal estate taxes. If you elect to have all or any part of your
account payable to a beneficiary (or beneficiaries) upon your death, the
election generally will not subject you to any gift tax liability.

5. Taxable distributions from a Roth IRA are not eligible for special
five-year or ten-year averaging that may apply to lump sum distributions
from qualified employer retirement plans.

REQUIRED MINIMUM DISTRIBUTIONS
1. You are not required to receive required minimum distributions from your
Roth IRA during your lifetime.

2. If you die before the entire balance in your Roth IRA has been
distributed, the general rule is that the entire balance must be
distributed within five (5) years of your death. However, if the balance
in your Roth IRA account is payable to your designated beneficiary, you
may elect or your designated beneficiary may elect that the amount be
paid in substantially equal installments over a fixed period not
exceeding the designated beneficiary's life expectancy, beginning no
later than December 31 of the year following the year in which you died.
If your spouse is the sole designated beneficiary of your Roth IRA on
your date of death, these rules do not apply and the Roth IRA will be
treated as your spouse's IRA, and no distributions from the Roth IRA to
your spouse will be required during your spouse's lifetime.

3. Life expectancies are determined using the expected return multiple
tables shown in IRS Publication 590 "Individual Retirement Arrangements."
To obtain a free copy of IRS Publication 590, write the IRS Forms
Distribution Center for your area as shown in your income tax return
instructions.

4. If the actual distribution from your Roth IRA is less than the minimum
amount that should be distributed in accordance with the rules set forth
above, the difference is subject to a 50% excise tax.

WHAT HAPPENS IF EXCESS CONTRIBUTIONS ARE MADE TO MY ROTH IRA?
1. You must pay a 6% excise tax each year on excess contributions that
remain in your Roth IRA. Generally, an excess contribution is the amount
contributed to your Roth IRA that is above the maximum amount you can
contribute for the year. The excess is taxed in the year contributed and
each year after that until you correct it.

2. You will not have to pay the 6% excise tax if you withdraw the excess
amount by the date your tax return is due, including extensions, for the
year of the contribution.

ARE THERE ANY PENALTIES FOR PREMATURE DISTRIBUTIONS?
There is an additional tax on premature distributions which are part of a
nonqualified distribution equal to 10% of the amount of the premature
distribution that you must include in your gross income. (See the discussion
above on the "Tax Status of Distributions.") Premature distributions are
generally amounts you withdraw from your Roth IRA before you are age 59 1/2.
However, the tax on premature distributions does not apply:

1. To distributions that constitute qualified rollover contributions to
another Roth IRA.

2. To a series of substantially equal periodic payments made over your life
or life expectancy, or the joint life expectancy of you and your
beneficiary.

3. To amounts distributed to a beneficiary, or your estate, on or after your
death.

5. To a distribution which does not exceed the amount of your medical
expenses that could be deducted for the year (generally speaking, medical
expenses paid during a year are deductible to the extent they exceed 7
1/2% of your adjusted gross income for the year).

6. To a distribution (subject to certain restrictions) that does not exceed
the premiums you paid for health insurance coverage for yourself, your
spouse and dependents if you have been unemployed and received
unemployment compensation for at least 12 weeks.

7. To a "qualified first-time homebuyer distribution," within the meaning of
Code ss.72(t)(8), up to $10,000.

8. To a distribution for post-secondary education costs for you, your spouse
or any child or grandchild of you or your spouse.

IRA EXCISE TAX REPORTING
Use Form 5329, Return for Individual Retirement Arrangement Taxes, to report
the excise taxes on excess contributions and premature distributions. If you
do not owe any excise taxes, you do not need Form 5329. Further information
can be obtained from any district office of the Internal Revenue Service.

TRANSACTIONS WITH YOUR ROTH IRA
If you engage in a so-called prohibited transaction with respect to your Roth
IRA, the IRA will lose its exemption from tax. In this event, you will be
taxed on the fair market value of the contract even if you do not actually
receive a distribution. In addition, if you are less than 59 1/2, your taxes
may be further increased by a penalty tax in an amount equal to 10% of the
fair market value of the contract. These prohibited transactions include
borrowing money from your Roth IRA, using your Roth IRA account as security
for a loan or a number of other financial transactions with your Roth IRA. If
you pledge your Roth IRA as security for a loan, then the amount or portion
pledged is considered to be distributed to you and also must be included in
your gross income. (Note: This contract does not allow borrowings under it,
nor may it be assigned or pledged as collateral for a loan.)

FINANCIAL INFORMATION
Contributions to your Roth IRA contract are not subject to sales charges. A
mortality and expense risk charge of .55% on an annual basis is deducted as
described in the attached variable annuity prospectus. (This charge is not
deducted with respect to contract value allocated to the fixed interest
account option.) See the accompanying prospectus for the underlying mutual
funds for information about the charges associated with the funds.
Contractowners who allocate contract value to the Subaccounts bear a pro rata
share of the fees and expenses of the underlying funds. The growth in value
of the Roth IRA contract is neither guaranteed, nor projected, but is based
upon the investment experience of the underlying mutual fund portfolios that
correspond to the Subaccounts to which you have allocated contract value.

IMPORTANT: The discussion of the tax rules for Roth IRAs in this Disclosure
Statement is based upon the best available information. However, Roth IRAs
are new under the tax laws, and the IRS has not issued regulations or rulings
on the operation and the tax treatment of Roth IRAs. Therefore, you should
consult your tax advisor for the latest developments and for advice about how
maintaining a Roth IRA will affect your personal tax or financial situation.

<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

T. ROWE PRICE NO-LOAD VARIABLE ANNUITY
STATEMENT OF ADDITIONAL INFORMATION
Date: May 1, 1999
Individual Flexible Premium Deferred Variable Annuity Contract
Individual Single Premium Immediate Variable Annuity Contract

ISSUED BY: MAILING ADDRESS:
Security Benefit T. Rowe Price Variable
Life Insurance Company Annuity Service Center
700 SW Harrison Street PO Box 750440
Topeka, Kansas 66636-0001 Topeka, Kansas 66675-0440
1-800-888-2461 1-800-469-6587

This Statement of Additional Information is not a prospectus and should be read
in conjunction with the current Prospectus for the T. Rowe Price No-Load
Variable Annuity or T. Rowe Price Immediate Variable Annuity dated May 1, 1999.
A copy of the Prospectus may be obtained from the T. Rowe Price Variable Annuity
Service Center by calling 1-800-469-6587 or by writing P.O. Box 750440, Topeka,
Kansas 66675-0440.

CONTENTS

General Information and History ............................................ 1
Distribution of the Contract ............................................... 1
Limits on Premiums Paid Under Tax-Qualified Retirement Plans ............... 1
Experts .................................................................... 2
Performance Information .................................................... 2
Financial Statements ....................................................... 4

GENERAL INFORMATION AND HISTORY

For a description of the Individual Flexible Premium Deferred Variable Annuity
Contract (the "Deferred Variable Annuity Contract") or the Individual Single
Premium Immediate Variable Annuity Contract (the "Immediate Variable Annuity
Contract") (both collectively referred to as the "Contract"), Security Benefit
Life Insurance Company (the "Company"), and the T. Rowe Price Variable Annuity
Account (the "Separate Account"), see the Prospectus. This Statement of
Additional Information contains information that supplements the information in
the Prospectuses. Defined terms used in this Statement of Additional Information
have the same meaning as terms defined in the section entitled "Definitions" in
the Prospectuses.

SAFEKEEPING OF ASSETS

The Company is responsible for the safekeeping of the assets of the Subaccounts.
These assets, which consist of shares of the Portfolios of the Funds in
non-certificated form, are held separate and apart from the assets of the
Company's General Account and its other separate accounts.

DISTRIBUTION OF THE CONTRACT

T. Rowe Price Investment Services, Inc. ("Investment Services"), a Maryland
corporation formed in 1980 as a wholly owned subsidiary of T. Rowe Price
Associates, Inc., is Principal Underwriter of the Contract. Investment Services
is registered as a broker/dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). The offering of the
Contracts is continuous.

Investment Services serves as Principal Underwriter under a Distribution
Agreement with the Company. Investment Services' registered representatives are
required to be authorized under applicable state regulations to make the
Contract available to its customers. Investment Services is not compensated
under its Distribution Agreement with the Company. Investment Services, however,
may receive compensation for the administrative services it provides to the
Company under other agreements.

LIMITS ON PREMIUMS PAID UNDER TAX-QUALIFIED RETIREMENT PLANS

SECTION 408

Premiums (other than rollover contributions) paid under a Deferred Variable
Annuity Contract or an Immediate Variable Annuity Contract used in connection
with an individual retirement annuity (IRA) that is described in Section 408 of
the Internal Revenue Code are subject to the limits on contributions to IRA's
under Section 219(b) of the Internal Revenue Code. Under Section 219(b) of the
Code, contributions (other than rollover contributions) to an IRA are limited to
the lesser of $2,000 per year or the Owner's annual compensation. An additional
$2,000 may be contributed if the Owner has a spouse with little or no
compensation for the year, provided distinct accounts are maintained for the
Owner and his or her spouse, and no more than $2,000 is contributed to either
account in any one year. The extent to which an Owner may deduct contributions
to an IRA depends on the gross income of the Owner and his or her spouse for the
year and whether either participates in another employer-sponsored retirement
plan.

Premiums under a Deferred Variable Annuity Contract or an Immediate Variable
Annuity Contract used in connection with a simplified employee pension plan
described in Section 408 of the Internal Revenue Code are subject to limits
under Section 402(h) of the Internal Revenue Code. Section 402(h) currently
limits employer contributions and salary reduction contributions (if permitted)
under a simplified employee pension plan to the lesser of (a) 15% of the
compensation of the participant in the Plan, or (b) $30,000. Salary reduction
contributions, if any, are subject to additional annual limits. Salary reduction
simplified employee pensions ("SARSEPs") have been repealed; however, SARSEPs
established prior to January 1, 1997 may continue to receive contributions.

EXPERTS

Ernst & Young LLP, independent auditors, perform certain auditing services for
the Company and the Separate Account. The financial statements for the Company
at December 31, 1997 and 1996, and for each of the three years in the period
ended December 31, 1997, are contained in this Statement of Additional
Information. Financial statements of the Separate Account as of December 31,
1997 and for each of the two years in the period ended December 31, 1997, also
included in this Statement of Additional Information. The financial statements
have been audited by Ernst & Young LLP, as set forth in their reports thereon
appearing herein and are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.

PERFORMANCE INFORMATION

Performance information for the Subaccounts of the Separate Account, including
the yield and total return of all Subaccounts, may appear in advertisements,
reports, and promotional literature provided to current or prospective Owners.

Quotations of yield for the Prime Reserve Subaccount will be based on the change
in the value, exclusive of capital changes, of a hypothetical investment in a
Contract over a particular seven day period, less a hypothetical charge
reflecting deductions from the Contract during the period (the "base period")
and stated as a percentage of the investment at the start of the base period
(the "base period return"). The base period return is then annualized by
multiplying by 365/7, with the resulting yield figure carried to at least the
nearest one hundredth of one percent. Any quotations of effective yield for the
Prime Reserve Subaccount assume that all dividends received during an annual
period have been reinvested. Calculation of "effective yield" begins with the
same "base period return" used in the yield calculation, which is then
annualized to reflect weekly compounding pursuant to the following formula:

Effective Yield = [(Base Period Return + 1)^365/7] - 1

For the seven-day period ended December 31, 1998, the yield of the Prime Reserve
Subaccount was 4.35% and the effective yield of the Subaccount was 4.44%.

Quotations of yield for the Subaccounts, other than the Prime Reserve
Subaccount, will be based on all investment income per Accumulation Unit earned
during a particular 30-day period, less expenses accrued during the period ("net
investment income"), and will be computed by dividing net investment income by
the value of the Accumulation Unit on the last day of the period, according to
the following formula:

a - b
YIELD = 2[(----- + 1)^6 - 1]
cd

where a = net investment income earned during the period by the
Portfolio attributable to shares owned by the Subaccount,

b = expenses accrued for the period (net of any reimbursements)

c = the average daily number of Accumulation Units outstanding
during the period that were entitled to receive dividends,
and

d = the maximum offering price per Accumulation Unit on the
last day of the period.

For the 30-day period ended December 31, 1998, the yield of the Limited-Term
Bond Subaccount was 5.47%.

Quotations of average annual total return for any Subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in a Deferred Variable Annuity Contract or an Immediate Variable
Annuity Contract over a period of one, five, and ten years (or, if less, up to
the life of the Subaccount), calculated pursuant to the following formula: P(1 +
T)^n = ERV (where P = a hypothetical initial payment of $1,000, T = the average
annual total return, n = the number of years, and ERV = the ending redeemable
value of a hypothetical $1,000 payment made at the beginning of the period). All
total return figures reflect the deduction of the mortality and expense risk
charge. Quotations of total return may simultaneously be shown for other
periods.

Where the Portfolio in which a Subaccount invests was established prior to
inception of the Subaccount, quotations of total return will include quotations
for periods beginning prior to the Subaccount's date of inception. Such
quotations of total return are based upon the performance of the Subaccount's
corresponding Portfolio adjusted to reflect deduction of the mortality and
expense risk charge.

For the one-year period ended December 31, 1998, the average annual total return
of New America Growth Subaccount, International Stock Subaccount, Equity Income
Subaccount, Personal Strategy Balanced Subaccount, and the Limited-Term Bond
Subaccount was 17.84%, 15.20%, 8.39%, 13.75%, and 6.47%, respectively. For the
period from March 31, 1994 (Portfolio date of inception) to December 31, 1998,
the average annual total return for the New America Growth Subaccount,
International Stock Subaccount, and Equity Income Subaccount was 21.90%, 9.08%,
and 19.20%, respectively. For the period from December 30, 1994 (Portfolio date
of inception) to December 31, 1998, the average annual total return for the
Personal Strategy Balanced Subaccount was 18.02%. For the period from May 13,
1994 (Portfolio date of inception) to December 31, 1998, the average annual
total return for the Limited-Term Bond Subaccount was 5.77%. For the period from
December 31, 1996, (Portfolio date of inception) to December 31, 1998, the
average annual total return for the Mid-Cap Growth Subaccount was 19.75%.

Performance information for a Subaccount may be compared, in reports and promo
tional literature, to: (i) the Standard & Poor's 500 Stock Index ("S&P 500"),
Dow Jones Industrial Average ("DJIA"), Donoghue Money Market Institutional
Averages, the Lehman Brothers Government Corporate Index, the Morgan Stanley
Capital International's EAFE Index, or other indices that measure performance of
a pertinent group of securities so that investors may compare a Subaccount's
results with those of a group of securities widely regarded by investors as
representative of the securities markets in general or representative of a
particular type of security; (ii) other variable annuity separate accounts,
mutual funds, or other investment products tracked by Lipper Analytical
Services, a widely used independent research firm which ranks mutual funds and
other investment companies by overall performance, investment objectives, and
assets, or tracked by The Variable Annuity Research and Data Service ("VARDS"),
an independent service which monitors and ranks the performance of variable
annuity issues by investment objectives on an industry-wide basis or tracked by
Morningstar, Inc., a widely used independent research firm which rates mutual
funds and variable annuities by overall performance, investment objectives and
assets, or tracked by other services, companies, publications or persons who
rank such investment companies on overall performance or other criteria; and
(iii) the Consumer Price Index (measure for inflation) to assess the real rate
of return from an investment in the Contract. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses.

Performance information for any Subaccount reflects only the performance of a
hypothetical Contract under which an Owner's Contract Value is allocated to a
Subaccount during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the Portfolio of the
Funds in which the Subaccount invests, and the market conditions during the
given time period, and should not be considered as a representation of what may
be achieved in the future.

Reports and promotional literature may also contain other information including:
(i) the ranking of any Subaccount derived from rankings of variable annuity
separate accounts, insurance products funds, or other investment products
tracked by Lipper Analytical Services, Morningstar, Inc., or by other rating
services, companies, publications, or other persons who rank separate accounts
or other investment products on overall performance or other criteria, (ii) the
effect of a tax-deferred compounding on a Subaccount's investment returns, or
returns in general, which may be illustrated by graphs, charts, or otherwise,
and which may include a comparison, at various points in time, of the return
from an investment in a Deferred Variable Annuity Contract or an Immediate
Variable Annuity Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a taxable basis, and (iii)
personal hypothetical illustrations of accumulation and payout period Contract
Values and annuity payments.

FINANCIAL STATEMENTS

The consolidated financial statements of the Company at December 31, 1997 and
1996 and for each of the three years in the period ended December 31, 1997, and
the financial statements of the Separate Account as of December 31, 1997 and for
each of the two years in the period ended December 31, 1997, are set forth
herein, starting on page 6.

The financial statements of the Company, which are included in this Statement of
Additional Information, should be considered only as bearing on the ability of
the Company to meet its obligations under the Contracts. They should not be
considered as bearing on the investment performance of the assets held in the
Separate Account.

CONTENTS

Report of Independent Auditors ............................................. 6

AUDITED FINANCIAL STATEMENTS
Balance Sheet .............................................................. 6
Statements of Operations and Changes in Net Assets ......................... 7
Notes to Financial Statements .............................................. 9

<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Contract Owners of T. Rowe Price Variable
Annuity Account and The Board of Directors of
Security Benefit Life Insurance Company

We have audited the accompanying balance sheet of T. Rowe Price Variable Annuity
Account (the Account) as of December 31, 1997, and the related statements of
operations and changes in net assets for each of the two years in the period
then ended. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of investments owned as of December 31, 1997 by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of T. Rowe Price Variable Annuity
Account at December 31, 1997, and the results of its operations and changes in
its net assets for each of the two years in the period then ended in conformity
with generally accepted accounting principles.

Ernst & Young LLP

Kansas City, Missouri
February 6, 1998
<PAGE>
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT

BALANCE SHEET DECEMBER 31, 1997
(DOLLARS IN THOUSANDS -
EXCEPT PER SHARE AND UNIT VALUES)
ASSETS
INVESTMENTS:
T. ROWE PRICE PORTFOLIOS:

New America Growth Portfolio - 1,833,800 shares
at net asset value of $21.35 per share (cost, $32,618)......... $ 39,153

International Stock Portfolio - 1,606,981 shares at
net asset value of $12.74 per share (cost, $20,455)............ 20,472

Equity Income Portfolio - 3,500,961 shares at net
asset value of $18.59 per share (cost, $56,024)................ 65,084

Personal Strategy Balanced Portfolio - 1,032,694
shares at net asset value of $15.13 per share (cost, $14,309).. 15,625

Limited-Term Bond Portfolio - 1,469,237 shares at net
asset value of $4.96 per share (cost, $7,241).................. 7,287

Mid-Cap Growth Portfolio - 1,095,013 shares at net
asset value of $11.88 per share (cost $11,586)................. 13,009

Prime Reserve Portfolio - 8,068,379 shares at net
asset value of $ 1.00 per share (cost $8,068).................. 8,068
-------
TOTAL ASSETS ........................................................ $168,698
=======

Number Unit
of Units Value Amount
--------- ------ -------
NET ASSETS
Net assets are represented by (Note 3):
New America Growth Subaccount:
Accumulation units ................. 2,030,514 $19.28 $39,141
Annuity reserves ................... 684 19.28 12
-------
$ 39,153
International Stock Subaccount:
Accumulation units ................. 1,562,428 13.09 20,450
Annuity reserves ................... 1,778 13.09 22
-------
20,472
Equity Income Subaccount:
Accumulation units ................. 3,450,047 18.84 64,989
Annuity reserves ................... 5,044 18.84 95
-------
65,084
Personal Strategy Balanced Subaccount:
Accumulation units ................. 983,602 15.86 15,603
Annuity reserves ................... 1,391 15.86 22
-------
15,625
Limited-Term Bond Subaccount:
Accumulation units ................. 626,694 11.60 7,271
Annuity reserves ................... 1,337 11.60 16
-------
7,287
Mid-Cap Growth Subaccount:
Accumulation units ................. 1,100,979 11.82 13,009

Prime Reserve Subaccount:
Accumulation units ................. 769,829 10.48 8,064
Annuity reserves ................... 413 10.48 4 8,068
-------
Total net assets ....................... $168,698
=======
See accompanying notes.
<PAGE>
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT

Statement of Operations and Changes in Net Assets
Year ended December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
Personal
New America International Equity Strategy Limited- Mid-Cap Prime
Growth Stock Income Balanced Term Bond Growth Reserve
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Dividend distributions ........................ $ -- $ 188 $ 1,156 $ 396 $ 311 $ -- $ 283
Expenses (Note 2):
Mortality and expense risk fee ................ (174) (108) (258) (65) (29) (43) (30)
Net investment income (loss) .................. (174) 80 898 331 282 (43) 253
-------- -------- -------- -------- ------- -------- --------
Capital gain distributions .................... 91 267 1,942 235 -- -- --
Realized gain on investments .................. 1,427 727 1,816 382 20 175 --
Unrealized appreciation (depreciation) on
investments ................................. 4,680 (791) 6,797 916 21 1,423 --
-------- -------- -------- -------- ------- -------- --------
Net realized and unrealized gain on investments 6,198 203 10,555 1,533 41 1,598 --
Net increase in net assets resulting from
operations .................................. 6,024 283 11,453 1,864 323 1,555 253
Net assets at beginning of year ............... 25,570 14,362 27,983 8,121 4,865 -- --
Variable annuity deposits (Notes 2 and 3) ..... 15,321 11,401 32,625 8,325 5,200 14,695 19,412
Terminations and withdrawals (Notes 2 and 3) .. (7,753) (5,574) (6,977) (2,684) (3,101) (3,241) (11,597)
Annuity payments (Notes 2 and 3) .............. (9) -- -- (1) -- -- --
-------- -------- -------- -------- ------- -------- --------
Net assets at end of year ..................... $ 39,153 $ 20,472 $ 65,084 $ 15,625 $ 7,287 $ 13,009 $ 8,068
-------- -------- -------- -------- ------- -------- --------
</TABLE>
See accompanying notes.
<PAGE>
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT

Statement of Operations and Changes in Net Assets
Year ended December 31, 1996
(In Thousands)
<TABLE>
<CAPTION>
Personal
New America International Equity Strategy Limited-
Growth Stock Income Balanced Term Bond
Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Dividend distributions ..................................... $ 36 $ 132 $ 534 $ 185 $ 164
Expenses (Note 2):
Mortality and expense risk fee ............................. (89) (49) (88) (28) (15)
Net investment income (loss) ............................... (53) 83 446 157 149
------ ------ ------ ------ ------
Capital gain distributions ................................. 319 75 130 150 --
Realized gain (loss) on investments ........................ 521 227 341 72 (37)
Unrealized appreciation (depreciation) on investments ...... 1,675 731 2,087 359 18
------ ------ ------ ------ ------
Net realized and unrealized gain (loss) on investments ..... 2,515 1,033 2,558 581 (19)
Net increase in net assets resulting from operations ....... 2,462 1,116 3,004 738 130
Net assets at beginning of year ............................ 4,474 2,444 4,522 1,765 925
Variable annuity deposits (Notes 2 and 3) .................. 22,024 12,438 22,410 6,629 5,935
Terminations and withdrawals (Notes 2 and 3) ............... (3,389) (1,636) (1,952) (1,008) (2,125)
Annuity payments (Notes 2 and 3) (1) ....................... -- -- (1) --
Net mortality guarantee transfer ........................... -- -- (1) (2) --
------ ------ ------ ------ ------
Net assets at end of year .................................. $25,570 $14,362 $27,983 $ 8,121 $ 4,865
------ ------ ------ ------ ------
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization

T. Rowe Price Variable Annuity Account (the Account) is a separate account
of Security Benefit Life Insurance Company (SBL). The Account is registered
as a unit investment trust under the Investment Company Act of 1940, as
amended. The Account currently is divided into seven subaccounts. Each
subaccount invests exclusively in shares of a single corresponding mutual
fund or series thereof. Purchase payments received by the Account are
invested in one of the Portfolios of either T. Rowe Price Equity Series,
Inc., T. Rowe Price Fixed Income Series, Inc. or T. Rowe Price International
Series, Inc., mutual funds not otherwise available to the public. As
directed by the owners, purchase payments are invested in shares of New
America Growth Portfolio -- emphasis on long-term capital growth through
investments in common stocks of domestic companies, International Stock
Portfolio -- emphasis on long-term capital growth through investments in
common stocks of established foreign companies, Equity Income Portfolio
--emphasis on substantial dividend income and capital appreciation by
investing primarily in dividend-paying common stocks, Personal Strategy
Balanced Portfolio -- emphasis on both capital appreciation and income,
Limited-Term Bond Portfolio -- emphasis on income with moderate price
fluctuation by investing in short- and intermediate-term investment grade
debt securities, Mid-Cap Growth Portfolio -- emphasis on long-term capital
appreciation through investments in companies with proven products or
services and Prime Reserve Portfolio -- emphasis on preservation of capital
and liquidity while generating the highest possible current income by
investing primarily in high-quality money market securities.

T. Rowe Price Associates, Inc. (T. Rowe Price) serves as the investment
advisor to each Portfolio except the International Stock Portfolio which is
managed by Rowe Price-Fleming International, Inc., an affiliate of T. Rowe
Price. The investment advisors are responsible for managing the Portfolio's
assets in accordance with the terms of the investment advisory contracts.

INVESTMENT VALUATION

Investments in mutual fund shares are carried in the balance sheet at market
value (net asset value of the underlying mutual fund). The first-in,
first-out cost method is used to determine gains and losses. Security
transactions are accounted for on the trade date.The cost of investments
purchased and proceeds from investments sold were as follows:

1997 1996
--------------------- ---------------------
Cost of Proceeds Cost of Proceeds
Purchases From Sales Purchases From Sales
--------- ---------- --------- ----------
(In Thousands)
New America Growth Portfolio ....... $15,921 $ 8,445 $23,168 $4,268
International Stock Portfolio ...... 12,122 5,948 13,265 2,305
Equity Income Portfolio ............ 36,441 7,953 24,102 3,069
Personal Strategy Balanced Portfolio 9,170 2,964 7,279 1,354
Limited-Term Bond Portfolio ........ 5,875 3,494 6,946 2,986
Mid-Cap Growth Portfolio ........... 14,965 3,554 -- --
Prime Reserve Portfolio ............ 21,041 12,973 -- --

ANNUITY RESERVES

Annuity reserves relate to contracts which have matured and are in the
payout stage. Such reserves are computed on the basis of published mortality
tables using assumed interest rates that will provide reserves as prescribed
by law. In cases where the payout option selected is life contingent, SBL
periodically recalculates the required annuity reserves, and any resulting
adjustment is either charged or credited to SBL and not to the Account.

REINVESTMENT OF DIVIDENDS

Dividend and capital gains distributions paid by the mutual fund to the
Account are reinvested in additional shares of each respective Portfolio.
Dividend income and capital gains distributions are recorded as income on
the ex-dividend date.

FEDERAL INCOME TAXES

Under current law, no federal income taxes are payable with respect to the
Account.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2. VARIABLE ANNUITY CONTRACT CHARGES

Mortality and expense risks assumed by SBL are compensated for by a fee
equivalent to an annual rate of .55% of the average daily net assets of each
account.

When applicable, an amount for state premium taxes is deducted as provided
by pertinent state law either from the purchase payments or from the amount
applied to effect an annuity at the time annuity payments commence.

3. SUMMARY OF UNIT TRANSACTIONS
Units
Year ended December 31
1997 1996
--------- ---------
(In Thousands)
New America Growth Subaccount:
Variable annuity deposits ............................. 897 1,494
Terminations, withdrawals and annuity payments ........ 464 230
International Stock Subaccount:
Variable annuity deposits ............................. 862 1,043
Terminations, withdrawals and annuity payments ........ 423 137
Equity Income Subaccount:
Variable annuity deposits ............................. 1,970 1,686
Terminations, withdrawals and annuity payments ........ 419 148
Personal Strategy Balanced Subaccount:
Variable annuity deposits ............................. 568 534
Terminations, withdrawals and annuity payments ........ 184 81
Limited-Term Bond Subaccount:
Variable annuity deposits ............................. 462 604
Terminations, withdrawals and annuity payments ........ 279 246
Mid-Cap Growth Subaccount:
Variable annuity deposits ............................. 1,406 --
Terminations, withdrawals and annuity payments ........ 305 --
Prime Reserve Subaccount:
Variable annuity deposits ............................. 1,929 --
Terminations, withdrawals and annuity payments ........ 1,159 --
<PAGE>
Security Benefit Life Insurance Company and Subsidiaries
Consolidated Financial Statements
Years ended December 31, 1997, 1996 and 1995

CONTENTS - AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Auditors ............................................ 12
Consolidated Balance Sheets ............................................... 13
Consolidated Statements of Income ......................................... 14
Consolidated Statements of Changes in Equity .............................. 15
Consolidated Statements of
Cash Flows ................................................................ 16
Notes to Consolidated Financial Statements ................................ 18

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Security Benefit Life Insurance Company

We have audited the accompanying consolidated balance sheets of Security Benefit
Life Insurance Company and Subsidiaries (the Company) as of December 31, 1997
and 1996, and the related consolidated statements of income, changes in equity
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Security Benefit
Life Insurance Company and Subsidiaries at December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.

Ernst & Young LLP
Kansas City, Missouri
February 6, 1998
<PAGE>
SECURITY BENEFIT LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
December 31,
1997 1996
---------- -----------
(In Thousands)
ASSETS
Investments:
Securities available-for-sale:
Fixed maturities ............................... $1,650,324 $ 1,805,066
Equity securities .............................. 120,508 89,188
Fixed maturities held-to-maturity............... 452,411 528,045
Mortgage loans ................................. 64,251 66,611
Real estate .................................... 3,056 4,000
Policy loans ................................... 85,758 106,822
Cash and cash equivalents ...................... 30,896 8,310
Other invested assets .......................... 42,395 40,531
---------- -----------
Total investments .................................. 2,449,599 2,648,573
Accrued investment income .......................... 30,034 32,161
Accounts receivable ................................ 6,278 4,256
Reinsurance recoverable 408,096 92,197
Property and equipment, net ........................ 19,669 18,592
Deferred policy acquisition costs .................. 159,441 216,918
Other assets ....................................... 20,909 24,939
Separate account assets ............................ 3,716,639 2,802,927
---------- -----------
$6,810,665 $ 5,840,563
========== ===========
Liabilities and equity
Liabilities:
Policy reserves and annuity account values ....... $2,439,713 $ 2,497,998
Policy and contract claims ....................... 10,955 10,607
Other policyholder funds ......................... 21,582 24,073
Accounts payable and accrued expenses ............ 23,576 18,003
Income taxes payable:
Current ....................................... 10,960 6,686
Deferred ....................................... 58,261 54,847
Long-term debt and other borrowings .............. 65,000 65,000
Other liabilities ................................ 29,098 11,990
Separate account liabilities ..................... 3,716,639 2,793,911
---------- -----------
Total liabilities .................................. 6,375,784 5,483,115
Equity:
Retained earnings ................................ 409,432 357,927
Unrealized gain (loss) on securities
available-for-sale, net ........................ 25,449 (479)
---------- -----------
Total equity ....................................... 434,881 357,448
---------- -----------
$6,810,665 $ 5,840,563
========== ===========

See accompanying notes to consolidated financial statements.
<PAGE>
SECURITY BENEFIT LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
Year ended December 31
1997 1996 1995
-------- ---------- --------
(In Thousands)
Revenues:
Insurance premiums and other considerations . $ 24,640 $ 28,848 $ 49,608
Net investment income ....................... 184,975 194,783 182,012
Asset based fees ............................ 72,025 55,977 40,652
Other product charges ....................... 9,163 10,470 10,412
Realized gains (losses) on investments ...... 4,929 (244) 3,876
Other revenues .............................. 21,389 24,391 22,164
-------- --------- --------
Total revenues ................................ 317,121 314,225 308,724
Benefits and expenses:
Annuity and interest sensitive life benefits:
Interest credited to account balances ..... 102,640 108,705 113,700
Benefit claims in excess of account
balances ................................ 4,985 7,541 6,808
Traditional life insurance benefits ......... 3,966 6,474 7,460
Supplementary contract payments ............. 9,660 11,121 11,508
Increase in traditional life reserves ....... 7,050 8,580 13,212
Dividends to policyholders .................. 1,608 2,374 2,499
Other benefits .............................. 19,699 20,790 22,379
-------- --------- --------
Total benefits ................................ 149,608 165,585 177,566
Commissions and other operating expenses ...... 56,933 52,044 48,305
Amortization of deferred policy acquisition
costs ....................................... 26,179 25,930 26,628
Interest expense .............................. 5,305 4,285 7
Restructuring expenses ........................ 2,643 -- --
Other expenses ................................ 3,381 1,667 1,099
-------- --------- --------
Total benefits and expenses ................... 244,049 249,511 253,605
-------- --------- --------
Income before income taxes .................... 73,072 64,714 55,119
Income taxes .................................. 21,567 20,871 17,927
-------- --------- --------
Net income .................................... $ 51,505 $ 43,843 $ 37,192
======== ========= ========

See accompanying notes to consolidated financial statements.
<PAGE>
Security Benefit Life Insurance Company and Subsidiaries

Consolidated Statements of Changes in Equity

Year ended December 31
1997 1996 1995
--------- --------- ---------
(In Thousands)
Retained earnings:
Beginning of year ........................ $357,927 $314,084 $276,892
Net income ............................... 51,505 43,843 37,192
-------- -------- --------
End of year .............................. 409,432 357,927 314,084
Unrealized gain (loss) on securities
available-for-sale, net:
Beginning of year ........................ (479) 11,607 (48,466)
Change in unrealized gain (loss) on
securities available-for-sale, net ..... 25,928 (12,086) 60,073
-------- -------- --------
End of year ................................. 25,449 (479) 11,607
Total equity ................................ $434,881 $357,448 $325,691
======== ======== ========

See accompanying notes to consolidated financial statements.
<PAGE>
Security Benefit Life Insurance Company and Subsidiaries

Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31
1997 1996 1995
---------- ----------- ----------
(In Thousands)
<S> <C> <C> <C>
Operating activities
Net income .................................................. $ 51,505 $ 43,843 $ 37,192
Adjustments to reconcile net income to net
cash provided by operating activities:
Annuity and interest sensitive life products:
Interest credited to account balances ................... 102,640 108,705 113,700
Charges for mortality and administration ................ (10,582) (13,115) (16,585)
(Decrease) increase in traditional life policy reserves ... (3,101) 10,697 2,142
Decrease (increase) in accrued investment income .......... 2,127 (1,538) (4,573)
Policy acquisition costs deferred ......................... (37,999) (36,865) (33,021)
Policy acquisition costs amortized ........................ 26,179 25,930 26,628
Accrual of discounts on investments ....................... (2,818) (3,905) (3,421)
Amortization of premiums on investments .................. 9,138 11,284 9,782
Depreciation and amortization ............................. 3,959 3,748 3,750
Other ..................................................... (8,444) (3,379) (4,225)
-------- ---------- --------
Net cash provided by operating activities ................... 132,604 145,405 131,369
Investing activities
Sale, maturity or repayment of investments:
Fixed maturities available-for-sale ....................... 368,901 870,240 517,480
Fixed maturities held-to-maturity ......................... 124,013 58,874 59,873
Equity securities available-for-sale ...................... 48,495 3,643 10,242
Mortgage loans ............................................ 3,739 12,545 23,248
Real estate ............................................... 946 2,935 3,173
Short-term investments .................................... -- 20,069 229,871
Separate account assets .................................. 9,180 5,214 --
Other invested assets ..................................... 7,865 6,224 22,839
-------- ---------- --------
563,139 979,744 866,726
Acquisition of investments:
Fixed maturities available-for-sale ....................... (219,736) (936,376) (591,121)
Fixed maturities held-to-maturity ......................... (1,188) (52,422) (125,276)
Equity securities available-for-sale ...................... (67,004) (68,222) (7,500)
Mortgage loans ............................................ (1,447) (4,538) (4,179)
Real estate ............................................... (712) (2,637) (1,511)
Short-term investments .................................... -- (19,070) (180,259)
Separate account assets ................................... -- -- (12,000)
Other invested assets ..................................... (7,518) (3,712) (31,861)
-------- ---------- --------
(297,605) (1,086,977) (953,707)
Purchase of property and equipment ........................ (4,144) (1,879) (2,036)
Net increase in policy loans .............................. (8,654) (6,370) (8,058)
-------- ---------- --------
Net cash transferred per coinsurance agreement ............ (218,043) -- (16,295)
-------- ---------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended December 31
1997 1996 1995
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Financing activities
Issuance of long-term debt ...................... $ -- $ 65,000 $ --
Annuity and interest sensitive life products:
Deposits credited to account balances ......... 167,517 202,129 234,321
Withdrawals from account balances ............. (312,228) (305,530) (251,647)
--------- --------- ---------
Net cash used in financing activities ........... (144,711) (38,401) (17,326)
--------- --------- ---------
Increase (decrease) in cash and cash equivalents 22,586 (8,478) 673
Cash and cash equivalents at beginning of year .. 8,310 16,788 16,115
--------- --------- ---------
Cash and cash equivalents at end of year ........ $ 30,896 $ 8,310 $ 16,788
========= ========= =========
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest ...................................... $ 5,307 $ 2,966 $ 120
========= ========= =========
Income taxes .................................. $ 27,920 $ 16,213 $ 11,551
========= ========= =========
Supplemental disclosures of noncash investing
and financing activities
Conversion of mortgage loans to real estate
owned ......................................... $ -- $ 844 $ --
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTSDecember 31, 1997

1. SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Security Benefit Life Insurance Company (SBL or the Company) is a
Kansas-domiciled mutual life insurance company whose insurance operations
are licensed to sell insurance products in 50 states. The Company offers a
diversified portfolio comprised primarily of individual and group annuities
and mutual fund products through multiple distribution channels. In recent
years, the Company's new business activities have increasingly been
concentrated in the individual flexible premium variable annuity markets.

The Company intends to modify its organizational structure by forming a
Kansas mutual holding company to be named Security Benefit Mutual Holding
Company. The Company will convert to a stock life insurance company and
continue to operate under its current name. All capital stock shares of the
reorganized stock life insurance company will be issued to and owned by a
newly created intermediate stock holding company Security Benefit
Corporation. Initially, Security Benefit Mutual Holding Company will own all
of the voting stock of Security Benefit Corporation. Kansas law requires
that Security Benefit Mutual Holding Company hold at least 51% of the
outstanding voting stock of the stock life insurance company (except to the
extent qualifying shares are required by the Kansas Insurance Code to be
held by directors of an insurance company admitted and authorized to do
business in Kansas). The conversion plan is subject to approval of the
Kansas Insurance Department and the policyholders of the Company.

BASIS OF PRESENTATION

The consolidated financial statements include the operations and accounts of
Security Benefit Life Insurance Company and its wholly-owned subsidiaries,
including Security Benefit Group, Inc., First Security Benefit Life
Insurance and Annuity Company of New York, Security Management Company, LLC,
Security Distributors, Inc., Security Benefit Academy, Inc. and Creative
Impressions, Inc. Significant intercompany transactions have been eliminated
in consolidation.

USE OF ESTIMATES

The preparation of consolidated financial statements requires management to
make estimates and assumptions that affect amounts reported in the
consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

INVESTMENTS

Fixed maturities are classified as either held-to-maturity or
available-for-sale. Fixed maturities are classified as held-to-maturity when
the Company has the positive intent and ability to hold the securities to
maturity. Held-to-maturity securities are stated at amortized cost, adjusted
for amortization of premiums and accrual of discounts. Such amortization and
accrual on these securities are included in investment income. Fixed
maturities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale fixed maturities are stated at fair
value with any unrealized gain or loss, net of deferred policy acquisition
costs (DPAC) and deferred income taxes, reported as a separate component of
equity. The DPAC offsets to the unrealized gain or loss represent valuation
adjustments or restatements of DPAC that would have been required as a
charge or credit to operations had such unrealized amounts been realized.
The amortized cost of fixed maturities classified as available-for-sale is
adjusted for amortization of premiums and accrual of discounts. Premiums and
discounts are recognized over the estimated lives of the assets adjusted for
prepayment activity.

Equity securities consisting of common stocks, mutual funds and
nonredeemable preferred stock are classified as available-for-sale and
stated at fair value. Mortgage loans and short-term investments are reported
at amortized cost. Real estate investments are carried at the lower of
depreciated cost or estimated realizable value. Policy loans are reported at
unpaid principal. Investments accounted for by the equity method include
investments in, and advances to, various joint ventures and partnerships.
Realized gains and losses on sales of investments are recognized in revenues
on the specific identification method. The operations of the Company are
subject to risk resulting from interest rate fluctuations to the extent that
there is a difference between the amount of the Company's interest-earning
assets and the amount of interest-bearing liabilities that are
prepaid/withdrawn, mature or reprice in specified periods. The principal
objective of the Company's asset/liability management activities is to
provide maximum levels of net investment income while maintaining acceptable
levels of interest rate and liquidity risk and facilitating the funding
needs of the Company. The Company periodically may use derivative financial
instruments to modify its interest sensitivity to levels deemed to be
appropriate based on the Company's current economic outlook.

Such derivative financial instruments are for purposes other than trading
and classified as available-for-sale in accordance with Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Accordingly, these instruments
are stated at fair value with the change in fair value reported as a
separate component of equity.

DEFERRED POLICY ACQUISITION COSTS

To the extent recoverable from future policy revenues and gross profits,
commissions and other policy-issue, underwriting and marketing costs that
are primarily related to the acquisition or renewal of traditional life
insurance, interest sensitive life and deferred annuity business have been
deferred. Traditional life insurance deferred policy acquisition costs are
being amortized in proportion to premium revenues over the premium-paying
period of the related policies using assumptions consistent with those used
in computing policy benefit reserves.

For interest sensitive life and deferred annuity business, deferred policy
acquisition costs are amortized in proportion to the present value
(discounted at the crediting rate) of expected gross profits from
investment, mortality and expense margins. That amortization is adjusted
retrospectively when estimates of current or future gross profits to be
realized from a group of products are revised.

CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers
certificates of deposits with original maturities of 90 days or less to be
cash equivalents.

PROPERTY AND EQUIPMENT

Property and equipment, including home office real estate, furniture and
fixtures, and data processing hardware and related systems, are recorded at
cost, less accumulated depreciation. The provision for depreciation of
property and equipment is computed using the straight-line method over the
estimated lives of the related assets.

SEPARATE ACCOUNTS

The separate account assets and liabilities reported in the accompanying
balance sheets represent funds that are separately administered for the
benefit of contractholders who bear the investment risk. The separate
account assets and liabilities are carried at fair value. Revenues and
expenses related to separate account assets and liabilities, to the extent
of benefits paid or provided to the separate account contractholders, are
excluded from the amounts reported in the consolidated statements of income.
Investment income and gains or losses arising from separate accounts accrue
directly to the contractholders and are, therefore, not included in
investment earnings in the accompanying statements of income. Revenues to
the Company from the separate accounts consist principally of contract
maintenance charges, administrative fees, and mortality and expense risk
charges.

POLICY RESERVES AND ANNUITY ACCOUNT VALUES

Liabilities for future policy benefits for traditional life and reinsurance
products are computed using a net level premium method, including
assumptions as to investment yields, mortality and withdrawals, and other
assumptions that approximate expected experience.

Liabilities for future policy benefits for interest sensitive life and
deferred annuity products represent accumulated contract values without
reduction for potential surrender charges and deferred front-end contract
charges that are amortized over the life of the policy. Interest on
accumulated contract values is credited to contracts as earned. Crediting
rates ranged from 3.8% to 7.25% during 1997, 3.5% to 7.25% during 1996 and
4% to 7.75% during 1995.

INCOME TAXES

Income taxes have been provided using the liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes." Under that method,
deferred tax assets and liabilities are determined based on differences
between the financial reporting and income tax bases of assets and
liabilities and are measured using the enacted tax rates and laws. Deferred
income tax expenses or credits reflected in the Company's statements of
income are based on the changes in deferred tax assets or liabilities from
period to period (excluding unrealized gains and losses on securities
available-for-sale).

RECOGNITION OF REVENUES

Traditional life insurance products include whole life insurance, term life
insurance and certain annuities. Premiums for these traditional products are
recognized as revenues when due. Revenues from interest sensitive life
insurance products and deferred annuities consist of policy charges for the
cost of insurance, policy administration charges and surrender charges
assessed against contractholder account balances during the period.

RESTRUCTURING EXPENSES

Restructuring expenses include costs relating to the mutual holding company
conversion and termination benefits provided to certain associates under an
early retirement program.

FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

* Cash and cash equivalents: The carrying amounts reported in the balance
sheet for these instruments approximate their fair values.

* Investment securities: Fair values for fixed maturities are based on
quoted market prices, if available. For fixed maturities not actively
traded, fair values are estimated using values obtained from independent
pricing services or estimated by discounting expected future cash flows
using a current market rate applicable to the yield, credit quality and
maturity of the investments. The fair values for equity securities are
based on quoted market prices.

* Mortgage loans and policy loans: Fair values for mortgage loans and
policy loans are estimated using discounted cash flow analyses based on
market interest rates for similar loans to borrowers with similar credit
ratings. Loans with similar characteristics are aggregated for purposes
of the calculations.

* Investment-type contracts: Fair values for the Company's liabilities
under investment-type insurance contracts are estimated using the
assumption reinsurance method, whereby the amount of statutory profit the
assuming company would realize from the business is calculated. Those
amounts are then discounted at a rate of return commensurate with the
rate presently offered by the Company on similar contracts.

* Long-term debt: Fair values for long-term debt are estimated using
discounted cash flow analyses based on current borrowing rates for
similar types of borrowing arrangements.

2. INVESTMENTS

Information as to the amortized cost, gross unrealized gains and losses, and
fair values of the Company's portfolio of fixed maturities and equity
securities at December 31, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
December 31, 1997
-------------------------------------------------
Gross
Amortized Unrealized Unrealized Gross
Cost Gains Losses Fair Value
---------- ---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
AVAILABLE-FOR-SALE
U.S. Treasury securities and obligations of U.S.
government corporations and agencies ................. $ 214,088 $ 3,313 $ -- $ 217,401
Obligations of states and political subdivisions ..... 23,753 1,320 8 25,065
Special revenue and assessment ....................... 255 45 -- 300
Corporate securities ................................. 742,123 27,986 1,674 768,435
Mortgage-backed securities ........................... 510,991 11,429 2,137 520,283
Asset-backed securities .............................. 117,907 1,030 97 118,840
-------------------------------------------------
Totals ............................................... $1,609,117 $45,123 $3,916 $1,650,324
=================================================

Equity securities .................................... $ 109,763 $11,220 $ 475 $ 120,508
=================================================
HELD-TO-MATURITY
Obligations of states and political subdivisions ..... $ 74,802 $ 2,094 $ 30 $ 76,866
Corporate securities ................................. 108,609 5,295 201 113,703
Mortgage-backed securities ........................... 227,131 2,725 364 229,492
Asset-backed securities............................... 41,869 297 1 42,165
Totals ............................................... $ 452,411 $10,411 $ 596 $ 462,226
</TABLE>

<TABLE>
<CAPTION>
December 31, 1996
-------------------------------------------------
Gross
Amortized Unrealized Unrealized Gross
Cost Gains Losses Fair Value
---------- ---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
AVAILABLE-FOR-SALE
U.S. Treasury securities and obligations of U.S. .....
government corporations and agencies ................. $ 173,884 $ 414 $ 1,431 $ 172,867
Obligations of states and political subdivisions ..... 23,244 361 705 22,900
Special revenue and assessment ....................... 330 -- -- 330
Corporate securities ................................. 863,124 13,758 18,651 858,231
Mortgage-backed securities ........................... 627,875 9,091 9,308 627,658
Asset-backed securities .............................. 122,523 832 275 123,080
=================================================
Totals ............................................... $1,810,980 $24,456 $30,370 $1,805,066
=================================================

Equity securities .................................... $ 86,991 $ 2,422 $ 225 $ 89,188

HELD-TO-MATURITY
Obligations of states and political subdivisions ..... $ 81,791 $ 463 $ 1,036 $ 81,218
Special revenue and assessment ....................... 420 -- -- 420
Corporate securities ................................. 128,487 2,003 1,830 128,660
Mortgage-backed securities ........................... 264,155 2,121 1,347 264,929
Asset-backed securities .............................. 53,192 382 97 53,477
-------------------------------------------------
Totals ............................................... $ 528,045 $ 4,969 $ 4,310 $ 528,704
=================================================
</TABLE>

The change in the Company's unrealized gain (loss) on fixed maturities was
$56,277,000, $(51,773,000) and $220,048,000 during 1997, 1996 and 1995,
respectively; the corresponding amounts for equity securities were
$8,588,000, $1,595,000 and $1,034,000 during 1997, 1996 and 1995,
respectively.

The amortized cost and fair value of fixed maturities at December 31, 1997,
by contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Available-For-Sale Held-To-Maturity
----------------------- --------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---------- ---------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Due in one year or less ............. $ 33,328 $ 33,578 $ -- $ --
Due after one year through five years 202,757 206,870 6,821 6,947
Due after five years through 10 years 455,242 466,263 37,726 38,995
Due after 10 years .................. 288,892 304,490 138,864 144,627
Mortgage-backed securities .......... 510,991 520,283 227,131 229,492
Asset-backed securities ............. 117,907 118,840 41,869 42,165
---------- ---------- -------- --------
$1,609,117 $1,650,324 $452,411 $462,226
========== ========== ======== ========
</TABLE>

Major categories of net investment income for the years ended December 31,
1997, 1996 and 1995 are summarized as follows:

1997 1996 1995
--------- -------- --------
(In Thousands)
Interest on fixed maturities ..... $ 167,646 $174,592 $165,684
Dividends on equity securities ... 7,358 5,817 1,309
Interest on mortgage loans ....... 6,017 6,680 7,876
Interest on policy loans ......... 6,282 6,372 5,927
Interest on short-term investments 2,221 1,487 2,625
Other ............................ (166) 4,199 2,740
Total investment income .......... 189,358 199,147 186,161
Investment expenses .............. 4,383 4,364 4,149
----------------------------------
Net investment income ............ $ 184,975 $194,783 $182,012
==================================

Proceeds from sales of fixed maturities and equity securities and related
realized gains and losses, including valuation adjustments, for the years
ended December 31, 1997, 1996 and 1995 are as follows:

1997 1996 1995
-------- -------- --------
(In Thousands)
Proceeds from sales ....... $333,498 $393,189 $310,590
Gross realized gains ...... 11,889 9,407 5,901
Gross realized losses ..... 6,640 9,723 3,361

Net realized gains (losses) for the years ended December 31, 1997, 1996 and
1995 consist of the following:

1997 1996 1995
------- ------- ------
(In Thousands)
Fixed maturities ............... $ 861 $(1,329) $1,805
Equity securities .............. 4,388 1,013 735
Other .......................... (320) 72 1,336
-------------------------------------
Total realized gains (losses) .. $ 4,929 $ (244) $3,876
=====================================

There were no deferred losses at December 31, 1997, and $2.2 million at
December 31, 1996, resulting from terminated and expired futures contracts.
These are included in fixed maturities and amortized as an adjustment to net
investment income. There were no outstanding agreements to sell securities
at December 31, 1997 or 1996.

The composition of the Company's portfolio of fixed maturities by quality
rating at December 31, 1997 is as follows:

Quality Rating Carrying Amount %
------------------------- --------------- ------
(In Thousands)
AAA ..................... $1,024,624 48.73%
AA ...................... 161,469 7.68
A ....................... 396,387 18.85
BBB ..................... 329,371 15.66
Noninvestment grade...... 190,884 9.08
---------- ------
$2,102,735 100.00%
========== ======

The Company has a diversified portfolio of commercial and residential
mortgage loans outstanding in 14 states. The loans are somewhat
geographically concentrated in the midwestern and southwestern United States
with the largest outstanding balances at December 31, 1997 being in the
states of Kansas (31%), Iowa (16%) and Texas (14%).

3. EMPLOYEE BENEFIT PLANS

Substantially all Company employees are covered by a qualified,
noncontributory defined benefit pension plan sponsored by the Company and
certain of its affiliates. Benefits are based on years of service and an
employee's highest average compensation over a period of five consecutive
years during the last 10 years of service. The Company's policy has been to
contribute funds to the plan in amounts required to maintain sufficient plan
assets to provide for accrued benefits. In applying this general policy, the
Company considers, among other factors, the recommendations of its
independent consulting actuaries, the requirements of federal pension law
and the limitations on deductibility imposed by federal income tax law. The
Company records pension cost in accordance with the provisions of SFAS No.
87, "Employers' Accounting for Pensions."

Pension cost for the plan for the years ended December 31, 1997, 1996 and
1995 is summarized below and includes termination benefit costs, a
significant portion of which were reflected as a reduction of the gain
recognized upon the sale of the block of life insurance business described
in Note 4.

1997 1996 1995
------- ------- -------
(In Thousands)
Service cost ................. $ 641 $ 670 $ 528
Interest cost ................ 721 587 508
Actual return on plan assets . (1,892) (1,064) (1,568)
Net amortization and deferral 990 284 900
Termination benefits ......... 1,539 -- --
-----------------------------------
Net pension cost ............. $ 1,999 $ 477 $ 368
===================================

The funded status of the plan as of December 31, 1997 and 1996 was as
follows:

December 31
1997 1996
-------- --------
(In Thousands)
Actuarial present value of benefit obligations:
Vested benefit obligation ................... $ (8,191) $ (6,059)
Non-vested benefit obligation ............... (865) (202)
-----------------------
Accumulated benefit obligation .............. (9,056) (6,261)
Excess of projected benefit obligation
over accumulated benefit obligation ....... (3,431) (2,961)
Projected benefit obligation ................ (12,487) (9,222)
Plan assets, at fair market value ............. 11,279 10,085
-----------------------
Plan assets greater than (less than) projected
benefit obligation .......................... (1,208) 863
Unrecognized net loss ......................... 1,819 1,007
Unrecognized prior service cost ............... 642 700
Unrecognized net asset established at the
date of initial application ................. (1,657) (1,841)
-----------------------
Net (accrued) prepaid pension cost ............ $ (404) $ 729
=======================

Assumptions were as follows:

1997 1996 1995
---- ---- ----
Weighted average discount rate .......................... 7.25% 7.75% 7.5%
Weighted average rate of increase in compensation
for participants age 45 and older ....................... 4.5 4.5 4.5
Weighted average expected long-term return on plan assets 9.0 9.0 9.0

Compensation rates that vary by age for participants under age 45 were used
in determining the actuarial present value of the projected benefit
obligation in 1997. Plan assets are invested in a diversified portfolio of
affiliated mutual funds that invest in equity and debt securities.

In addition to the Company's defined benefit pension plan, the Company
provides certain medical and life insurance benefits to full-time employees
who have retired after the age of 55 with five years of service. The plan is
contributory, with retiree contributions adjusted annually and contains
other cost-sharing features such as deductibles and coinsurance.
Contributions vary based on the employee's years of service earned after age
40. The Company's portion of the costs is frozen after 1996 with all future
cost increases passed on to the retirees. Retirees in the plan prior to July
1, 1993 are covered 100% by the Company.

Retiree medical care and life insurance cost for the total plan for the
years ended December 31, 1997, 1996 and 1995 is summarized below and
includes termination benefit costs, a significant portion of which were
reflected as a reduction of the gain recognized upon the sale of the block
of life insurance business described in Note 4.

1997 1996 1995
----- ---- ----
(In Thousands)
Service cost .................. $ 155 $157 $151
Interest cost ................. 291 280 305
Net amortization .............. (32) -- --
Termination benefits .......... 372 -- --
--------------------------------
$ 786 $437 $456
================================

The funded status of the plan as of December 31, 1997 and 1996 was as
follows:

1997 1996
------- -------
(In Thousands)
Accumulated postretirement benefit obligation:
Retirees ................................... $(2,595) $(2,498)
Active participants:
Retirement eligible ........................ (666) (568)
Others ..................................... (1,100) (1,023)
-----------------------
(4,361) (4,089)
Unrecognized net gain ........................ (692) (348)
-----------------------
Accrued postretirement benefit cost .......... $(5,053) $(4,437)
=======================

The annual assumed rate of increase in the per capita cost of covered
benefits is 9% for 1997 and is assumed to decrease gradually to 5% for 2001
and remain at that level thereafter. The health care cost trend rate has a
significant effect on the amount reported. For example, increasing the
assumed health care cost trend rates by one percentage point each year would
increase the accumulated postretirement benefit obligation as of December
31, 1997 by $201,000 and the aggregate of the service and interest cost
components of net periodic postretirement benefit cost for 1997 by $55,000.

The discount rate used in determining the accumulated postretirement benefit
obligation was 7.25%, 7.75% and 7.5% at December 31, 1997, 1996 and 1995,
respectively.

The Company has a profit-sharing and savings plan for which substantially
all employees are eligible after one year of employment with the Company.
Contributions for profit sharing are based on a formula established by the
Board of Directors with pro rata allocation among employees based on
salaries. The savings plan is a tax-deferred, 401(k) retirement plan.
Employees may contribute up to 10% of their eligible compensation. The
Company matches 50% of the first 6% of the employee contributions. Employee
contributions are fully vested, and Company contributions are vested over a
five-year period. Company contributions to the profit-sharing and savings
plan charged to operations were $1,857,000, $1,783,000 and $1,567,000 for
1997, 1996 and 1995, respectively.

4. REINSURANCE

The Company assumes and cedes reinsurance with other companies to provide
for greater diversification of business, allow management to control
exposure to potential losses arising from large risks, and provide
additional capacity for growth. The Company's maximum retention on any one
life is $500,000. The Company does not use financial or surplus relief
reinsurance. Life insurance in force ceded at December 31, 1997 and 1996 was
$7.4 billion and $4 billion, respectively.

Principal reinsurance transactions for the years ended December 31, 1997,
1996 and 1995 are summarized as follows:

1997 1996 1995
------- ------- ------
(In Thousands)
Reinsurance ceded:
Premiums paid ............ $33,872 $25,442 $5,305
================================
Commissions received ..... $ 4,636 $ 4,669 $ 230
================================
Claim recoveries ......... $14,581 $ 5,235 $3,089
================================

In the accompanying financial statements, premiums, benefits, settlement
expenses and deferred policy acquisition costs are reported net of
reinsurance ceded; policy liabilities and accruals are reported gross of
reinsurance ceded. The Company remains liable to policyholders if the
reinsurers are unable to meet their contractual obligations under the
applicable reinsurance agreements. To minimize its exposure to significant
losses from reinsurance insolvencies, the Company evaluates the financial
condition of its reinsurers and monitors concentrations of credit risk
arising from similar geographic regions, activities or economic
characteristics of reinsurers. At December 31, 1997 and 1996, the Company
had established a receivable totaling $408,096,000 and $92,197,000 for
reserve credits, reinsurance claims and other receivables from its
reinsurers. Substantially all of these receivables are collateralized by
assets of the reinsurers held in trust. The amount of reinsurance assumed is
not significant.

In 1997, the Company transferred, though a 100% coinsurance agreement, $318
million in policy reserves and claim liabilities reduced by a ceding
commission of $63 million and other related items. The agreement related to
a block of universal life and traditional life insurance business. The
Company recorded a pretax gain of $14,625,000 which is deferred in other
liabilities and amortized to income over the estimated life of the business
transferred.

In prior years, the Company was involved in litigation arising out of its
participation from 1986 to 1990 in a reinsurance pool. The litigation
related to the pool manager and a reinsurance intermediary placing major
medical business in the pool without authorization. During 1993, the Company
settled the major medical portion of the pool's activity with no significant
adverse effect on the Company. The nonmajor medical business placed in the
pool has experienced significant losses. At December 31, 1997, the Company
believes adequate provision has been made for such losses.

5. INCOME TAXES

The Company files a life/nonlife consolidated federal income tax return. The
provision for income taxes includes current federal income tax expense or
benefit and deferred income tax expense or benefit due to temporary
differences between the financial reporting and income tax bases of assets
and liabilities. Such differences relate principally to liabilities for
future policy benefits and accumulated contract values, deferred
compensation, deferred policy acquisition costs, postretirement benefits,
deferred selling commissions, depreciation expense and unrealized gains
(losses) on securities available-for-sale.

Income tax expense consists of the following for the years ended December
31, 1997, 1996 and 1995:

1997 1996 1995
-------- ------- -------
(In Thousands)
Current ........... $ 32,194 $12,528 $15,200
Deferred .......... (10,627) 8,343 2,727
-------------------------------------------
$ 21,567 $20,871 $17,927
===========================================

The provision for income taxes differs from the amount computed at the
statutory federal income tax rate due primarily to dividends received
deductions and tax credits.

Net deferred tax assets or liabilities consist of the following:

December 31
--------------------
1997 1996
------- -------
(In Thousands)
Deferred tax assets:
Future policy benefits .......................... $ 9,869 $20,487
Net unrealized depreciation on securities
available-for-sale ............................ -- 1,409
Guaranty fund assessments ....................... 1,250 1,400
Employee benefits ............................... 6,487 4,852
Deferred gain on coinsurance agreement .......... 4,970 --
Other ........................................... 7,497 4,620
---------------------
Total deferred tax assets .......................... 30,073 32,768
Deferred tax liabilities:
Deferred policy acquisition costs ............... 53,173 69,647
Net unrealized appreciation on securities
available-for-sale ............................ 18,115 --
Deferred gain on investments .................... 8,378 10,446
Depreciation .................................... 1,935 2,061
Other ........................................... 6,733 5,461
---------------------
Total deferred tax liabilities ..................... 88,334 87,615
---------------------
Net deferred tax liabilities ....................... $58,261 $54,847
=====================

6. CONDENSED FAIR VALUE INFORMATION

SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosures of fair value information about financial instruments,
whether recognized or not recognized in a company's balance sheet, for which
it is practicable to estimate that value. The methods and assumptions used
by the Company to estimate the following fair value disclosures for
financial instruments are set forth in Note 1.

SFAS No. 107 excludes certain insurance liabilities and other nonfinancial
instruments from its disclosure requirements. However, the liabilities under
all insurance contracts are taken into consideration in the Company's
overall management of interest rate risk that minimizes exposure to changing
interest rates through the matching of investment maturities with amounts
due under insurance contracts. The fair value amounts presented herein do
not include an amount for the value associated with customer or agent
relationships, the expected interest margin (interest earnings in excess of
interest credited) to be earned in the future on investment-type products or
other intangible items. Accordingly, the aggregate fair value amounts
presented herein do not necessarily represent the underlying value of the
Company; likewise, care should be exercised in deriving conclusions about
the Company's business or financial condition based on the fair value
information presented herein.

<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
----------------------- -----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Investments:
Mortgage loans ................. $ 64,251 $ 66,454 $ 66,611 $ 69,004
Policy loans ................... 85,758 85,993 106,822 108,685
Liabilities:
Supplementary contracts
without life contingencies ... 29,890 30,189 33,225 33,803
Individual and group annuities.. 1,894,605 1,713,509 1,942,697 1,767,692
Long-term debt ................. 65,000 71,793 65,000 67,683
</TABLE>

7. COMMITMENTS AND CONTINGENCIES

The Company leases various equipment under several operating lease
agreements. Total expense for all operating leases amounted to $1,018,000,
$1,108,000 and $802,000 for the years ended December 31, 1997, 1996 and
1995, respectively. The Company has aggregate future lease commitments at
December 31, 1997 of $3,906,000 for noncancelable operating leases
consisting of $1,158,000 in 1998, $1,026,000 in 1999, $940,000 in 2000,
$782,000 in 2001. There are no noncancelable lease commitments beyond 2001.

In 2001, under the terms of one of the operating leases, the Company has the
option to renew the lease for another five years, purchase the asset for
approximately $4.7 million, or return the asset to the lessor and pay a
termination charge of approximately $3.7 million.

In connection with its investments in low income housing partnerships, the
Company is committed to invest additional capital of $4,008,000 and
$9,190,000 in 1998 and 1999, respectively.

Guaranty fund assessments are levied on the Company by life and health
guaranty associations in most states in which it is licensed to cover losses
of policyholders of insolvent or rehabilitated insurers. In some states,
these assessments can be partially recovered through a reduction in future
premium taxes. The Company cannot predict whether and to what extent
legislative initiatives may affect the right to offset. Based on information
from the National Organization of Life and Health Guaranty Association and
information from the various state guaranty associations, the Company
believes that it is probable that these insolvencies will result in future
assessments. The Company regularly evaluates its reserve for these
insolvencies and updates its reserve based on the Company's interpretation
of information recently received. The associated costs for a particular
insurance company can vary significantly based on its premium volume by line
of business in a particular state and its potential for premium tax offset.
The Company accrued no additional reserves for these insolvencies in 1997.
Additional accruals in the amount of $1,574,000 and $2,302,000 were recorded
during 1996 and 1995, respectively. At December 31, 1997, the Company has
reserved $3,573,000 to cover current and estimated future assessments, net
of related premium tax credits.

8. LONG-TERM DEBT AND OTHER BORROWINGS

The Company has a $61.5 million line of credit facility from the Federal
Home Loan Bank of Topeka. Any borrowings in connection with this facility
bear interest at .1% over the Federal Funds rate. No amounts were
outstanding at December 31, 1997 and 1996.

In February 1996, the Company negotiated three separate $5 million advances
with the Federal Home Loan Bank of Topeka. The advances are due February 27,
1998, February 26, 1999 and February 28, 2001 and carry interest rates of
5.59%, 5.76% and 6.04%, respectively.

In May 1996, the Company issued $50 million of 8.75% surplus notes maturing
on May 15, 2016. The surplus notes were issued pursuant to Rule 144A under
the Securities Act of 1933. The surplus notes have repayment conditions and
restrictions whereby each pay ment of interest on or principal of the
surplus notes may be made only with the prior approval of the Kansas
Insurance Commissioner and only out of surplus funds that the Kansas
Insurance Commissioner determines to be available for such payment under the
Kansas Insurance Code.

9. RELATED PARTY TRANSACTIONS

The Company owns shares of mutual funds managed by Security Management
Company, LLC with net asset values totaling $85,950,000 and $60,559,000 at
December 31, 1997 and 1996, respectively.

10. ASSETS HELD IN SEPARATE ACCOUNTS

Separate account assets were as follows:

December 31
1997 1996
---------- ----------
(In Thousands)
Premium and annuity considerations for the
variable annuity products and variable universal
life product for which the contractholder, rather
than the Company, bears the investment risk ..... $3,716,639 $2,793,911

Assets of the separate accounts owned
by the Company, at fair value ................... -- 9,016
-----------------------
$3,716,639 $2,802,927
=======================

11. STATUTORY INFORMATION

The Company and its insurance subsidiary prepare statutory-basis financial
statements in accordance with accounting practices prescribed or permitted
by the Kansas and New York Insurance regulatory authorities, respectively.
Accounting practices used to prepare statutory-basis financial statements
for regulatory filings of life insurance companies differ in certain
instances from generally accepted accounting principles (GAAP). Prescribed
statutory accounting practices include a variety of publications of the
National Association of Insurance Commissioners, as well as state laws,
regulations and general administrative rules. Permitted statutory accounting
practices encompass all accounting practices not so prescribed; such
practices may differ from state to state, may differ from company to company
within a state and may change in the future. Statutory capital and surplus
of the insur ance operations are $382,005,000 and $286,689,000 at December
31, 1997 and 1996, respectively.

12. IMPACT OF YEAR 2000 (UNAUDITED)

Some of the Company's computer systems were written using two digits rather
than four to define the applicable year. As a result, those computer systems
will not recognize the year 2000 which, if not corrected, could cause
disruptions of operations, including, among other things, an inability to
process transactions or engage in similar normal business activities.

The Company has completed an assessment of its systems which will need to be
modified or replaced to function properly in the year 2000. Based on this
assessment, the Company does not believe that the costs to complete such
system modifications or replacements will be material to the Company's
financial statements. The Company has been in the process of converting
existing products to a new administration system during the past few years,
and all new products during this conversion period have been placed on the
new system.

The modification or replacement of the Company's computer systems not
currently year 2000 ready is estimated to be completed not later than March
31, 1999, which is prior to any anticipated impact on its operating systems.
The Company believes that with modifications to existing software and
conversions to new software, the year 2000 issue will not pose significant
operational problems for its computer systems. However, if such
modifications and conversions are not made or are not completed timely, the
year 2000 issue could have a material impact on the operations of the
Company.

The Company has initiated formal communications with significant third
parties which provide the Company with information to determine the extent
to which the Company's interface systems are vulnerable to those third
parties' failure to solve their own year 2000 issues. There is no guarantee
that the systems of other companies on which the Company's systems rely will
be timely converted and would not have an adverse effect on the Company's
systems. However, third-party vendors of the Company's primary adminis
trative systems have represented to the Company that the systems are or will
be year 2000 ready.

The costs of the project and the date on which the Company believes it will
complete the year 2000 modifications are based on management's estimates,
which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources and other factors.
However, there can be no guarantee that these estimates will be achieved,
and actual results could differ materially from those anticipated. Specific
factors that might cause such material differences include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to convert to year 2000 ready systems and similar uncertainties.
<PAGE>
PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

All required financial statements are included in Part B of this
Registration Statement.

(b) Exhibits

(1) Certified Resolution of the Board of Directors of Security
Benefit Life Insurance Company ("SBL") authorizing
establishment of the Separate Account

(2) Not Applicable

(3) Amended and Restated Distribution Agreement

(4) (a) Individual DVA Contract (Form V6021 R8-98)
(b) Individual IVA Contract (Form V6027 8-98)
(c) TSA Loan Endorsement (Form V6846 R1-97)(a)
(d) SIMPLE IRA Endorsement (Form 4453C-5S 2-97)(a)
(e) IRA Endorsement (Form V6842A 1-97)(a)
(f) TSA Endorsement (Form V6832A R9-96)(a)
(g) Roth IRA Endorsement (Form V6851 10-97)(b)
(h) 457 Endorsement (Form V6054 1-98)(c)
(i) Options 8&9 Endorsement (Form V6056 8-98)

(5) (a) DVA Application (Form V6844 R1-98)
(b) IVA Application (Form V7588 8-98)

(6) (a) Composite of Articles of Incorporation of SBL(d)
(b) Bylaws of SBL(d)

(7) Not Applicable

(8) (a) Amended and Restated Participation Agreement
(b) Amended and Restated Master Agreement

(9) Opinion of Counsel

(10) Consent of Independent Auditors

(11) Not Applicable

(12) Not Applicable

(13) Schedule of Computation of Performance

(14) Powers of Attorney of Thomas R. Clevenger,
Sister Loretto Marie Colwell, John C. Dicus,
Steven J. Douglass, Howard R. Fricke, William W.
Hanna, John E. Hayes, Jr., Laird G. Noller,
Frank C. Sabatini, and Robert C. Wheeler

(a) Incorporated herein by reference to the Exhibits filed with the
Registrant's Post-Effective Amendment No. 6 under the Securities Act of
1933 and Amendment No. 7 under the Investment Company Act of 1940 to
Registration Statement No. 33-83238 (April 30, 1997).

(b) Incorporated herein by reference to the Exhibits filed with the Variflex
Separate Account Post-Effective Amendment No. 19 under the Securities Act
of 1933 and Amendment No. 18 under the Investment Company Act of 1940 to
Registration Statement No. 2-89328 (April 30, 1998).

(c) Incorporated herein by reference to the Exhibits filed with the
Registrant's Post-Effective Amendment No. 7 under the Securities Act of
1933 and Amendment No. 8 under the Investment Company Act of 1940 to
Registration Statement No. 33-83238 (April 30, 1998).

(d) Incorporated herein by reference to the Exhibits filed with the Variflex
Separate Account Post-Effective Amendment No. 20 under the Securities Act
of 1933 and Amendment No. 19 under the Investment Company Act of 1940 to
Registration Statement No. 2-89328 (August 17, 1998).
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

NAME AND PRINCIPAL
BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR
------------------ -------------------------------------

Howard R. Fricke* Chairman of the Board, Chief
Executive Officer and Director

Thomas R. Clevenger Director
P.O. Box 8514
Wichita, Kansas 67208

Sister Loretto Marie Colwell Director
1700 SW 7th Street
Topeka, Kansas 66044

John C. Dicus Director
700 Kansas Avenue
Topeka, Kansas 66603

Steven J. Douglass Director
3231 E. 6th Street
Topeka, Kansas 66607

William W. Hanna Director
P.O. Box 2256
Wichita, KS 67201

John E. Hayes, Jr. Director
P.O. Box 889
Topeka, Kansas 66601

Laird G. Noller Director
2245 Topeka Avenue
Topeka, Kansas 66611

Frank C. Sabatini Director
120 SW 6th Street
Topeka, Kansas 66603

Robert C. Wheeler Director
P.O. Box 148
Topeka, Kansas 66601

Donald J. Schepker* Senior Vice President, Chief
Financial Officer and Treasurer

Kris A. Robbins* President and Chief
Operating Officer

Roger K. Viola* Senior Vice President,
General Counsel and Secretary

Malcolm E. Robinson* Senior Vice President and
Assistant to the Chairman and CEO

Richard K Ryan* Senior Vice President

John D. Cleland Senior Vice President

Terry A. Milberger Senior Vice President

Venette K. Davis Senior Vice President

J. Craig Anderson Senior Vice President

Gregory Garvin Senior Vice President

Amy J. Lee* Associate General Counsel
and Vice President

James R. Schmank* Senior Vice President

Tom Swank Vice President
and Chief Investment Officer

*Located at 700 Harrison Street, Topeka, Kansas 66636.

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT

The Depositor, Security Benefit Life Insurance Company ("SBL"), is
controlled by Security Benefit Corp. through the ownership of 700,000
of SBL's 700,010 issued and outstanding shares of common stock. One
share each of SBL's issued and outstanding common stock is owned by
each director of SBL, in accordance with the requirements of Kansas
law. Security Benefit Corp. is wholly-owned by Security Benefit Mutual
Holding Company ("SBMHC"), which in turn is controlled by SBL
policyholders. No one person holds more than approximately 0.0004% of
the voting power of SBL. The Registrant is a segregated asset account
of SBL.

The following chart indicates the persons controlled by or under common
control with T. Rowe Price Variable Annuity Account or SBL:

PERCENT OF
JURISDICTION OF VOTING SECURITIES
NAME INCORPORATION OWNED BY SBL

Security Benefit Life Kansas ----
Insurance Company
Stock Life Insurance Company)

Security Benefit Group, Inc. Kansas 100%
(Holding Company)

Security Management Kansas 100%
Company, LLC
(Investment Adviser)

Security Distributors, Inc. Kansas 100%
(Broker/Dealer, Principal Underwriter
Underwriter of Mutual Funds)

Security Benefit Academy, Inc. Kansas 100%
(Daycare Company)

Creative Impressions, Inc. Kansas 100%
(Advertising Agency)

First Advantage Insurance Kansas 100%
Agency, Inc.

First Security Benefit Life New York 100%
Insurance and Annuity Company
of New York

SBL is also the depositor of the following separate accounts: SBL
Variable Annuity Accounts I, III, IV, VIII and X, Variflex Separate
Account, SBL Variable Life Insurance Account Varilife, Security
Varilife Separate Account and Parkstone Variable Annuity Separate
Account.

Through the above-referenced separate accounts, SBL might be deemed to
control the open-end management investment companies listed below. The
approximate percentage of ownership by the separate accounts for each
company is as follows:

Security Ultra Fund 32.0% SBL Fund 100%
Security Growth and Income Fund 39.4%

ITEM 27. NUMBER OF CONTRACT OWNERS

As of January 31, 1999, there were 4,287 owners of T. Rowe Price
Variable Annuity Contracts.

ITEM 28. INDEMNIFICATION

The bylaws of Security Benefit Life Insurance Company provide that the
Company shall, to the extent authorized by the laws of the State of
Kansas, indemnify officers and directors for certain liabilities
threatened or incurred in connection with such person's capacity as
director or officer.

The Articles of Incorporation include the following provision:

A Director shall not be personally liable to the Corporation or to
its policyholders for monetary damages for breach of fiduciary duty
as a director, provided that this sentence shall not eliminate nor
limit the liability of a director

A. for any breach of his or her duty of loyalty to the Corporation
or its policyholders;

B. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;

C. under the provisions of K.S.A. 17-6424 and amendments thereto;
or

D. for any transaction from which the director derived an improper
personal benefit.

This Article Eighth shall not eliminate or limit the liability of a
director for any act or omission occurring prior to the date this
Article Eighth becomes effective.

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

ITEM 29. PRINCIPAL UNDERWRITER

(a) T. Rowe Price Investment Services, Inc. ("Investment Services"), a
Maryland corporation formed in 1980 as a wholly-owned subsidiary
of T. Rowe Price Associates, Inc., serves as the distributor of
the T. Rowe Price Variable Annuity Account contracts. Investment
Services receives no compensation for distributing the Contracts.
Investment Services also serves as principal underwriter for the
following investment companies:

T. Rowe Price Growth Stock Fund, Inc.; T. Rowe Price New Horizons
Fund, Inc.; T. Rowe Price New Era Fund, Inc.; T. Rowe Price New
Income Fund, Inc.; T. Rowe Price Growth & Income Fund, Inc.; T.
Rowe Price Prime Reserve Fund, Inc. (which includes T. Rowe Price
Prime Reserve Fund - PLUS class); T. Rowe Price Tax-Free Income
Fund, Inc.; T. Rowe Price Tax-Exempt Money Fund, Inc. (which
includes T. Rowe Price Tax-Exempt Money Fund - PLUS class); T.
Rowe Price Short-Term Bond Fund, Inc.; T. Rowe Price Tax-Free
Intermediate Bond Fund, Inc.; T. Rowe Price Tax-Free
Short-Intermediate Fund, Inc.; T. Rowe Price High Yield Fund,
Inc.; T. Rowe Price Tax-Free High Yield Fund, Inc.; T. Rowe Price
GNMA Fund; T. Rowe Price Equity Income Fund; T. Rowe Price New
America Growth Fund; T. Rowe Price Capital Appreciation Fund; T.
Rowe Price Capital Opportunity Fund, Inc.; T. Rowe Price Science &
Technology Fund, Inc.; T. Rowe Price Health Science Fund, Inc.; T.
Rowe Price Small-Cap Value Fund, Inc.; T. Rowe Price U.S. Treasury
Funds, Inc. (which includes U.S. Treasury Money Fund, U.S.
Treasury Intermediate Fund and U.S. Treasury Long-Term Fund); T.
Rowe Price State Tax-Free Income Trust (which includes Maryland
Tax-Free Bond Fund, New York Tax-Free Bond Fund, New York Tax-Free
Money Fund, Virginia Short-Term Tax-Free Bond Fund, Virginia
Tax-Free Bond Fund, New Jersey Tax-Free Bond Fund, Georgia
Tax-Free Bond Fund, Florida Intermediate Tax-Free Fund, and
Maryland Short-Term Tax-Free Bond Fund); T. Rowe Price California
Tax-Free Income Trust (which includes California Tax-Free Bond
Fund and California Tax-Free Money Fund); T. Rowe Price Index
Trust, Inc. (which includes the T. Rowe Price Equity Index 500
Fund, T. Rowe Price Extended Equity Market Index Fund and T. Rowe
Price Total Equity Market Index Fund); T. Rowe Price Spectrum
Fund, Inc. (which includes the Spectrum Growth Fund, Spectrum
International Fund and Spectrum Income Fund); T. Rowe Price
Short-Term U.S. Government Fund, Inc.; T. Rowe Price Value Fund,
Inc.; T. Rowe Price Balanced Fund, Inc.; T. Rowe Price Mid-Cap
Growth Fund, Inc.; T. Rowe Price Small Cap Stock Fund, Inc.
(formerly known as T. Rowe Price OTC Fund); T. Rowe Price Blue
Chip Growth Fund, Inc.; T. Rowe Price Dividend Growth Fund, Inc.;
T. Rowe Price Summit Funds, Inc. (which includes T. Rowe Price
Summit Cash Reserves Fund, T. Rowe Price Summit Limited-Term Bond
Fund and T. Rowe Price Summit GNMA Fund); T. Rowe Price Summit
Municipal Funds, Inc. (which includes T. Rowe Price Summit
Municipal Money Market Fund, T. Rowe Price Summit Municipal
Intermediate Fund, T. Rowe Price Summit Municipal Income Fund); T.
Rowe Price Corporate Income Fund, Inc.; T. Rowe Price Equity
Series, Inc., (which includes T. Rowe Price Equity Income
Portfolio, T. Rowe Price New America Growth Portfolio, T. Rowe
Price Mid-Cap Growth Portfolio and T. Rowe Price Personal Strategy
Balanced Portfolio); T. Rowe Price Fixed Income Series, Inc.
(which includes T. Rowe Price Limited-Term Bond Portfolio and T.
Rowe Price Prime Reserve Portfolio); T. Rowe Price International
Series, Inc. (which includes T. Rowe Price International Stock
Portfolio); T. Rowe Price Personal Strategy Funds, Inc. (which
includes T. Rowe Price Personal Strategy Income Fund, T. Rowe
Price Personal Strategy Balanced Fund and T. Rowe Price Personal
Strategy Growth Fund); T. Rowe Price International Funds, Inc.
(which includes the T. Rowe Price International Stock Fund, T.
Rowe Price International Bond Fund, T. Rowe Price International
Discovery Fund, T. Rowe Price European Stock Fund, T. Rowe Price
New Asia Fund, T. Rowe Price Global Bond Fund, T. Rowe Price Japan
Fund, T. Rowe Price Latin America Fund, T. Rowe Price Emerging
Markets Stock Fund, T. Rowe Price Global Stock Fund, and T. Rowe
Price Emerging Markets Bond Fund); Frank Russell Investment
Securities Fund; the RPF International Bond Fund; the
Institutional International Funds, Inc. (which includes the
Foreign Equity Fund); T. Rowe Price Diversified Small-Cap Growth
Fund, Inc; T. Rowe Price Financial Services Fund, Inc.; T. Rowe
Price Media & Telecommunications Fund, Inc.; T. Rowe Price Mid-Cap
Value Fund, Inc.; T. Rowe Price Real Estate Fund, Inc.; T. Rowe
Price Tax-Efficient Balanced Fund, Inc.; Reserved Investment
Funds, Inc. (which includes Reserve Investment Fund and Government
Reserve Investment Fund); Institutional Equity Funds, Inc.
(which includes Mid-Cap Equity Growth Fund).

(b) NAME AND PRINCIPAL POSITION AND OFFICES
BUSINESS ADDRESS* WITH UNDERWRITER
------------------ ------------------
James S. Riepe Chairman of the Board of Directors
Patricia M. Archer Vice President
Edward C. Bernard President and Director
Joseph C. Bonasorte Vice President
Darrell N. Braman Vice President
Ronae M. Brock Vice President
Meredith C. Callanan Vice President
Ann R. Campbell Vice President
Christine M. Carolan Vice President
Joseph A. Carrier Vice President
Laura H. Chasney Vice President
Renee M. Christoff Vice President
Christopher W. Dyer Vice President
Christine Fahlund Vice President
Forrest R. Foss Vice President
Thomas A. Gannon Vice President
Andrea G. Griffin Vice President
Douglas E. Harrison Vice President
David J. Healy Vice President
Joseph P. Healy Vice President
Walter J. Helmlinger Vice President
Henry H. Hopkins Vice President and Director
Eric G. Knauss Vice President
Valerie King-Calloway Vice President
Sharon R. Krieger Vice President
Jeanette M. LeBlanc Vice President
Keith Wayne Lewis Vice President
Kim Lewis-Collins Vice President
Sarah McCafferty Vice President
Maurice Albert Minerbi Vice President
Mark Mitchell Vice President
Nancy M. Morris Vice President
George A. Murnaghan Vice President
Steven E. Norwitz Vice President
Kathleen M. O'Brien Vice President
Barbara O'Connor Vice President and Controller
David Oestreicher Vice President
Robert Petrow Vice President
Pamela D. Preston Vice President
George D. Riedel Vice President
Lucy Beth Robins Vice President
John Richard Rockwell Vice President
Kenneth J. Rutherford Vice President
Kristin E. Seeberger Vice President
Donna B. Singer Vice President
Charles E. Vieth Vice President and Director
William F. Wendler, II Vice President
Jane F. White Vice President
Thomas R. Woolley Vice President
Alvin M. Younger, Jr. Treasurer and Secretary

*Unless otherwise indicated, the business address of each of
Investment Services' officers and directors is 100 East Pratt
Street, Baltimore, Maryland 21202.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts and records required to be maintained by Section 31(a) of
the 1940 Act and the rules under it are maintained by SBL at its
administrative offices--700 Harrison Street, Topeka, Kansas 66636-0001.

ITEM 31. MANAGEMENT SERVICES

All management contracts are discussed in Part A or Part B.

ITEM 32. UNDERTAKINGS

(a) Registrant undertakes that it will file a post-effective amendment
to this Registration Statement as frequently as necessary to
ensure that the audited financial statements in the Registration
Statement are never more than sixteen (16) months old for so long
as payments under the Variable Annuity contracts may be accepted.

(b) Registrant undertakes that it will provide, as a part of the
Application Kit, a box for the applicant to check if he or she
wishes to receive a copy of the Statement of Additional
Information.

(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this Form promptly upon written or oral request to
SBL at the address or phone number listed in the prospectus.

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

(e) Depositor represents that the fees and charges deducted under the
contract, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the
risks assumed by the Depositor.
<PAGE>
SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has caused this Registration Statement to be signed on its
behalf, in the City of Topeka, and State of Kansas on this 5th day of February,
1999.

SIGNATURES AND TITLES
- ---------------------

Howard R. Fricke SECURITY BENEFIT LIFE INSURANCE COMPANY
Director, President and (THE DEPOSITOR)
Chief Executive Officer
By: ROGER K. VIOLA
Thomas R. Clevenger -----------------------------------------
Director Roger K. Viola, Senior Vice President,
General Counsel and Secretary as
Sister Loretto Marie Colwell Attorney-In-Fact for the Officers and
Director Directors Whose Names Appear Opposite

John C. Dicus
Director T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
(THE REGISTRANT)
Steven J. Douglass
Director By: SECURITY BENEFIT LIFE INSURANCE COMPANY
(THE DEPOSITOR)
William W. Hanna
Director By: HOWARD R. FRICKE
-----------------------------------------
John E. Hayes, Jr. Howard R. Fricke, Chairman of the Board,
Director President, Chief Executive Officer and
Director
Laird G. Noller
Director
By: DONALD J. SCHEPKER
Frank C. Sabatini -----------------------------------------
Director Donald J. Schepker, Senior Vice President
Chief Financial Officer and Treasurer
Robert C. Wheeler
Director
(ATTEST): ROGER K. VIOLA
------------------------------------
Roger K. Viola, Senior Vice
President, General Counsel and
Secretary

Date: February 5, 1999
<PAGE>
EXHIBIT INDEX

(1) Certified Resolution of the Board of Directors of Security Benefit Life
Insurance Company ("SBL") authorizing establishment of the Separate
Account.

(2) None

(3) Amended and Restated Distribution Agreement

(4) (a) Individual DVA Contract (Form V6021 R8-98)
(b) Individual IVA Contract (Form V6027 8-98)
(i) Options 8 and 9 Endorsement (Form V6056 8-98)

(5) (a) DVA Application (Form V6844 R1-98)
(b) IVA Application (Form 7588 8-98)

(6) (a) None
(b) None

(7) None

(8) (a) Amended and Restated Participation Agreement
(b) Amended and Restated Master Agreement

(9) Opinion of Counsel

(10) Consent of Independent Auditors

(11) None

(12) None

(13) Schedule of Computation of Performance

(14) Powers of Attorney of Thomas R. Clevenger, Sister Loretto Marie Colwell,
John C. Dicus, Steven J. Douglass, Howard R. Fricke, William W. Hanna,
John E. Hayes, Jr., Laird G. Noller, Frank C. Sabatini, and Robert C.
Wheeler

<PAGE>
RESOLUTION TO ESTABLISH SEPARATE ACCOUNT

RESOLVED, that Security Benefit Life Insurance Company ("SBL") shall establish a
separate account in accordance with and under the provisions of Sections 40-436
and 40-437 of the Kansas Statutes Annotated, such separate account to be known
as the SBL Variable Annuity Account VII, or such other appropriate designation
as may be determined by the appropriate officers of SBL (hereinafter referred to
as the "Account"), and that hereafter the Account shall be deemed to be and
shall be established as a separate account in accordance with and under the
provisions of said Sections 40-436 and 40-437 as heretofore or hereafter
amended.

FURTHER RESOLVED, that variable annuity contracts, including group contracts
(which shall provide that part or all of the benefits and payments thereunder
will reflect the investment experience of SBL Fund or of another investment
company established to fund variable annuity or variable life insurance
contracts) are hereby approved and adopted for use by SBL, such contracts to
contain the terms and conditions which the appropriate officers of SBL shall
deem necessary, prudent and in the best interests of SBL.

FURTHER RESOLVED, that such variable annuity contracts shall be issued and
established in as many Series as the appropriate officers of SBL may, from time
to time, deem necessary to establish.

FURTHER RESOLVED, that in accordance with Section 40-436(c) of the Kansas
Statutes Annotated, the income, if any, and gains and losses, whether realized
or unrealized, from assets allocated to each Account, shall be, in accordance
with the applicable contract, credited to or charged against the Account without
regard to other income, gains or losses of SBL.

FURTHER RESOLVED, that the appropriate officers of SBL be, and they hereby are,
authorized and directed to do any and all things necessary to:

(a) Register each Account as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), as amended;

(b) Register the variable annuity contracts, in such amounts as the appropriate
officers of SBL shall from time to time deem necessary or in an indefinite
amount under the Securities Act of 1933 (the "1933 Act"); and

(c) Take all other action necessary to comply with the 1940 Act, the Securities
Exchange Act of 1934 (the "1934 Act") and the 1933 Act, including without
limitation, the filing of an application or applications for exemptions
from the 1940 Act as the appropriate officers of SBL or as counsel shall
deem necessary or advisable.

FURTHER RESOLVED, that the President of the Company, or in his absence, a Senior
Vice President, be and each of them is hereby authorized, empowered and directed
to sign a form of Notification of Registration under the 1940 Act, and such
Registration Statement as may be required by the 1940 Act and the 1933 Act, in
the name of the Account by SBL as sponsor and depositor, and that the
appropriate officers of SBL be, and they hereby are, fully authorized, empowered
and directed to execute and cause to be filed for and on behalf of the Account
and SBL said Notification of Registration and said Registration Statement, and
that the appropriate officers of SBL be, and they hereby are, fully authorized
and empowered to execute and cause to be filed, for and on behalf of the Account
and SBL, and the President and each Senior Vice President of SBL is hereby fully
authorized and empowered to execute in the name of the Account and SBL, such
amendments to, and such instruments, exhibits and documents in connection with,
said Notification of Registration and Registration Statement, as they, or any of
them, may, upon advice of counsel, deem necessary or advisable.

CERTIFICATION

The undersigned hereby certifies that he is the duly elected Senior Vice
President, Secretary and General Counsel of SECURITY BENEFIT LIFE INSURANCE
COMPANY, a corporation organized and existing under the laws of the State of
Kansas. The Executive Committee of the Board of Directors of said SECURITY
BENEFIT LIFE INSURANCE COMPANY did hereby adopt the aforesaid stated resolution
at their meeting held March 28, 1994:

Dated this 1st day of August, 1994.

ROGER K. VIOLA
------------------------------
Roger K. Viola
Senior Vice President,
Secretary and General Counsel

<PAGE>
AMENDED AND RESTATED

DISTRIBUTION AGREEMENT

BETWEEN

SECURITY BENEFIT LIFE INSURANCE COMPANY

AND

T. ROWE PRICE INVESTMENT SERVICES, INC.

THIS DISTRIBUTION AGREEMENT, made as of the 25th day of April, 1995, amended
and restated as of May 1, 1998, by and between SECURITY BENEFIT LIFE INSURANCE
COMPANY ("INSURER"), a life insurance company organized under the laws of the
State of Kansas, for itself and on behalf of the T. Rowe Price Variable Annuity
Account (the "SEPARATE ACCOUNT"), a separate account established and maintained
by Insurer under the laws of the State of Kansas, and T. ROWE PRICE INVESTMENT
SERVICES, INC., a corporation organized and existing under the laws of the State
of Maryland ("UNDERWRITER").

WITNESSETH:

WHEREAS, the Separate Account has been established by Insurer to support a
certain class of variable annuity contracts issued by Insurer;

WHEREAS, the Separate Account has been registered as a unit investment trust
under the federal Investment Company Act of 1940, as amended ("ICA-40");

WHEREAS, the Separate Account is sub-divided into various subaccounts (the
"SUBACCOUNTS");

WHEREAS, certain companies registered as open-end management investment
companies under ICA-40 will serve as the underlying investment vehicles for the
Separate Account;

WHEREAS, such investment companies are authorized to issue shares of capital
stock ("Shares") in separate series, with each such series representing the
interests in a separate portfolio of securities and other assets;

WHEREAS, each subaccount will purchase Shares of a corresponding investment
company;

WHEREAS, Underwriter is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, ("SEA-34") and is a member of the National
Association of Securities Dealers, Inc.("NASD");

WHEREAS, Underwriter, together with T. Rowe Price Insurance Agency, Inc.
(the "AGENCY"), an insurance agency that is affiliated with Underwriter, desire
to distribute the variable annuity contracts supported by the Separate Account
and offered by Insurer; and

WHEREAS, Insurer desires to issue such variable annuity contracts described
more fully below to the public through Underwriter acting as the principal
underwriter and the Agency acting as the insurance agency for such contracts;

NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:

1. ADDITIONAL DEFINITIONS

(a) AFFILIATE -- With respect to a person, any other person controlling,
controlled by, or under common control with, such person.

(b) APPLICATION -- An application for a Contract and any other forms
required to be completed before a Contract is issued.

(c) CONTRACTS -- The class or classes of variable annuity contracts set
forth on SCHEDULE 1 to this Agreement as in effect at the Effective
Date, and such other classes of variable insurance products that may be
added to SCHEDULE 1 from time to time in accordance with Section 18 of
this Agreement, and including any riders to such Contracts and any
other contracts offered in connection therewith. For purposes of
Sections 3 and 14 of this Agreement, Contracts shall include Premiums
for the Contracts.

(d) CUSTOMER SERVICE CENTER -- P.O. Box 750440, Topeka, Kansas 66675, or
such other location as may be designated in writing from time to time
by Insurer.

(e) DISTRIBUTOR -- A person registered as a broker-dealer and licensed as a
life insurance agent or affiliated with a person so licensed, who in
the future will be authorized to distribute the Contracts under
arrangements that the parties may subsequently agree to as described in
Section 2.A. of this Agreement.

(f) EFFECTIVE DATE -- The date as of which this Agreement is executed.

(g) FUND -- An investment company established and/or distributed by
Underwriter or an Affiliate, specified on SCHEDULE 2 to this Agreement
as in effect at the Effective Date, and such other investment companies
that may be added to SCHEDULE 2 from time to time in accordance with
Section 18 of this Agreement.

(h) PREMIUM -- A payment made under a Contract by an applicant or purchaser
to purchase benefits under the Contract.

(i) PROSPECTUS -- The prospectus and statement of additional information,
if any, included within a Registration Statement, except that, if the
most recently filed prospectus and statement of additional information
filed pursuant to Rule 497 under SA-33 subsequent to the date on which
a Registration Statement became effective differs from the prospectus
and statement of additional information included within such
Registration Statement at the time it became effective, the term
"Prospectus" shall refer to the most recently filed prospectus and
statement of additional information filed under Rule 497 under SA-33,
from and after the date on which they each shall have been filed. For
purposes of Section 14 of this Agreement, the term "any Prospectus"
means any document which is or at any time was a Prospectus within the
meaning of this definition.

(j) REGISTRATION STATEMENT -- At any time that this Agreement is in effect,
each currently effective registration statement, or currently effective
post-effective amendment thereto, relating to the Contracts, including
financial statements included in, and all exhibits to, such
registration statement or post-effective amendment. For purposes of
Section 14 of this Agreement, the term "Registration Statement" means
any document which is or at any time was a Registration Statement
within the meaning of this definition.

(k) REGULATIONS -- The rules and regulations promulgated by the SEC under
SA-33, SEA-34 and ICA-40.

(l) REPRESENTATIVE -- When used with reference to Underwriter or a
Distributor, an individual who is an associated person, as that term is
defined in SEA-34, thereof.

(m) SA-33 -- The Securities Act of 1933, as amended.

(n) SEC -- The Securities and Exchange Commission.

2. SALE OF CONTRACTS

(a) PRINCIPAL UNDERWRITER

Insurer, on its behalf and on behalf of the Separate Account,
authorizes Underwriter, on an exclusive basis, and Underwriter accepts
such authority, to be the distributor and principal underwriter of the
Contracts. Underwriter will use all reasonable efforts (but only in
states in which it may lawfully do so) to distribute the Contracts,
consistent with its other business, market and regulatory conditions,
and any other restrictions that may become applicable to its
activities. As exclusive distributor and principal underwriter,
Underwriter shall have sole authority to solicit Applications and
Premiums directly from customers and prospective customers located in
the jurisdictions listed on SCHEDULE 3. Underwriter reserves the right
to authorize third parties as Distributors to engage in distribution
activities involving the solicitation of Applications and Premiums
directly from customers and prospective customers, in each case as
Underwriter may in its sole discretion so provide or limit, but in all
such cases, subject to such general terms and conditions regarding
arrangements with Distributors as the parties hereto may subsequently
agree upon in writing, provided that Insurer reserves the right, which
shall not be exercised unreasonably, to require that Underwriter not
enter into a sales agreement with a proposed Distributor. Insurer shall
appoint in the appropriate states or jurisdictions such Distributors or
Distributor Representatives, provided that Insurer reserves the right,
which right shall not be exercised unreasonably, to refuse to appoint
as agent any Distributor or Distributor Representative, if any, or,
once appointed, to terminate the same at any time with or without
cause. Underwriter shall be an independent contractor and neither
Underwriter, nor any of its officers, directors, employees, or agents
is or shall be an employee of Insurer in the performance of
Underwriter's duties hereunder. Underwriter is not hereby obligated to
register or maintain its registration as a broker or dealer under the
state securities laws of any jurisdiction if, in the discretion of
Underwriter, such registration is not practical, necessary for its
duties under this Agreement, or feasible, nor does it restrict
Underwriter from entering into distribution arrangements with other
issuers or investment companies, except as otherwise agreed to in
writing by the parties.

(b) INSURANCE AGENCY

It is understood that, pursuant to an insurance agency agreement,
Insurer will appoint the Agency as its insurance agent for the sale of
the Contracts. Underwriter agrees that no Underwriter Representative
shall engage in any solicitation activities on behalf of Underwriter
unless such Representative is associated with Agency and subject to the
supervision of Agency respecting compliance with state insurance law.

Underwriter shall not have authority, and shall not grant authority to
Underwriter Representatives, Distributors or Distributor
Representatives, on behalf of Insurer: to make, alter, waive, change or
discharge any Contract or other contract entered into pursuant to a
Contract; to waive any Contract forfeiture provision; to extend the
time of paying any Premium; to endorse checks or money orders payable
to Insurer, or to receive any monies or Premiums (except for the sole
purpose of forwarding monies or Premiums to Insurer). Underwriter shall
not expend, nor contract for the expenditure of, the funds of Insurer.
Underwriter shall not possess or exercise any authority on behalf of
Insurer other than that expressly conferred on Underwriter by this
Agreement. To the extent that Underwriter receives a check payable to
"T. Rowe Price," Underwriter, or an affiliate thereof, and all or part
of such check represents a Premium, such check shall be processed in
accordance with mutually agreed upon procedures.

(d) OPINION OF INSURER'S COUNSEL

The obligations of Underwriter under this Agreement are subject to the
accuracy of the representations and warranties of Insurer contained in
this Agreement, to the performance by Insurer of its obligations
hereunder, and to the condition that (i) prior to the time that
Underwriter begins offering the Contracts, Underwriter shall have
received an opinion of the general counsel or an associate general
counsel of Insurer, such opinion to be substantially to the effect set
forth in EXHIBIT A hereto; and (ii) each time, during the period in
which Underwriter is offering the Contracts, that an amendment to a
Registration Statement becomes effective under Rule 485(a) under SA-33,
Underwriter shall have received an opinion from the general counsel or
associate general counsel to Insurer, that is reasonably acceptable to
Underwriter, such opinion to be substantially to the effect set forth
in EXHIBIT A hereto.

3. SOLICITATION ACTIVITIES, APPLICATIONS AND PREMIUMS

Underwriter agrees that its solicitation activities with respect to the
Contracts shall be subject to applicable laws and regulations, procedures
provided by Insurer, and the rules set forth herein:

(a) Underwriter shall use Applications and other materials approved by
Insurer for use in the solicitation activities with respect to the
Contracts. Insurer shall notify Underwriter and the Agency in writing
of those states or jurisdictions which require delivery of a statement
of additional information for the Contracts with a prospectus to a
prospective purchaser.

(b) All Premiums paid by check or money order that are collected by
Underwriter or any Underwriter Representative shall be remitted in full
promptly, and in any event not later than two business days (except to
the extent of any commissions deducted from Premiums in accordance with
an insurance agency agreement), together with any Applications, forms
and any other required documentation, to the Customer Service Center.
Checks or money orders in payment of Premiums shall be drawn to the
order of "Security Benefit Life Insurance Company." Premiums may be
transmitted by wire order from Underwriter or the Agency to the
Customer Service Center in accordance with the procedures reasonably
agreed upon by the parties. If any Premium is held at any time by
Underwriter, Underwriter shall hold such Premium in a fiduciary
capacity and such Premium shall be remitted in full promptly, and in
any event not later than two business days, to Insurer. All such
Premiums, whether by check, money order or wire, shall be the property
of Insurer.

(c) Underwriter acknowledges that Insurer shall have the right to reject,
in whole or in part, any Application, but only for reasonable cause and
only after giving prior notice to Underwriter. In the event an
Application is rejected, any Premium submitted therewith shall be
returned by Insurer to the applicant. Insurer shall promptly notify
Underwriter and, if applicable, the Distributor who submitted the
Application, of such action. In the event that a purchaser exercises
his or her free look right under their Contract, any amount to be
refunded as provided in such Contract shall be so refunded to the
purchaser by Insurer. Insurer shall notify Underwriter and, if
applicable, the Distributor who solicited the Contract, of such action.

(d) Underwriter intends that no recommendations will be made to prospects
for the Contracts. To the extent that Underwriter or Underwriter
Representatives make recommendations, or to the extent required by
applicable securities laws, Underwriter and Underwriter Representatives
will comply with Section 2310 of the NASD's Conduct Rules.

(e) During the term of this Agreement, neither Underwriter nor any
Underwriter Representative shall intentionally encourage a Contract
owner to exchange his or her Contract for any other insurance contract
except (i) with Insurer's consent or (ii) to comply with applicable
laws, regulations or rules, including but not limited to the NASD's
Conduct Rules.

(f) All solicitation and sales activities engaged in by Underwriter and
Underwriter Representatives in regard to the Contracts shall be in
compliance with all applicable federal and state securities laws and
regulations, as well as all applicable insurance laws and regulations.
No Underwriter Representative shall solicit the sale of a Contract
unless at the time of such solicitation such individual is:

(1) Properly licensed by the NASD and all applicable state insurance
and securities regulatory authorities; and

(2) Appointed as an insurance agent of Insurer, except as may be
otherwise agreed to by Insurer.

(g) Neither Underwriter nor any Underwriter Representative shall give any
written information or make any written or oral representation in
regard to a class of Contracts in connection with the offer or sale of
such class of Contracts that is inconsistent with the then-currently
effective Prospectus for such class of Contracts, or in the
then-currently effective prospectus or statement of additional
information for a Fund, or in current advertising materials for such
class of Contracts which have been authorized by Insurer.

(h) Neither Underwriter nor any Underwriter Representative shall offer,
attempt to offer, or solicit Applications for the Contracts or deliver
the Contracts, in any state or other jurisdiction as to which Insurer
has notified Underwriter that such Contracts may not legally be sold or
offered for sale.

4. ADMINISTRATION

(a) Insurer shall administer the Contracts in accordance with their terms
and applicable laws and regulations, such administration to be
performed in all respects at a level commensurate with those standards
prevailing in the variable insurance industry. Neither Insurer nor its
officers, directors, employees or agents (which, for these purposes
shall not include Underwriter Representatives or Distributor
Representatives) shall give any written information or make any written
or oral representation in regard to a class of Contracts in connection
with the offer or sale of such class of Contracts that is inconsistent
with the then currently effective Prospectus for such class of
Contracts, or the then currently effective prospectus or statement of
additional information for a Fund, or in current advertising materials
for such class of Contracts which have been authorized by Underwriter.

(b) Insurer, as agent for Underwriter, shall confirm to each applicant for
and purchaser of a Contract in accordance with Rule 10b-10 under SEA-34
acceptance of premiums and such other transactions as are required to
be confirmed by Rule 10b-10 or administrative interpretations
thereunder, or any NASD requirements. Insurer shall not be separately
compensated for these services.

(c) Insurer shall maintain and preserve such books and records with respect
to the Contracts in conformity with the requirements of Rules 17a-3 and
17a-4 under SEA-34 including, to the extent such requirements apply,
all books and records with respect to confirmations provided under Rule
10b-10. Insurer shall maintain all such books and records, which shall
be considered the joint property of Insurer and Underwriter, and
Insurer acknowledges that such books and records are at all times
subject to inspection by the SEC and the NASD in accordance with
Section 17(a) of SEA-34 and shall provide copies thereof upon
Underwriter's request. Insurer shall not be separately compensated for
these services.

(d) Insurer shall not sub-contract with another person other than an
affiliate of Insurer to perform any of the functions contemplated by
this Section or maintain any information, books and records
contemplated by this Agreement without first obtaining such person's
undertaking, in writing, to comply with the provisions of this
Agreement to keep confidential all proprietary information obtained by
such person, and to acknowledge that such information, books and
records are at all times subject to inspection by the SEC, NASD or any
state regulatory body, administrative agency or any other governmental
instrumentality, and further, without obtaining Underwriter's prior
written consent. In addition, such person shall be required, upon the
request of Underwriter, and at the expense of the Insurer, to furnish
such information, books and records to Underwriter.

5. MARKETING

Underwriter shall have responsibility for and control over the marketing
name, marketing arrangements, marketing materials and marketing practices,
respecting the Contracts and, subject to the effectiveness of the
Registration Statement respecting the Contracts and approval of the
Contracts in each of the jurisdictions shown on Schedule 3, the timing and
commencement of the offering of the Contracts. Underwriter shall be
responsible for the design and preparation of all promotional, sales and
advertising material relating to the Contracts. Insurer may propose any
additional or alternative marketing arrangements for the Contracts,
including any proposed marketing name, arrangements, materials and
practices, which shall be subject to Underwriter's prior review and
approval. No promotional, sales or advertising material may be used by any
party without the approval of the other party. Prior to any use with members
of the public, the following procedures shall be observed:

(a) Each party shall provide to the other party copies of all promotional,
sales and advertising material developed by such party, if any, for
such other party's review and written approval, and each party shall be
given a reasonable amount of time to complete its review.

(b) Each party shall respond on a prompt and timely basis in approving any
such material and shall act reasonably in connection therewith.

(c) Insurer shall be responsible for filing all promotional, sales or
advertising material, whether developed by Underwriter or Insurer, as
required, with any state insurance regulatory authorities.

(d) Underwriter shall be responsible for filing all promotional, sales or
advertising material, whether developed by Underwriter or Insurer, as
required, with the NASD, and state securities regulatory authorities.

(e) Each party shall notify the other party expeditiously of any comments
provided by the NASD or any securities or insurance regulatory
authority on such material, and will cooperate expeditiously in
resolving and implementing any comments, as applicable.

(f) Each party shall deliver to the other party ten final print copies of
all promotional, sales and advertising material developed by such
party.

The parties acknowledge that such material, to the extent it identifies
or discusses a Fund, may be subject to review and approval procedures
implemented by that Fund. Each party reserves the right, after having
approved a piece of material, to object to further use of such material
and may require the other party to cease use of such material.

6. COMPENSATION

Insurer may pay marketing allowance expenses, if any, to the Agency with
respect to Contracts sold pursuant to this Agreement in the amounts and
under the rules and procedures set forth in an insurance agency agreement.

7. EXPENSES

(a) INSURER

With respect to this Agreement, Insurer shall pay (or will enter into
arrangements providing that persons other than Insurer shall pay) all
expenses in connection with:

(1) the preparation and filing of each Registration Statement for the
Contracts (including each pre-effective and post-effective
amendment thereto) and the preparation and filing of each
Prospectus for the Contracts (including any preliminary and each
definitive Prospectus);

(2) the preparation, insurance underwriting, issuance and
administration of the Contracts; provided that Insurer shall not
be responsible for expenses, including the expense of a leased
line, incurred by Underwriter in connection with the service
center operated by Underwriter;

(3) any registration, qualification or approval of the Contracts for
offer and sale required under the securities, blue-sky or
insurance laws of any state or jurisdiction listed on SCHEDULE 3;

(4) all registration fees for the Contracts payable to the SEC and the
NASD; and

(5) the printing of the Prospectus for the Contracts (or its pro rata
share of expenses in the event the Prospectuses for the Contracts
and the Funds are printed together in one document) and any
supplements thereto for distribution to existing contract owners
and its pro rata share of expenses of mailing the Prospectuses for
the Contracts and the Funds to existing Contract owners.

(b) UNDERWRITER

With respect to this Agreement, Underwriter shall pay (or will enter
into arrangements providing that persons other than Underwriter shall
pay) the following expenses related to its distribution of the
Contracts:

(1) the compensation of Underwriter Representatives and employees, and
Distributors, if any;

(2) expenses associated with the registration and training of
Underwriter Representatives and other employees involved in the
distribution of the Contracts;

(3) expenses incurred in connection with its registration as a broker
or dealer or the registration or qualification of its officers,
directors or Representatives under federal and state laws;

(4) the costs of any promotional, sales and advertising material,
including Applications and any other materials included in the
fulfillment kit, that Underwriter develops for its use in
connection with the sale of the Contracts; and

(5) expenses of printing and mailing the Prospectuses for the
Contracts and the Funds (and any supplements thereto) for
distribution to prospective customers.

Other than as specifically provided in this Agreement or in an
insurance agency agreement, Insurer shall pay all expenses that it
incurs in connection with this Agreement and Underwriter shall pay all
expenses that it incurs in connection with this Agreement; it being
understood that neither Underwriter nor the Agency shall be responsible
for any expenses relating to the Contracts or the processing of
Contracts, Premiums or Applications, including without limitation any
expenses incurred in connection with the return of Premiums solicited
by Distributors, if any, for Applications rejected by Insurer, or
relating to any of the matters or acts contemplated by this Agreement,
except to the extent expressly set forth herein. Except as specifically
provided above or as otherwise agreed to in writing by the parties, it
is further understood that Insurer shall not bear any responsibility
for the expenses of the Underwriter and Underwriter Representatives,
nor for printing the prospectuses and statements of additional
information for the Funds, nor for the preparation of the registration
statements for the Funds nor for providing seed capital for the Funds,
nor for any other expenses relating to the Funds.

8. REPRESENTATIONS AND WARRANTIES OF INSURER

(a) Insurer represents and warrants to Underwriter on the Effective Date
that:

(1) Insurer has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Kansas
with full power and authority to own, lease and operate its
properties and conduct its business, is duly qualified to transact
the business of a life insurance company and to issue variable
insurance products, and is in good standing, in each state or
jurisdiction listed on SCHEDULE 3.

(2) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been duly authorized
by all necessary corporate action by Insurer, and when so executed
and delivered this Agreement shall be the valid and binding
obligation of Insurer enforceable in accordance with its terms.

(3) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict
with, result in any breach in any material respect of any of the
terms and provisions of, or constitute (with or without notice or
lapse of time) a default in any material respect under, the
articles of incorporation or bylaws of Insurer, or any indenture,
agreement, mortgage, deed of trust, or other instrument to which
Insurer is a party or by which it is bound, or, to the best of
Insurer's knowledge, violate in any material respect any law, any
order, rule or regulation applicable to Insurer of any court or of
any federal or state regulatory body, administrative agency or any
other governmental instrumentality having jurisdiction over
Insurer or any of its properties.

(b) Insurer further represents and warrants to Underwriter on the effective
date of the initial Registration Statement for the Contracts, and
undertakes to use its best efforts to ensure as of the effective date
of each subsequent Registration Statement, that:

(1) Insurer has filed with the SEC all statements, notices and other
documents required for registration of the Contracts (or the
interests therein) and the Separate Account under the provisions
of ICA-40 and SA-33 and the Regulations thereunder; further, there
are no contracts or documents of Insurer or relating to the
Contracts or the Separate Account which are required to be filed
as exhibits to such Registration Statement by SA-33, ICA-40 or the
Regulations which have not been so filed.

(2) Such Registration Statement has been declared effective by the SEC
or has become effective in accordance with the Regulations.

(3) Insurer has not received any notice from the SEC with respect to
such Registration Statement pursuant to Section 8(e) of ICA-40 and
no stop order under SA-33 has been issued and no proceeding
therefor has been instituted or threatened by the SEC.

(4) Insurer has obtained, or prior to the commencement of the offering
of the Contracts will obtain, all necessary or customary orders of
exemption or approval from the SEC to permit the distribution of
the Contracts pursuant to this Agreement and to permit the
operation of the Separate Account supporting such Contracts as
contemplated in the related Prospectus, and such orders apply to
Underwriter, as principal underwriter for the Contracts and the
Separate Account to the extent necessary.

(5) Insurer has represented in the Registration Statement that the
fees and charges deducted under the Contracts, in the aggregate,
are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the Insurer. In
addition, Insurer complies with all other applicable provisions of
Section 26 of the ICA-40, as if it were trustee or custodian of
the Separate Account; Insurer has filed with the insurance
regulatory authority for the State of Kansas an annual statement
of its financial condition, which indicates that Insurer has
capital and surplus or unassigned surplus of not less than $1
million or such other amount as prescribed by SEC rule; and
Insurer, together with its registered separate accounts, is
supervised and examined periodically by the insurance authority of
Kansas.

(6) Such Registration Statement and the related Prospectus comply in
all material respects with the provisions of SA-33 and ICA-40 and
the Regulations, and neither the Registration Statement nor the
Prospectus contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light
of the circumstances in which they were made; provided, however,
that none of the representations and warranties in this Section
8(b)(5) shall apply to statements or omissions from a Registration
Statement or Prospectus made in reliance upon and in conformity
with information furnished to Insurer in writing by Underwriter
expressly for use in such Registration Statement or Prospectus.

(7) The Separate Account has been duly established by Insurer and
conforms to the description thereof in the Registration Statement
and the Prospectus for the Separate Account.

(8) The form of the Contracts has been approved to the extent required
by the Kansas Insurance Commissioner and by the governmental
agency responsible for regulating insurance companies in each
other state or jurisdiction listed on SCHEDULE 3 as such Schedule
is in effect on the pertinent date of each Registration Statement.

(9) The Contracts have been duly authorized by Insurer and conform to
the descriptions thereof in the Registration Statement for the
Contracts and the related Prospectus and, when issued as
contemplated by such Registration Statement, shall constitute
legal, validly issued and binding obligations of Insurer in
accordance with their terms.

(10) No other consent, approval, authorization or order of any court or
governmental authority or agency is required for the issuance or
sale of the Contracts, the establishment or operation of the
Separate Account, or for the consummation of the transactions
contemplated by this Agreement, that has not been obtained.

9. UNDERTAKINGS OF INSURER

Insurer undertakes as follows:

(a) Insurer shall use its best efforts to maintain the registration of the
Contracts (or interests therein) and the Separate Account with the SEC
and to maintain any registrations and approvals of the Contracts and
the Separate Account with any state securities or insurance regulatory
bodies, administrative agencies, or any other governmental
instrumentalities of any state or other jurisdiction listed on SCHEDULE
3 whose securities or insurance laws, in Insurer's reasonable judgment,
require registration or approval of the Contracts or the Separate
Account, and Insurer shall maintain the registration of the Contracts
(or interests therein) and the Separate Account with such state
securities regulatory bodies and any other governmental
instrumentalities of any state or jurisdiction listed on Schedule 3 as
Insurer deems appropriate.

(b) Insurer shall take all action necessary to cause the Contracts to
comply, and to continue to comply, as annuity contracts under state
insurance laws and federal tax laws. In the event of a change in
applicable law that renders it impracticable or impossible to maintain
the Contracts as annuity contracts, Insurer shall consult with
Underwriter and shall take no action respecting the Contracts without
the consent of Underwriter.

(c) Insurer shall take all action necessary to cause the Separate Account
to comply, and to continue to comply, with the provisions of ICA-40 and
the Regulations applicable to the Separate Account as a registered
investment company classified as a unit investment trust and a separate
account, and deemed to be issuing periodic payment plan certificates.

(d) Insurer shall not deduct any amounts from the assets of the Separate
Account or enter into a transaction or arrangement involving the
Contracts or the Separate Account or cause the Separate Account to
enter into any such transaction or arrangement without obtaining any
necessary or customary approvals or exemptions from the SEC or any
no-action assurance deemed necessary from the SEC staff and without
ensuring that such approval, exemption or assurance applies to
Underwriter as the principal underwriter for the Contracts, to the
extent necessary or appropriate.

(e) Insurer shall provide Underwriter with preliminary drafts of any
amendments to Registration Statements, supplements to Prospectuses,
exemptive applications or no-action requests to be filed with the SEC
in connection with the Contracts, the Separate Account, or both.
Insurer shall provide Underwriter with a reasonable opportunity to
review and comment on such drafts before any such materials are filed
with the SEC. Insurer shall furnish Underwriter with copies of any such
materials or amendments thereto, as filed with the SEC, promptly after
the filing thereof, and any SEC communications or orders with respect
thereto, promptly after receipt thereof. Insurer shall maintain and
keep on file in its principal executive office any file memoranda or
any supplemental materials referred to in such Registration Statements,
exemptive applications and no-action requests and shall maintain and,
as necessary, amend such memoranda or materials and shall provide or
otherwise make available copies of such memoranda and materials to
Underwriter.

(f) Insurer shall notify Underwriter immediately upon discovery or in any
event as soon as possible under the following circumstances:

(1) Of any event which makes any material statement made in the
Registration Statement or the Prospectus untrue in any material
respect or results in a material omission in the Registration
Statement or the Prospectus;

(2) Of any request by the SEC for any amendment to the Registration
Statement, or any supplement to the Prospectus, or statement of
additional information;

(3) Of the issuance by the SEC of any notice pursuant to Section 8(e)
of ICA-40, any stop order with respect to the Registration
Statement or any amendment thereto, or the initiation of any
proceedings for that purpose or for any other purpose relating to
the registration and/or offering of the Contracts;

(4) Of any event of the Contracts' or the Separate Account's
noncompliance with the applicable requirements of the Internal
Revenue Code or regulations, rulings, or interpretations
thereunder that could jeopardize the Contracts' status as annuity
contracts;

(5) Of any change in applicable insurance laws or regulations of any
state or jurisdiction listed on SCHEDULE 3 materially adversely
affecting the insurance status of the Contracts or Underwriter's
obligations with respect to the distribution of the Contracts;

(6) Of any loss or suspension of the approval of the Contracts or
distribution thereof by a state securities or insurance regulatory
body, administrative agency, or any other governmental
instrumentality of any state or jurisdiction listed on SCHEDULE 3
authorizing the sale of the Contracts, any loss or suspension of
Insurer's certificate of authorization to do business or to issue
variable insurance contracts in such state or jurisdiction, or of
the lapse or termination of the Contracts' or the Separate
Account's registration, approval or clearance in any such state or
jurisdiction;

(7) Of any termination of the authorization or approval of the sale of
the Contracts in the states and jurisdictions listed on SCHEDULE
3;

(8) Of any material adverse change in the condition (financial or
otherwise) of Insurer or the Separate Account that would cause the
information in the Registration Statement to be materially
misleading; and

(9) Of any event which causes a representation or warranty of Insurer
contained in this Agreement to no longer be true.

(g) Insurer shall notify Underwriter in a reasonably timely manner under
the circumstances:

(1) When a Registration Statement has become effective or any
post-effective amendment with respect to a Registration Statement
becomes effective thereafter;

(2) When any registration of the Contracts (or interests therein)
under the securities or blue sky laws of the states or
jurisdictions listed on SCHEDULE 3 have become effective to the
extent not yet obtained as of the Effective Date;

(3) When approval of the Contract forms under the applicable insurance
laws of the states or jurisdictions listed on SCHEDULE 3 have been
obtained to the extent not yet obtained as of the Effective Date;
and

(4) In which states or jurisdictions listed on SCHEDULE 3 the
Contracts may not be lawfully sold.

(h) Insurer shall provide Underwriter access to such records, officers and
employees of Insurer at reasonable times as is necessary to enable
Underwriter to fulfill its obligation, as the underwriter under SA-33
for the Contracts and as principal underwriter for the Separate Account
under ICA-40, to perform due diligence and to use reasonable care.

(i) Insurer shall use its best efforts to timely file each post-effective
amendment to a Registration Statement, Prospectus, annual reports on
Form N-SAR, and all other reports, notices, statements and amendments
required to be filed by or for Insurer and the Separate Account with
the SEC under SA-33, SEA-34 and/or ICA-40 or any applicable
Regulations. Insurer shall timely file Rule 24f-2 notices required to
be filed by or for Insurer and the Separate Account with the SEC under
SA-33 and/or ICA-40 or any applicable Regulations. To the extent there
occurs an event or development (including, without limitation, a change
of applicable law, regulation or administrative interpretation)
warranting an amendment to the Registration Statement or supplement to
the Prospectus, Insurer shall endeavor to promptly prepare and file
such amendment or supplement with the SEC.

(j) To the extent that Insurer is responsible for printing under Section 7,
Insurer shall provide Underwriter with as many copies of the Prospectus
(and any amendments or supplements to the Prospectus) as Underwriter
may reasonably request.

(k) Insurer shall deliver to Underwriter, as soon as practicable after it
becomes available, the annual statement for Insurer and for the
Separate Account in the form filed with the State of Kansas.

(l) Insurer shall furnish to Underwriter without charge promptly after
filing ten (10) complete copies of each Registration Statement and any
pre-effective or post-effective amendment thereto, including financial
statements and all exhibits not incorporated therein by reference.

10. REPRESENTATIONS AND WARRANTIES OF UNDERWRITER

Underwriter represents and warrants to Insurer on the Effective Date as
follows:

(a) Underwriter has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland
with full power and authority to own, lease and operate its properties
and to conduct its business, and is in good standing, in each state in
which its business so requires.

(b) The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have been duly authorized by all
necessary corporate action by Underwriter, and when so executed and
delivered this Agreement shall be the valid and binding obligation of
Underwriter enforceable in accordance with its terms.

(c) The consummation of the transactions contemplated herein, and the
fulfillment of the terms of this Agreement, shall not conflict with,
result in any breach in any material respect of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default in any material respect under, the articles of incorporation
or bylaws of Underwriter, or any indenture, agreement, mortgage, deed
of trust, or other instrument to which Underwriter is a party or by
which it is bound, or to the best of Underwriter's knowledge violate in
any material respect any law, or, to the best of Underwriter's
knowledge, any order, rule or regulation applicable to Underwriter of
any court or of any federal or state regulatory body, administrative
agency or any other governmental instrumentality having jurisdiction
over Underwriter or any of its properties.

(d) Underwriter is registered as a broker-dealer under SEA-34, is a member
of the NASD, and is duly registered as a broker-dealer under the
securities laws of the states or jurisdictions to the extent required
in connection with its obligations under this Agreement, and its
Representatives, together with Agency, are fully licensed in accordance
with applicable state insurance laws to the extent necessary to perform
their obligations under this Agreement.

(e) Underwriter is and shall remain during the term of this Agreement in
compliance with Section 9(a) of ICA-40.

11. UNDERTAKINGS OF UNDERWRITER

Underwriter undertakes as follows:

(a) Underwriter shall train, supervise and be solely responsible for the
conduct of its Representatives in their solicitation of Contracts, and
shall supervise their compliance with applicable rules and regulations
of any securities regulatory agencies that have jurisdiction over
variable annuity sales activities.

(b) Underwriter will use its best efforts to maintain its registration as a
broker-dealer under SEA-34 and its membership with the NASD, and will
use its best efforts to maintain its registration as a broker-dealer
with the applicable securities authorities under the laws of any
applicable state or jurisdiction listed on SCHEDULE 3 where necessary
in connection with its obligations under this Agreement.

(c) Underwriter shall be responsible for its own conduct and the
employment, control, and conduct of its officers, employees and agents
and for injury to such officers, employees or agents or to others
through its officers, employees or agents. Underwriter assumes full
responsibility for its officers, employees and agents under applicable
laws, rules and regulations and agrees to pay all employee taxes
thereunder.

(d) Underwriter will notify Insurer if its SEC or state broker-dealer
registration or NASD membership is terminated or if it is the subject
of any proceeding that, in its reasonable judgment, is likely to result
in such termination.

(e) Underwriter shall notify Insurer immediately upon discovery or in any
event as soon as possible under the following circumstances:

(1) Of any material adverse change in the condition (financial or
otherwise) of Underwriter that would materially affect
Underwriter's obligations with respect to the distribution of the
Contracts; and

(2) Of any event which causes a representation or warranty of
Underwriter contained in this Agreement to no longer be true.

12. RECORDS

Insurer and Underwriter each shall maintain such accounts, books, records
and other documents as are required to be maintained by each of them by
applicable laws and regulations and shall preserve such accounts, books,
records and other documents for the periods prescribed by such laws and
regulations. The accounts, books, records and other documents of Insurer,
the Separate Account and Underwriter as to all transactions hereunder shall
be maintained so as to clearly and accurately disclose the nature and
details of the transactions, including such accounting information as
necessary to support the reasonableness of the amounts paid by Insurer
hereunder. Each party shall have the right to inspect and audit such
accounts, books, records and other documents of the other party during
normal business hours upon reasonable written notice to the other party.
Each party shall keep confidential all information obtained pursuant to such
an inspection or audit, and shall disclose such information to third parties
only upon receipt of written authorization from the other party or as
otherwise described in Section 15, below.

13. INVESTIGATIONS AND PROCEEDINGS

(a) COOPERATION

Underwriter and Insurer shall cooperate fully in any insurance or
securities regulatory investigation or proceeding or judicial
proceeding with respect to Insurer, Underwriter, their Affiliates and
their agents, Representatives or employees to the extent that such
investigation or proceeding is in connection with the offering, sale or
distribution of the Contracts distributed under this Agreement. Without
limiting the foregoing, Insurer and Underwriter shall notify each other
promptly of any notice of any regulatory investigation or proceeding or
judicial proceeding, arising in connection with the offering, sale or
distribution of the Contracts distributed under this Agreement,
received by either party with respect to Insurer, Underwriter or any of
their Affiliates, agents, Representatives or employees or which may
affect Insurer's issuance or Underwriter's distribution of any Contract
marketed under this Agreement.

(b) CUSTOMER COMPLAINT

Insurer and Underwriter shall notify each other promptly in the case of
a substantive customer complaint arising in connection with the
offering, sale or distribution of the Contracts distributed under this
Agreement. In addition, Underwriter and Insurer shall cooperate in
investigating such complaint and any response by either party to such
complaint shall be sent to the other party for written approval not
less than five business days prior to its being sent to the customer or
any regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or
facsimile. In any event, neither party shall release any such response
without the other party's prior written approval.

14. INDEMNIFICATION

(a) BY UNDERWRITER

Underwriter agrees to indemnify and hold harmless Insurer and each of
its directors and officers and each person, if any, who controls
Insurer within the meaning of Section 15 of SA-33 (collectively, the
"Indemnified Parties" for purposes of this Section 14(a)), against any
and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of Underwriter) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation,
at common law, or otherwise, insofar as such losses, claims expenses,
damages, liabilities (or actions in respect thereof) or settlements:

(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading,
in light of the circumstances in which they were made, contained
in any Registration Statement or in any Prospectus; to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission: (i) was made in
reliance upon information furnished in writing to Insurer by
Underwriter specifically for use in the preparation of any such
Registration Statement or any amendment thereof or supplement
thereto; or (ii) was contained in (A) any registration statement,
or any post-effective amendment thereto which becomes effective,
filed by or on behalf of a Fund with the SEC relating to Shares,
including any financial statements included in, or any exhibit to,
such registration statement or post-effective amendment, (B) any
prospectus of a Fund relating to the Shares either contained in
any such registration statement or post-effective amendment or
filed pursuant to Rule 497(c) or Rule 497(e) under SA-33, or (C)
in any promotional, sales or advertising material or written
information relating to the Shares authorized by or on behalf of a
Fund; or

(2) result because of any use by Underwriter or any Underwriter
Representative of promotional, sales or advertising material not
authorized by Insurer or any written or oral misrepresentations by
Underwriter or any Underwriter Representative or any unlawful
sales practices concerning the Contracts by Underwriter or any
Underwriter Representative under federal securities laws or NASD
regulations or other applicable law, or from the failure to
deliver the Prospectus or prospectuses for the Funds to the extent
required; or

(3) result from any claims by agents or Representatives or employees
of Underwriter for commissions or other compensation or
remuneration of any type; or

(4) arise out of or result from any material breach by Underwriter or
any Underwriter Representative of any provision of this Agreement.

This indemnification shall be in addition to any liability that
Underwriter may otherwise have; provided, however, that no Indemnified
Party shall be entitled to indemnification pursuant to this provision
if such loss, claim, expense, damage, liability or litigation is due to
the willful misfeasance, bad faith or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties under
this Agreement or to Insurer.

Underwriter shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify
Underwriter of any such claim shall not relieve Underwriter from any
liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified
Party, Underwriter will be entitled to participate, at its own expense,
in the defense thereof. Underwriter also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in
the action. After notice from Underwriter to such party of
Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional legal counsel
retained by it, and Underwriter will not be liable to such party under
this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other
than reasonable costs of investigation.

Underwriter agrees to promptly notify Insurer of the commencement of
any litigation or proceedings against it or a Fund or any of
Underwriter's directors, officers, employees or agents in connection
with the sale of any Contracts.

(b) BY INSURER

Insurer agrees to indemnify and hold harmless Underwriter and each of
its directors and officers and each person, if any, who controls
Underwriter within the meaning of Section 15 of SA-33 (collectively,
the "Indemnified Parties" for purposes of this Section 14(b)), against
any and all losses, claims expenses, damages, liabilities (including
amounts paid in settlement with the written consent of Insurer) or
litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute or regulation,
at common law, or otherwise, insofar as such losses, claims expenses,
damages, liabilities (or actions in respect thereof) or settlements:

(1) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact or omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light
of the circumstances in which they were made, contained in any
Registration Statement or in any Prospectus; provided that Insurer
shall not be liable in any such case to the extent that such loss,
liability, damage, claim or expense arises out of, or is based
upon, an untrue statement or alleged untrue statement or omission
or alleged omission: (i) was made in reliance upon information
furnished in writing to Insurer by Underwriter specifically for
use in the preparation of any such Registration Statement or any
amendment thereof or supplement thereto; or (ii) was contained in
(A) any registration statement, or any post-effective amendment
thereto which becomes effective, filed by or on behalf of a Fund
with the SEC relating to Shares, including any financial
statements included in, or any exhibit to, such registration
statement or post-effective amendment, (B) any prospectus of a
Fund relating to the Shares either contained in any such
registration statement or post-effective amendment or filed
pursuant to Rule 497(c) or Rule 497(e) under SA-33, or (C) in any
promotional, sales or advertising material or written information
relating to the Shares authorized by or on behalf of a Fund; or

(2) result because of the terms of any Contract or because of any
material breach by Insurer or any of its officers, directors,
employees or agents (which, for these purposes, shall not include
Underwriter Representatives or Distributor Representatives) of any
provision of this Agreement or of any Contract; or

(3) result because of any use by Underwriter or any Underwriter
Representative of promotional, sales and/or advertising material
prepared by Insurer or any written or oral misrepresentations by
Insurer, its officers, directors, employees or agents (which, for
these purposes, shall not include Underwriter Representatives or
Distributor Representatives), or any unlawful sales practices
concerning the Contracts by Insurer, its officers, directors,
employees, or agents (which, for these purposes, shall not include
Underwriter Representatives or Distributor Representatives) under
the federal securities laws or NASD regulations or other
applicable law; or

(4) arise out of or result from any material breach by Insurer of any
provision of this Agreement.

This indemnification shall be in addition to any liability that Insurer
may otherwise have; provided, however, that no Indemnified Party shall
be entitled to indemnification pursuant to this provision if such loss,
claim, expense, damage, liability or litigation is due to the willful
misfeasance, bad faith or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to
Underwriter.

Insurer shall not be liable under this indemnification provision with
respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Insurer in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but failure to notify
Insurer of any such claim shall not relieve Insurer from any liability
which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Party, Insurer
will be entitled to participate, at its own expense, in the defense
thereof. Insurer also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After
notice from Insurer to such party of Insurer's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional legal counsel retained by it, and Insurer will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

Insurer agrees to promptly notify Underwriter of the commencement of
any litigation or proceedings against it or any of its directors,
officers, employees or agents in connection with the sale of any
Contracts.

The indemnification provisions contained in this Section 14 shall
remain operative in full force and effect, regardless of (1) any
investigation made by or on behalf of Insurer or Underwriter or by or
on behalf of any controlling person thereof, (2) delivery of any
Contracts and Premiums therefor, and (3) any termination of this
Agreement. A successor by law of Underwriter or Insurer, as the case
may be, shall be entitled to the benefits of the indemnification
provisions contained in this Section 14.

15. CONFIDENTIAL AND PROPRIETARY INFORMATION

At all times throughout the term of this Agreement, and following any
termination or expiration of this Agreement, each party and all of its
respective Affiliates, and each officer, director, shareholder,
employee or agent thereof, shall maintain the confidentiality of (i)
this Agreement, (ii) the transactions and other matters contemplated
herein, (iii) any proprietary or other information provided by one
party to the other party to facilitate the transactions contemplated
herein, provided that this obligation of confidentiality shall not
apply to: (i) disclosures required to be made to any regulatory bodies,
administrative agencies or other governmental instrumentalities or
disclosures deemed by such party to be desirable to disclose to any
such entity; (ii) disclosures made to attorneys, accountants and other
representatives in order to assist in the consummation of the
transactions and other matters contemplated herein; (iii) disclosures
otherwise required by applicable law; or (iv) disclosures to which the
other party consents; provided further that, with respect to the
immediately foregoing clauses (i) and (iii), any party that makes such
a disclosure shall so notify the other party prior to or simultaneously
with making such disclosure to the extent reasonably practicable; and
provided further that, with respect to the foregoing clause (ii), a
party shall make disclosures regarding this Agreement and the
transactions contemplated herein only to such party's attorneys,
accountants and other third party representatives who agree to keep
such information confidential in accordance with this Section.

16. DURATION AND TERMINATION OF THIS AGREEMENT

(a) TERM

This Agreement shall become effective upon the Effective Date and shall
remain in effect for five years from the Effective Date and from year
to year thereafter, unless terminated as provided herein.

(b) TERMINATION

After the initial term, this Agreement may be terminated at any time,
on 60 days written notice, without the payment of any penalty, by
Underwriter or Insurer.

This Agreement will automatically terminate in the event of its
assignment, as such term is defined in ICA-40, without the prior
written consent of the other party.

(d) TERMINATION UPON MATERIAL BREACH

This Agreement may be terminated at the option of either party to this
Agreement upon the other party's material breach of any provision of
this Agreement or of any representation made in this Agreement, unless
such breach has been cured within 10 days after receipt of notice of
breach from the non-breaching party.

(e) TERMINATION OF FUND PARTICIPATION AGREEMENT

Either party has the right to terminate this Agreement in the event of
termination of the Fund Participation Agreement between Underwriter,
Insurer, and the Funds.

(f) EFFECT OF TERMINATION

Upon termination of this Agreement all authorizations, rights and
obligations shall cease except: (1) the obligation to settle accounts
hereunder, including commissions on Premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant to
Applications received by Insurer prior to termination; and (2) the
obligations contained in Sections 2(d), 6, 7, 8(b), 9 (but not clause
(h) thereof), 12, 13, 14, and 15 hereof.

17. AMENDMENT OF THIS AGREEMENT

No provisions of this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge, or
termination is sought.

18. AMENDMENT OF SCHEDULES

The parties to this Agreement may amend Schedules 1 and 2 to this
Agreement from time to time to reflect additions of or changes in any
class of Contracts, Separate Accounts, subaccounts and Funds that have
been agreed upon. The provisions of this Agreement shall be equally
applicable to each such class of Contracts, Separate Accounts,
subaccounts and Funds that may be added to the Schedules, unless the
context otherwise requires.

19. MISCELLANEOUS

(a) CAPTIONS

The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.

(b) COUNTERPARTS

This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws. Failure of either party to insist upon
strict compliance with any of the conditions of this Agreement shall
not be construed as a waiver of any of the conditions, but the same
shall remain in full force and effect. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provisions, whether or not similar, nor shall any
waiver constitute a continuing waiver.

(d) INTERPRETATION; JURISDICTION

This Agreement constitutes the whole agreement between the parties
hereto with respect to the subject matter hereof, and supersedes all
prior oral or written understandings, agreements or negotiations
between the parties with respect to such subject matter. No prior
writings by or between the parties with respect to the subject matter
hereof shall be used by either party in connection with the
interpretation of any provision of this Agreement. This Agreement shall
be construed and its provisions interpreted under and in accordance
with the internal laws of the state of Maryland without giving effect
to principles of conflict of laws.

(e) SEVERABILITY

This is a severable Agreement. In the event that any provision of this
Agreement would require a party to take action prohibited by applicable
federal or state law or prohibit a party from taking action required by
applicable federal or state law, then it is the intention of the
parties hereto that such provision shall be enforced to the extent
permitted under the law, and, in any event, that all other provisions
of this Agreement shall remain valid and duly enforceable as if the
provision at issue had never been a part hereof.

(f) REGULATION

This Agreement shall be subject to the provisions of SA-33, SEA-34 and
ICA-40 and the Regulations and the rules and regulations of the NASD,
from time to time in effect, including such exemptions from ICA-40 as
the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith. Without limiting the generality of
the foregoing, the term "assigned" shall not include any transaction
exempted from Section 15(b)(2) of ICA-40.

20. NOTICE, CONSENT AND REQUEST

Any notice, consent or request required or permitted to be given by
either party to the other shall be deemed sufficient if sent by
facsimile transmission followed by Federal Express or other overnight
carrier, or if sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to the other party at the
following address (or at such other address for a party as shall be
specified by like notice):

if to Insurer:

Security Benefit Life Insurance Company
Attn: Amy J. Lee, Esq.
700 Harrison Street
Topeka, Kansas 66636

and if to Underwriter:

T. Rowe Price Investment Services, Inc.
Attn: Henry Hopkins, Esq.
100 East Pratt Street
Baltimore, Maryland 21202.

IN WITNESS WHEREOF, Insurer and Underwriter have each duly executed
this Agreement as of the day and year first above written.

SECURITY BENEFIT LIFE INSURANCE COMPANY

By Its Authorized Officer

By: BRANDT BROCK
---------------------------
Brandt Brock

Title: VICE PRESIDENT

Date: MAY 1, 1998

T. ROWE PRICE INVESTMENT SERVICES, INC.

By Its Authorized Officer

By: DARRELL N. BRAMAN
------------------------------
Darrell N. Braman

Title: VICE PRESIDENT

Date: MAY 1, 1998
<PAGE>
EXHIBIT A

FORM OF OPINION PURSUANT TO SECTION 2

T. Rowe Price Investment Services, Inc.

Dear Sirs:

You have requested our opinion with respect to certain matters in connection
with the execution of the distribution agreement dated as of April 25, 1995 (the
"Agreement") entered into between you ("Underwriter) and Security Benefit Life
Insurance Company ("Insurer"). The Agreement relates to your distribution of
certain variable insurance contracts, described more specifically in a
registration statement, as amended, on Form N-4 filed with the Securities and
Exchange Commission ("SEC"), File No. 33-83238, which are to be issued by
Insurer and supported by the T. Rowe Price Variable Annuity Account of Insurer.
All capitalized terms contained herein not otherwise defined shall have the
meaning assigned to them in the Agreement.

We are of the following opinion:

(1) Insurer has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Kansas with
full power and authority to own, lease and operate its properties and
conduct its business, is duly qualified to transact the business of a
life insurance company and to issue variable insurance products, and is
in good standing, in each state or jurisdiction listed on Schedule 3 to
the Agreement.

(2) The execution and delivery of the Agreement and the consummation of the
transactions contemplated therein have been duly authorized by all
necessary corporate action by Insurer, and when so executed and
delivered the Agreement shall be the valid and binding obligation of
Insurer enforceable in accordance with its terms.

(3) The consummation of the transactions contemplated by the Agreement, and
the fulfillment of its terms, shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
incorporation or bylaws of Insurer, or to the best of our knowledge,
any indenture, agreement, mortgage, deed of trust, or other instrument
to which Insurer is a party or by which it is bound, or violate any
law, or, to the best of our knowledge, any order, rule or regulation
applicable to Insurer of any court or of any federal or state
regulatory body, administrative agency or any other governmental
instrumentality having jurisdiction over Insurer or any of its
properties.

(4) Insurer has filed with the SEC all statements, notices and other
documents required for registration of the Contracts and the Separate
Account under the provisions of ICA-40 and SA-33 and the Regulations
thereunder; further, there are no contracts or documents of Insurer or
relating to the Contracts or the Separate Account which are required to
be filed as exhibits to the Registration Statement by SA-33, ICA-40 or
the Regulations which have not been so filed.

(5) The Registration Statement has been declared effective by the SEC or
has become effective in accordance with the Regulations.

(6) Insurer has not received any notice from the SEC with respect to the
Registration Statement pursuant to Section 8(e) of ICA-40 and no stop
order under SA-33 has been issued and no proceeding therefor has been
instituted or threatened by the SEC.

(7) Insurer has obtained all necessary or customary orders of exemption or
approval from the SEC to permit the distribution of the Contracts
pursuant to the Agreement and to permit the operation of the Separate
Account as contemplated in the related Prospectus, and such orders
apply to Underwriter, as principal underwriter for the Contracts and
the Separate Account.

(8) The Registration Statement and the related Prospectus comply in all
material respects with the provisions of SA-33 and ICA-40 and the
Regulations.

(9) We have no reason to believe that the Registration Statement (other
than any financial statements included therein and any statements or
omissions made in reliance upon information furnished to the Company by
the Distributor or a Fund (and confirmed in writing) specifically for
use in the preparation of the Registration Statement, as to which no
opinion is rendered), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances under which they
were made, nor do we have any reason to believe that the Prospectus
(other than any financial statements included therein and any
statements or omissions made in reliance upon information furnished to
the Company by the Distributor or a Fund (and confirmed in writing)
specifically for use in the preparation of the Registration Statement
or Prospectus, as to which no opinion is rendered), as amended or
supplemented as of the date hereof, contains an untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein not misleading, in light of the
circumstances under which they were made.

(10) We have no reason to believe that the statements made in the Prospectus
under the caption "Tax Status," to the extent that they constitute
matters of law or legal conclusions with respect thereto, are not
correct in any material respect.

(11) The Separate Account has been duly established by Insurer and conforms
to the description thereof in the Registration Statement and the
Prospectus for the Separate Account.

(12) The form of the Contracts has been approved to the extent required by
the Kansas Insurance Commissioner and by the governmental agency
responsible for regulating insurance companies in each other state or
jurisdiction listed on Schedule 3 to the Agreement.

(13) The Contracts have been duly authorized by Insurer and conform to the
descriptions thereof in the Registration Statement for the Contracts
and the related Prospectus and, when issued as contemplated by the
Registration Statement, shall constitute legal, validly issued and
binding obligations of Insurer in accordance with their terms.

(14) The Contracts and the Separate Account have been duly registered with
the state securities regulatory bodies, administrative agencies, or any
other governmental instrumentalities with which the Contracts or
Separate Account must be registered of each state or jurisdiction
listed on Schedule 3 to the Agreement, to the extent such registration
requirements apply.

(15) To the best of our knowledge, no other consent, approval, authorization
or order of any court or governmental authority or agency is required
for the issuance or sale of the Contracts, the establishment or
operation of the Separate Account, or for the consummation of the
transactions contemplated by the Agreement, that has not been obtained.

Very truly yours,

SECURITY BENEFIT LIFE INSURANCE COMPANY

By:
-----------------------------------
Name:
Title:
<PAGE>
October 26, 1995

Amy J. Lee, Esquire
Security Benefit Life Insurance Company
700 Harrison Street
Topeka, Kansas 66636-0001

Re: Registration Statement No. 33-83238 for
T. Rowe Price Variable Annuity Separate Account of
SECURITY BENEFIT LIFE INSURANCE COMPANY

Dear Amy:

This letter is delivered to you in connection with (a) the Distribution
Agreement dated as of April 25, 1995 between you and T. Rowe Price Investment
Services, Inc. ("Underwriter") relating to its distribution of certain variable
annuity contracts (the "Contracts"), interests in which have been registered
with the Securities and Exchange Commission (the "SEC") pursuant to the
Registration Statement identified above, and (b) the Participation Agreement
dated as of April 25, 1995, between you and the undersigned relating to the
Separate Account's investment in the undersigned. For purposes of such
agreements, this letter identifies information we have provided to you for
inclusion in the Registration Statement, as amended on Form N-4, filed with the
SEC, and the definitive versions of the related prospectus and statement of
additional information for the Contracts (the "Prospectus" and "SAI,"
respectively), as filed with the SEC on July 18, 1995 in accordance with Rule
497 of the Securities Act of 1933.

References herein to pages, paragraphs, or sentences are references to such
in the definitive versions of the Prospectus and SAI. Capitalized terms used
herein and not defined herein have the same meaning as in the Prospectus and
SAI.

The Fund hereby confirms that it has furnished the following information to
you specifically for use in the preparation of the Registration Statement, the
Amendment, the Prospectus, and SAI (to the extent that the following applies to
or describes the Fund and not with respect to information regarding any other
mutual fund):

* The names of the portfolios of the Fund, as they appear on page 2 of the
prospectus and page 7 of the prospectus.

* The definition of the Fund on page 6 of the prospectus.

* The "Management Fee," "Other Expenses," and "Total Portfolio Expenses"
shown for the portfolios of the Fund in the Expense Table on page 10, and
accompanying note.

* The section entitled "The Funds" beginning on page 12 and ending on page
14, except for the sentence to the effect that ". . . if the Company
believes that any Fund's response to any of these events or conflicts
insufficiently protects Owners, it will take appropriate action on its
own."

* The section entitled "The Investment Advisers," on page 14.

* The section entitled "Fund Expenses," on page 25.

* * *

Very truly yours,

T. ROWE PRICE EQUITY SERIES, INC.

By:
-----------------------------------
Name: Henry H. Hopkins
Title: Vice President
<PAGE>
October 26, 1995

Amy J. Lee, Esquire
Security Benefit Life Insurance Company
700 Harrison Street
Topeka, Kansas 66636-0001

Re: Registration Statement No. 33-83238 for
T. Rowe Price Variable Annuity Separate Account of
SECURITY BENEFIT LIFE INSURANCE COMPANY

Dear Sirs:

* The names of the portfolios of the Fund, as they appear on page 2 of the
prospectus and page 7 of the prospectus.

* The definition of the Fund on page 6 of the prospectus.

* The "Management Fee," "Other Expenses," and "Total Portfolio Expenses"
shown for the portfolios of the Fund in the Expense Table on page 10, and
accompanying note.

* The section entitled "The Investment Advisers," on page 14.

* The section entitled "Fund Expenses," on page 25.

* * *

Very truly yours,

T. ROWE PRICE FIXED INCOME SERIES, INC.

By:
-----------------------------------
Name: Henry H. Hopkins
Title: Vice President
<PAGE>
October 26, 1995

Amy J. Lee, Esquire
Security Benefit Life Insurance Company
700 Harrison Street
Topeka, Kansas 66636-0001

Re: Registration Statement No. 33-83238 for
T. Rowe Price Variable Annuity Separate Account of
SECURITY BENEFIT LIFE INSURANCE COMPANY

Dear Sirs:

This letter is delivered to you in connection with (a) the Distribution
Agreement dated as of April 25, 1995 between you and T. Rowe Price Investment
Services, Inc. ("Underwriter") relating to its distribution of certain variable
annuity contracts (the "Contracts"), interests in which have been registered
with the Securities and Exchange Commission (the "SEC") pursuant to the
Registration Statement identified above, and (b) the Participation Agreement
dated as of April 25, 1995 between you and the undersigned relating to the
Separate Account's investment in the undersigned. For purposes of such
agreements, this letter identifies information we have provided to you for
inclusion in the Registration Statement, as amended on Form N-4, filed with the
SEC, and the definitive versions of the related prospectus and statement of
additional information for the Contracts (the "Prospectus" and "SAI,"
respectively), as filed with the SEC on July 18, 1995 in accordance with Rule
497 of the Securities Act of 1933.

* The names of the portfolios of the Fund, as they appear on page 2 of the
prospectus and page 7 of the prospectus.

* The definition of the Fund on page 6 of the prospectus.

* The "Management Fee," "Other Expenses," and "Total Portfolio Expenses"
shown for the portfolios of the Fund in the Expense Table on page 10, and
accompanying note.

* The section entitled "The Investment Advisers," on page 14.

* The section entitled "Fund Expenses," on page 25.

* * *

Very truly yours,

T. ROWE PRICE INTERNATIONAL SERIES, INC.

By:
------------------------------------
Name: Henry H. Hopkins
Title: Vice President
<PAGE>
October 26, 1995

Amy J. Lee, Esquire
Security Benefit Life Insurance Company
700 Harrison Street
Topeka, Kansas 66636-0001

Re: Registration Statement No. 33-83238 for
T. Rowe Price Variable Annuity Separate Account of
SECURITY BENEFIT LIFE INSURANCE COMPANY

Dear Sirs:

This letter is delivered to you in connection with the Distribution
Agreement (the "Agreement") dated as of April 25, 1995 between you and the
undersigned relating to our distribution of certain variable annuity contracts,
interests in which have been registered with the Securities and Exchange
Commission (the "SEC") pursuant to the Registration Statement identified above.
This letter identifies information we have provided to you for inclusion in the
Registration Statement, as amended on Form N-4, filed with the SEC, and the
definitive versions of the related prospectus and statement of additional
information for the Contracts (the "Prospectus" and "SAI," respectively), as
filed with the SEC on July 18, 1995 in accordance with Rule 497 of the
Securities Act of 1933.

References herein to pages, paragraphs, or sentences are references to the
definitive versions of the Prospectus and SAI. Capitalized terms used herein and
not defined herein have the same meaning as in the Prospectus and SAI.

We have provided the following information to you specifically for use in
the preparation of the Registration Statement, the Amendment, the Prospectus,
and the SAI:

* The second and third sentences under the caption, "Application for a
Contract," on page 15 to the extent of references to the Underwriter's
effectuation of redemptions from the T. Rowe Price mutual funds.

* The fourth sentence under the heading "Purchase Payments," on page 16, to
the extent of references to redemption of Fund shares.

* The paragraph captioned "Distribution of the Contracts," on page 42.

* Item 29 of Part C of the Amendment, which lists officers of Underwriter.

Further, to the extent Investment Services has agreed to perform an
administrative or operational service specifically described in the Prospectus
and not referred to in the preceding paragraph, you may rely upon the fact that
Investment Services shall perform such service.

* * *

It is understood that the opinion of counsel to Security Benefit Life
Insurance Company to be furnished to us in accordance with section 2 of the
Distribution Agreement will not cover (I.E., will specifically exclude) all of
the information referred to above, as well as all information confirmed in
writing by or on behalf of the Funds as being provided by the Funds, and any
omissions relating to, arising out of, or pertaining to such provided
information.

Very truly yours,

T. ROWE PRICE INVESTMENT SERVICES, INC.

By:
----------------------------------
Name: Nancy M. Morris
Title: Vice President
<PAGE>
SCHEDULE 1

Contracts Subject to Agreement

- --------------------------------------------------------------------------------
CONTRACT MARKETING NAME POLICY FORM NOS. SEC REGISTRATION NO.
- --------------------------------------------------------------------------------
T. Rowe Price No-Load File No. 33-83238

Variable Annuity V6021 File No. 811-8724

T. Rowe Price No-Load File No. 33-83238

Immediate Variable Annuity V6027 File No. 811-8724
<PAGE>
SCHEDULE 2

SEPARATE ACCOUNTS, SUBACCOUNTS AND FUNDS

AVAILABLE UNDER THE CONTRACTS

- --------------------------------------------------------------------------------
Separate Account Subaccount Funds
- --------------------------------------------------------------------------------
T. Rowe Price Variable T. Rowe Price Equity
Annuity Account Series, Inc.

* New America * T. Rowe Price New
Growth Subaccount America Growth Portfolio

* Equity Income * T. Rowe Price Equity
Subaccount Income Portfolio

* Personal Strategy
Balanced Subaccount * T. Rowe Price Personal
Strategy Balanced
Portfolio

* Mid-Cap Growth
Subaccount * T. Rowe Price Mid-Cap
Growth Portfolio
- -------------------------------------------------------------------------------
T. Rowe Price International
Series, Inc.

* International Stock * T. Rowe Price
Subaccount International
Stock Portfolio
- -------------------------------------------------------------------------------
T. Rowe Price Fixed Income
Series, Inc.

* T. Rowe Price Limited
* Limited-Term -Term Bond Portfolio
Bond Subaccount
* T. Rowe Price Prime
* Prime Reserve Reserve Portfolio
Subaccount
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 3

LIST OF JURISDICTIONS IN WHICH SECURITY BENEFIT
IS QUALIFIED TO OFFER THE CONTRACTS

Alabama Missouri
Alaska Montana
Arizona Nebraska
Arkansas Nevada
California New Hampshire
Colorado New Jersey
Connecticut New Mexico
Delaware North Carolina
District of Columbia North Dakota
Florida Ohio
Georgia Oklahoma
Hawaii Oregon
Idaho Pennsylvania
Illinois Rhode Island
Indiana South Carolina
Iowa South Dakota
Kansas Tennessee
Kentucky Texas
Louisiana Utah
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming

- -----------------------
* Approval of Form Nos. V6027 (8-98) and V6021 (R8-98) is pending.

<PAGE>
SECURITY BENEFIT LIFE INSURANCE COMPANY

FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT

THE COMPANY'S PROMISE

In consideration of the Purchase Payments and the attached Application,
Security Benefit Life Insurance Company (the "Company") will pay the
benefits of this Contract according to its provisions.

LEGAL CONTRACT

PLEASE READ THE CONTRACT CAREFULLY. It is a legal Contract between the
Owner and the Company. The Contract's table of contents is on page 2.

FREE LOOK PERIOD-RIGHT TO CANCEL

IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, HE OR SHE
MAY RETURN IT TO THE COMPANY WITHIN 10 DAYS FROM THE DATE OF RECEIPT. IT
MAY BE RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED,
THIS CONTRACT SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY
WILL REFUND ANY PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT
AND WILL REFUND SEPARATE ACCOUNT VALUE AS OF THE DATE THE RETURNED POLICY
IS RECEIVED BY THE COMPANY.

Signed for Security Benefit Life Insurance Company on the Contract Date.

[ROGER K. VIOLA] [HOWARD R. FRICKE]
Secretary President

A BRIEF DESCRIPTION OF THIS CONTRACT

This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.

* Purchase Payments may be made until the earlier of the Annuity Payout
Date or termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Payout Date according
to the Contract provisions.
* Annuity Payments begin on the Annuity Payout Date using the method
specified in this Contract.

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. (SEE "ACCOUNT
VALUE AND EXPENSE PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)

[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
700 SW Harrison Street, Topeka, KS 66636-0001
1-800-469-6587 for Customer Service

V6021 (R8-98)

<PAGE>

- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page

CONTRACT SPECIFICATIONS............................... 3
DEFINITIONS........................................... 4-7
GENERAL PROVISIONS.................................... 7-10
The Contract..................................... 7, 8
Compliance....................................... 8
Misstatement of Age and Sex...................... 8
Evidence of Survival............................. 8
Incontestability................................. 8
Assignment....................................... 8
Exchanges........................................ 8, 9
Limits on Exchanges.............................. 10
Claims of Creditors.............................. 10
Nonforfeiture Values............................. 10
Participation.................................... 10
Statements....................................... 10
OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS....... 10,11
Ownership........................................ 10
Joint Ownership.................................. 11
Annuitant........................................ 11
Primary and Secondary Beneficiaries.............. 11
Ownership and Beneficiary Changes................ 11
PURCHASE PAYMENT PROVISIONS........................... 12
Flexible Purchase Payments....................... 12
Purchase Payment Limitations..................... 12
Purchase Payment Allocation...................... 12
Place of Payment................................. 12
ACCOUNT VALUE AND EXPENSE PROVISIONS.................. 12-15
Account Value.................................... 12
Fixed Account Value.............................. 12
Fixed Account Interest Crediting................. 13
Separate Account Value........................... 13
Accumulation Unit Value.......................... 13
Net Investment Factor............................ 14
Determining Accumulation Units................... 14
Mortality and Expense Risk Charge................ 14
Premium Tax Expense.............................. 14
Mutual Fund Expenses............................. 15
WITHDRAWAL PROVISIONS................................. 15-17
Withdrawals...................................... 15,16
Withdrawal Value................................. 16
Withdrawal Charge................................ 16
Payment Adjustment............................... 16,17
Date of Request.................................. 17
Systematic Withdrawals........................... 17
Payment of Withdrawal Benefits................... 17
DEATH BENEFIT PROVISIONS.............................. 18,19
Death Benefit.................................... 18
Proof of Death................................... 19
Distribution Rules............................... 19
ANNUITY PAYMENT PROVISIONS............................ 20-26
Annuity Payout Date.............................. 20
Change of Annuity Payout Date.................... 20
Annuity Options.................................. 20-23
Payment Adjustment Upon Death of Joint
Annuitant........................................ 23
Annuity Payout Amount............................ 24
Fixed Annuity Payments........................... 24
Variable Annuity Payments........................ 24
Annuity Tables................................... 24
Annuity Payments................................. 25
Payment Units.................................... 25,26
Payment Unit Value............................... 26
AMENDMENTS OR ENDORSEMENTS, if any

<PAGE>

- --------------------------------------------------------------------------------
CONTRACT SPECIFICATIONS
- --------------------------------------------------------------------------------
OWNER NAME: John A. Doe CONTRACT NUMBER: Specimen

JOINT OWNER NAME: Mary K. Doe CONTRACT DATE: 6-30-2023

ANNUITANT NAME: John A. Doe ANNUITY PAYOUT DATE: 7-1-2023

ANNUITANT DATE OF BIRTH: 10-30-1953 LIQUIDITY PERIOD EXPIRATION
DATE: 6-30-2028

ANNUITANT GENDER: Male PERIOD CERTAIN EXPIRATION
DATE: 6-30-2038

PRIMARY BENEFICIARY PLAN: IRA
NAME: Linda L. Doe

SECONDARY BENEFICIARY ASSIGNMENT:This policy may not be
NAME: John A. Doe, Jr. assigned. See Assignment Provision
of your Policy.
- --------------------------------------------------------------------------------
INITIAL PURCHASE PAYMENT......................$10,000

MINIMUM SUBSEQUENT PURCHASE PAYMENTS $1,000 or $200 through an
PAYMENTS......................................automatic investment program

MINIMUM SYSTEMATIC WITHDRAWAL.................$100

MORTALITY AND EXPENSE RISK CHARGE.............0.55% Annually (1.40% Annually for
Option 9)

WITHDRAWAL CHARGE (OPTION 9 ONLY).............
Year of Withdrawal from Annuity Payout Date* 1 2 3 4 5
Withdrawal Charge ----------------------------------
5% 4% 3% 2% 1%

*Withdrawals under Option 9 are available
only during the Liquidity Period

GUARANTEED RATE...............................3%

ANNUITY OPTION................................Life Income with Liquidity
(Option 9)
PERIOD CERTAIN 15 Years
JOINT & SURVIVOR PERCENTAGE 100%
FLOOR PAYMENT $450

BASIS OF ANNUITY TABLES.......................1983(a) Mortality Table with
mortality improvement using
Projection Scale G

ASSUMED INTEREST RATE.........................3.5% Annually

SEPARATE ACCOUNT..............................T. Rowe Price Variable Annuity
Account
SUBACCOUNT:
Prime Reserve Subaccount (Not available under Option 9); Limited-Term Bond
Subaccount; Personal Strategy Balanced Subaccount; Equity Income Subaccount;
Mid-Cap Growth Subaccount; International Stock Subaccount; New America Growth
Subaccount.

METHOD FOR DEDUCTIONS:
Deductions for any Premium Taxes will be allocated proportionately to the
Owner's Account Value in the Subaccounts and the Fixed Account.

The Annuity Payout Date and Annuity Option are assigned automatically and may
be changed by the Owner prior to the Annuity Payout Date. See "Change of
Annuity Payout Date" and "Annuity Options."

<PAGE>

- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------

ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.

ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to compute Separate
Account Value. It is also used to compute the Variable Annuity Payments for
Annuity Options 5 through 7.

ANNUITANT
An Annuitant is a person on whose life the Annuity Payments depend for Annuity
Options 1 through 4 and 9. The Annuitant receives Annuity Payments under this
Contract. Please see "Annuitant" provisions on page 11.

ANNUITY OPTION
An Annuity Option is a set of provisions that form the basis for making
Annuity Payments. The Annuity Option is set prior to the Annuity Payout Date.

ANNUITY PAYMENTS
Annuity Payments are payments made according to the provisions of the Annuity
Option selected. Annuity Payments begin on the Annuity Payout Date and are
made on the same date of each month on a monthly, quarterly, semiannual or
annual basis. Please see "Annuity Payment Provisions" on pages 20 through 27.

ANNUITY PAYOUT DATE
The Annuity Payout Date is the date on which Annuity Payments begin. This date
may be changed by the Owner. The Annuity Payout Date is set forth on page 3.
Please see "Annuity Payout Date" on page 20.

AUTOMATIC EXCHANGES
Automatic Exchanges are Exchanges among the Subaccounts and the Fixed Account
prior to the Annuity Payout Date. Such Exchanges are made automatically on a
periodic basis by the Company at the written request of the Owner. The Company
reserves the right to discontinue, modify or suspend Automatic Exchanges.

COMPANY
The Company is Security Benefit Life Insurance Company, 700 SW Harrison
Street, Topeka, Kansas 66636-0001.

CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date.

CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is set
forth on page 3.

CONTRACT YEAR
Contract Years are measured from the Contract Date.

CURRENT INTEREST
The Company may in its discretion pay Current Interest on Fixed Account Value
at a rate that exceeds the Guaranteed Rate set forth on page 3. The Company
will declare the rate of Current Interest, if any, from time to time.

DESIGNATED BENEFICIARY
Upon the death of the Owner or Joint Owner, the Designated Beneficiary will be
the first person on the following list who is alive on the date of death:
1. Owner;
2. Joint Owner;
3. Primary Beneficiary;
4. Secondary Beneficiary;
5. Annuitant; and
6. the Owner's estate if no one listed above is alive.

The Designated Beneficiary receives a death benefit upon the death of the
Owner prior to the Annuity Payout Date.

Under certain Annuity Options, the Designated Beneficiary receives a death
benefit upon the death of the Annuitant(s). Please see "Ownership, Annuitant
and Beneficiary Provisions" on page 11, "Death Benefit Provisions" on pages 18
through 20 and "Annuity Options" on pages 21 through 24.

EXCHANGE
An Exchange is an Exchange of Account Value or Payment Units of one Subaccount
for the equivalent dollar amount of Account Value or Payment Units of another
Subaccount(s). An Exchange also includes Exchanges of Account Value among the
Subaccounts and the Fixed Account.

FIXED ACCOUNT
The Fixed Account is part of the Company's general account. The Company
manages the general account and guarantees that it will credit interest on
Fixed Account Value at an annual rate at least equal to the Guaranteed Rate.
This Rate is set forth on page 3.

GUARANTEE PERIOD
Current Interest, if declared, is fixed for rolling periods of one or more
years, referred to as Guarantee Periods. The Company may offer Guarantee
Periods of different durations.

The Guarantee Period that applies to any Fixed Account Value:

(1) starts on the date that such Account Value is allocated to the Fixed
Account pursuant to:
(a) a Purchase Payment Received by the Company; or
(b) an Exchange to the Fixed Account; and

(2) ends on the last day of the same month in the year in which the Guarantee
Period expires.

When any Guarantee Period expires, a new Guarantee Period shall start for such
Account Value on the date that follows such expiration date. Such new period
shall end on the immediately preceding date in the year in which the Guarantee
Period expires. For example, assuming a one-year Guarantee Period, Account
Value exchanged to the Fixed Account on June 1 would have a Guarantee Period
starting on that date and ending on June 30 of the following year. A new
Guarantee Period for such Account Value would start on July 1 of that year and
end on June 30 of the following year.

HOME OFFICE
The address of the Company's Home Office is Security Benefit Life Insurance
Company, 700 SW Harrison Street, Topeka, Kansas 66636-0001.

JOINT OWNER
The Joint Owner, if any, shares an undivided interest in the entire Contract
with the Owner. The Joint Owner, if any, is named on page 3. Please see "Joint
Ownership" provisions on page 11.

LIQUIDITY PERIOD
Under Option 9, the Liquidity Period is the period of time during which the
Owner may withdraw Account Value. The Liquidity Period begins on the Annuity
Payout Date and ends on the Valuation Date preceding the 61st Annuity Payment.
The Liquidity Period Expiration Date is set forth on page 3.

NONNATURAL PERSON
Any group or entity that is not a living person, such as a trust or
corporation.

NONQUALIFIED CONTRACT
A Contract that is not a Qualified Contract.

OWNER
The Owner is the person who has all rights under the Contract. The Owner is
named on page 3. Please see "Ownership" provisions on page 11.

PAYMENT UNIT
The Payment Unit is a unit of measure used to compute Variable Annuity
Payments for Annuity Options 1 through 4, 8 and 9.

PREMIUM TAX
Any Premium Taxes levied by a state or other entity will be charged against
this Contract. When Premium Tax is assessed after the Purchase Payment is
applied, it will be deducted as described on page 3.

PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and applied to the
Contract.

QUALIFIED CONTRACT
A Contract issued in connection with a plan qualified under Section 401, 403,
408 or a similar provision of the Internal Revenue Code.

RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company in good
order at its Home Office, 700 SW Harrison, Topeka, Kansas 66636-0001.

SEPARATE ACCOUNT
The Separate Account set forth on page 3 is a separate account established and
maintained by the Company under Kansas law. The Separate Account is registered
with the Securities and Exchange Commission (SEC) under the Investment Company
Act of 1940 as a Unit Investment Trust. It was established by the Company to
support variable annuity contracts. The Company owns the assets of the
Separate Account and maintains them apart from the assets of its general
account and its other separate accounts. The assets held in the Separate
Account equal to the reserves and other contract liabilities with respect to
the Separate Account may not be charged with liabilities arising from any
other business the Company may conduct.

Income and realized and unrealized gains and losses from assets in the
Separate Account are credited to, or charged against, the Separate Account
without regard to the income, gains or losses from the Company's general
account or its other separate accounts. The Separate Account is divided into
Subaccounts set forth on page 3. Income and realized and unrealized gains and
losses from assets in each Subaccount are credited to, or charged against, the
Subaccount without regard to income, gains or losses in the other Subaccounts.
The Company has the right to transfer to its general account any assets of the
Separate Account that are in excess of the reserves and other contract
liabilities with respect to the Separate Account. The value of the assets in
the Separate Account on each Valuation Date is determined as of the end of
each Valuation Date.

SUBACCOUNTS
The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are set forth on
page 3. Subject to the regulatory requirements then in force, the Company
reserves the right to:

1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or purchased
by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other separate accounts of
the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to the
Separate Account; and
7. terminate and liquidate any Subaccount.

If any of these changes result in a material change to the Separate Account or
a Subaccount, the Company will notify the Owner of the change. The Company
will not change the investment policy of any Subaccount in any material
respect without complying with the filing and other procedures of the
insurance regulators of the state of issue.

SUBACCOUNT NET ASSET VALUE
The Subaccount Net Asset Value is equal to:

(1) the net asset value of all shares of the underlying mutual fund held by
the Subaccount; plus
(2) any cash or other assets of the Subaccount; less
(3) all liabilities of the Subaccount.

VALUATION DATE
A Valuation Date is each day that both the New York Stock Exchange and the
Company's Home Office are open for business.

VALUATION PERIOD
A Valuation Period is the interval of time from the close of one Valuation
Date to the close of the next Valuation Date.

- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------

THE CONTRACT
The entire Contract between the Owner and the Company consists of:

(1) this Contract;
(2) the attached Application; and
(3) any Amendments, Endorsements or Riders to the Contract.

All statements made in the Application will, in the absence of fraud, as ruled
by a court of competent jurisdiction, be deemed representations and not
warranties. The Company will use no statement made by or on behalf of any
Owner or Annuitant to void this Contract unless it is in the written
Application. Any change in the Contract can be made only with the written
consent of the President, a Vice President, or the Secretary of the Company.

The Purchase Payment and the Application must be acceptable to the Company
under its rules and practices. If they are not, the Company's liability shall
be limited to a return of the Purchase Payments.

COMPLIANCE
The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or state
law. This includes, but is not limited to: (1) requirements for annuity
contracts under the Internal Revenue Code; or (2) the laws of any state. The
Company will provide the Owner with a copy of any such change and also will
file such a change with the insurance regulatory officials of the state in
which the Contract is delivered.

MISSTATEMENT OF AGE AND SEX
If the age or sex of any Annuitant has been misstated, Annuity Payments shall
be adjusted, when allowed by law, to the amount which would have been payable
based upon the correct age or sex. Proof of the age of an Annuitant may be
required at any time, in a form acceptable to the Company. If Annuity Payments
have already commenced and the misstatement has caused an underpayment, the
full amount due will be paid with the next scheduled Annuity Payment. If the
misstatement has caused an overpayment, the amount due will be deducted from
one or more future Annuity Payments.

EVIDENCE OF SURVIVAL
When any Annuity Payments under this Contract depend on the Annuitant being
alive on a given date, proof that the Annuitant is living may be required by
the Company. Such proof must be in a form acceptable to the Company, and may
be required prior to making the Annuity Payments.

INCONTESTABILITY
This Contract will not be contested after it has been in force for two years
from the Contract Date during the life of the Owner.

ASSIGNMENT
Please refer to page 3 to see if this Contract may be assigned. If so, no
Assignment under this Contract is binding unless Received by the Company in
writing. The Company assumes no responsibility for the validity, legality, or
tax status of any Assignment. The Assignment will be subject to any payment
made or other action taken by the Company before the Assignment is Received by
the Company. Once filed, the rights of the Owner, Annuitant and Beneficiary
are subject to the Assignment. Any claim is subject to proof of interest of
the assignee.

EXCHANGES
Certain Exchanges of Account Value or Payment Units are permitted under the
Contract. An Owner may make only six Exchanges per Contract Year. Automatic
Exchanges are not included in the six Exchanges allowed per Contract Year.
Annuity Payments after an Exchange will reflect the new allocation of Account
Value or Payment Units among the Subaccounts and the Fixed Account.

An Exchange may be effected by submitting a written request to the Company or
by any other means permitted by the Company. The Company will effect an
Exchange to or from a Subaccount on the basis of Accumulation Unit Value (or,
if applicable, Payment Unit Value) as of the close of the Valuation Period in
which all information required to make the Exchange is Received by the
Company.

Prior to the Annuity Payout Date, Account Value may be Exchanged among the
Subaccounts and the Fixed Account.

Account Value may be Exchanged from the Fixed Account only:

(1) during the calendar month in which the applicable Guarantee Period
expires; and
(2) pursuant to an Automatic Exchange.

Exchanges of Fixed Account Value shall be made:

(1) first from Fixed Account Value for which the Guarantee Period expires
during the calendar month in which the Exchange is effected;
(2) then in the order that starts with Fixed Account Value which has the
longest amount of time before its Guarantee Period expires; and
(3) ends with that which has the least amount of time before its Guarantee
Period expires.

Annuity Options 1 through 4 and 8 provide for fixed payments (a "Fixed
Annuity") or payments that vary according to the performance of the
Subaccounts (a "Variable Annuity"). If a Variable Annuity under one of Annuity
Options 1 through 4 or 8 is elected, the Owner may Exchange Payment Units only
among the Subaccounts.

Annuity Options 5 through 7 provide for:

(1) a Fixed Annuity;
(2) a Variable Annuity; or
(3) a combination Fixed and Variable Annuity.

Account Value may be Exchanged among the Subaccounts and the Fixed Account
under Annuity Options 5 through 7. Account Value may be Exchanged from the
Fixed Account only during the calendar month in which the applicable Guarantee
Period expires.

Annuity Option 9 provides for a Variable Annuity. Account Value may be
Exchanged among the Subaccounts during the Liquidity Period under Option 9.
After the Liquidity Period, Payment Units may be Exchanged among the
Subaccounts. An Owner's Exchange of Account Value under Option 9 will
automatically effect a corresponding Exchange of Payment Units. Exchanges
under Option 9 do not affect the amount of Annuity Payments until such amount
is reset as discussed under "Payment Units" on pages 26 and 27.

LIMITS ON EXCHANGES
The Company reserves the right to:

(1) limit the amount of Account Value that may be subject to Exchanges;
(2) limit the amount of Account Value remaining in an Account after an
Exchange;
(3) waive or limit the number of Exchanges allowed each Contract Year;
(4) impose conditions on the right to Exchange; and
(5) suspend Exchanges.

Exchanges of Account Value must be at least $500 or, if less, the remaining
balance in the Fixed Account or a Subaccount.

The Company reserves the right to delay Exchanges from the Fixed Account for
up to 6 months as required by most states. The Company will inform the Owner
if there will be a delay.

CLAIMS OF CREDITORS
The Account Value and other benefits under this Contract are exempt from the
claims of creditors of the Owner to the extent allowed by law.

NONFORFEITURE VALUES
The Death Benefits, Withdrawal Values and Annuity Payout Amounts will at least
equal the minimum required by law.

PARTICIPATION
The Company may pay dividends on some of its contracts. The Company, however,
does not expect dividends to become payable on this Contract. At the end of
each Contract Year the Company will determine the Contract's dividend, if any.
The Owner may choose to have it: (1) added to the Account Value; or (2) paid
in cash. If no choice is made, any dividend will be added to Account Value.

STATEMENTS
At least once each Contract Year the Owner shall be sent a statement including
any current Account Value and any other information required by law. The Owner
may send a written request for a statement at other intervals. The Company may
charge a reasonable fee for statements at such other intervals.

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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
- --------------------------------------------------------------------------------

OWNERSHIP
During the Owner's lifetime, all rights and privileges under the Contract may
be exercised only by the Owner. If the purchaser names someone other than
himself or herself as Owner, the purchaser has no rights in the Contract. No
Owner may be older than age 85 on the Contract Date. Upon the Owner's death,
all rights and privileges under the Contract may be exercised by: (1) the
Designated Beneficiary if death occurs prior to the Annuity Payout Date; or
(2) the Annuitant(s) if death occurs on or after the Annuity Payout Date.

JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint Owner
share an undivided interest in the entire Contract as joint tenants with
rights of survivorship. When an Owner and Joint Owner have been named, the
Company will honor only requests for changes and the exercise of other
Ownership rights made by both the Owner and Joint Owner. When a Joint Owner is
named, all references to "Owner" throughout this Contract should be construed
to mean both the Owner and Joint Owner, except for the "Statements" provision
on page 10 and the "Death Benefit Provisions" on pages 18 through 20. Joint
Owners are permitted only if the Contract is a Nonqualified Contract.

ANNUITANT
The Annuitant is named on page 3. The Owner may change the Annuitant or any
Joint Annuitant only prior to the Annuity Payout Date. The request for this
change must be made in writing and Received by the Company at least 30 days
prior to the Annuity Payout Date. No Annuitant may be named who is more than
85 years old on the Contract Date. When the Annuitant dies prior to the
Annuity Payout Date, the Owner must name a new Annuitant within 30 days or, if
sooner, by the Annuity Payout Date, except where the Owner is a Nonnatural
Person. If a new Annuitant is not named, the Owner becomes the Annuitant.

PRIMARY AND SECONDARY BENEFICIARIES
The Primary Beneficiary and any Secondary Beneficiary are named on page 3. The
Owner may change any Beneficiary as described in "Ownership and Beneficiary
Changes" below. If the Primary Beneficiary dies prior to the Owner, the
Secondary Beneficiary becomes the Primary Beneficiary. Unless the Owner
directs otherwise, when there are two or more Primary Beneficiaries, they will
receive equal shares. The Owner may designate a permanent Beneficiary whose
rights under the Contract may not be changed without his or her written
consent.

OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a new
Owner, a new Primary Beneficiary or a new Secondary Beneficiary. Any new
choice of Owner, Primary Beneficiary or Secondary Beneficiary will revoke any
prior choice. Any change must be made in writing and recorded at the Home
Office. The change will become effective as of the date the written request is
signed, whether or not the Owner is living at the time the change is recorded.
A new choice of Primary Beneficiary or Secondary Beneficiary will not apply to
any payment made or action taken by the Company prior to the time it was
recorded. The Company may require the Contract be returned so these changes
may be made.

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PURCHASE PAYMENT PROVISIONS
- --------------------------------------------------------------------------------

FLEXIBLE PURCHASE PAYMENTS
The Contract begins on the Contract Date when the initial Purchase Payment is
applied under the Contract. The Owner is not required to continue Purchase
Payments in the amount or frequency originally planned. The Owner may: (1)
increase or decrease the amount of Purchase Payments, subject to any Contract
or administrative limits; or (2) change the frequency of Purchase Payments. A
change in frequency or amount of Purchase Payments does not require a written
request.

PURCHASE PAYMENT LIMITATIONS
Total Purchase Payments to the Contract may not be greater than $1,000,000
without prior approval by the Company. The minimum subsequent Purchase Payment
amount is set forth on page 3.

PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Subaccounts and the Fixed
Account. The allocation to each Account must be a whole percentage. No less
than 5 percent of the Purchase Payment may be allocated to any Account. The
Owner may change the allocation of Purchase Payments by submitting a written
request to the Company or by other means permitted by the Company.

PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to the Company at its
Home Office. Purchase Payments after the first Purchase Payment are applied as
of the end of the Valuation Period during which they are Received by the
Company.

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ACCOUNT VALUE AND EXPENSE PROVISIONS
- --------------------------------------------------------------------------------

ACCOUNT VALUE
Account Value is determined on each Valuation Date: (1) prior to the Annuity
Payout Date; and (2) after the Annuity Payout Date for Options 5 through 7 and
for Option 9 during the Liquidity Period. Account Value is the sum of: (1) the
Separate Account Value; and (2) the Fixed Account Value. At any time after the
first Contract Year and prior to the Annuity Payout Date, the Company reserves
the right to pay to the Owner the Account Value as a lump sum if it is below
$2,000.

FIXED ACCOUNT VALUE
On any Valuation Date, the Fixed Account Value is equal to any part of the
First Purchase Payment allocated under the Contract to the Fixed Account:

PLUS
1. any other Purchase Payment allocated under the Contract to the Fixed
Account;
2. any Exchanges from the Separate Account to the Fixed Account; and
3. any interest credited to the Fixed Account.

LESS:
1. any Withdrawals deducted from the Fixed Account;
2. any Exchanges from the Fixed Account to the Separate Account;
3. any Premium Taxes; and
4. any Fixed Account Value which is applied to any of Annuity Options 1
through 4, 8 or 9; and
5. any Annuity Payments made under Annuity Options 5 through 7.

FIXED ACCOUNT INTEREST CREDITING
The Company shall credit interest on Fixed Account Value at an annual rate at
least equal to the Guaranteed Rate set forth on page 3. Also, the Company may
in its sole judgment credit Current Interest at a rate in excess of the
Guaranteed Rate. The rate of Current Interest, if declared, shall be fixed
during the Guarantee Period. Fixed Account Value shall earn Current Interest
during each Guarantee Period at the rate, if any, declared by the Company on
the first day of the Guarantee Period.

The Company may credit Current Interest on Account Value that was allocated or
exchanged to the Fixed Account during one period at a different rate than
amounts allocated or exchanged to the Fixed Account in another period. Also,
the Company may credit Current Interest on Fixed Account Value at different
rates based upon the length of the Guarantee Period. Therefore, at any time,
portions of Fixed Account Value may be earning Current Interest at different
rates based upon the period during which such portions were allocated or
exchanged to the Fixed Account and the length of the Guarantee Period.

SEPARATE ACCOUNT VALUE
On any Valuation Date, the Separate Account Value is the sum of the then
current value of the Accumulation Units allocated to each Subaccount for this
Contract. The number of Accumulation Units initially allocated to each
Subaccount is determined by dividing: (1) the portion of the first Purchase
Payment allocated to the Subaccount on the Contract Date; by (2) the
Accumulation Unit Value on the Contract Date.

ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Series was set at $10. The
Accumulation Unit Value for any subsequent Valuation Date is equal to (1)
multiplied by (2) where:

1. is the Accumulation Unit Value determined on the immediately preceding
Valuation Date; and
2. is the Net Investment Factor on the Valuation Date with respect to which
the Accumulation Unit Value is being determined.

NET INVESTMENT FACTOR

The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is found by dividing (1) by (2) and subtracting (3) from the result,
where:

1. is equal to:

a. the net asset value per share of the mutual fund held in the
Subaccount found at the end of the current Valuation Period; plus

b. the per share amount of any dividend or capital gain distributions
paid by the Subaccount's underlying mutual fund that is not included
in the net asset value per share; plus or minus

c. a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or Subaccount; the operations of the Company with respect to
the Contract; or the payment of premium or acquisition costs under the
Contract.

2. is the net asset value per share of the Subaccount's underlying mutual
fund as found at the end of the prior Valuation Period.

3. is a daily factor representing the Mortality and Expense Risk charge
deducted from the Separate Account.

DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a Subaccount under the Contract
will not change as a result of investment experience. Events that change the
number of Accumulation Units are:

1. Purchase Payments applied to the Subaccount;
2. Account Value Exchanged into or out of the Subaccount;
3. Withdrawals deducted from the Subaccount;
4. Annuity Payments from the Subaccount under Options 5 through 7 and 9;
5. Any amounts deducted from the Subaccount to increase the amount of the
Annuity Payments under Option 9 to the amount of the Floor Payment;
6. Separate Account Value applied to any of Annuity Options 1 through 4 or
8; and
7. Premium Taxes deducted from the Subaccount.

MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the Mortality and Expense Risk Charge shown on page 3.
This charge will be computed and deducted from each Subaccount on each
Valuation Date. This charge is factored into the Accumulation Unit and Payment
Unit Values on each Valuation Date.

PREMIUM TAX EXPENSE
The Company reserves the right to deduct Premium Tax when due or any time
thereafter. Any Premium Taxes will be deducted as described on page 3.

MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each such fund reflects the deduction of any investment advisory fees
and other expenses of the fund. These fees and expenses are not deducted from
the assets of a Subaccount, but are paid by the funds. The Owner indirectly
bears a pro rata share of such fees and expenses. A fund's fees and expenses
are not specified or fixed under the terms of this Contract.

- --------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------

WITHDRAWALS
Prior to the Annuity Payout Date, a full Withdrawal of Account Value or
Partial Withdrawal of Separate Account Value is permitted. Partial Withdrawals
of Fixed Account Value are restricted as described below. On or after the
Annuity Payout Date, the Owner may withdraw Account Value if one of Options 5
through 7 has been elected. The Owner also may withdraw Account Value during
the Liquidity Period under Option 9. Under these options, a full Withdrawal of
Account Value or full or partial Withdrawal of Separate Account Value is
allowed. Partial Withdrawals of Fixed Account Value are restricted as
described below. This provision is subject to any federal or state Withdrawal
restrictions.

A partial Withdrawal of Fixed Account Value may be made only: (1) during the
calendar month in which the applicable Guarantee Period expires; and (2) once
per Contract Year in an amount up to the greater of $5,000 or 10 percent of
the Fixed Account Value at the time of the partial Withdrawal. Systematic
Withdrawals are permitted prior to the Annuity Payout Date.

The Owner also may withdraw the present value of future Annuity Payments
commuted at the Assumed Interest Rate if a Variable Annuity under Option 8 has
been elected.

Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum.

All Withdrawals must meet the following conditions:

1. The request for Withdrawal must be Received by the Company in writing or
under other methods allowed by the Company.

2. The Owner must request a Withdrawal while this Contract is in force.

3. The amount Withdrawn must be at least $500.00 except when terminating the
Contract.

4. For Option 9, the request for Withdrawal must be Received by the Company
prior to the Liquidity Period Expiration Date set forth on page 3.

A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. Withdrawals of Fixed Account Value shall be
made:

(1) first from Fixed Account Value for which the Guarantee Period expires
during the calendar month in which the Withdrawal is effected;

(2) then in the order that starts with Fixed Account Value which has the
longest amount of time before its Guarantee Period expires; and

(3) ends with that which has the least amount of time before its Guarantee
Period expires.

WITHDRAWAL VALUE
The Withdrawal Value as of any Valuation Date will be:

(1) the Account Value (or for Option 8, the present value of future Annuity
Payments commuted at the Assumed Interest Rate); less

(2) any Premium Taxes due or paid by the Company; and

(3) for Option 9, the Withdrawal Charge set forth on page 3.

If Account Value after any partial Withdrawal is $2,000 or less, or with
respect to Option 8, Annuity Payments would be less than $100, the Company
reserves the right to treat such partial Withdrawal as a full Withdrawal.

WITHDRAWAL CHARGE
If part or all of the Account Value is Withdrawn under Option 9, a Withdrawal
Charge is applied at the time of Withdrawal. The amount of the charge is based
on the year in which the Withdrawal is made measured from the Annuity Payout
Date. See the Withdrawal Charge set forth on page 3. The Withdrawal Charge is
applied to the amount of the Withdrawal and is deducted from Account Value
allocated to the Subaccounts in the same proportion as the Withdrawal is
allocated.

PAYMENT ADJUSTMENT
Upon a partial Withdrawal during the Liquidity Period under Option 9, the
Company will adjust the amount of the Annuity Payment and Floor Payment as
follows. The Company will reduce the amount of the Annuity Payment and Floor
Payment by a percentage determined by dividing the amount of the Withdrawal,
including the amount of the Withdrawal Charge, by Account Value on the date of
the Withdrawal. The number of Payment Units used to compute each Annuity
Payment will be reduced by the same percentage.:

An example of a payment adjustment is set forth below:

SUBACCOUNTS FROM ACCOUNT VALUE WITHDRAWAL AMOUNT
WHICH ANNUITY ON DATE OF (INCLUDING WITHDRAWAL PERCENTAGE
PAYMENT IS MADE WITHDRAWAL CHARGES) REDUCTION

Equity Income $95,000 $0 0%
International Stock $25,000 $15,000 60%
Total $120,000 $15,000 12.5%

SUBACCOUNTS FROM PRIOR TO PARTIAL WITHDRAWAL AFTER PARTIAL WITHDRAWAL
WHICH ANNUITY --------------------------- ----------------------------
PAYMENT IS MADE ANNUITY PAYMENT FLOOR ANNUITY PAYMENT FLOOR
PAYMENT UNITS PAYMENT PAYMENT UNITS PAYMENT(1)

Equity Income(2) $300 29.7914 N/A $300 29.7914 N/A
International Stock(3) $100 9.7847 N/A $40 3.9139 N/A
Total $400 $304 $340 $266

DATE OF REQUEST
The Company will effect a Withdrawal of Separate Account Value on the basis of
Accumulation Unit Value determined as of the end of the Valuation Period in
which all the required information is Received by the Company.

SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic distributions from the Contract in
substantially equal amounts prior to the Annuity Payout Date. In order to
start Systematic Withdrawals, the Owner must make the request in writing. The
Minimum Systematic Withdrawal is set forth on page 3. The Owner must choose
the type of payment.

The payment type may be:

(1) a percentage of Account Value;
(2) a specified dollar amount;
(3) all earnings in the Contract; or
(4) based upon the life expectancy of the Owner or the Owner and a
beneficiary.

The payment frequency may be: (1) monthly; (2) quarterly; (3) semiannually; or
(4) annually.

Systematic Withdrawals of Fixed Account Value must provide for payment over a
period of not less than 36 months. Systematic Withdrawals may be stopped by
the Owner upon proper written request Received by the Company at least 30 days
in advance. The Company reserves the right to stop, modify or suspend
Systematic Withdrawals.

- --------------------------------
1 The Floor Payment is reduced by 12.5%, the percentage by which the
partial Withdrawal reduced Account Value.
2 The Annuity Payment and Payment Units allocated to this Subaccount are
not reduced in this example, because no amount is withdrawn from Account
Value allocated to the Equity Income Subaccount.
3 The Annuity Payment and Payment Units are reduced by 60%, the percentage
by which the partial Withdrawal reduced Account Value allocated to the
International Stock Subaccount.

PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend an Exchange or delay payment of a
Withdrawal from the Separate Account for any period:

1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which: (a) disposal of securities
held in the Separate Account is not reasonably practicable; or (b) it is
not reasonably practicable to fairly value the net assets of the Separate
Account; or
4. during any other period when the SEC, by order, so permits to protect
owners of securities.

Rules and regulations of the SEC will govern as to whether the conditions set
forth above exist.

The Company further reserves the right to delay payment of a Withdrawal from
the Fixed Account for up to six months as required by most states. The Company
will notify the Owner if there will be a delay.

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DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------

DEATH BENEFIT
If any Owner dies prior the Annuity Payout Date, a Death Benefit will be paid
to the Designated Beneficiary when due Proof of Death and payment instructions
are Received by the Company. If an Owner is a Nonnatural Person, the Death
Benefit will be paid in the event of the death of the Annuitant or any Joint
Owner that is a natural person prior to the Annuity Payout Date. Further, if
an Owner is a Nonnatural Person, the amount of the death benefit is based on
the age of the Annuitant or any Joint Owner that is a natural person on the
Contract Date.

If the age of each Owner was 75 or younger on the Contract Date, the Death
Benefit will be the greatest of:

(1) all Purchase Payments, less any Premium Taxes due or paid by the Company
and less all partial Withdrawals;
(2) the Account Value on the date due Proof of Death and payment instructions
are Received by the Company, less any Premium Taxes due or paid by the
Company; or
(3) the Stepped-Up Death Benefit below.

The Stepped-Up Death Benefit is:

1. the largest Death Benefit on any Contract Anniversary that is both an
exact multiple of five and occurs prior to the oldest Owner reaching age
76; plus
2. any Purchase Payments received since the applicable fifth Contract
Anniversary; less
3. any reductions caused by Withdrawals since the applicable fifth Contract
Anniversary; less
4. any Premium Taxes due or paid by the Company.

If the age of any Owner on the Contract Date was 76 or older, the Death
Benefit will be: (1) the Account Value on the date due Proof of Death and
payment instructions are Received by the Company; less (2) any Premium Taxes
due or paid by the Company.

If a lump sum payment is requested, the payment will be made in accordance
with any laws that govern the payment of Death Benefits.

The value of the Death Benefit is determined as of the date that both Proof of
Death and payment instructions are Received by the Company in good order.

In the event of any Owner's death on or after the Annuity Payout Date, the
Death Benefit will be determined under the terms of the Annuity Option. Any
Death Benefit will be paid to the Designated Beneficiary when due proof of
death and payment instructions are Received by the Company.

PROOF OF DEATH
Any of the following will serve as Proof of Death:

1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the finding
of death;
3. written statement by a medical doctor who attended the deceased Owner; or
4. any proof accepted by the Company.

DISTRIBUTION RULES

In the event of an Owner's death prior to the Annuity Payout Date, the entire
Death Benefit shall be paid within 5 years after the death of the Owner. In
the event that the Designated Beneficiary elects an Annuity Option, the length
of time for the payment period may be longer than 5 years if:

(1) the Designated Beneficiary is a natural person;
(2) the Death Benefit is paid out under one of Annuity Options 1 through 9;
(3) payments are made over a period that does not exceed the life or life
expectancy of the Designated Beneficiary; and
(4) Annuity Payments begin within one year of the death of the Owner.

If the deceased Owner's spouse is the sole Designated Beneficiary, the spouse
shall become the sole Owner of the contract. He or she may elect to: (1) keep
the Contract in force until the sooner of the spouse's death or the Annuity
Payout Date; or (2) receive the Death Benefit.

If any Owner dies on or after the Annuity Payout Date, Annuity Payments shall
continue to be paid at least as rapidly as under the method of payment being
used as of the date of the Owner's death.

If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or a change in, the Annuitant. This
Contract is deemed to incorporate any provision of Section 72(s) of the
Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision. This Contract is also deemed to incorporate any other provision of
the Code deemed necessary by the Company, in its sole judgment, to qualify
this Contract as an annuity. The application of the distribution rules will be
made in accordance with Code section 72(s), or any successor provision, as
interpreted by the Company in its sole judgment.

The foregoing distribution rules do not apply to a Contract which is:

(1) provided under a plan described in Code section 401(a);
(2) described in Code section 403(b);
(3) an individual retirement annuity or provided under an individual
retirement account or annuity; or
(4) otherwise exempt from the Code section 72(s) distribution rules.

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ANNUITY PAYMENT PROVISIONS
- --------------------------------------------------------------------------------

ANNUITY PAYOUT DATE
The Annuity Payout Date is the date as of which the first Annuity Payment is
computed under one of the Annuity Options. The Owner may elect the Annuity
Payout Date at the time of application. If no Annuity Payout Date is chosen,
the Company will use the later of: (1) the oldest Annuitant's seventieth
birthday; or (2) the tenth Contract Anniversary. The Annuity Payout Date must
be prior to the oldest Annuitant's ninetieth birthday.

CHANGE OF ANNUITY PAYOUT DATE
The Owner may change the Annuity Payout Date. A request for the change must be
made in writing. The written request must be Received by the Company at least
30 days prior to the new Annuity Payout Date as well as 30 days prior to the
previous Annuity Payout Date.

ANNUITY OPTIONS
The Contract provides for Annuity Payments to be made under one of nine
Annuity Options. The Annuity Option is set forth on page 3. Options 1 through
4 and 9 generally provide for payments to be made during the life of the
Annuitant or Joint Annuitants. Under Options 5 through 8, payments are made to
the Annuitant and in the event of the Annuitant's death, to the Designated
Beneficiary.

Options 1 through 4 are available as either a Fixed or Variable Annuity Option
9 is available only as a Variable Annuity. Options 5 through 7 are also
available as a combination of Fixed and Variable Annuity. The Annuity Options
are described below.

Prior to the Annuity Payout Date, the Owner may change the Annuity Option
chosen. The Owner must request the change in writing. This request must be
Received by the Company at least 30 days prior to the Annuity Payout Date.

OPTION 1
LIFE INCOME OPTION: This option provides Annuity Payments for the life of the
Annuitant. Upon the Annuitant's death, no further Annuity Payments will be
made.

OPTION 2
LIFE INCOME WITH PERIOD CERTAIN OPTION: This option provides Annuity Payments
for the life of the Annuitant. A fixed period of 5, 10, 15 or 20 years may be
chosen. Annuity Payments will be made to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies before
receiving all the Annuity Payments during the fixed period, the remaining
Annuity Payments will be made to the Designated Beneficiary. Upon the
Annuitant's death after the period certain, no further Annuity Payments will
be made.

OPTION 3
LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides
Annuity Payments for the life of the Annuitant, with a period certain
determined by dividing the Annuity Payout Amount (as defined on page 25) by
the amount of the first Annuity Payment. A fixed number of Annuity Payments
will be made even if the Annuitant dies. If the Annuitant dies before
receiving the fixed number of Annuity Payments, any remaining Annuity Payments
will be made to the Designated Beneficiary. If the Annuitant dies after
receiving the fixed number of Annuity Payments, no further Annuity Payments
will be made.

OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides Annuity Payments for the
lives of the Annuitant and Joint Annuitant. Annuity Payments will be made as
long as either is living. Upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of
75%, 66 2/3% or 50% of Annuity Payments, as elected by the Owner. With respect
to Fixed Annuity Payments, the amount of the Annuity Payment, and, with
respect to Variable Annuity Payments, the number of Annuity Units used to
determine the Annuity Payment, is reduced as of the first Annuity Payment
following the Annuitant's death. The percentage elected is set forth on page
3. In the event of the death of one Annuitant, the surviving Joint Annuitant
has the right to exercise all rights under the Contract, including the right
to make Exchanges and Beneficiary changes. Upon the death of the last
Annuitant, no further Annuity Payments will be made.

OPTION 5
FIXED PERIOD OPTION: This option provides Annuity Payments for a fixed number
of years between 5 and 20. If the Account Value is held in the Fixed Account,
then the amount of the Annuity Payments will vary as a result of the interest
rate (as adjusted periodically) credited on Fixed Account Value. This rate is
guaranteed to be no less than the Guaranteed Rate set forth on page 3. The
amount of each Fixed Annuity Payment is determined by dividing Fixed Account
Value on the Annuity Payment date by the number of remaining Annuity Payments.
If the Account Value is held in the Separate Account, then the amount of the
Annuity Payments will vary as a result of the investment performance of the
Subaccounts chosen. The amount of each Variable Annuity Payment is determined
by multiplying the Accumulation Unit Value on the Annuity Payment date by the
result of dividing total Accumulation Units by the number of remaining Annuity
Payments. If the Annuitant dies before receiving the fixed number of Annuity
Payments, any remaining Annuity Payments will be made to the Designated
Beneficiary.

OPTION 6
FIXED PAYMENT OPTION: This option provides for Annuity Payments of a fixed
amount selected by the Owner. This amount is paid until Account Value is
exhausted. If the Account Value is held in the Fixed Account, then the number
of Annuity Payments will vary as a result of the interest rate (as adjusted
periodically) credited on Fixed Account Value. This rate is guaranteed to be
no less than the Guaranteed Rate set forth on page 3. If the Account Value is
held in the Separate Account, then the number of Annuity Payments will vary as
a result of the investment performance of the Subaccounts chosen. If the
Annuitant dies before receiving all of the Annuity Payments, any remaining
Annuity Payments will be made to the Designated Beneficiary. This Option is
available only for Nonqualified Contracts.

OPTION 7
AGE RECALCULATION OPTION: This option provides for Annuity Payments based upon
the Annuitant's life expectancy, or the joint life expectancy of the Annuitant
and a beneficiary, at the Annuitant's attained age (and the Annuitant's
beneficiary's attained or adjusted age) each year. The Annuity Payments are
computed by reference to actuarial tables prescribed by the Treasury Secretary
and in accordance with Section 401(a)(9) of the Internal Revenue Code and
rules and regulations thereunder. Annuity Payments are made until Account
Value is exhausted. If the Account Value is held in the Fixed Account, then
the amount of the Annuity Payments will vary as a result of the interest rate
(as adjusted periodically) credited on Fixed Account Value. This rate is
guaranteed to be not less than the Guaranteed Rate set forth on page 3. If the
Account Value is held in the Separate Account, then the amount of the Annuity
Payments will vary as a result of the investment performance of the
Subaccounts chosen. If the Annuitant dies before receiving the remaining
Annuity Payments, Account Value will be paid to the Designated Beneficiary.

OPTION 8
PERIOD CERTAIN OPTION: This option provides Annuity Payments for a fixed
period of 5, 10, 15 or 20 years. Annuity Payments will be made until the end
of this period. If the Annuitant dies prior to the end of the period, the
remaining Annuity Payments will be made to the Designated Beneficiary.

OPTION 9
LIFE INCOME WITH LIQUIDITY OPTION: This option provides monthly Annuity
Payments for the life of the Annuitant or the lives of the Annuitant and a
Joint Annuitant with a period certain of 15 years (or less in certain
instances where the period certain would exceed the life expectancy of the
Annuitant or joint life expectancy of the Joint Annuitants). Annuity Payments
under this option are guaranteed never to be less than 80 percent of the
initial Annuity Payment ("Floor Payment"); provided that the Floor Payment is
adjusted in the event of a Withdrawal. See "Withdrawal Provisions" on pages 15
through 18. The amount of the Annuity Payment will remain level for 12 month
intervals and will reset on each anniversary of the Annuity Payout Date as
discussed under "Payment Units," on pages 26 and 27. Annuity Payments during
the Liquidity Period are paid from Account Value and reduce the amount of
Account Value available for Withdrawal.

If Account Value allocated to a Subaccount from which Annuity Payments are
being made will be reduced to $0 by the current Annuity Payment, the Annuity
Payment will be adjusted as of the date of that payment. The amount of any
shortfall in the affected Subaccount will be deducted from the first of the
Subaccounts set forth on page 3 that has Account Value. Until the next reset
of the Annuity Payment, Annuity Payments will be made from the Subaccounts
that have Account Value in the same proportion as Account Value is allocated
among the Subaccounts on the date of the payment adjustment. Payment Units
also will be adjusted as of that date to reflect the proportion of Account
Value allocated to the Subaccounts.

If there are Joint Annuitants, upon the death of one Annuitant, Annuity
Payments continue to the surviving Joint Annuitant at the same or a reduced
level of 75%, 66 2/3% or 50% of Annuity Payments as elected by the Owner. The
percentage elected is set forth on page 3. The number of Payment Units used to
determine each Annuity Payment is reduced as of: (1) the Annuity Payment due
on the Period Certain Expiration Date; or (2) if later, the first Annuity
Payment following the death of the Joint Annuitant. If such death occurs
during the Liquidity Period, the Annuity Payment may be increased as discussed
under "Payment Adjustment Upon Death of Joint Annuitant" below.

In the event of the death of the Annuitant or, in the case of Joint
Annuitants, the last Annuitant, prior to the Period Certain Expiration Date, a
death benefit will be paid as follows. In the event of death during the
Liquidity Period, the death benefit is the Account Value as of the date due
proof of death and payment instructions are Received by the Company. In the
event of death during the period beginning at the close of the Liquidity
Period and ending on the Period Certain Expiration Date, the Designated
Beneficiary may elect the death benefit as follows: (1) the present value of
the remaining guaranteed Annuity Payments as of the date due proof of death
and payment instructions are Received by the Company, commuted at the Assumed
Interest Rate, and paid in a lump sum; or (2) the remaining guaranteed Annuity
Payments paid to the Designated Beneficiary on a monthly basis until the
Period Certain Expiration Date.

PAYMENT ADJUSTMENT UPON DEATH OF JOINT ANNUITANT
Under Option 9, if a Joint Annuitant dies during the Liquidity Period, the
amount of the Annuity Payment to the surviving Joint Annuitant may be
increased beginning on the date of the 61st Annuity Payment. The determination
of whether to increase the amount of the Annuity Payment is made as of the
date of the 61st Annuity Payment, as follows. An amount equal to the present
value of future Annuity Payments based on the joint lives of the Annuitants,
commuted at the Assumed Interest Rate, is divided by $1,000, and the result is
multiplied by an amount determined by reference to the Annuity Table for
Option 2 with a ten year period certain based upon the surviving Joint
Annuitant's age and sex (unless unisex rates apply). If the amount of the
Annuity Payment as determined above is greater than the Annuity Payment
calculated as of the date of the 61st Annuity Payment, the Annuity Payment
will be increased as of the date of the 61st Annuity Payment to that amount
and the Floor Payment and number of Payment Units will be increased
proportionately.

ANNUITY PAYOUT AMOUNT

The Annuity Payout Amount is used to calculate Annuity Payments under Annuity
Options 1 through 4, 8 and 9. The Annuity Payout Amount is:

(1) Account Value on the Annuity Payout Date; less
(2) any Premium Taxes due or paid by the Company; less
(3) for Fixed Annuity Payments, an amount equal to 1.8% of Account Value on
the Annuity Payout Date.

Annuity Payout Amount allocated to the Fixed Account is applied to purchase a
Fixed Annuity and that allocated to the Subaccounts is applied to purchase a
Variable Annuity. The Annuity Payout Amount is divided by $1,000, and the
result is multiplied by the applicable amount in the Annuity Tables to
determine the minimum guaranteed monthly Annuity Payment with respect to a
Fixed Annuity or the first monthly Annuity Payment with respect to a Variable
Annuity.

FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the rate of interest credited by the Company, is the
amount of each monthly Annuity Payment for Annuity Options 1 through 4 and 8.
For Options 5 through 7, Fixed Annuity Payments are based on Account Value.

VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the Assumed Interest Rate, is the amount of the FIRST
monthly Annuity Payment for Annuity Options 1 through 4, 8 and 9. The amount
of each Annuity Payment after the first for these options is computed by means
of Payment Units as set forth on pages 26 and 27. For Options 5 through 7,
Variable Annuity Payments are based on Account Value. Variable Annuity
Payments will fluctuate with the performance of the Subaccount(s).

ANNUITY TABLES
The amounts set forth in the Annuity Tables for Annuity Options 1 through 4
and 9 depend on the sex (unless unisex rates apply) and age of the Annuitant
or the Joint Annuitants on the Annuity Payout Date. The Annuity Tables are
modified to reflect (1) the Assumed Interest Rate for Variable Annuity
Payments; or (2) the rate of interest in effect on the Contract Date for Fixed
Annuity Payments. The rate of interest for Fixed Annuity Payments is
guaranteed to be no less than the Guaranteed Rate set forth on page 3. The
Annuity Tables contain the amount of monthly Annuity Payment per $1,000 of
Annuity Payout Amount. The Annuity Tables state values for the exact ages
shown. The values will be interpolated based on the exact age(s) of the
Annuitant or Joint Annuitants on the Annuity Payout Date. The basis of the
Annuity Tables for Options 1 through 4 and 9 and the Assumed Interest Rate are
set forth on page 3. The Annuity Tables for Option 8 are determined without
reference to the age or sex of the Annuitant and are based upon the Assumed
Interest Rate. Annuity Payments for Options 5 through 7 are computed without
reference to the Annuity Tables. The Annuity Tables are used in accordance
with generally accepted actuarial principles.

ANNUITY PAYMENTS
No Annuity Option can be selected that requires the Company to make Annuity
Payments of less than $100.00; provided that there is no minimum Annuity
Payment under Option 9. Each Annuity Option allows for making Annuity Payments
annually, semiannually, quarterly or monthly, except Option 9 for which
Annuity Payments are made monthly. Annuity Payments due on a date other than a
Valuation Date, are paid as of the end of the next following Valuation Date.

PAYMENT UNITS
On the Annuity Payout Date, the amount of the first Variable Annuity Payment
is divided by the Payment Unit Value as of that date to determine the number
of Payment Units to be used in calculating subsequent Annuity Payments. If the
Annuity Payout Amount was allocated to more than one Subaccount, the first
Variable Annuity Payment will be allocated to each Subaccount in the
percentage corresponding to the Annuity Payout Amount allocation. The number
of Payment Units for each Subaccount is then found by dividing the amount of
the first Variable Annuity Payment allocated to that Subaccount by the Payment
Unit Value for the Subaccount on the Annuity Payout Date. The number of
Payment Units for the Subaccount then remains constant, unless an Exchange of
Payment Units or a Withdrawal is made. After the first Variable Annuity
Payment, the dollar amount of each subsequent Annuity Payment is equal to the
sum of the payment amount determined for each Subaccount. The payment amount
for each Subaccount is equal to the number of Payment Units allocated to that
Subaccount multiplied by the Payment Unit Value on the date of the Annuity
Payment. For Option 9, the amount of each Annuity Payment is calculated as
described above; provided that the amount of the Annuity Payment is reset only
once each year on the 12-month anniversary of the Annuity Payout Date.

An example of a Variable Annuity Payment calculation for a male, age 60 is as
follows:

Annuity Payout Amount = $100,000 $100,000
-------- = 100
$1,000

Amount determined by reference in 1998 to Annuity
Table for a male, age 60 under Option 9 $4.78

First Variable Annuity Payment 100 x $4.78 = $478

FIRST VARIABLE PAYMENT UNIT NUMBER OF PAYMENT
PURCHASE ANNUITY VALUE ON UNITS USED TO
PAYMENT PAYMENT ANNUITY DETERMINE
SUBACCOUNT ALLOCATION ALLOCATION PAYOUT DATE SUBSEQUENT PAYMENTS

Equity Income 50% $239.00 / $1.51 = 158.2781
International 50% $239.00 / $1.02 = 234.3137
Stock

An example of an annual reset under Option 9 of the Annuity Payment amount
using the assumptions above is as follows:

PAYMENT DATE PAYMENT AMOUNT

Annuity Payout Date 2/15 $478
3/15 $478
4/15 $478
5/15 $478
6/15 $478
7/15 $478
8/15 $478
9/15 $478
10/15 $478
11/15 $478
12/15 $478
1/15 $478
Annual Reset 2/15 $510.98

PAYMENT PAYMENT UNIT VALUE NEW ANNUITY
SUBACCOUNT UNITS ON ANNUAL RESET DATE PAYMENT AMOUNT

Equity Income 158.2781 x $1.60 = $253.24
International Stock 234.3137 x $1.10 = $257.74
-------
$510.98

PAYMENT UNIT VALUE

The Payment Unit Value for each Subaccount was first set at $1.00. The Payment
Unit Value for any subsequent Valuation Date is equal to (a) times (b) times
(c), where:

(a) is the Payment Unit Value on the immediately preceding Valuation Date;
(b) is the Net Investment Factor for the day;
(c)is a factor used to adjust for the Assumed Interest Rate set forth on
page 3 which is used to determine Variable Annuity Payment amounts.
<PAGE>
A BRIEF DESCRIPTION OF THIS CONTRACT

This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT

* Purchase Payments may be made until the earlier of the Annuity
Payout Date or termination of the Contract.

* A Death Benefit may be paid prior to the Annuity Payout Date
according to the Contract provisions.

* Annuity Payments begin on the Annuity Payout Date using the
method specified in this Contract.

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. (SEE "ACCOUNT
VALUE AND EXPENSE PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)

[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
700 SW Harrison Street, Topeka, KS 66636-0001

<PAGE>
SECURITY BENEFIT LIFE INSURANCE COMPANY

SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT

THE COMPANY'S PROMISE

In consideration of the Purchase Payment and the attached Application, Security
Benefit Life Insurance Company (the "Company") will pay the benefits of this
Contract according to its provisions.

LEGAL CONTRACT

PLEASE READ THE CONTRACT CAREFULLY. It is a legal Contract between the Owner and
the Company. The Contract's table of contents is on page 2.

FREE LOOK PERIOD-RIGHT TO CANCEL

If for any reason the Owner is not satisfied with this Contract, he or she may
return it to the Company within 10 days from the date of receipt. It may be
returned by delivering or mailing it to the Company. If returned, this Contract
shall be deemed void from the Contract Date. The Company will refund any
Purchase Payment made and allocated to the Fixed Account and will refund
Separate Account Value (including any premium taxes) as of the date the returned
policy is received by the Company.

Signed for Security Benefit Life Insurance Company on the Contract Date.

ROGER K. VIOLA HOWARD R. FRICKE
Secretary President

A BRIEF DESCRIPTION OF THIS CONTRACT

This is a SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT.

* Annuity Payments begin on the Annuity Payout Date using the method specified
in this Contract.

(SBL LOGO)

SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
700 SW Harrison Street, Topeka, KS 66636-0001
1-800-469-6587 for Customer Service

V6027 (8-98)
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page

CONTRACT SPECIFICATIONS..................................... 3

DEFINITIONS................................................. 4-7

GENERAL PROVISIONS.......................................... 7-10
The Contract.............................................. 7
Compliance................................................ 7
Misstatement of Age and Sex............................... 8
Evidence of Survival...................................... 8
Incontestability.......................................... 8
Assignment................................................ 8
Exchanges................................................. 8,9
Limits on Exchanges....................................... 9
Claims of Creditors....................................... 9
Nonforfeiture Values...................................... 9
Participation............................................. 9
Statements................................................ 10

OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS............. 10
Ownership................................................. 10
Joint Ownership........................................... 10
Annuitant................................................. 10
Primary and Secondary Beneficiaries....................... 10
Beneficiary Changes....................................... 10

PURCHASE PAYMENT PROVISIONS................................. 11
Single Purchase Payments.................................. 11
Purchase Payment Limitations.............................. 11
Purchase Payment Allocation............................... 11
Place of Payment.......................................... 11

ANNUITY PAYMENT PROVISIONS.................................. 11-18
Annuity Payout Date....................................... 11
Annuity Options........................................... 11-14
Payment Adjustment Upon Death of Joint Annuitant.......... 15
Annuity Payout Amount..................................... 15
Fixed Annuity Payments.................................... 15
Variable Annuity Payments................................. 15
Annuity Tables............................................ 16
Annuity Payments.......................................... 16
Payment Units............................................. 16,17
Payment Unit Value........................................ 18
Net Investment Factor..................................... 18

ACCOUNT VALUE AND EXPENSE PROVISIONS........................ 18-20
Account Value............................................. 18
Fixed Account Value....................................... 18,19
Fixed Account Interest Crediting.......................... 19
Separate Account Value.................................... 19
Accumulation Unit Value................................... 19
Determining Accumulation Units............................ 20
Mortality and Expense Risk Charge......................... 20
Premium Tax Expense....................................... 20
Mutual Fund Expenses...................................... 20

WITHDRAWAL PROVISIONS....................................... 20-22
Withdrawals............................................... 20,21
Withdrawal Value.......................................... 21
Withdrawal Charge......................................... 21
Payment Adjustment........................................ 21,22
Date of Request........................................... 22
Payment of Withdrawal Benefits............................ 22

DEATH BENEFIT PROVISIONS.................................... 22,23
Death Benefit............................................. 22,23
Proof of Death............................................ 23
Distribution Rules........................................ 23

AMENDMENTS OR ENDORSEMENTS, if any

V6027A (8-98)
<PAGE>
- --------------------------------------------------------------------------------
CONTRACT SPECIFICATIONS
- --------------------------------------------------------------------------------

OWNER NAME: John A. Doe CONTRACT NUMBER: Specimen

JOINT OWNER NAME: Mary K. Doe CONTRACT DATE: 6-30-2023

ANNUITANT NAME: John A. Doe ANNUITY PAYOUT DATE: 7-1-2023

ANNUITANT DATE OF BIRTH: 10-30-1953 LIQUIDITY PERIOD EXPIRATION
DATE: 6-30-2028

ANNUITANT PERIOD CERTAIN EXPIRATION
GENDER: Male DATE: 6-30-2038

JOINT ANNUITANT NAME: Mary K. Doe PLAN: IRA

JOINT ANNUITANT DATE OF BIRTH: 6-5-58 ASSIGNMENT: This policy may not be
assigned. See Assignment Provision
of your Policy.

JOINT ANNUITANT GENDER: Female

PRIMARY BENEFICIARY SECONDARY BENEFICIARY
NAME: Linda L. Doe NAME: John A. Doe, Jr.
- --------------------------------------------------------------------------------
INITIAL PURCHASE PAYMENT.................... $25,000

MORTALITY AND EXPENSE RISK CHARGE........... 55% Annually (1.45% Annually
for Option 9)

WITHDRAWAL CHARGE (OPTION 9 ONLY)...........
Contract Year of Withdrawal* 1 2 3 4 5+
--------------------------------
Withdrawal Charge 5% 4% 3% 2% 1%

*Withdrawals are available only during the
Liquidity Period

GUARANTEED RATE............................. 3%

ANNUITY OPTION.............................. Life Income with Liquidity
(Option 9)
PERIOD CERTAIN 15 Years
JOINT & SURVIVOR PERCENTAGE 100%
FLOOR PAYMENT $450

BASIS OF ANNUITY TABLES..................... 1983(a) Mortality Table with
mortality improvement
using Projection Scale G

ASSUMED INTEREST RATE....................... 3.5% Annually

SEPARATE ACCOUNT............................ T. Rowe Price Variable Annuity
Account

SUBACCOUNTS: Prime Reserve Subaccount (Not available under Option 9);
Limited-Term Bond Subaccount; Personal Strategy Balanced Subaccount; Equity
Income Subaccount; Mid-Cap Growth Subaccount; International Stock Subaccount;
New America Growth Subaccount.
<PAGE>
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------

ACCOUNT

An Account is one of the Subaccounts or the Fixed Account.

ACCUMULATION UNIT

The Accumulation Unit is a unit of measure. It is used to compute Separate
Account Value. It is also used to compute the Variable Annuity Payments for
Annuity Options 5 through 7.

ANNUITANT

An Annuitant is a person on whose life the Annuity Payments depend for Annuity
Options 1 through 4 and 9. The Annuitant receives Annuity Payments under this
Contract. Please see "Annuitant" provisions on page 10.

ANNUITY OPTION

An Annuity Option is a set of provisions that form the basis for making Annuity
Payments. The Annuity Option is elected in the Application. Please see "Annuity
Options" on pages 11 through 14.

ANNUITY PAYMENTS

Annuity Payments are payments made according to the provisions of the Annuity
Option selected. Annuity Payments begin on the Annuity Payout Date and are made
on the same date of each month on a monthly, quarterly, semiannual or annual
basis. Please see "Annuity Payment Provisions" on pages 11 through 18.

ANNUITY PAYOUT DATE

The Annuity Payout Date is the date on which Annuity Payments begin. The Annuity
Payout Date is set forth on page 3. Please see "Annuity Payout Date" on page 11.

COMPANY

The Company is Security Benefit Life Insurance Company, 700 SW Harrison Street,
Topeka, Kansas 66636-0001.

CONTRACT ANNIVERSARY

A Contract Anniversary is a 12-month anniversary of the Contract Date.

CONTRACT DATE

The Contract Date is the date the Contract begins. The Contract Date is set
forth on page 3.

CONTRACT YEAR

Contract Years are measured from the Contract Date.

CURRENT INTEREST

The Company may in its discretion pay Current Interest on Fixed Account Value at
a rate that exceeds the Guaranteed Rate set forth on page 3. The Company will
declare the rate of Current Interest, if any, from time to time.

DESIGNATED BENEFICIARY

Upon the death of the Annuitant or, if there are Joint Annuitants upon the death
of the last Annuitant, the Designated Beneficiary will be the first person on
the following list who is alive on the Annuitant's date of death:

1. Primary Beneficiary;
2. Secondary Beneficiary;
3. the Owner's estate if no one listed above is alive.

Under certain Annuity Options, the Designated Beneficiary receives a death
benefit upon the death of the Annuitant(s). Please see "Annuity Options" on
pages 11 through 14 and "Death Benefit Provisions" on pages 22 through 23.

EXCHANGE

An Exchange is an Exchange of Account Value or Payment Units of one Subaccount
for the equivalent dollar amount of Account Value or Payment Units of another
Subaccount(s). Under Options 5-7, an Exchange also includes Exchanges of Account
Value among the Subaccounts and the Fixed Account.

FIXED ACCOUNT

The Fixed Account is part of the Company's general account. The Company manages
the general account and guarantees that it will credit interest on Fixed Account
Value at an annual rate at least equal to the Guaranteed Rate. This Rate is set
forth on page 3.

GUARANTEE PERIOD

Current Interest, if declared, is fixed for rolling periods of one or more
years, referred to as Guarantee Periods. The Company may offer Guarantee Periods
of different durations.

The Guarantee Period that applies to any Fixed Account Value:

(1) starts on the date that such Account Value is allocated to the Fixed
Account pursuant to:

(a) a Purchase Payment Received by the Company; or

(b) an Exchange to the Fixed Account; and

(2) ends on the last day of the same month in the year in which the Guarantee
Period expires.

HOME OFFICE

The address of the Company's Home Office is Security Benefit Life Insurance
Company, 700 SW Harrison Street, Topeka, Kansas 66636-0001.

JOINT OWNER

The Joint Owner, if any, is named on page 3. The Joint Owner shares an undivided
interest in the entire Contract with the Owner. Please see "Joint Ownership"
provisions on page 10.

LIQUIDITY PERIOD

Under Option 9, the Liquidity Period is the period of time during which the
Owner may withdraw Account Value. The Liquidity Period begins on the Contract
Date and ends on the Valuation Date preceding the 61st Annuity Payment. The
Liquidity Period Expiration Date is set forth on page 3.

NONNATURAL PERSON

Any group or entity that is not a living person, such as a trust or corporation.

NONQUALIFIED CONTRACT

A Contract that is not a Qualified Contract.

OWNER

The Owner is the person who has all rights under the Contract. The Owner is
named on page 3. Please see "Ownership" provisions on page 9.

PAYMENT UNIT

The Payment Unit is a unit of measure used to compute Variable Annuity Payments
for Annuity Options 1 through 4, 8 and 9.

PREMIUM TAX

Any Premium Taxes levied by a state or other entity will be charged against this
Contract and will be deducted from the initial Purchase Payment.

PURCHASE PAYMENT

A Purchase Payment is money Received by the Company and applied to the Contract.

QUALIFIED CONTRACT

A Contract issued in connection with a plan qualified under Section 401, 403,
408 or a similar provision of the Internal Revenue Code.

RECEIVED BY THE COMPANY

The phrase "Received by the Company" means receipt by the Company in good order
at its Home Office, 700 SW Harrison, Topeka, Kansas 66636-0001.

SEPARATE ACCOUNT

The Separate Account set forth on page 3 is a separate account established and
maintained by the Company under Kansas law. The Separate Account is registered
with the Securities and Exchange Commission (SEC) under the Investment Company
Act of 1940 as a Unit Investment Trust. It was established by the Company to
support variable annuity contracts. The Company owns the assets of the Separate
Account and maintains them apart from the assets of its general account and its
other separate accounts. The assets held in the Separate Account equal to the
reserves and other contract liabilities with respect to the Separate Account may
not be charged with liabilities arising from any other business the Company may
conduct.

Income and realized and unrealized gains and losses from assets in the Separate
Account are credited to, or charged against, the Separate Account without regard
to the income, gains or losses from the Company's general account or its other
separate accounts. The Separate Account is divided into Subaccounts set forth on
page 3. Income and realized and unrealized gains and losses from assets in each
Subaccount are credited to, or charged against, the Subaccount without regard to
income, gains or losses in the other Subaccounts. The Company has the right to
transfer to its general account any assets of the Separate Account that are in
excess of the reserves and other contract liabilities with respect to the
Separate Account. The value of the assets in the Separate Account on each
Valuation Date is determined as of the end of each Valuation Date.

SUBACCOUNTS

The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are set forth on
page 3. Subject to the regulatory requirements then in force, the Company
reserves the right to:

1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other separate
accounts of the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to
the Separate Account; and
7. terminate and liquidate any Subaccount.

SUBACCOUNTS

If any of these changes result in a material change to the Separate Account or a
Subaccount, the Company will notify the Owner of the change. The Company will
not change the investment policy of any Subaccount in any material respect
without complying with the filing and other procedures of the insurance
regulators of the state of issue.

SUBACCOUNT NET ASSET VALUE

The Subaccount Net Asset Value is equal to:

(1) the net asset value of all shares of the underlying mutual fund held by the
Subaccount; plus
(2) any cash or other assets of the Subaccount; less
(3) all liabilities of the Subaccount.

VALUATION DATE

A Valuation Date is each day that both the New York Stock Exchange and the
Company's Home Office are open for business.

VALUATION PERIOD

A Valuation Period is the interval of time from the close of one Valuation Date
to the close of the next Valuation Date.

- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------

THE CONTRACT

The entire Contract between the Owner and the Company consists of:

(1) this Contract;

(2) the attached Application; and

(3) any Amendments, Endorsements or Riders to the Contract.

All statements made in the Application will, in the absence of fraud, as ruled
by a court of competent jurisdiction, be deemed representations and not
warranties. The Company will use no statement made by or on behalf of any Owner
or Annuitant to void this Contract unless it is in the written Application. Any
change in the Contract can be made only with the written consent of the
President, a Vice President, or the Secretary of the Company.

The Purchase Payment and the Application must be acceptable to the Company under
its rules and practices. If they are not, the Company's liability shall be
limited to a return of the Purchase Payment.

COMPLIANCE

The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or state
law. This includes, but is not limited to: (1) requirements for annuity
contracts under the Internal Revenue Code; or (2) the laws of any state. The
Company will provide the Owner with a copy of any such change and also will file
such a change with the insurance regulatory officials of the state in which the
Contract is delivered.

MISSTATEMENT OF AGE AND SEX

If the age or sex of any Annuitant has been misstated, Annuity Payments shall be
adjusted, when allowed by law, to the amount which would have been payable based
upon the correct age or sex. Proof of the age of an Annuitant may be required at
any time, in a form acceptable to the Company. If Annuity Payments have already
commenced and the misstatement has caused an underpayment, the full amount due
will be paid with the next scheduled Annuity Payment. If the misstatement has
caused an overpayment, the amount due will be deducted from one or more future
Annuity Payments.

EVIDENCE OF SURVIVAL

When any Annuity Payments under this Contract depend on the Annuitant being
alive on a given date, proof that the Annuitant is living may be required by the
Company. Such proof must be in a form acceptable to the Company, and may be
required prior to making the Annuity Payments.

INCONTESTABILITY

This Contract will not be contested after it has been in force for two years
from the Contract Date during the life of the Owner.

ASSIGNMENT

Please refer to page 3 to see if this Contract may be assigned. If so, no
Assignment under this Contract is binding unless Received by the Company in
writing. The Company assumes no responsibility for the validity, legality, or
tax status of any Assignment. The Assignment will be subject to any payment made
or other action taken by the Company before the Assignment is Received by the
Company. Once filed, the rights of the Owner, Annuitant and Beneficiary are
subject to the Assignment. Any claim is subject to proof of interest of the
assignee.

EXCHANGES

Certain Exchanges of Account Value or Payment Units are permitted under the
Contract. An Owner may make only six Exchanges per Contract Year. Annuity
Payments after an Exchange will reflect the new allocation of Account Value or
Payment Units among the Subaccounts and the Fixed Account.

An Exchange may be effected by submitting a written request to the Company or by
any other means permitted by the Company. The Company will effect an Exchange to
or from a Subaccount on the basis of Accumulation Unit Value (or, if applicable,
Payment Unit Value) as of the close of the Valuation Period in which all
information required to make the Exchange is Received by the Company.

Annuity Options 1 through 4 and 8 provide for fixed payments (a "Fixed Annuity")
or payments that vary according to the performance of the Subaccounts (a
"Variable Annuity"). If a Variable Annuity under one of Annuity Options 1
through 4 or 8 is elected, the Owner may Exchange Payment Units only among the
Subaccounts.

Annuity Options 5 through 7 provide for:

(1) a Fixed Annuity;

(2) a Variable Annuity; or

(3) a combination Fixed and Variable Annuity.

Account Value may be Exchanged among the Subaccounts and the Fixed Account under
Annuity Options 5 through 7. Account Value may be Exchanged from the Fixed
Account only during the calendar month in which the applicable Guarantee Period
expires.

Annuity Option 9 provides for a Variable Annuity. Account Value may be Exchanged
among the Subaccounts during the Liquidity Period under Option 9. After the
Liquidity Period, Payment Units may be Exchanged among the Subaccounts. An
Owner's Exchange of Account Value under Option 9 will automatically effect a
corresponding Exchange of Payment Units. Exchanges under Option 9 do not affect
the amount of Annuity Payments until such amount is reset as discussed under
"Payment Units" on pages 16 and 17.

LIMITS ON EXCHANGES

The Company reserves the right to:

(1) limit the amount of Account Value that may be subject to Exchanges;

(2) limit the amount of Account Value remaining in an Account after an
Exchange;

(3) waive or limit the number of Exchanges allowed each Contract Year;

(4) impose conditions on the right to Exchange; and

(5) suspend Exchanges.

Exchanges of Account Value must be at least $500 or, if less, the remaining
balance in the Fixed Account or a Subaccount.

The Company reserves the right to delay Exchanges from the Fixed Account for up
to 6 months as required by most states. The Company will inform the Owner if
there will be a delay.

CLAIMS OF CREDITORS

The Account Value and other benefits under this Contract are exempt from the
claims of creditors of the Owner to the extent allowed by law.

NONFORFEITURE VALUES

The Death Benefits, Withdrawal Values and Annuity Payout Amounts will at least
equal the minimum required by law.

PARTICIPATION

The Company may pay dividends on some of its contracts. The Company, however,
does not expect dividends to become payable on this Contract. At the end of each
Contract Year the Company will determine the Contract's dividend, if any. The
Owner may choose to have it: (1) added to the Account Value; or (2) paid in
cash. If no choice is made, any dividend will be added to Account Value.

STATEMENTS

At least once each Contract Year the Owner shall be sent a statement including
any current Account Value and any other information required by law. The Owner
may send a written request for a statement at other intervals. The Company may
charge a reasonable fee for statements at such other intervals.

OWNERSHIP

During the Owner's lifetime, all rights and privileges under the Contract may be
exercised only by the Owner. If the purchaser names someone other than himself
or herself as Owner, the purchaser has no rights in the Contract. No Owner may
be older than age 85 on the Contract Date. The Owner must be an Annuitant.

JOINT OWNERSHIP

If a Joint Owner is named in the application, then the Owner and Joint Owner
share an undivided interest in the entire Contract as joint tenants with rights
of survivorship. When an Owner and Joint Owner have been named, the Company will
honor only requests for changes and the exercise of other Ownership rights made
by both the Owner and Joint Owner. When a Joint Owner is named, all references
to "Owner" throughout this Contract should be construed to mean both the Owner
and Joint Owner, except for the "Statements" provision above and the "Death
Benefit Provisions" on pages 22 through 23. Joint Owners are permitted only if:
(1) the Contract is a Nonqualified Contract; and (2) the Joint Owner is a Joint
Annuitant.

ANNUITANT

The Annuitant is named on page 3. The Owner may not change the Annuitant or any
Joint Annuitant. No Annuitant may be named who is more than 85 years old on the
Contract Date.

PRIMARY AND SECONDARY BENEFICIARIES

The Primary Beneficiary and any Secondary Beneficiary are named on page 3. The
Owner may change any Beneficiary as described in "Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the Secondary Beneficiary
becomes the Primary Beneficiary. Unless the Owner directs otherwise, when there
are two or more Primary Beneficiaries, they will receive equal shares.

BENEFICIARY CHANGES

Subject to the terms of any existing Assignment, the Owner may name a new
Primary Beneficiary or a new Secondary Beneficiary. Any new choice of Primary
Beneficiary or Secondary Beneficiary will revoke any prior choice. Any change
must be made in writing and recorded at the Home Office. The change will become
effective as of the date the written request is signed, whether or not the Owner
is living at the time the change is recorded. A new choice of Primary
Beneficiary or Secondary Beneficiary will not apply to any payment made or
action taken by the Company prior to the time it was recorded. The Company may
require the Contract be returned so these changes may be made.

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PURCHASE PAYMENT PROVISIONS
- --------------------------------------------------------------------------------

SINGLE PURCHASE PAYMENT

This is a single premium ("Purchase Payment") immediate variable annuity
contract. The Contract begins on the Contract Date when the Purchase Payment is
applied under the Contract.

PURCHASE PAYMENT LIMITATIONS

The Purchase Payment to the Contract may not be greater than $1,000,000 without
prior approval by the Company.

PURCHASE PAYMENT ALLOCATION

The Purchase Payment may be allocated either among the Subaccounts as set forth
on page 3, or to the Fixed Account. If one of Options 5, 6 or 7 is selected, the
Purchase Payment may be allocated among the Subaccounts and the Fixed Account.
The allocation to each Account must be a whole percentage. No less than 5
percent of the Purchase Payment may be allocated to any Account.

PLACE OF PAYMENT

The Purchase Payment under this Contract is to be paid to the Company at its
Home Office. The Purchase Payment is applied no later than the end of the second
Valuation Date following receipt by the Company of the Purchase Payment and an
Application containing all information necessary to issue the Contract.

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ANNUITY PAYMENT PROVISIONS
- --------------------------------------------------------------------------------

ANNUITY PAYOUT DATE

The Annuity Payout Date is the date as of which the first Annuity Payment is
computed under one of the Annuity Options. The Owner elects the Annuity Payout
Date at the time of application. The Owner must select an Annuity Payout Date
that is within 30 calendar days of the Contract Date. If no Annuity Payout Date
is chosen, the Company will use a date one month from the Contract Date. The
Owner may not change the Annuity Payout Date.

ANNUITY OPTIONS

The Contract provides for Annuity Payments to be made under one of nine Annuity
Options. The Owner elects an Annuity Option in the Application. The Annuity
Option is set forth on page 3 and may not be changed. Options 1 through 4 and 9
generally provide for payments to be made during the life of the Annuitant or
Joint Annuitants. Under Options 5 through 8, payments are made to the Annuitant
and in the event of the Annuitant's death, to the Designated Beneficiary.

Options 1 through 4 are available as either a Fixed or Variable Annuity. Option
9 is available only as a Variable Annuity. Options 5 through 7 are also
available as a combination of Fixed and Variable Annuity. The Annuity Options
are described below.

OPTION 1

LIFE INCOME OPTION: This option provides Annuity Payments for the life of the
Annuitant. Upon the Annuitant's death, no further Annuity Payments will be made.

OPTION 2

LIFE INCOME WITH PERIOD CERTAIN OPTION: This option provides Annuity Payments
for the life of the Annuitant. A fixed period of 5, 10, 15 or 20 years may be
chosen. Annuity Payments will be made to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies before
receiving all the Annuity Payments during the fixed period, the remaining
Annuity Payments will be made to the Designated Beneficiary. Upon the
Annuitant's death after the period certain, no further Annuity Payments will be
made.

OPTION 3

LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides Annuity
Payments for the life of the Annuitant, with a period certain determined by
dividing the Annuity Payout Amount (as defined on page 15) by the amount of the
first Annuity Payment. A fixed number of Annuity Payments will be made even if
the Annuitant dies. If the Annuitant dies before receiving the fixed number of
Annuity Payments, any remaining Annuity Payments will be made to the Designated
Beneficiary. If the Annuitant dies after receiving the fixed number of Annuity
Payments, no further Annuity Payments will be made.

OPTION 4

JOINT AND LAST SURVIVOR OPTION: This option provides Annuity Payments for the
lives of the Annuitant and Joint Annuitant. Annuity Payments will be made as
long as either is living. Upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of 75%,
66 2/3% or 50% of Annuity Payments, as elected in the Application. With respect
to Fixed Annuity Payments, the amount of the Annuity Payment, and, with respect
to Variable Annuity Payments, the number of Annuity Units used to determine the
Annuity Payment, is reduced as of the first Annuity Payment following the
Annuitant's death. The percentage elected is set forth on page 3. In the event
of the death of one Annuitant, the surviving Joint Annuitant has the right to
exercise all rights under the Contract, including the right to make Exchanges
and Beneficiary changes. Upon the death of the last Annuitant, no further
Annuity Payments will be made.

OPTION 5

FIXED PERIOD OPTION: This option provides Annuity Payments for a fixed number of
years between 5 and 20. If the Account Value is held in the Fixed Account, then
the amount of the Annuity Payments will vary as a result of the interest rate
(as adjusted periodically) credited on Fixed Account Value. This rate is
guaranteed to be no less than the Guaranteed Rate set forth on page 3. The
amount of each Fixed Annuity Payment is determined by dividing Fixed Account
Value on the Annuity Payment date by the number of remaining Annuity Payments.
If the Account Value is held in the Separate Account, then the amount of the
Annuity Payments will vary as a result of the investment performance of the
Subaccounts chosen. The amount of each Variable Annuity Payment is determined by
multiplying the Accumulation Unit Value on the Annuity Payment date by the
result of dividing total Accumulation Units by the number of remaining Annuity
Payments. If the Annuitant dies before receiving the fixed number of Annuity
Payments, any remaining Annuity Payments will be made to the Designated
Beneficiary.

OPTION 6

FIXED PAYMENT OPTION: This option provides for Annuity Payments of a fixed
amount selected by the Owner. This amount is paid until Account Value is
exhausted. If the Account Value is held in the Fixed Account, then the number of
Annuity Payments will vary as a result of the interest rate (as adjusted
periodically) credited on Fixed Account Value. This rate is guaranteed to be no
less than the Guaranteed Rate set forth on page 3. If the Account Value is held
in the Separate Account, then the number of Annuity Payments will vary as a
result of the investment performance of the Subaccounts chosen. If the Annuitant
dies before receiving all of the Annuity Payments, any remaining Annuity
Payments will be made to the Designated Beneficiary. This Option is available
only for Nonqualified Contracts.

OPTION 7

AGE RECALCULATION OPTION: This option provides for Annuity Payments based upon
the Annuitant's life expectancy, or the joint life expectancy of the Annuitant
and a beneficiary, at the Annuitant's attained age (and the Annuitant's
beneficiary's attained or adjusted age, if applicable) each year. The Annuity
Payments are computed by reference to actuarial tables prescribed by the
Treasury Secretary and in accordance with Section 401(a)(9) of the Internal
Revenue Code and rules and regulations thereunder. Annuity Payments are made
until Account Value is exhausted. If the Account Value is held in the Fixed
Account, then the amount of the Annuity Payments will vary as a result of the
interest rate (as adjusted periodically) credited on Fixed Account Value. This
rate is guaranteed to be not less than the Guaranteed Rate set forth on page 3.
If the Account Value is held in the Separate Account, then the amount of the
Annuity Payments will vary as a result of the investment performance of the
Subaccounts chosen. If the Annuitant dies before receiving the remaining Annuity
Payments, Account Value will be paid to the Designated Beneficiary.

OPTION 8

PERIOD CERTAIN OPTION: This option provides Annuity Payments for a fixed period
of 5, 10, 15 or 20 years. Annuity Payments will be made until the end of this
period. If the Annuitant dies prior to the end of the period, the remaining
Annuity Payments will be made to the Designated Beneficiary.

OPTION 9

LIFE INCOME WITH LIQUIDITY OPTION: This option provides monthly Annuity Payments
for the life of the Annuitant or the lives of the Annuitant and a Joint
Annuitant with a period certain of 15 years (or less in certain instances where
the period certain would exceed the life expectancy of the Annuitant or joint
life expectancy of the Joint Annuitants). Annuity Payments under this option are
guaranteed never to be less than 80 percent of the initial Annuity Payment
("Floor Payment"); provided that the Floor Payment is adjusted in the event of a
Withdrawal. See "Withdrawal Provisions" on pages 20 through 22. The amount of
the Annuity Payment will remain level for 12 month intervals and will reset on
each anniversary of the Annuity Payout Date as discussed under "Payment Units,"
on pages 16 and 17. Annuity Payments during the Liquidity Period are paid from
Account Value and reduce the amount of Account Value available for Withdrawal.

If Account Value allocated to a Subaccount from which Annuity Payments are being
made will be reduced to $0 by the current Annuity Payment, the Annuity Payment
will be adjusted as of the date of that payment. The amount of any shortfall in
the affected Subaccount will be deducted from the first of the Subaccounts set
forth on page 3 that has Account Value. Until the next reset of the Annuity
Payment, Annuity Payments will be made from the Subaccounts that have Account
Value in the same proportion as Account Value is allocated among the Subaccounts
on the date of the payment adjustment. Payment Units also will be adjusted as of
that date to reflect the proportion of Account Value allocated to the
Subaccounts.

If there are Joint Annuitants, upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of 75%,
66 2/3% or 50% of Annuity Payments as elected in the Application. The percentage
elected is set forth on page 3. The number of Payment Units used to determine
each Annuity Payment is reduced as of: (1) the Annuity Payment due on the Period
Certain Expiration Date; or (2) if later, the first Annuity Payment following
the death of the Joint Annuitant. If such death occurs during the Liquidity
Period, the Annuity Payment may be increased as discussed under "Payment
Adjustment Upon Death of Joint Annuitant," page 15.

In the event of the death of the Annuitant or, in the case of Joint Annuitants,
the last Annuitant, prior to the Period Certain Expiration Date, a death benefit
will be paid as follows. In the event of death during the period beginning on
the Annuity Payout Date and ending on the Liquidity Period Expiration Date, the
death benefit is the Account Value as of the date due proof of death and payment
instructions are Received by the Company. In the event of death during the
period beginning at the close of the Liquidity Period and ending on the Period
Certain Expiration Date, the Designated Beneficiary may elect the death benefit
as follows: (1) the present value of the remaining guaranteed Annuity Payments
as of the date due proof of death and payment instructions are Received by the
Company, commuted at the Assumed Interest Rate, and paid in a lump sum; or (2)
the remaining guaranteed Annuity Payments paid to the Designated Beneficiary on
a monthly basis until the Period Certain Expiration Date.

PAYMENT ADJUSTMENT UPON DEATH OF JOINT ANNUITANT

Under Option 9, if a Joint Annuitant dies during the Liquidity Period, the
amount of the Annuity Payment to the surviving Joint Annuitant may be increased
beginning on the date of the 61st Annuity Payment. The determination of whether
to increase the amount of the Annuity Payment is made as of the date of the 61st
Annuity Payment, as follows. An amount equal to the present value of future
Annuity Payments based on the joint lives of the Annuitants, commuted at the
Assumed Interest Rate, is divided by $1,000, and the result is multiplied by an
amount determined by reference to the Annuity Table for Option 2 with a ten year
period certain based upon the surviving Joint Annuitant's age and sex (unless
unisex rates apply). If the amount of the Annuity Payment as determined above is
greater than the Annuity Payment calculated as of the date of the 61st Annuity
Payment, the Annuity Payment will be increased as of the date of the 61st
Annuity Payment to that amount and the Floor Payment and number of Payment Units
will be increased proportionately.

ANNUITY PAYOUT AMOUNT

The Annuity Payout Amount is used to calculate Annuity Payments under Annuity
Options 1 through 4, 8 and 9.

The Annuity Payout Amount is:

(1) the initial Purchase Payment; less

(2) any Premium Taxes due or paid by the Company; less

(3) for Fixed Annuity Payments, an amount equal to 1.8% of the amount of the
initial Purchase Payment.

Annuity Payout Amount allocated to the Fixed Account is applied to purchase a
Fixed Annuity and that allocated to the Subaccounts is applied to purchase a
Variable Annuity. The Annuity Payout Amount is divided by $1,000, and the result
is multiplied by the applicable amount in the Annuity Tables to determine the
minimum guaranteed monthly Annuity Payment with respect to a Fixed Annuity or
the first monthly Annuity Payment with respect to a Variable Annuity.

FIXED ANNUITY PAYMENTS

With respect to Fixed Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the rate of interest credited by the Company, is the
amount of each monthly Annuity Payment for Annuity Options 1 through 4 and 8.
For Options 5 through 7, Fixed Annuity Payments are based on Account Value.

VARIABLE ANNUITY PAYMENTS

With respect to Variable Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the Assumed Interest Rate, is the amount of the FIRST
monthly Annuity Payment for Annuity Options 1 through 4, 8 and 9. The amount of
each Annuity Payment after the first for these options is computed by means of
Payment Units as set forth on pages 16 and 17. For Options 5 through 7, Variable
Annuity Payments are based on Account Value. Variable Annuity Payments will
fluctuate with the performance of the Subaccount(s).

ANNUITY TABLES

The amounts set forth in the Annuity Tables for Annuity Options 1 through 4 and
9 depend on the sex (unless unisex rates apply) and age of the Annuitant or the
Joint Annuitants on the Annuity Payout Date. The Annuity Tables are modified to
reflect (1) the Assumed Interest Rate for Variable Annuity Payments; or (2) the
rate of interest in effect on the Contract Date for Fixed Annuity Payments. The
Annuity Tables contain the amount of monthly Annuity Payment per $1,000 of
Annuity Payout Amount. The Annuity Tables state values for the exact ages shown.
The values will be interpolated based on the exact age(s) of the Annuitant or
Joint Annuitants on the Annuity Payout Date. The basis of the Annuity Tables for
Options 1 through 4 and 9, and the Assumed Interest Rate are set forth on page
3. The Annuity Tables for Option 8 are determined without reference to the age
or sex of the Annuitant and are based upon the Assumed Interest Rate. Annuity
Payments for Options 5 through 7 are computed without reference to the Annuity
Tables. The Annuity Tables are used in accordance with generally accepted
actuarial principles.

ANNUITY PAYMENTS

No Annuity Option can be selected that requires the Company to make Annuity
Payments of less than $100.00; provided that there is no minimum Annuity Payment
under Option 9. Each Annuity Option allows for making Annuity Payments annually,
semiannually, quarterly or monthly, except Option 9 for which Annuity Payments
are made monthly. Annuity Payments due on a date other than a Valuation Date,
are paid as of the end of the next following Valuation Date.

PAYMENT UNITS

On the Annuity Payout Date, the amount of the first Variable Annuity Payment is
divided by the Payment Unit Value as of that date to determine the number of
Payment Units to be used in calculating subsequent Annuity Payments. If the
initial Purchase Payment was allocated to more than one Subaccount, the first
Variable Annuity Payment will be allocated to each Subaccount in the percentage
corresponding to the initial Purchase Payment allocation. The number of Payment
Units for each Subaccount is then found by dividing the amount of the first
Variable Annuity Payment allocated to that Subaccount by the Payment Unit Value
for the Subaccount on the Annuity Payout Date. The number of Payment Units for
the Subaccount then remains constant, unless an Exchange of Payment Units or a
Withdrawal is made. After the first Variable Annuity Payment, the dollar amount
of each subsequent Annuity Payment is equal to the sum of the payment amount
determined for each Subaccount. The payment amount for each Subaccount is equal
to the number of Payment Units allocated to that Subaccount multiplied by the
Payment Unit Value on the date of the Annuity Payment. For Option 9, the amount
of each Annuity Payment is calculated as described above; provided that the
amount of the Annuity Payment is reset only once each year on the 12-month
anniversary of the Annuity Payout Date.

An example of a Variable Annuity Payment calculation for a male, age 60 is as
follows:

Annuity Payout Amount = $100,000 $100,000 = 100
-------
$1,000

Amount determined by reference in 1998 to Annuity Table for a male, age 60 under
Option 9
$4.78

First Variable Annuity Payment 100 x $4.78 = $478

PURCHASE FIRST VARIABLE PAYMENT UNIT NUMBER OF PAYMENT
PAYMENT ANNUITY VALUE ON UNITS USED TO
SUBACCOUNT ALLOCATION PAYMENT ANNUITY DETERMINE
ALLOCATION PAYOUT SUBSEQUENT PAYMENTS
DATE

Equity Income 50% $239.00 / $1.51 = 158.2781
International 50% $239.00 / $1.02 = 234.3137
Stock

An example of an annual reset under Option 9 of the Annuity Payment amount using
the assumptions above is as follows:

PAYMENT DATE PAYMENT AMOUNT

Annuity Payout Date 2/15 $478
3/15 $478
4/15 $478
5/15 $478
6/15 $478
7/15 $478
8/15 $478
9/15 $478
10/15 $478
11/15 $478
12/15 $478
1/15 $478
Annual Reset 2/15 $510.98

PAYMENT PAYMENT UNIT VALUE NEW ANNUITY
SUBACCOUNT UNITS ON ANNUAL RESET DATE PAYMENT AMOUN

Equity Income 158.2781 x $1.60 = $253.24
International Stock 234.3137 x $1.10 = $257.74
-------
$510.98

PAYMENT UNIT VALUE

The Payment Unit Value for each Subaccount was first set at $1.00. The Payment
Unit Value for any subsequent Valuation Date is equal to (a) times (b) times
(c), where:

(a) is the Payment Unit Value on the immediately preceding Valuation
Date;
(b) is the Net Investment Factor for the day;
(c) is a factor used to adjust for the Assumed Interest Rate set forth on
page 3 which is used to determine Variable Annuity Payment amounts.

NET INVESTMENT FACTOR

The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is found by dividing (1) by (2) and subtracting (3) from the result,
where:

1. is equal to:

a. the net asset value per share of the mutual fund held in the
Subaccount found at the end of the current Valuation Period; plus
b. the per share amount of any dividend or capital gain distributions
paid by the Subaccount's underlying mutual fund that is not
included in the net asset value per share; plus or minus
c. a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or Subaccount; the operations of the Company with respect
to the Contract; or the payment of premium or acquisition costs
under the Contract.

2. is the net asset value per share of the Subaccount's underlying mutual
fund as found at the end of the prior Valuation Period.

3. is a daily factor representing the Mortality and Expense Risk Charge
deducted from the Separate Account.

ACCOUNT VALUE

Account Value is determined:

(1) for all Options prior to the Annuity Payout Date;

(2) for Options 5 through 7, during the life of the Contract; and

(3) for Option 9 during the Liquidity Period.

Account Value is the sum of: (1) the Separate Account Value; and (2) the Fixed
Account Value.

FIXED ACCOUNT VALUE

On any Valuation Date, the Fixed Account Value is equal to any part of the
Purchase Payment allocated under the Contract to the Fixed Account:

PLUS:

1. any Exchanges from the Separate Account to the Fixed Account; and
2. any interest credited to the Fixed Account.

LESS:

1. any Withdrawals deducted from the Fixed Account;
2. any Exchanges from the Fixed Account to the Separate Account;
3. any Premium Taxes; and
4. any Annuity Payments made under Annuity Options 5 through 7.

FIXED ACCOUNT INTEREST CREDITING

The Company shall credit interest on Fixed Account Value at an annual rate at
least equal to the Guaranteed Rate shown on page 3. Also, the Company may in its
sole judgment credit Current Interest at a rate in excess of the Guaranteed
Rate. The rate of Current Interest, if declared, shall be fixed during the
Guarantee Period. Fixed Account Value shall earn Current Interest during each
Guarantee Period at the rate, if any, declared by the Company on the first day
of the Guarantee Period.

The Company may credit Current Interest on Account Value that was allocated or
exchanged to the Fixed Account during one period at a different rate than
amounts allocated or exchanged to the Fixed Account in another period. Also, the
Company may credit Current Interest on Fixed Account Value at different rates
based upon the length of the Guarantee Period. Therefore, at any time, portions
of Fixed Account Value may be earning Current Interest at different rates based
upon the period during which such portions were allocated or exchanged to the
Fixed Account and the length of the Guarantee Period.

SEPARATE ACCOUNT VALUE

On any Valuation Date, the Separate Account Value is the sum of the then current
value of the Accumulation Units allocated to each Subaccount for this Contract.
The number of Accumulation Units initially allocated to each Subaccount is
determined by dividing the portion of the Purchase Payment allocated to the
Subaccount on the Contract Date by the Accumulation Unit Value on the Contract
Date.

ACCUMULATION UNIT VALUE

The initial Accumulation Unit Value for each Subaccount was set at $10. The
Accumulation Unit Value for any subsequent Valuation Date is equal to (1)
multiplied by (2) where:

1. is the Accumulation Unit Value determined on the immediately preceding
Valuation Date; and

2. is the Net Investment Factor (as defined on page 17) on the Valuation
Date with respect to which the Accumulation Unit Value is being
determined.

DETERMINING ACCUMULATION UNITS

The number of Accumulation Units allocated to a Subaccount under the Contract
will not change as a result of investment experience. Events that change the
number of Accumulation Units are:

1. Purchase Payment applied to the Subaccount;
2. Account Value Exchanged into or out of the Subaccount;
3. Withdrawals deducted from the Subaccount;
4. Annuity Payments from the Subaccount under Options 5 through 7 and 9;
5. Any amounts deducted from the Subaccount to increase the amount of the
Annuity Payments under Option 9 to the amount of the Floor Payment;
and
6. Premium Taxes deducted from the Subaccount.

MORTALITY AND EXPENSE RISK CHARGE

The Company will deduct the Mortality and Expense Risk Charge shown on page 3.
This charge will be computed and deducted from each Subaccount on each Valuation
Date. This charge is factored into the Accumulation Unit and Payment Unit Values
on each Valuation Date.

PREMIUM TAX EXPENSE

The Company deducts Premium Tax from the initial Purchase Payment. The Company
reserves the right to deduct Premium Tax when due or any time thereafter.

MUTUAL FUND EXPENSES

Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each underlying fund reflects the deduction of any investment advisory
and administration fees and other expenses of the fund. These fees and expenses
are not deducted from the assets of a Subaccount, but are paid by the underlying
funds. The Owner indirectly bears a pro rata share of such fees and expenses. An
underlying fund's fees and expenses are not specified or fixed under the terms
of this Contract.

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WITHDRAWAL PROVISIONS
- --------------------------------------------------------------------------------

WITHDRAWALS

The Owner may withdraw Account Value if one of Options 5 through 7 has been
elected. The Owner also may withdraw Account Value during the Liquidity Period
under Option 9. Under these options, a full Withdrawal of Account Value or full
or partial Withdrawal of Separate Account Value is allowed. Partial Withdrawals
of Fixed Account Value, however, are restricted as described on page 21. This
provision is subject to any federal or state Withdrawal restrictions.

A partial Withdrawal of Fixed Account Value may be made only: (1) during the
calendar month in which the applicable Guarantee Period expires; and (2) once
per Contract Year in an amount up to the greater of $5,000 or 10 percent of the
Fixed Account Value at the time of the partial Withdrawal.

The Owner also may withdraw the present value of future Annuity Payments
commuted at the Assumed Interest Rate if a Variable Annuity under Option 8 has
been elected.

Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum.

All Withdrawals must meet the following conditions.

1. The request for Withdrawal must be Received by the Company in writing
or under other methods allowed by the Company.
2. The Owner must request a withdrawal while this Contract is in force.
3. The amount Withdrawn must be at least $500.00 except when terminating
the Contract.
4. For Option 9, the request for Withdrawal must be Received by the
Company prior to the Liquidity Period Expiration Date set forth on
page 3.

A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. Withdrawals of Fixed Account Value shall be made:

(1) first from Fixed Account Value for which the Guarantee Period expires
during the calendar month in which the Withdrawal is effected;

(2) then in the order that starts with Fixed Account Value which has the
longest amount of time before its Guarantee Period expires; and

(3) ends with that which has the least amount of time before its Guarantee
Period expires.

WITHDRAWAL VALUE

The Withdrawal Value as of any Valuation Date will be:

(1) the Account Value (or for Option 8, the present value of future Annuity
Payments commuted at the Assumed Interest Rate); less

(2) any Premium Taxes due or paid by the Company; and

(3) for Option 9, the Withdrawal Charge set forth on page 3.

If Account Value after any partial Withdrawal is $10,000 or less, or with
respect to Option 8, Annuity Payments after the Withdrawal would be less than
$100, the Company reserves the right to treat such partial Withdrawal as a full
Withdrawal.

WITHDRAWAL CHARGE

If part or all of the Account Value is Withdrawn under Option 9, a Withdrawal
Charge is applied at the time of Withdrawal. The amount of the charge is based
on the Contract Year in which the Withdrawal is made. See the Withdrawal Charge
set forth on page 3. The Withdrawal Charge is applied to the amount of the
Withdrawal and is deducted from Account Value allocated to the Subaccounts in
the same proportion as the Withdrawal is allocated.

PAYMENT ADJUSTMENT

Upon a partial Withdrawal during the Liquidity Period under Option 9, the
Company will adjust the amount of the Annuity Payment and Floor Payment as
follows. The Company will reduce the amount of the Annuity Payment and Floor
Payment by a percentage determined by dividing the amount of the Withdrawal,
including the amount of the Withdrawal Charge, by Account Value on the date of
the Withdrawal. The number of Payment Units used to compute each Annuity Payment
will be reduced by the same percentage.

An example of a payment adjustment is set forth below:

SUBACCOUNTS FROM ACCOUNT VALUE
WHICH ANNUITY ON DATE OF WITHDRAWAL AMOUNT PERCENTAGE
PAYMENT IS MADE WITHDRAWAL (INCLUDING WITHDRAWAL REDUCTION
CHARGES)

Equity Income $95,000 $0 0%
International Stock $25,000 $15,000 60%
Total $120,000 $15,000 12.5%

PRIOR TO PARTIAL WITHDRAWAL AFTER PARTIAL WITHDRAWAL
SUBACCOUNTS FROM --------------------------- ------------------------
WHICH ANNUITY ANNUITY PAYMENT FLOOR ANNUITY PAYMENT FLOOR
PAYMENT IS MADE PAYMENT UNITS PAYMENT PAYMENT UNITS PAYMENT^1

Equity Income^2 $300 29.7914 N/A $300 29.7914 N/A
International Stock^3 $100 9.7847 N/A $40 3.9139 N/A
Total $400 $304 $340 $266

DATE OF REQUEST

The Company will effect a Withdrawal of Separate Account Value on the basis of
Accumulation Unit Value determined as of the end of the Valuation Period in
which all the required information is Received by the Company.

1 The Floor Payment is reduced by 12.5%, the percentage by which the partial
Withdrawal reduced Account Value.

2 The Annuity Payment and Payment Units allocated to this Subaccount are not
reduced in this example, because no amount is withdrawn from Account Value
allocated to the Equity Income Subaccount.

3 The Annuity Payment and Payment Units are reduced by 60%, the percentage by
which the partial Withdrawal reduced Account Value allocated to the
International Stock Subaccount.

PAYMENT OF WITHDRAWAL BENEFITS

The Company reserves the right to suspend an Exchange or delay payment of a
Withdrawal from the Separate Account for any period:

1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which:
(a) disposal of securities held in the Separate Account is not
reasonably practicable; or
(b) it is not reasonably practicable to fairly value the net assets of
the Separate Account; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits to protect owners of securities.

Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth above exist.

The Company further reserves the right to delay payment of a Withdrawal from the
Fixed Account for up to six months as required by most states. The Company will
notify the Owner if there will be a delay.

- --------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
- --------------------------------------------------------------------------------

DEATH BENEFIT PROVISIONS

In the event the Owner dies prior to the Annuity Payout Date and there is no
Joint Annuitant, the Death Benefit will be the Account Value on the date due
proof of death and payment instructions are Received by the Company, less any
Premium Taxes due or paid by the Company, all partial Withdrawals, and any
Annuity Payments made.

In the event any Owner dies prior to the Annuity Payout Date and there is a
Joint Annuitant, the surviving Joint Annuitant may elect: (1) a new Annuity
Option; or (2) to receive the Death Benefit described above.

In the event of any Owner's death on or after the Annuity Payout Date, the Death
Benefit will be determined under the terms of the Annuity Option. Any such Death
Benefit will be paid to the Designated Beneficiary when due proof of death and
payment instructions are Received by the Company.

PROOF OF DEATH

Any of the following will serve as Proof of Death:

1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the
finding of death;
3. written statement by a medical doctor who attended the deceased Owner;
or
4. any proof accepted by the Company.

DISTRIBUTION RULES

If any Owner dies prior to the Annuity Payout Date, the entire Death Benefit
shall be paid within 5 years after the death of such Owner. If any Owner dies on
or after the Annuity Payout Date, Annuity Payments shall continue to be paid at
least as rapidly as under the method of payment being used as of the date of the
Owner's death.

If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or a change in, the Annuitant. This Contract
is deemed to incorporate any provision of Section 72(s) of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor provision. This Contract
is also deemed to incorporate any other provision of the Code deemed necessary
by the Company, in its sole judgment, to qualify this Contract as an annuity.
The application of the distribution rules will be made in accordance with Code
section 72(s), or any successor provision, as interpreted by the Company in its
sole judgment.

The foregoing distribution rules do not apply to a Contract which is:

(1) provided under a plan described in Code section 401(a);

(2) described in Code section 403(b);

(3) an individual retirement annuity or provided under an individual retirement
account or annuity; or

(4) otherwise exempt from the Code section 72(s) distribution rules.
<PAGE>
A BRIEF DESCRIPTION OF THIS CONTRACT

This is a SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT

* Annuity Payments begin on the Annuity Payout Date using the method as
specified in this Contract.

(SBL LOGO)

SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
700 SW Harrison Street, Topeka, KS 66636-0001

<PAGE>
ENDORSEMENT

ENDORSEMENT

This endorsement is attached to and made part of this Contract as of the date
shown below. The Contract is amended as set forth below to make available under
the Contract two new options-Annuity Options 8 and 9.

CONTRACT SPECIFICATIONS

The Mortality and Expense Risk Charge set forth on page 3 is deleted and
replaced with the following: "0.55% Annually [(1.45% Annually for Option 9).]"

A Withdrawal Charge that only applies to Withdrawals under Option 9 is added to
page 3 as set forth below:

Year of Withdrawal from Annuity Payout Date* 1 2 3 4 5
----------------------------
Withdrawal Charge 5% 4% 3% 2% 1%

*Withdrawals under Option 9 are available only during the Liquidity Period.

The Subaccounts set forth on page 3 are amended by adding the following
information to the Prime Reserve Subaccount: "(Not available under Option 9)."

The following item is added on page 3: "Assumed Interest Rate . . . [3.5%]
Annually."

DEFINITIONS

The "Definitions" provision is amended by adding the following definition of
"Liquidity Period" on page 5:

LIQUIDITY PERIOD

Under Option 9, the Liquidity Period is the period of time during which the
Owner may withdraw Contract Value. The Liquidity Period begins on the Annuity
Payout Date and ends on the Valuation Date preceding the 61st Annuity Payment.

EXCHANGES

The second paragraph under "Exchanges" on page 8 is deleted and replaced with
the following:

The Owner may make only six Exchanges per Contract Year. Automatic Exchanges are
not included in the six Exchanges allowed per Contract Year. After the Annuity
Payout Date, for Annuity Options 1 through 4, 8 and 9, Exchanges may be made
only among Subaccounts. An Owner's Exchange of Contract Value under Option 9
will automatically effect a corresponding Exchange of Annuity Units. Exchanges
under Option 9 do not affect the amount of Annuity Payments until such amount is
reset as discussed under "Annuity Units," below.

CONTRACT VALUE

The following sentence is added to the beginning of the "Contract Value"
provision on page 10:

"Contract Value is determined on each Valuation Date: (1) prior to the Annuity
Payout Date; and (2) after the Annuity Payout Date for Options 5 through 7 and
for Option 9 during the Liquidity Period."

FIXED ACCOUNT CONTRACT VALUE

The provisions of "Fixed Account Contract Value" on page 10 are deleted and
replaced with the following:

On any Valuation Date, the Fixed Account Contract Value is equal to the first
Purchase Payment allocated under the Contract to the Fixed Account:

PLUS:

1. any other Purchase Payments allocated under the Contract to the Fixed
Account;
2. any Exchanges from the Separate Account to the Fixed Account; and
3. any interest credited to the Fixed Account.

LESS:

1. any Withdrawals deducted from the Fixed Account;
2. any Exchanges from the Fixed Account to the Separate Account;
3. Premium Taxes, if any;
4. any Fixed Account Contract Value applied to any of Annuity Options 1 through
4, 8 or 9; and
5. any Annuity Payments made under Annuity Options 5 through 7.

DETERMINING ACCUMULATION UNITS

The last sentence under "Determining Accumulation Units" on page 11 is deleted
and replaced with the following:

Events that change the number of Accumulation Units are:

1. Purchase Payments applied to the Subaccount;
2. Contract Value Exchanged into or out of the Subaccount;
3. Withdrawals deducted from the Subaccount;
4. Annuity Payments from the Subaccount under Options 5 through 7 and 9;
5. Any amounts deducted from the Subaccount to increase the amount of Annuity
Payments under Option 9 to the amount of the Floor Payment; and
6. Premium Taxes deducted from the Subaccount.

WITHDRAWALS

The first paragraph under "Withdrawals" on page 12 is deleted and replaced with
the following:

Prior to the Annuity Payout Date, a full Withdrawal of Contract Value or partial
Withdrawal of Separate Account Contract Value is permitted. Partial Withdrawals
of Fixed Account Contract Value are restricted as described below. On or after
the Annuity Payout Date, the Owner may withdraw Contract Value if one of Options
5 through 7 has been elected. The Owner also may withdraw Contract Value during
the Liquidity Period under Option 9. Under these options, a full Withdrawal of
Contract Value or full or partial Withdrawal of Separate Account Contract Value
is allowed. Partial Withdrawals of Fixed Account Contract Value, however, are
restricted as described below. This provision is subject to any federal or state
restrictions.

The following paragraph is added after the second paragraph under "Withdrawals":

The Owner also may withdraw the present value of future Annuity Payments
commuted at the Assumed Interest Rate if a Variable Annuity under Option 8 has
been elected.

The fourth paragraph under "Withdrawals" is deleted and replaced with the
following:

All Withdrawals must meet the following conditions.

1. The request for Withdrawal must be Received by the Company in writing or by
other methods allowed by the Company.
2. The Owner must request a Withdrawal while this Contract is in force.
3. The amount Withdrawn must be at least $500.00 except for Systematic
Withdrawals as discussed below, or when terminating the Contract.
4. For Option 9, the request for Withdrawal must be Received by the Company
prior to the close of the Liquidity Period.

WITHDRAWAL VALUE

The "Withdrawal Value," provision on page 13, is deleted and replaced with the
following:

The Withdrawal Value as of any Valuation Date will be:

(1) the Contract Value (or for Option 8, the present value of future Annuity
Payments commuted at the Assumed Interest Rate); less
(2) any Premium Taxes due or paid by the Company; and
(3) for Option 9, the Withdrawal Charge set forth on page 3.

If with respect to Option 8, Annuity Payments after the Withdrawal would be less
than $100, the Company reserves the right to treat such partial Withdrawal as a
full Withdrawal.

The following new provisions are inserted following "Withdrawal Value."

WITHDRAWAL CHARGE

If part or all of the Contract Value is Withdrawn under Option 9, a Withdrawal
Charge is applied at the time of Withdrawal. The amount of the charge is based
on the year in which the Withdrawal is made measured from the Annuity Payout
Date. See the Withdrawal Charge set forth on page 3. The Withdrawal Charge is
applied to the amount of the Withdrawal and is deducted from Contract Value
allocated to the Subaccounts in the same proportion as the Withdrawal is
allocated.

PAYMENT ADJUSTMENT

Upon a partial Withdrawal during the Liquidity Period under Option 9, the
Company will adjust the amount of the Annuity Payment and Floor Payment as
follows. The Company will reduce the amount of the Annuity Payment and Floor
Payment by a percentage determined by dividing the amount of the Withdrawal,
including the amount of the Withdrawal Charge, by Contract Value on the date of
the Withdrawal. The number of Annuity Units used to compute each Annuity Payment
will be reduced by the same percentage. An example of a payment adjustment is
set forth below:

Net Withdrawal $ 9,500
Withdrawal Charge 500
------
Gross Withdrawal $10,000

Payment Adjustment = Gross Withdrawal $10,000
------------------------------------ = ------- = 10%
Contract Value on Date of Withdrawal $100,000

PRIOR TO WITHDRAWAL AFTER WITHDRAWAL

Contract Value $100,000 $90,000
Annuity Payment $500 $450
Floor Payment $352 $316.80
Annuity Units 50 45

ANNUITY TABLES

The first two paragraphs of the "Annuity Tables" provision on page 16 are
deleted and replaced with the following:

The Annuity Tables show the guaranteed minimum amount of monthly Annuity Payment
that applies to the first Annuity Payment for Variable Annuity Payments and to
each Annuity Payment for Fixed Annuity Payments for each $1,000 of Annuity
Payout Amount for each of Annuity Options 1 through 4, 8 and 9. The amount of
each Annuity Payment for Annuity Options 1 through 4 and 9 will depend on the
Annuitant's sex and age on the Annuity Payout Date. The Annuity Tables state
values for the exact ages shown. The values will be interpolated based upon the
Annuitant's exact age on the Annuity Payout Date. On request, the Company will
furnish the amount of monthly Annuity Payment per $1,000 applied for any ages
not shown.

The Company bases the Tables for Annuity Options 1 through 4 on (1) the 1983
Table "A" Mortality Table projected for mortality improvement for 45 years using
projection scale G; and (2) the Assumed Interest Rate set forth on page 3. For
Option 8, the Company bases the Tables on the Assumed Interest Rate. For Option
9, the Annuity Table is based upon: (1) the 1983 Table "A" Mortality Table with
mortality improvement using projection scale G; and (2) the Assumed Interest
Rate set forth on page 3. The Annuity Tables are used in accordance with
generally accepted actuarial principles. The Owner may select prior to the
Annuity Payout Date any Assumed Interest Rate made available by the Company.

ANNUITY PAYMENTS

The following sentence is added to the "Annuity Payments" provision on page 16:
"There is no minimum Annuity Payment under Option 9, and Annuity Payments under
Option 9 must be made monthly."

ANNUITY UNITS

The "Annuity Units" provision on page 16 is deleted and replaced with the
following:

The number of Annuity Units is found by dividing the first Variable Annuity
Payment by the Annuity Unit Value of the selected Subaccount on the Annuity
Payout Date. The number of Annuity Units for the Subaccount then remains
constant, unless an Exchange of Annuity Units or a Withdrawal is made. After the
first Annuity Payment, the dollar amount of each subsequent Annuity Payment is
equal to the number of Annuity Units times the Annuity Unit Value for the
Subaccount on the due date of the Annuity Payment. For Option 9, the amount of
each Annuity Payment is calculated as described above; provided that the amount
of the Annuity Payment is reset only once each year on the 12-month anniversary
of the Annuity Payout Date.

ANNUITY OPTIONS

The following new Annuity Options, Options 8 and 9, are added following "Option
7" on page 19.

OPTION 8

OPTION 9

LIFE INCOME WITH LIQUIDITY OPTION: This option provides monthly Annuity Payments
for the life of the Annuitant or the lives of the Annuitant and a Joint
Annuitant with a Period Certain of 15 years (or less in certain instances where
the Period Certain would exceed the life expectancy of the Annuitant or joint
life expectancy of the Joint Annuitants). Annuity Payments under this option are
guaranteed never to be less than 80 percent of the initial Annuity Payment
("Floor Payment"); provided that the Floor Payment is adjusted in the event of a
Withdrawal. See "Payment Adjustment" above. The amount of the Annuity Payment
will remain level for 12 month intervals and will reset on each anniversary of
the Annuity Payout Date as discussed under "Annuity Units," above. Annuity
Payments during the Liquidity Period are paid from Contract Value and reduce the
amount of Contract Value available for Withdrawal.

If Contract Value allocated to a Subaccount from which Annuity Payments are
being made will be reduced to $0 by the current Annuity Payment, the Annuity
Payment will be adjusted as of the date of that payment. The amount of any
shortfall in the affected Subaccount will be deducted from the first (in reverse
order) of the Subaccounts set forth on page 3 that has Contract Value. Until the
next reset of the Annuity Payment, Annuity Payments will be made from the
Subaccounts that have Contract Value in the same proportion as Contract Value is
allocated among the Subaccounts on the date of the payment adjustment. Annuity
Units also will be adjusted as of that date to reflect the proportion of
Contract Value allocated to the Subaccounts.

If there are Joint Annuitants, upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of 75%,
66 2/3% or 50% of Annuity Payments as elected by the Owner upon election of the
Annuity Option. The number of Annuity Units used to determine each Annuity
Payment is reduced as of: (1) the Annuity Payment due at the close of the Period
Certain; or (2) if later, the first Annuity Payment following the death of the
Joint Annuitant. If such death occurs during the Liquidity Period, the Annuity
Payment may be increased as discussed under "Payment Adjustment Upon Death of
Joint Annuitant" below.

In the event of the death of the Annuitant or, in the case of Joint Annuitants,
the last Annuitant, prior to the close of the Period Certain, a death benefit
will be paid as follows. In the event of death during the Liquidity Period, the
death benefit is the Contract Value as of the date due proof of death and
payment instructions are Received by the Company. In the event of death during
the period beginning at the close of the Liquidity Period and ending at the
close of the Period Certain, the Designated Beneficiary may elect the death
benefit as follows: (1) the present value of the remaining guaranteed Annuity
Payments as of the date due proof of death and payment instructions are Received
by the Company, commuted at the Assumed Interest Rate and paid in a lump sum; or
(2) the remaining guaranteed Annuity Payments paid to the Designated Beneficiary
on a monthly basis until the close of the Period Certain.

PAYMENT ADJUSTMENT UPON DEATH OF JOINT ANNUITANT

(1) An amount equal to the present value of future Annuity Payments based on the
joint lives of the Annuitants, commuted at the Assumed Interest Rate, is divided
by $1,000; and

(2) the result is multiplied by an amount determined by reference to the Annuity
Table for Option 2 with a ten year period certain based upon the surviving Joint
Annuitant's age and sex (unless unisex rates apply).

If the amount of the Annuity Payment as determined above is greater than the
current Annuity Payment, the Annuity Payment will be increased as of the 61st
Annuity Payment date to that amount and the Floor Payment and number of Annuity
Units will be increased in the same proportionately.

SECURITY BENEFIT LIFE INSURANCE COMPANY

ROGER VIOLA
Secretary

- --------------------------
Endorsement Effective Date
(If Other Than Issue Date)

V6056 (8-98)

<PAGE>
Variable Annuity Application

Application to Security Benefit Life Insurance Company for an Individual
Flexible Premium Deferred Variable Annuity

Complete this application and mail to:
T. Rowe Price Variable Annuity Service Center
P.O. Box 750440, 700 SW Harrison Street
Topeka, KS 66675-0440

For help with this application, or for more information, call us at
1-800-469-6587.

1 OWNER INFORMATION
[ ] Male
___________________________________________ [ ] Female
Name

_________________________________________________________
Street Address or P.O. Box

_________________________________________________________
City, State, Zip Code

_________________________________________________________
Daytime Phone

_________________________________________________________
Evening Phone

_________________________________________________________
Date of Birth (Mo/Day/Yr)

_________________________________________________________
Social Security Number/Tax ID Number

2 JOINT OWNER INFORMATION

[ ] Male
___________________________________________ [ ] Female
Name

_________________________________________________________
Street Address or P.O. Box

_________________________________________________________
City, State, Zip Code

_________________________________________________________
Daytime Phone

_________________________________________________________
Evening Phone

_________________________________________________________
Date of Birth (Mo/Day/Yr)

_________________________________________________________
Social Security Number/Tax ID Number

_________________________________________________________
Relationship to Owner

3 ANNUITANT INFORMATION
[ ] Same as Owner
[ ] Male
___________________________________________ [ ] Female
Name

_________________________________________________________
Street Address or P.O. Box

_________________________________________________________
City, State, Zip Code

_________________________________________________________
Date of Birth (Mo/Day/Yr)

_________________________________________________________
Social Security Number/Tax ID Number

4 BENEFICIARIES

PRIMARY BENEFICIARIES

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

SECONDARY BENEFICIARIES

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

V6844 (R1-98)
<PAGE>

5 ALLOCATION OF PURCHASE PAYMENTS

Allocation of purchase payments - USE WHOLE PERCENTAGES NO LESS THAN 5%.
ALLOCATIONS MUST TOTAL 100%.

[ ] [ ] [ ]% NEW AMERICA GROWTH PORTFOLIO
[ ] [ ] [ ]% INTERNATIONAL STOCK PORTFOLIO
[ ] [ ] [ ]% MID-CAP GROWTH PORTFOLIO
[ ] [ ] [ ]% EQUITY INCOME PORTFOLIO
[ ] [ ] [ ]% PERSONAL STRATEGY BALANCED PORTFOLIO
[ ] [ ] [ ]% LIMITED-TERM BOND PORTFOLIO
[ ] [ ] [ ]% PRIME RESERVE PORTFOLIO
[ ] [ ] [ ]% FIXED INTEREST ACCOUNT*
- ------------
[1] [0] [0]% TOTAL

*EXCHANGES AND WITHDRAWALS ARE SUBJECT TO CERTAIN LIMITATIONS.

6 METHOD OF PURCHASE

A. [ ] BY CHECK
Made payable to Security Benefit Life Insurance Company.

Amount
$[ ],[ ][ ][ ],[ ][ ][ ].[ ][ ]

B. [ ] BY EXCHANGE
From T. Rowe Price mutual fund account.

Amount
$[ ],[ ][ ][ ],[ ][ ][ ].[ ][ ]

Name of Fund
[ ]

Account Number
[ ][ ][ ][ ][ ][ ][ ][ ][ ]-[ ]

If you are establishing your account by exchange and your mutual fund ownership
registration is not exactly the same as in Sections 1 and 2, please obtain a
signature guarantee so that we may complete the transaction for you. Sign this
form in the presence of an officer of a commercial bank (FDIC member), trust
company, a member firm of the domestic stock exchange, or any other eligible
guarantor institution as defined by the Securities Exchange Act of 1934. We
cannot accept guarantees from notaries or others who will not provide
reimbursement in case of fraud.

____________________________________________________________
Signature Guaranteed by:

____________________________________________________________
Name of Guaranateeing Institution

____________________________________________________________
Signature of Authorized Officer Date

C. [ ] BY REPLACEMENT

Will the annuity applied for here replace or change any life insurance or
annuity?

[ ] Yes [ ] No

If yes, please provide the information below and complete the Exchange Form:

____________________________________________________________
Company Name

____________________________________________________________
Policy Number

7 INDIVIDUAL RETIREMENT ANNUITIES

[ ] Regular IRA [ ] Roth IRA
[ ] IRA Contributory - Tax Year _______________

8 SIGNATURES

All statements made in this application are true to the best of my knowledge and
belief. I agree that this application shall be part of the Variable Annuity
Contract issued by Security Benefit Life Insurance Company. I UNDERSTAND THAT
ALL PAYMENTS AND VALUES PROVIDED BY THE CONTRACT MAY VARY AS TO DOLLAR AMOUNT TO
THE EXTENT THEY ARE BASED ON THE INVESTMENT EXPERIENCE OF THE SELECTED
SUBACCOUNTS. I have received and reviewed the prospectuses that describe the
Contract and the underlying mutual funds. I believe that this Contract will meet
my financial objectives.

- --------------------------------------------------------------------------------
TAX IDENTIFICATION NUMBER CERTIFICATION*

UNDER PENALTIES OF PERJURY I CERTIFY THAT:

a) the number shown on this form is my correct taxpayer identification number;
and

b) I am not subject to backup withholding because:

1) I am exempt from backup withholding; or

2) I have not been notified by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to report all
interest or dividends; or

3) the IRS has notified me that I am no longer subject to backup withholding.

THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
- --------------------------------------------------------------------------------

____________________________________________________________
Owner's Signature Date

____________________________________________________________
Location (City/State)

____________________________________________________________
Joint Owner's Signature Date

____________________________________________________________
Location (City/State)

- --------------------------------------------------------------------------------
*CERTIFICATION INSTRUCTIONS

You must strike out the language in Clause (b) above if the IRS has notified you
that you ARE subject to backup withholding and you have not since received
notice from the IRS that backup withholding has terminated.
- --------------------------------------------------------------------------------

TRP602 1/98-NATL

<PAGE>
T. Rowe Price
Immediate Variable Annuity Application

Application to Security Benefit Life Insurance Company for an Individual
Single Premium Immediate Variable Annuity

Complete this application and mail to:
T. Rowe Price Variable Annuity Service Center
P.O. Box 750440, 700 SW Harrison Street
Topeka, KS 66675-0440

For help with this application, or for more information, call us at
1-800-469-5304.

1 OWNER/ANNUITANT INFORMATION
[ ] Male
___________________________________________ [ ] Female
Name

_________________________________________________________
Street Address or P.O. Box

_________________________________________________________
City, State, Zip Code

_________________________________________________________
Daytime Phone

_________________________________________________________
Evening Phone

_________________________________________________________
Date of Birth (Mo/Day/Yr)

_________________________________________________________
Social Security Number/Tax ID Number

2 JOINT OWNER/JOINT ANNUITANT INFORMATION
[ ] Joint Annuitant is also a Joint Owner
[ ] Male
___________________________________________ [ ] Female
Name

_________________________________________________________
Street Address or P.O. Box

_________________________________________________________
City, State, Zip Code

_________________________________________________________
Daytime Phone

_________________________________________________________
Evening Phone

_________________________________________________________
Date of Birth (Mo/Day/Yr)

_________________________________________________________
Social Security Number/Tax ID Number

3 BENEFICIARY

PRIMARY BENEFICIARIES

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

SECONDARY BENEFICIARIES

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

_________________________________________________________
Name

_________________________________________________________
Relationship to Owner

V7588 (8-98)
<PAGE>

4 ALLOCATION OF PURCHASE PAYMENT

Allocation of purchase payment - USE WHOLE PERCENTAGES NO LESS THAN 5%.
ALLOCATIONS MUST TOTAL 100%.

[ ] [ ] [ ]% NEW AMERICA GROWTH SUBACCOUNT
[ ] [ ] [ ]% INTERNATIONAL STOCK SUBACCOUNT
[ ] [ ] [ ]% MID-CAP GROWTH SUBACCOUNT
[ ] [ ] [ ]% EQUITY INCOME SUBACCOUNT
[ ] [ ] [ ]% PERSONAL STRATEGY BALANCED SUBACCOUNT
[ ] [ ] [ ]% LIMITED-TERM BOND SUBACCOUNT
[ ] [ ] [ ]% PRIME RESERVE SUBACCOUNT*
[ ] [ ] [ ]% FIXED INTEREST ACCOUNT
- ------------
[1] [0] [0]% TOTAL

*NOT AVAILABLE FOR OPTION 9.

5 METHOD OF PURCHASE

A. [ ] BY CHECK
Made payable to Security Benefit Life Insurance Company.

Amount
$[ ],[ ][ ][ ],[ ][ ][ ].[ ][ ]

B. [ ] BY EXCHANGE
From T. Rowe Price mutual fund account.

Amount
$[ ],[ ][ ][ ],[ ][ ][ ].[ ][ ]

Name of Fund
[ ]

Account Number
[ ][ ][ ][ ][ ][ ][ ][ ][ ]-[ ]

C. [ ] BY REPLACEMENT

Will the annuity applied for here replace or change any life insurance or
annuity?

[ ] Yes [ ] No

If yes, please provide the information below and complete the Exchange Form:

____________________________________________________________
Company Name

____________________________________________________________
Policy Number

6 INDIVIDUAL RETIREMENT ANNUITIES

A. REGULAR IRA

Check the appropriate box below
[ ] Rollover IRA [ ] Transfer IRA

B. ROTH IRA

Check the appropriate box below.
[ ] Rollover from Regular IRA [ ] Transfer from Roth IRA

7 TELEPHONE EXCHANGE

Use this service to call and request an exchange among portfolio subaccounts and
the Fixed Interest Account. Exchanges are subject to the rules detailed in the
current T. Rowe Price Immediate Variable Annuity prospectus.

[ ] I elect telephone exchange privileges.

8 ANNUITY OPTIONS

Indicate the option you prefer by checking the appropriate box and completing
any additional information required.

Select one option:

[ ] 1. Life Income

[ ] 2. Life Income, Period Certain (please circle one) Guaranteed payments of
5, 10, 15, or 20 years

[ ] 3. Life Income with Installment or Unit Refund

[ ] 4. Joint and Last Survivor (elect Joint and Last Survivor percentage
below)

[ ] 5. Fixed Period of ______ years (between 5 and 20 years)
number

[ ] 6. Fixed Payment of $__________ per payment

<PAGE>

[ ] 7. Age Recalculation

Use: [ ] Annuitant's Life Expectancy
[ ] Joint Life (Annuitant and Beneficiary)

[ ] 8. Period Certain (plese circle one)
Guaranteed payments of 5, 10, 15, or 20 years

[ ] 9. Life Income with Liquidity (if applicable, elect Joint and Last
Survivor percentage below)

Before annuity payments can commence, proof of the age of the Annuitant and any
Joint Annuitant must be provided.

JOINT AND LAST SURVIVOR PERCENTAGE

After the death of one annuitant, the percentage of the original amount of each
annuity payment should be:

[ ] 100% [ ] 75% [ ] 66 2/3% [ ] 50%

Minimum payment is $100. Indicate frequency (payments are available on a monthly
basis only under Life Income with Liquidity. Option 9 (check one)

[ ] Monthly [ ] Quarterly [ ] Semiannually [ ] Annually

ANNUITY PAYMENT DATE

Select the date of the month on which you want your Annuity Payments to start.
The first check will be mailed within five (5) business days after processing
this application.

Payment date: ___________________________
(Name any day of the month)

9 PAYMENT OPTIONS

Select one of the following:

[ ] Please mail a check, payable to the annuitant, to the address listed on this
application.

[ ] Please mail a check payable as follows below and mail to the address
indicated. The signature of the contract owner(s) listed in Sections 1 and 2
must be guaranteed (see Section 12).

____________________________________________________________
Name of Payee

____________________________________________________________
Address

[ ] Please automatically transfer proceeds to the annuitant's bank account.
Enter bank account information here and attach a VOIDED CHECK. If the bank
account owner name(s) is/are not identical to the annuitant(s) listed in
Section 1 and 2, the signature of the contract owner must be guaranteed (see
Section 12).

____________________________________________________________
Bank Name and Address

____________________________________________________________
Bank Account Number

____________________________________________________________
Bank Account Owner(s)

[ ] Please send proceeds to the following T. Rowe Price mutual fund account. If
the mutual fund owner name(s) are not identical to the annuitant(s) listed
in Section 1 and 2, the signature of the contract owner(s) must be
guaranteed (see section 12).

____________________________________________________________
Mutual Fund

____________________________________________________________
Account Number

____________________________________________________________
Fund Account Owner(s)

10 NOTICE OF WITHHOLDING ON PERIODIC PAYMENTS

The Annuity Payments you receive are subject to federal income tax withholding.
We are required to withhold unless you decide not to withhold.

Your election will remain in effect until you revoke it. You may revoke your
election at any time by sending a completed, signed, and dated revocation to us
at our address on the front of this form. Election and revocation forms may be
obtained by calling 1-800-469-5304 or by writing to the address on the front of
the form.

[ ] I DO NOT want to have federal income tax withheld from my annuity payments.

Even if you elect not to have federal income tax withheld, you are liable for
payment of federal income tax on the taxable portion of your annuity payments.
You also may be subject to tax penalties under the estimated tax payment rules
if your payments of estimated tax and withholding, if any, are not adequate.

(over, please)
<PAGE>
[ ] I DO want federal income tax to be withheld from my annuity payments.

_____% (State an even percentage.) Please withhold the amount indicated. (If no
election is made, withholding will be at 10% of the taxable portion of annuity
payments.)

11 SIGNATURES

Statement made in this application are true to the best of my knowledge and
belief. I agree that this application shall be part of the T. Rowe Price
Immediate Variable Annuity Contract issued by Security Benefit Life Insurance
Company. I UNDERSTAND THAT ALL PAYMENTS AND VALUES PROVIDED BY THE CONTRACT MAY
VARY AS TO DOLLAR AMOUNT TO THE EXTENT THEY ARE BASED ON THE INVESTMENT
EXPERIENCE OF THE SELECTED SUBACCOUNTS. I have received and reviewed the
prospectuses that describe the Contract and the underlying mutual funds. I
believe that this Contract will meet my financial objectives.

- --------------------------------------------------------------------------------
TAX IDENTIFICATION NUMBER CERTIFICATION*

UNDER PENALTIES OF PERJURY I CERTIFY THAT:

a) the number shown on this form is my correct taxpayer identification number;
and

b) I am not subject to backup withholding because:

1) I am exempt from backup withholding; or

2) I have not been notified by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to report all
interest or dividends; or

3) the IRS has notified me that I am no longer subject to backup withholding.

____________________________________________________________
Signature (Owner) Date

____________________________________________________________
Signature (Joint Owner) Date

- --------------------------------------------------------------------------------
*CERTIFICATION INSTRUCTIONS

12 SIGNATURE GUARANTEE

You need a signature guarantee if (under Section 5 Method of Purchase or Section
9 Payment Options):

You requested an exchange from a T. Rowe Price mutual fund account registered
in a name which is not identical to the annuitant(s) listed in Sections 1 and
2.

You requested payment to a bank account registered in a name which is not
identical to the annuitant(s) listed in Sections 1 and 2.

You requested payment to a T. Rowe Price mutual fund account registered in a
name which is not identical to the annuitant(s) listed in Sections 1 and 2.

Sign this form in the presence of an officer of a commercial bank (FDIC member),
trust company, a member firm of the domestic stock exchange, or any other
eligible guarantor institution as defined by the Securities Exchange Act of
1934. We cannot accept guarantees from notaries or others who will not provide
reimbursement in case of fraud.

____________________________________________________________
Name of Bank or Broker

____________________________________________________________
Authorized Signature Stamp

TRP700 (8/98)

<PAGE>
PARTICIPATION AGREEMENT
AMONG
T. ROWE PRICE FIXED INCOME SERIES, INC.,
T. ROWE PRICE EQUITY SERIES, INC.,
T. ROWE PRICE INTERNATIONAL SERIES, INC.,
AND
T. ROWE PRICE INVESTMENT SERVICES, INC.
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY

THIS AGREEMENT, made and entered into as of this 25th day of April, 1995 by
and among Security Benefit Life Insurance Company (hereinafter, the "Company"),
a Kansas life insurance company, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each account hereinafter referred to as the
"Account"), and the T. Rowe Price Fixed Income Series, Inc., T. Rowe Price
Equity Series, Inc., and T. Rowe Price International Series, Inc., each a
corporation organized under the laws of Maryland (each Fund, hereinafter
referred to as the "Fund") and T. Rowe Price Investment Services, Inc.
(hereinafter, the "Underwriter"), a Maryland corporation.

WHEREAS, the Fund engages in business as an open-end management investment
company and is or will be available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and

WHEREAS, the beneficial interest in the Fund is divided into several series of
shares, each designated a "Portfolio" and representing the interest in a
particular managed portfolio of securities and other assets; and

WHEREAS, the Fund will obtain an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (hereinafter, the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T) (b)(15) thereunder, if and to the extent necessary to permit shares of
the Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(hereinafter, the "Shared Funding Exemptive Order"); and

WHEREAS, the Fund is registered as an open-end management investment company
under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter, the "1933 Act"); and

WHEREAS, T. Rowe Price Associates, Inc. and Rowe Price-Fleming International,
Inc. (each hereinafter referred to as the "Adviser," and all references
hereinafter to "Adviser" shall refer to the investment adviser for a Fund, as
pertinent) are each duly registered as an investment adviser under the federal
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and

WHEREAS, the Company has registered or will register certain variable life
insurance or variable annuity contracts (or interests in a separate account
funding such contracts) supported wholly or partially by the Account (the
"Contracts") under the 1933 Act, and said Contracts are listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement; and

WHEREAS, the Account is duly established and maintained as a segregated asset
account, established by resolution of the Board of Directors of the Company, or
by the Executive Committee of the Board, on the date shown for such Account on
Schedule A hereto, to set aside and invest assets attributable to the aforesaid
Contracts; and

WHEREAS, the Company has registered or will register the Account as a unit
investment trust under the 1940 Act; and

WHEREAS, the Underwriter is registered as a broker dealer with the SEC under
the Securities Exchange Act of 1934, as amended (hereinafter the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (hereinafter "NASD"); and

WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase shares in the Portfolios listed in Schedule A
hereto, as it may be amended from time to time by mutual written agreement (the
"Designated Portfolios") on behalf of the Account to fund the aforesaid
Contracts, and the Underwriter is authorized to sell such shares to unit
investment trusts such as the Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:

ARTICLE I. SALE OF FUND SHARES

1.1 The Underwriter agrees to sell to the Company those shares of the
Designated Portfolios which the Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Designated Portfolios.

1.2 The Fund agrees to make shares of the Designated Portfolios available for
purchase at the applicable net asset value per share by the Company and the
Account on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission, and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees or Directors of the Fund (hereinafter the "Board") may refuse
to sell shares of any Designated Portfolio to any person, or suspend or
terminate the offering of shares of any Designated Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Designated Portfolio.

1.3 The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts. No shares
of any Designated Portfolios will be sold to the general public. The Fund and
the Underwriter will not sell Fund shares to any insurance company or separate
account unless an agreement containing provisions substantially the same as
Articles I, III and VII of this Agreement is in effect to govern such sales.

1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption, except that
the Fund reserves the right to suspend the right of redemption or postpone the
date of payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus. Cash
redemptions ordinarily shall be paid not later than one Business Day, as defined
below, following receipt by the Fund or its designee of the request for
redemption unless, as described herein, the Fund exercises its rights under
Section 22(e) of the 1940 Act and any rules thereunder. Cash payments shall be
made in federal funds transmitted by wire.

1.5 For purposes of Sections 1.1 and 1.4, the Company shall be the designee of
the Fund for receipt of purchase and redemption orders from the Account, and
receipt by such designee shall constitute receipt by the Fund; provided that the
Company receives the order by 4:00 p.m. Baltimore time and the Fund receives
notice of such order by 9:30 a.m. Baltimore time on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value pursuant
to the rules of the SEC.

1.6 The Company agrees to purchase and redeem the shares of each Designated
Portfolio offered by the then current prospectus of the Fund and in accordance
with the provisions of such prospectus.

1.7 The Company shall pay for Fund shares one Business Day after an order to
purchase Fund shares is made in accordance with the provisions of Section 1.5
hereof. Payment shall be in federal funds transmitted by wire by 3:00 p.m.
Baltimore time. If payment in Federal Funds for any purchase is not received or
is received by the Fund after 3:00 p.m. Baltimore time on such Business Day, the
Company shall promptly, upon the Fund's request, reimburse the Fund for any
charges, costs, fees, interest or other expenses incurred by the Fund in
connection with any advances to, or borrowings or overdrafts by, the Fund, or
any similar expenses incurred by the Fund, as a result of portfolio transactions
effected by the Fund based upon such purchase request. For purposes of Section
2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.

1.8 Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.

1.9 The Fund shall furnish same day notice (by wire or telephone, followed by
written confirmation) to the Company of any income, dividends or capital gain
distributions payable on the Designated Portfolios' shares. The Company hereby
elects to receive all such income, dividends, and capital gain distributions as
are payable on Designated Portfolio shares in additional shares of that
Portfolio. The Company reserves the right to revoke this election and to receive
all such income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions. The Fund shall use its best efforts to furnish
advance notice of the day such dividends and distributions are expected to be
paid.

1.10 The Fund shall make the net asset value per share for each Designated
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Baltimore time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Baltimore time.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

2.1 The Company represents and warrants that the Contracts (or interests in a
separate account funding such Contracts) are or will be registered under the
1933 Act; that the Contracts will be issued in compliance in all material
respects with all applicable federal and state laws; and that the Company will
require any person authorized to sell the Contract to do so in compliance in all
material respects with all applicable federal and state laws. The Company
further represents and warrants that it is an insurance company duly organized,
validly existing, and in good standing under applicable law and that it has
legally and validly established the Account prior to any issuance or sale
thereof as a segregated asset account under Kansas insurance laws and has
registered or, prior to any issuance or sale of the Contracts, will register the
Account as a unit investment trust in accordance with the provisions of the 1940
Act to serve as a segregated investment account for the Contracts.

2.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for issuance
and sold in compliance with the laws of the State of Kansas and all applicable
federal and state securities laws and that the Fund is and shall remain
registered as an open-end management investment company under the 1940 Act. The
Fund shall amend the Registration Statement for its shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Fund shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.

2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, although it may
make such payments in the future. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have a
Board, a majority of whom are not interested persons of the Fund, formulate and
approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.

2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees and expenses are and shall at all times remain in compliance with the laws
of the State of Kansas to the extent required to perform this Agreement.

2.5 The Fund represents that it is lawfully organized, validly existing, and
in good standing under the laws of the State of Maryland and that it does and
will comply in all material respects with the 1940 Act.

2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Kansas and any applicable state and
federal securities laws.

2.7 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered under all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Fund in compliance in
all material respects with the laws of the State of Kansas and any applicable
state and federal securities laws.

2.8 The Fund and the Underwriter represent and warrant that all of their
respective directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.

2.9 The Company represents and warrants that all of its directors, officers,
employees, investment advisers, and other individuals/entities employed or
controlled by the Company dealing with the money and/or securities of the
Account are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. The Company agrees to hold for the benefit of the
Fund and to pay to the Fund any amounts lost from larceny, embezzlement or other
events covered by the aforesaid bond to the extent such amounts properly belong
to the Fund pursuant to the terms of this Agreement.

ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING

3.1 Unless the parties otherwise agree in writing, the Fund shall provide such
documentation (including a final copy of the new prospectus as set in type at
the Fund's expense) and other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the Fund's prospectus
printed together in one document. The expense of printing the Fund's prospectus
for distribution to existing owners of Contracts shall be borne by the
Underwriter or the Fund. The expense of printing the Fund's prospectus for
distribution to prospective customers shall be governed by a Distribution
Agreement between the Company and the Underwriter.

3.2 The Fund's prospectus shall state that the Statement of Additional
Information ("SAI") for the Fund is available from the Company, and the
Underwriter (or the Fund), at its expense, shall print and provide a copy of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.

3.3 The Fund (or the Underwriter), at its expense, shall provide the Company
with copies of the Fund's proxy material, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners. The Fund (or the Underwriter) shall
bear the expense of mailing the Fund's proxy material and other communications
to contract owners. The Fund (or the Underwriter) shall bear the expense of
mailing Fund reports (including the Fund's semi-annual and annual reports) to
Contract owners.

3.4 The Company shall:

(i) solicit voting instructions from Contract owners;

(ii) vote the Fund shares in accordance with instructions received from
Contract owners; and

(iii) vote Fund shares for which no instructions have been received in the
same proportion as Fund shares of such portfolio for which
instructions have been received,

so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law.

3.5 Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt.

3.6 The Fund will comply with all provisions of the 1940 Act requiring voting
by shareholders, and in particular the Fund will either provide for annual
meetings or comply with Section 16(c) of the 1940 Act (although the Fund is not
one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the SEC may promulgate with respect thereto.

ARTICLE IV. SALES MATERIAL AND INFORMATION

4.1 The Company shall furnish, or shall cause to be furnished, to the Fund or
its designee, each piece of sales literature or other promotional material that
the Company develops or uses and in which the Fund (or a Portfolio thereof) or
the Adviser or the Underwriter is named, at least ten calendar days prior to its
use. No such material shall be used if the Fund or its designee reasonably
objects to such use within ten calendar days after receipt of such material. The
Fund or its designee reserves the right to reasonably object to the continued
use of such material, and no such material shall be used if the Fund or its
designee so objects.

4.2 The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with the
sale of the Contracts other than the information or representations contained in
the registration statement or prospectus or SAI for the Fund shares, as such
registration statement and prospectus or SAI may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee or
by the Underwriter, except with the permission of the Fund or the Underwriter or
the designee of either.

4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause to be
furnished, to the Company, each piece of sales literature or other promotional
material in which the Company, the Contract, and/or its Account, is named at
least ten calendar days prior to its use. No such material shall be used if the
Company reasonably objects to such use within ten calendar days after receipt of
such material. The Company reserves the right to reasonably object to the
continued use of such material and no such material shall be used if the Company
so objects.

4.4. The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account,
or the Contracts inconsistent with the information or representations contained
in a registration statement or prospectus, or SAI for the Contracts, as such
registration statement, prospectus or SAI may be amended or supplemented from
time to time, or in published reports for the Account which are in the public
domain or approved by the Company for distribution to Contract owners, or in
sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.

4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities.

4.6 The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, contemporaneously with the
filing of such document(s) with the SEC or other regulatory authorities.

4.7 The Fund will provide the Company with as much notice as is reasonably
practicable of any proxy solicitation for any Designated Portfolio, and of any
material change in the Fund's registration statement, particularly any change
resulting in a change to the registration statement or prospectus for any
Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract Owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.

4.8 For purposes of this Article IV, the phrase "sales literature and other
promotional materials" includes, but is not limited to, any of the following:
advertisements (such as material published, or designed for use in, a newspaper,
magazine, or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public media),
sales literature (I.E., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available.

ARTICLE V. OTHER FEES AND EXPENSES

5.1 The Fund and the Underwriter shall pay no fee or other compensation to the
Company under this Agreement, except that if the Fund or any Portfolio adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then the Underwriter may make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in writing, and
such payments will be made out of existing fees otherwise payable to the
Underwriter, past profits of the Underwriter, or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.

5.2 All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.

5.3 The Fund (or the Underwriter) shall bear the expenses of mailing the
Fund's prospectus to owners of Contracts issued by the Company. The expense of
mailing the Fund's prospectus to prospective owners of Contracts shall be
governed by a Distribution Agreement between the Company and the Underwriter.

ARTICLE VI. DIVERSIFICATION AND QUALIFICATION

6.1 The Fund will invest the assets of each Designated Portfolio in such a
manner as to ensure that the Contracts will be treated as annuity or life
insurance contracts, whichever is appropriate, under the Internal Revenue Code
of 1986, as amended (the "Code") and the regulations issued thereunder (or any
successor provisions). Without limiting the scope of the foregoing, each
Designated Portfolio has complied and will continue to comply with Section
817(h) of the Code and Treasury Regulation ss.1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications or successor provisions to such Section or Regulations. In
the event of a breach of this Article VI by the Fund, it will take all
reasonable steps (a) to notify the Company of such breach as promptly as
possible and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Regulation 817.5.

6.2 The Fund represents that each Designated Portfolio is or will be qualified
as a Regulated Investment Company under Subchapter M of the Code, and that it
will make every effort to maintain such qualification (under Subchapter M or any
successor or similar provisions) and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.

6.3 The Company represents that the Contracts are currently, and at the time
of issuance shall be, treated as life insurance or annuity insurance contracts,
under applicable provisions of the Code, and that it will make every effort to
maintain such treatment, and that it will notify the Fund and the Underwriter
immediately upon having a reasonable basis for believing the Contracts have
ceased to be so treated or that they might not be so treated in the future. The
Company agrees that any prospectus offering a contract that is a "modified
endowment contract" as that term is defined in Section 7702A of the Code (or any
successor or similar provision), shall identify such contract as a modified
endowment contract.

ARTICLE VII. POTENTIAL CONFLICTS. The following provisions apply effective upon
(a) the issuance of the Shared Funding Exemptive Order, and (b) investment in
the Fund by a separate account of a Participating Insurance Company supporting
variable life insurance contracts.

7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

7.2. The Company will report any potential or existing conflicts of which it
is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.

7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (I.E., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.

7.4 If a material irreconcilable conflict arises because of a decision by the
Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to each Account provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.

7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account within six months after the Board informs the Company in writing
that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Until the
end of the foregoing six month period, the Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.

7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contract if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Fund and terminate this
Agreement within six (6) months after the Board informs the Company in writing
of the foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.

7.7 If and to the extent the Shared Funding Order contains terms and
conditions different from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of
this Agreement, then the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with the Shared
Funding Exemptive Order, and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5
of the Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in the Shared
Funding Exemptive Order or any amendment thereto. If and to the extent that Rule
6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940 Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the Shared Funding
Exemptive Order) on terms and conditions materially different from those
contained in the Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable; and (b) Sections 3.4, 3.5,
3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect
only to the extent that terms and conditions substantially identical to such
Sections are contained in such Rule(s) as so amended or adopted.

ARTICLE VIII. INDEMNIFICATION

8.1 INDEMNIFICATION BY THE COMPANY

8.1(a). The Company agrees to indemnify and hold harmless the Fund and the
Underwriter and each of their officers and directors and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:

(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration
Statement, prospectus, or statement of additional information for
the Contracts or contained in the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made
in reliance upon and in conformity with information furnished to the
Company by or on behalf of the Fund for use in the Registration
Statement, prospectus or statement of additional information for the
Contracts or in the Contracts (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Fund shares; or

(ii) arise out of or are based upon any statements or representations or
the omission or alleged omission of any statements or
representations about the Contracts contained in sales literature
for the Contracts (or any amendment or supplement) that arise out of
or are based upon state insurance law; or

(iii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied
by the Company or persons under its control) or wrongful conduct of
the Company or persons under its authorization or control (which
shall not include any T. Rowe Price Representative, or any
Representative or employee of T. Rowe Price Insurance Agency, as
such persons are defined or referred to in the Distribution
Agreement), with respect to the sale or distribution of the
Contracts or Fund Shares; or

(iv) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus, or
sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission
was made in reliance upon information furnished to the Fund by or on
behalf of the Company; or

(v) arise as a result of any material failure by the Company to provide
the services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the qualification requirements
specified in Article VI of this Agreement); or

(vi) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company,

as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.

8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement, or
to the Fund, whichever is applicable.

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. After notice from the Company to such party of the Company's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Company will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.

8.2 INDEMNIFICATION BY THE UNDERWRITER

8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers, the Account, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the Fund's
shares or the Contracts; and

(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or prospectus or SAI or sales literature of the Fund (or
any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with information
furnished to the Underwriter or Fund by or on behalf of the Company
for use in the Registration Statement or prospectus for the Fund or
in sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Fund shares;
or

(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration
Statement, prospectus or sales literature for the Contracts not
supplied by the Underwriter or persons under its control or by or on
behalf of the Fund) or wrongful conduct of the Fund or Underwriter
or persons under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus or
sales literature covering the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Underwriter or the
Fund; or

(iv) arise as a result of any failure by the Underwriter or the Fund to
provide the services and furnish the materials under the terms of
this Agreement (including a failure by the Fund, whether
unintentional or in good faith or otherwise, to comply with the
diversification and other qualification requirements specified in
Article VI of this Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Underwriter;

as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.

8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.

8.3 INDEMNIFICATION BY THE FUND

8.3(a). The Fund agrees to indemnify and hold harmless the Company and
each of its directors and officers, the Account, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, expenses, damages, liabilities (including
amounts paid in settlement with the written consent of the Fund) or litigation
(including legal and other expenses) to which the Indemnified Parties may be
required to pay or which the Indemnified Parties may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, expenses, damages, liabilities or expenses (or actions in respect
thereof) or settlements, are related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to provide the services
and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this
Agreement); or

(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund;

as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.

8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or the Account, whichever is applicable.

8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
expense thereof, with counsel satisfactory to the party named in the action and
to settle the claim at its own expense; provided, however, that no such
settlement shall, without the Indemnified Parties' written consent, include any
factual stipulation referring to the Indemnified Parties or their conduct. After
notice from the Fund to such party of the Fund's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

8.3(d). The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceeding against it or any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Fund.

ARTICLE IX. APPLICABLE LAW

9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Maryland.

9.2 This Agreement shall be subject to the provisions of the 1933, 1934 and
1940 Acts, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X. TERMINATION

10.1 This Agreement shall continue in full force and effect until the first to
occur of:

(a) termination by any party, for any reason with respect to some or all
Designated Portfolios after five (5) years from the effective date of
this Agreement, by six (6) months' advance written notice delivered to
the other parties; or

(b) termination by the Company by written notice to the Fund and the
Underwriter based upon the Company's determination that shares of the
Fund are not reasonably available to meet the requirements of the
Contracts; or

(c) termination by the Company by written notice to the Fund and the
Underwriter in the event any of the Portfolio's shares are not
registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the
underlying investment media of the Contracts issued or to be issued by
the Company; or

(d) termination by the Fund or Underwriter in the event that formal
administrative proceedings are instituted against the Company by the
NASD, the SEC, the Insurance Commissioner or like official of any
state or any other regulatory body regarding the Company's duties
under this Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Fund shares,
provided, however, that the Fund or Underwriter determines in its sole
judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of
the Company to perform its obligations under this Agreement; or

(e) termination by the Company in the event that formal administrative
proceedings are instituted against the Fund or Underwriter by the
NASD, the SEC, or any state securities or insurance department or any
other regulatory body, provided, however, that the Company determines
in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Fund or Underwriter to perform its obligations
under this Agreement; or

(f) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Designated Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI hereof, or if the
Company reasonably believes that such Portfolio may fail to so qualify
or comply; or

(g) termination by the Fund or Underwriter by written notice to the
Company in the event that the Contracts fail to meet the
qualifications specified in Article VI hereof; or

(h) termination by either the Fund or the Underwriter by written notice to
the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company has suffered a material adverse change in
its business, operations, financial condition, or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or

(i) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that the Fund, the Adviser or the Underwriter
has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or

(j) termination by the Underwriter by written notice to the Company, upon
a termination of the Master Agreement between the Company and the
Underwriter, or termination of the Distribution Agreement.

10.2 EFFECT OF TERMINATION. Notwithstanding any termination of this Agreement,
the Fund and the Underwriter shall, at the option of the Underwriter, continue
to make available additional shares of the Fund pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, the owners of the Existing Contracts may be permitted
to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 10.2 shall not apply to
any termination under Article VII and the effect of such Article VII termination
shall be governed by Article VII of this Agreement. The parties further agree
that this Section 10.2 shall not apply to any termination under Section 10.1(f)
or (g) of this Agreement.

10.3 The Company shall not redeem Fund shares attributable to the Contracts
(as opposed to Fund shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or except for a
redemption that arises in connection with the Company's right to make additions
to, deletions from, substitutions for, or combinations of the securities that
are held by the Account (hereinafter referred to as a "Substitution
Redemption"). Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Substitution Redemptions will be governed by a Master Agreement between the
Company, the Underwriter, and certain affiliates of the Underwriter.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract Owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.

10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.

ARTICLE XI. NOTICES

Any notice required or permitted to be given under any provision other than
Article I, shall be sufficiently given when sent by registered or certified mail
to the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.

If to the Fund:

T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins, Esq.

If to the Company:

Security Benefit Life Insurance Company
700 Harrison Street
Topeka, Kansas 66636
Attention: Amy J. Lee, Esq.

If to Underwriter:

T. Rowe Price Investment Services
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins

ARTICLE XII. MISCELLANEOUS

12.1 All persons dealing with the Fund must look solely to the property of
such Fund, and in the case of a series company, the respective Designated
Portfolio listed on Schedule A hereto as though such Designated Portfolio had
separately contracted with the Company and the Underwriter for the enforcement
of any claims against the Fund. The parties agree that neither the Board,
officers, agents or shareholders assume any personal liability or responsibility
for obligations entered into by or on behalf of the Fund.

12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain.

12.3 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.

12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.

12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Kansas Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable annuity
operations of the Company are being conducted in a manner consistent with the
Kansas variable annuity laws and regulations and any other applicable law or
regulations.

12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies, and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

12.8 This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of all parties hereto.

12.9 The term "affiliated person" as used in this Agreement shall be defined
as provided in Section 2(a)(3) of the 1940 Act.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative and
its seal to be hereunder affixed hereto as of the date specified below.

COMPANY: SECURITY BENEFIT LIFE INSURANCE COMPANY

By its authorized officer

By: JAMES R. SCHMANK
-----------------------------------
James R. Schmank
Title: VICE PRESIDENT
Date: JUNE 20, 1995

FUND: T. ROWE PRICE FIXED INCOME SERIES, INC.

By its authorized officer

By: JAMES S. RIEPE
-----------------------------------
James S. Riepe
Title: VICE PRESIDENT
Date: JUNE 20, 1995

FUND: T. ROWE PRICE EQUITY INCOME SERIES, INC.

By its authorized officer

By: JAMES S. RIEPE
-----------------------------------
James S. Riepe
Title: VICE PRESIDENT
Date: JUNE 20, 1995

FUND: T. ROWE PRICE INTERNATIONAL SERIES, INC.

By its authorized officer

By: JAMES S. RIEPE
---------------------------------
James S. Riepe
Title: VICE PRESIDENT
Date: JUNE 20, 1995

UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.

By its authorized officer

By: NANCY M. MORRIS
---------------------------------
Nancy M. Morris
Title: VICE PRESIDENT
Date: JUNE 20, 1995

<PAGE>

SCHEDULE A

NAME OF CONTRACTS FUNDED DESIGNATED PORTFOLIOS
SEPARATE BY
ACCOUNT SEPARATE ACCOUNT
and DATE
ESTABLISHED
BY BOARD OF
DIRECTORS

T. Rowe Price T. Rowe Price T. ROWE PRICE EQUITY SERIES, INC.
Variable Annuity No-Load Variable * T. Rowe Price New America Growth
Account, Annuity Portfolio
March 28, 1994
* T. Rowe Price Equity Income
Portfolio

* T. Rowe Price Personal Strategy
Balanced Portfolio

* T. Rowe Price Mid-Cap Growth
Portfolio

T. ROWE PRICE FIXED INCOME SERIES, INC.
* T. Rowe Price Limited-Term Bond
Portfolio

* T. Rowe Price Prime Reserve
Portfolio

T. ROWE PRICE INTERNATIONAL SERIES, INC.

* T. Rowe Price International
Stock Portfolio

AMENDED as of the 2nd day of January, 1997

COMPANY: SECURITY BENEFIT LIFE INSURANCE COMPANY

By its authorized officer

By: BRANDT BROCK
-----------------------------------
Brandt Brock
Title: Vice President
Date: January 2, 1997

FUND: T. ROWE PRICE FIXED INCOME SERIES, INC.

By its authorized officer

By: HENRY H. HOPKINS
-------------------------------------
Henry H. Hopkins
Title: Vice President
Date: January 2, 1997

FUND: T. ROWE PRICE EQUITY INCOME SERIES, INC.

By its authorized officer

By: HENRY H. HOPKINS
-------------------------------------
Henry H. Hopkins
Title: Vice President
Date: January 2, 1997

FUND: T. ROWE PRICE INTERNATIONAL SERIES, INC.

By its authorized officer

By: HENRY H. HOPKINS
-------------------------------------
Henry H. Hopkins
Title: Vice President
Date: January 2, 1997

UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.

By its authorized officer

By: DARRELL N. BRAMAN
-------------------------------------
Darrell N. Braman
Title: Vice President
Date: January 2, 1997

<PAGE>
AMENDED AND RESTATED
MASTER AGREEMENT
AMONG
T. ROWE PRICE INVESTMENT SERVICES, INC.,
T. ROWE PRICE ASSOCIATES, INC.,
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY

THIS AGREEMENT is made as of the 25th day of April, 1995, amended and restated
as of May 1, 1998, by and among T. ROWE PRICE INVESTMENT SERVICES, INC.
("INVESTMENT SERVICES"), T. ROWE PRICE ASSOCIATES, INC. ("PRICE ASSOCIATES"),
both Maryland corporations with principal offices at 100 East Pratt Street,
Baltimore, Maryland 21202, and SECURITY BENEFIT LIFE INSURANCE COMPANY
("SECURITY Benefit"), a Kansas insurance company with principal offices at 700
Harrison Street, Topeka, Kansas 66636.

WITNESSETH:

WHEREAS, Security Benefit is a life insurance company authorized to conduct an
insurance business in 49 states and the District of Columbia;

WHEREAS, Security Benefit issues, among other things, variable insurance
products;

WHEREAS, Investment Services markets various investment products;

WHEREAS, Price Associates is the parent company of Investment Services;

WHEREAS, the parties are desirous of entering into a relationship whereby
Investment Services will market and distribute a variable annuity product to be
issued by Security Benefit;

WHEREAS, this Agreement is intended to serve as the framework for setting
forth certain rights, responsibilities and obligations of the parties;

WHEREAS, at or about the same time as entering into this Agreement, Security
Benefit will enter into a Distribution Agreement with Investment Services, a
Participation Agreement with Investment Services and the Funds, an Insurance
Agency Agreement ("AGENCY AGREEMENT") with T. Rowe Price Insurance Agency, Inc.
("AGENCY"), and a Consulting Agreement ("CONSULTING AGREEMENT") with Investment
Services or an Affiliate thereof; and

WHEREAS, this Agreement together with the Distribution Agreement, the
Participation Agreement, the Agency Agreement, and the Consulting Agreement are
intended to serve as the framework for setting forth the various rights,
responsibilities and obligations of the parties vis-a-vis one another with
respect to the overall relationship;

NOW THEREFORE, it is agreed as follows:

ARTICLE 1
ADDITIONAL DEFINITIONS

1.1 AFFILIATE -- With respect to a party, any person controlling, controlled
by, or under common control with, such party, but shall not include a Fund or
Fund Series.

1.2 CONTRACTS -- The variable annuity products developed by the parties in
accordance with Article 2, which shall consist of the variable annuity products
identified on SCHEDULE 1 to this Agreement as of the Effective Date and any
class of variable insurance products that may be added to SCHEDULE 1 from time
to time in accordance with Article 2 of this Agreement. For this purpose and
under this Agreement generally, the phrase a "class of Contracts" shall mean
those Contracts: (i) issued by Security Benefit on the same contract form (but
allowing for state variations) with the same benefits, features and charges
distinguishing such class and reflected on the schedule pages included therein;
(ii) providing for investment in the same Subaccounts which in turn invest in
the same Funds; and (iii) covered by the same Registration Statement.

1.3 DISTRIBUTOR -- The same meaning as provided in the Distribution Agreement.

1.4 EFFECTIVE DATE -- The date as of which this Agreement is executed.

1.5 FUND AND FUND SERIES -- An investment company or series thereof serving as
a funding medium for the Contracts or a class thereof, which shall include those
Funds and Fund Series named on SCHEDULE 2 to this Agreement as of the Effective
Date, and any other investment company or series thereof that may be added to
SCHEDULE 2 from time to time in accordance with Article 2 of this Agreement.

1.6 GENERAL ACCOUNT -- The assets of Security Benefit other than those
allocated to a separate account.

1.7 ICA-40 -- The federal Investment Company Act of 1940, as amended.

1.8 INSURANCE COMMISSION -- The appropriate agency charged with regulating
insurance activities in a state or other jurisdiction.

1.9 N.Y. AGREEMENTS -- The distribution agreement, participation agreement,
agency agreement, and master agreement, substantially in the form of this
Agreement and the Related Agreements, which shall be entered into by First
Security Benefit Life Insurance and Annuity Company of New York ("SBL-N.Y."), an
Affiliate of Security Benefit, and Investment Services and certain of its
Affiliates, pursuant to which SBL-N.Y. shall issue the Contracts in the state of
New York.

1.10 PROSPECTUS -- Unless the context otherwise requires, the prospectus and
statement of additional information, if any, included in a Registration
Statement or the definitive form thereof for any class of Contracts, including
any supplement thereto, as filed with the SEC under SA-33.

1.11 REGISTRATION STATEMENT -- Unless the context otherwise requires, a
registration statement or amendment thereto for a class of Contracts filed with
the SEC under SA-33.

1.12 RELATED AGREEMENT(S) -- The Distribution Agreement, the Participation
Agreement, the Agency Agreement, and the Consulting Agreement including the
schedules to each, as such Agreements and schedules may be amended from time to
time.

1.13 SA-33 -- The Securities Act of 1933, as amended.

1.14 SEC -- The Securities and Exchange Commission.

1.15 SECURITIES COMMISSION -- The appropriate agency charged with regulating
securities activities in a state or other jurisdiction, but not the SEC.

1.16 SEPARATE ACCOUNT -- Each separate account of Security Benefit supporting
a class of Contracts, which shall consist of the separate accounts named or
otherwise identified on SCHEDULE 3 to this Agreement as of the Effective Date,
and any other separate account of Security Benefit that may be added to SCHEDULE
3 from time to time in accordance with Article 2 of this Agreement.

1.17 SUBACCOUNT -- A sub-division of the Separate Account available under a
class of Contracts, which shall include those subaccounts named or otherwise
identified on SCHEDULE 3 to this Agreement as of the Effective Date, and any
other subaccount that may be added to SCHEDULE 3 from time to time in accordance
with Article 2 of this Agreement.

ARTICLE 2
PRODUCT DESIGN AND PRODUCT DEVELOPMENT

2.1 SCOPE. The parties intend that this Agreement shall govern certain aspects
of their relationship with respect to the development, administration and
offering of one or more classes of Contracts, to be marketed and distributed by
Investment Services or other Distributors and to be issued, underwritten and
administered by Security Benefit. Nothing contained in this Agreement creates
the relationship of employer-employee, joint venture, partnership or association
between Security Benefit on the one hand and Investment Services and Price
Associates on the other hand.

2.2 EXCLUSIVITY.

(a) Until May 1, 1999, neither Security Benefit, nor an Affiliate thereof,
shall commence, proceed with or finalize discussions or negotiations with any
mutual fund or brokerage complex, or any Affiliate thereof, set forth on
SCHEDULE 4 (the "SCHEDULE 4 COMPANIES") regarding the development,
registration or distribution of any variable annuity or variable life
insurance product without the prior written consent of Investment Services.
Until May 1, 1999, neither Investment Services nor any Affiliate thereof shall
commence, proceed with or finalize any discussions or negotiations with any
insurance company which is not Security Benefit or an Affiliate thereof
regarding the development, registration or distribution of any variable
annuity product without the prior written consent of Security Benefit. Until
October 1, 2004, neither Investment Services nor any Affiliate thereof shall
commence, proceed with, or finalize any discussion or negotiations with any
insurance company which is not Security Benefit or an Affiliate thereof
regarding the development, registration or distribution of any immediate
variable annuity product without the prior written consent of Security
Benefit. Until October 1, 2003, neither Security Benefit, nor any Affiliate
thereof, shall commence, proceed with, or finalize negotiations or discussions
with any of the Schedule 4 Companies regarding the development, registration
or distribution of any immediate variable annuity product without the prior
written consent of Investment Services. In the event that, prior to May 1,
1999, Investment Services determines to enter into an agreement for the
development, registration or distribution of any variable life insurance
product for distribution by Investment Services, Investment Services will
consider Security Benefit, or an Affiliate thereof, for such product; provided
that Investment Services shall not be prohibited from entering into such an
agreement with any other party.

(b) Nothing in this Agreement shall prohibit:

(i) Funds managed by Price Associates or Rowe Price-Fleming
International, Inc. ("ROWE PRICE-FLEMING") or their respective
Affiliates from entering into agreements with insurance companies
other than Security Benefit to act as investment vehicles for such
companies' separate accounts; or

(ii) Price Associates, Rowe Price-Fleming or their respective Affiliates
from providing investment advisory services to insurance companies
other than Security Benefit, as a sub-adviser or otherwise, with
respect to such companies' variable insurance products; or

(iii)Security Benefit, or an Affiliate thereof, from entering into a
participation agreement with a fund established or operated by a
Schedule 4 Company, to act as a funding vehicle for a variable
insurance product established or operated by Security Benefit, or an
Affiliate thereof, provided that such variable insurance product is
marketed and/or distributed by Security Benefit or an Affiliate
thereof; or

(iv) Security Benefit, or an Affiliate thereof, from entering into an
agreement with a Schedule 4 Company for the provision of investment
advisory services to an underlying investment vehicle of a variable
insurance product established or operated by Security Benefit or an
Affiliate thereof, provided that such variable insurance product is
marketed and/or distributed by Security Benefit, or an Affiliate
thereof.

2.3 PRODUCT DESIGN. The first class of Contracts shall contain the features
indicated in SCHEDULE 5 and Sections 2.5 and 2.6, provided that such features
are not inconsistent with the features described in the initial Registration
Statement filed with the SEC and declared effective on or prior to the Effective
Date and as provided in the Contract filed as an exhibit thereto. Security
Benefit and Investment Services shall consult in good faith with each other in
connection with the development of any subsequent class of Contract with respect
to the parameters set forth in Sections 2.5 and 2.6, and the desired features
and benefits for each class of Contracts. The features and benefits may include,
among others:

(a) minimum and maximum initial and subsequent premium payments and premium
payment plans;

(b) premium payment allocations, including limits thereon;

(c) transfers among Subaccounts, including transfers made in connection with
various asset rebalancing and dollar cost averaging programs, and limits
thereon and charges therefor;

(d) full and partial withdrawals, including limits and charges thereon;

(e) minimum guaranteed death benefits;

(f) annuity options and modes, including any such options or modes that
Security Benefit has available, and partial annuitization;

(g) overall limits on charges and expenses, and any limits on allocations
thereof to subaccounts;

(h) funding media underlying the Subaccounts;

(i) availability of a General Account option and terms and conditions
thereof;

(j) a liquidity feature for the withdrawal of contract value; and

(k) a minimum guarantee to the level of annuity payments.

Security Benefit shall be responsible for creating one or more Contract forms,
as appropriate for the states or jurisdictions agreed upon for the marketing of
the Contracts.

2.4 GEOGRAPHIC SCOPE OF MARKETING. Unless otherwise agreed in writing,
Security Benefit shall use its best efforts to make the Contracts available for
issuance in all fifty states and the District of Columbia ("D.C.") (it being
understood that SBL-N.Y. shall issue the Contract in New York). Security
Benefit, recognizing the business needs of Investment Services, will use its
best efforts, as appropriate, to make the Contracts available as promptly as
practicable in California, D.C., Florida, Maryland, New York, and Virginia. It
is understood that Security Benefit will make all reasonable efforts to have the
Contracts approved, filed or otherwise cleared in a substantial majority of all
states and jurisdictions, which majority shall include all the jurisdictions
specifically identified above, so that the first class of Contracts can be
offered no later than the second quarter of 1995.

2.5 SPECIFIC PARAMETERS. The specific parameters to be reflected in the first
class of Contracts and to be considered in the development of any subsequent
class of Contracts include the following:

(A) PREMIUM TAX. Assessments of a premium tax against a Contract only upon
annuitization, surrender or death, and not against premium payments when
accepted by Security Benefit; except that Security Benefit may reserve
the right to deduct premium taxes at any time;

(B) RESERVATION OF RIGHTS. That any right to restrict, terminate, or
otherwise limit transfer, premium payment allocation, or partial
withdrawal privileges, or to impose charges therefor, to deduct premium
tax assessments, or to impose or increase other expenses or charges
related to such Contracts and reserved by Security Benefit may not be
exercised without the written consent of Investment Services and without
first having made appropriate modifications to applicable Contract forms,
Registration Statements and Prospectuses;

(C) ANNUITY OPTIONS. The annuity options available shall be similar in kind
and number to those offered by competitors and include any annuity
options that Security Benefit or its Affiliates have available, and any
change or amendment to the assumed interest rate used in connection with
such annuity options from that used in the first class of Contracts may
be made only with the written consent of Investment Services; and

(D) GENERAL ACCOUNT. The General Account option shall be designed and offered
in a manner that will qualify the interests therein for the exclusion
provided by Section 3(a)(8) of SA-33. The General Account option shall
offer rates of interest determined, under normal circumstances, in
accordance with Security Benefit's normal interest rate crediting
procedures set forth in SCHEDULE 6 to this Agreement. Security Benefit
shall consult with Investment Services in advance with respect to the
General Account's current interest rates to be declared, and the views of
Investment Services shall be reasonably considered in the establishment
of such rates; provided that the determination of the current rate to be
credited shall be made by Security Benefit. Security Benefit and
Investment Services have determined to use interest rate crediting
procedures that maintain sufficient liquidity in the General Account to
allow exchanges from such Account to any Subaccount pursuant to the
dollar cost averaging and asset rebalancing options. Security Benefit and
Investment Services agree that in the event that short-term rates fall to
a level such that it is difficult to maintain the contractually
guaranteed minimum interest rate of three (3) percent that must be
credited on the General Account, the parties hereto shall in good faith
enter into discussions with a view to changing the interest rate
crediting procedures, or taking other steps to allow Security Benefit to
support the contractually guaranteed interest rate, which steps may
include requiring the dollar cost averaging from the General Account be
implemented over a minimum period of time in excess of the one-year
period currently required or Investment Services ceasing to collect from
Security Benefit any or all of the fee described in Section 4.2(a)(ii).

2.6 SECTION 403(B) PLANS. Security Benefit has informed Investment Services of
its profitability concerns if the Contracts are used to fund plans under Section
403(b) of the Internal Revenue Code of 1986, as amended ("403(b) Plans"). As a
result, Security Benefit reserves the right to cease offering the first class of
Contracts in connection with 403(b) Plans and to create a separate contract for
403(b) Plans with different specifications than those of the Contracts. Security
Benefit shall consult with Investment Services prior to creating such separate
contracts and take such action only after obtaining Investment Services' written
consent, which shall not be unreasonably withheld. Once such separate contracts
are available, Investment Services will no longer offer the first class of
Contracts to fund 403(b) Plans; provided, however, that 403(b) Plans to which
the Contracts have been offered prior to the creation of such separate contracts
may continue to offer the Contracts. In the event Security Benefit demonstrates
to Investment Services' reasonable satisfaction that the Contracts are not
sufficiently profitable when used to fund 403(b) Plans, measured solely with
respect to such Plans, then Investment Services will cease to collect from
Security Benefit all or a portion of the fee described in Section 4.2(a)(i) with
respect to 403(b) Plan separate account assets funding the Contracts. Security
Benefit shall assist Investment Services in understanding its approach to
marketing, administering and processing 403(b) Plans.

2.7 CHANGES IN OR RELATING TO A CONTRACT FORM. After the initial Registration
Statement for a class of Contracts has been declared effective by the SEC, the
parties from time to time may mutually agree upon a material change in the terms
and provisions of a Contract form(s) for such class or an amendment or rider to
such Contract form(s). Except to the extent necessary to comply with applicable
laws, rules, regulations or orders, or to accommodate the termination of a Fund
or Fund Series pursuant to a decision of that Fund's management, Security
Benefit shall not change unilaterally in any material respect the terms and
provisions of a Contract form for a class of Contracts, including, but not
limited to, a change in the variable information included in schedule pages
distinguishing such class of Contracts, or a change in the Separate Account or
Subaccounts thereof designated to support such Contract or any Fund or other
funding media underlying any Subaccount, or make any amendment or rider to such
Contract form whatsoever, without first obtaining Investment Services' written
consent thereto, which shall not be unreasonably withheld. Any such change
agreed upon or consented to in accordance with this Section shall be reflected
on the Schedules to this Agreement, to the extent appropriate, in accordance
with the provisions of Section 2.9.

2.8 CHANGES RELATING TO OUTSTANDING CONTRACTS OR RELATED SEPARATE ACCOUNTS,
SUBACCOUNTS AND FUNDS. After a Contract has been issued and is outstanding,
Security Benefit shall not make any material change unilaterally to such
Contract or the class of Contracts including such Contract or to the Separate
Account or Subaccounts supporting such Contract or class, including, but not
limited to, reinsuring such Contract or such class with another insurer,
transferring a Separate Account or Subaccount to another insurer, substituting a
Fund or Fund Series or terminating investment therein, or adding new funding
media, without first giving Investment Services the opportunity to review such
change and obtaining Investment Services' written consent thereto, which shall
not be unreasonably withheld, except to the extent necessary to comply with
applicable laws, rules, regulations or orders, or to accommodate the termination
of a Fund or Fund Series pursuant to a decision of that Fund's management.
Notwithstanding the above, Security Benefit will not substitute a Fund or Fund
Series or terminate investment therein without the consent of Investment
Services and Price Associates unless it is necessary for the best interests of
Contract owners in all states in which the Contracts are held, the continuation
of such option would cause undue risk to Security Benefit, and Investment
Services and Price Associates shall have received an opinion from counsel,
acceptable to them, that the substitution or termination is in the best
interests of Contract owners in all states in which the Contracts are held and
the continuation of such option would cause undue risk to Security Benefit. Any
such change implemented in accordance with this Section shall be reflected on
the Schedules to this Agreement, to the extent appropriate, in accordance with
the provisions of Section 2.9.

2.9 SCHEDULES. The Schedules as in effect on the Effective Date provide
particular information concerning the class of Contracts agreed upon as of such
Date. When the parties agree upon the features and benefits of another class of
Contracts, the parties shall execute an additional Schedule 5 to this Agreement
which shall be the proposed specifications reflecting the minimum requirements
for such Contracts. When the parties agree upon any change to any class of
Contracts pursuant to Section 2.7 or 2.8, the Schedules may be amended and
updated and signed by parties to reflect such changes, to the extent
appropriate. The provisions of this Agreement shall be equally applicable to
each such added class of Contracts, Separate Account(s) and Subaccounts
supporting such Contracts and Funds and Fund Series, unless the context
otherwise requires. With respect to SCHEDULE 7, Security Benefit shall update
such Schedule promptly or otherwise notify Investment Services in writing of any
changes to such Schedule.

ARTICLE 3
REGISTRATION, DISTRIBUTION AND ADMINISTRATION
OF THE CONTRACTS

3.1 REGISTRATION, FILINGS AND APPROVALS RELATING TO THE CONTRACTS.

(a) Security Benefit shall be solely responsible for developing and preparing
all necessary Contract forms and related applications, Registration
Statements, Prospectuses and other documents in the usual form, and for
establishing the appropriate Separate Accounts and Subaccounts to support the
Contracts and invest in the designated Funds. Security Benefit may establish
more than one Separate Account for this purpose; however, no variable
insurance products other than the Contracts shall be issued through a Separate
Account, nor shall the Funds be made available to any other variable insurance
products issued by Security Benefit, if any, without Investment Services'
prior written consent. Each Separate Account shall be established in
accordance with applicable state law.

(b) Security Benefit shall be responsible for filing all such Contract forms,
applications, Registration Statements, Prospectuses, exemptive applications
relating to the Contract features, and other documents with the SEC and
applicable Securities Commissions.

(c) Security Benefit shall be responsible for filing all such Contract forms,
applications and other documents relating to the Contracts and/or the Separate
Accounts, as required or customary, with Insurance Commissions. Security
Benefit shall be responsible for one year from the effective date of this
Agreement for informing Investment Services of any states or jurisdictions
requiring the registration of a Fund or Fund Series with a regulatory body of
such state or jurisdiction.

(d) Security Benefit shall be responsible for filing amendments to such
Contract forms, applications, Registration Statements, Prospectuses and other
documents to the extent appropriate or required by applicable law.

3.2 REGISTRATIONS, FILINGS AND APPROVALS RELATING TO THE FUNDS

(a) Investment Services shall be responsible for establishing any Fund or
Fund Series selected as a funding medium for a class of Contracts, to the
extent such Fund or Fund Series is not otherwise established or maintained by
another person.

(b) With respect to each Fund or Fund Series for which Investment Services is
responsible pursuant to paragraph (a) hereof, Investment Services shall be
responsible for filing all initial registration statements, applications,
prospectuses and other documents for the Fund and its shares with the SEC and
applicable Securities Commissions, it being understood that, once a Fund has
been established and has begun to offer its shares to investors, such Fund
shall thereafter be responsible for its own operations and compliance with
applicable requirements.

3.3 DISTRIBUTION. The Contracts shall be distributed solely through Investment
Services, any Affiliate thereof, or a Distributor, pursuant to the Distribution
Agreement. Investment Services and its Affiliates shall develop, implement and
manage the marketing programs for the Contracts, including, but not limited to,
the operation of the Investment Services telesales center(s). In the event that
the Separate Account assets and the General Account assets attributable to the
Contracts have not reached mutually agreeable levels, or, regardless of mutual
agreement, in any case where the Separate Account assets and General Account
assets attributable to the first class of Contracts do not exceed $325 million,
and with respect to the second class of Contracts do not exceed $150 million,
twenty-four months (or for the second class of Contracts, thirty-six months)
after the respective class of Contracts may be offered in the fifty states (it
being understood the Contract will be issued by SBL-N.Y. in New York) and D.C.,
the parties shall enter into good faith negotiations with a view to enhancing
the profitability to the parties of the distribution of the Contracts under this
Agreement and the Related Agreements. In the event the second class of Contracts
is not approved in all states and D.C., the thirty-six month period discussed
above will run from the date that Security Benefit reasonably concludes it has
obtained approval in all states (and D.C.) where it is feasible to do so.

3.4 AGENT LICENSING.

(a) Licensing of insurance agents to solicit applications for the Contracts
shall be governed by the Agency Agreement.

(b) Security Benefit shall be responsible for compliance with applicable
insurance laws governing agent appointment of all persons including persons
associated with Investment Services or an Affiliate thereof, or a Distributor,
engaged in the sale or solicitation of the Contracts. Security Benefit shall
provide such persons with an Agent and Administration Manual ("MANUAL"),
substantially in the form attached hereto as EXHIBIT A. Security Benefit shall
inform Investment Services of any applicable insurance rules and regulations
of which it becomes aware and which it has reason to believe Investment
Services is not aware.

3.5 CONTRACT AND SEPARATE ACCOUNT ADMINISTRATION

(a) Security Benefit shall be responsible for the insurance underwriting,
issuance, service, and administration of the Contracts and for the
administration of the Separate Accounts, including, without limitation,
maintenance of a toll-free telephone service center, such function to be
performed in all respects at a level commensurate with those standards
prevailing in the variable insurance industry. Security Benefit has developed
procedures for performing such underwriting, issuing, servicing and
administrative functions, which procedures are set forth in the Manual.
Security Benefit shall not materially amend or supplement the Manual or adopt
or implement any other administrative rules, procedures or systems without
first giving Investment Services an opportunity to review any such material
and obtaining Investment Services' written consent.

(b) Nothing in this Section 3.5 shall relieve Security Benefit of its duty,
or otherwise diminish such duty, to perform its obligations under this
Agreement, nor shall this Section relieve Security Benefit of its liabilities,
or otherwise diminish such liabilities, for its failure to perform its
obligations under this Agreement.

ARTICLE 4
COMPENSATION AND EXPENSES

4.1 COMPENSATION FOR SECURITY BENEFIT. Unless the parties otherwise agree in
writing, the sole source of compensation for Security Benefit for carrying out
its responsibilities and obligations assumed under this Agreement or the Related
Agreements shall be the revenues derived from the charges deducted in connection
with the Contracts.

4.2 COMPENSATION FOR INVESTMENT SERVICES

(a) For certain services provided in connection with the distribution and
ongoing servicing of the Contracts, Security Benefit shall pay Investment
Services (or, if appropriate, an Affiliate thereof):

(i) compensation at the annual rate of 0.10% of the net asset value of
the Separate Account as of each month end, including any assets of
persons who have annuitized their Contracts under a variable payment
option;

(ii) compensation at the annual rate of 0.20% of the net asset value of
assets attributable to the Contracts as of each month-end that are
(i) in the accumulation period; or (ii) in payout under Annuity
Option 5, 6 or 7; and (iii) allocated to the General Account; and

(iii)a lump sum payment upon annuitization of an amount equal to 1.8% of
amounts allocated under the contracts to purchase a fixed annuity
under Annuity Option 1 through 4 or 8 in accordance with the
calculation set forth in SCHEDULE 8 of this Agreement.

(b) Such compensation provided for in subsection (a) hereof shall be
calculated and paid monthly within fifteen (15) days after the end of each
calendar month.

(c) Upon request, Security Benefit shall furnish Investment Services with
satisfactory information and materials documenting the calculation of
compensation provided for in this Section.

4.3 COMPENSATION FOR INVESTMENT ADVISORY SERVICES. Price Associates and/or
Rowe Price-Fleming have executed investment management agreements with the Funds
specified on SCHEDULE 2 as of the Effective Date. Security Benefit, other than
as a shareholder, bears no responsibility in any respect for payment of
investment advisory services to the Funds.

4.4 COMPENSATION FOR AGENCY, INC. Agency, an affiliate of Investment Services,
shall enter into an insurance agency agreement with Security Benefit and shall
receive the compensation provided for therein, if any, subject to any amendment
to such agreement mutually agreed to by the parties thereto.

4.5 COMPENSATION FOR THE DISTRIBUTORS. Investment Services may enter into
sales agreements with Distributors under the terms specified in the Distribution
Agreement. Investment Services and the Agency shall be solely responsible for
the payment of compensation to the Distributors for solicitation activities
relating to the Contracts.

4.6 SEEDING OF FUNDS AND FUND SERIES. Investment Services or an Affiliate
thereof shall be responsible for providing seed capital for any Fund or Fund
Series for whose establishment it is responsible under Section 3.2(a).

4.7 OTHER INVESTMENT VEHICLES OF SEPARATE ACCOUNTS OF SECURITY BENEFIT. In the
event that Security Benefit or an Affiliate thereof is seeking an unaffiliated
investment manager for any mutual funds serving as investment vehicles for other
separate accounts established and operated by Security Benefit or such
Affiliate, Security Benefit will consider the appointment of Price Associates or
Rowe Price-Fleming, or an Affiliate of the foregoing, as a sub-adviser for such
funds, or, in the alternative, to enter into a participation agreement with a
fund managed by any of the foregoing; provided that Security Benefit believes,
in its sole discretion, that Price Associates or Rowe Price-Fleming meets the
criteria and standards, including marketing standards, that the Company employs
for selecting investment managers for such mutual funds, and provided further
that Security Benefit shall not be prohibited from providing such recommendation
of, or entering into an agreement with, any other party.

4.8 EXPENSES. Security Benefit shall be responsible to pay for the expense of
a third party licensing service to facilitate the initial state insurance
licensing process for thirty-five (35) agents and any continuing expenses with
respect to such licensing through December 31, 1995. Thereafter, Investment
Services shall be responsible for state insurance licensing expenses. Except as
otherwise provided herein and in the Related Agreements, or in SCHEDULE 9 to
this Agreement, each party shall bear the expenses it incurs in carrying out its
responsibilities and obligations assumed under this Agreement or the Related
Agreements.

ARTICLE 5
ADDITIONAL RESPONSIBILITIES AND OBLIGATIONS

5.1 RESOURCES. Security Benefit and Investment Services shall each allocate
sufficient technical support, human resources and all other resources reasonably
necessary to carry out their respective responsibilities and obligations assumed
under this Agreement and the related Agreements in a timely manner.

5.2 DUE DILIGENCE. Each party shall provide the other parties access to such
of its records, officers and employees at reasonable times as is necessary to
enable the parties to fulfill their obligations under this Agreement and any
Related Agreements and applicable law.

5.3 EXCHANGES AND REPLACEMENTS.

(A) SECURITY BENEFIT. During the term of this Agreement and subject to
Sections 9.1 and 9.3 hereof, neither Security Benefit nor any of its
Affiliates shall knowingly induce or cause, or attempt to induce or cause,
directly or indirectly, any Contract owner to lapse, terminate, surrender,
exchange or cancel his or her Contract, or to cease or discontinue making
premium payments thereunder except where such act or attempt to cause a lapse,
termination, surrender, exchange or cancellation is in response to an
enactment of federal or state legislation, order or decision of any court or
regulatory body, administrative agency, or any other governmental
instrumentality, a change in circumstances which makes the Contracts or
insurance contracts of that type (E.G., annuity contracts or life insurance
policies) an unsuitable investment for existing Contract owners, or is in
response to any event or occurrence which results or is likely to result in
material adverse publicity pertaining to any party to this Agreement.

(B) INVESTMENT SERVICES. Unless the parties otherwise agree in writing,
during the term of this Agreement and subject to Sections 9.1 and 9.2 hereof,
neither Investment Services nor any of its Affiliates shall execute a program
to induce or cause, or attempt to induce or cause, directly or indirectly, all
or substantially all Contract owners of a class of Contracts to lapse,
terminate, surrender, exchange or cancel their Contracts, or to cease or
discontinue making premium payments thereunder except where such lapse,
termination, surrender, exchange or cancellation is in response to an
enactment of federal or state legislation, order or decision of any court or
regulatory body, administrative agency, or any other governmental
instrumentality, a change in circumstances which makes the contracts or
insurance contracts of that type (E.G., annuity contracts of life insurance
policies) an unsuitable investment for existing Contract owners, is in
response to any event or occurrence which results or is likely to result in
material adverse publicity pertaining to any party to this Agreement, or is in
response to normal marketing activities or practices of Investment Services or
its Affiliates.

(c) COMPLIANCE. Insurer shall be responsible for obtaining from owners of
the Contracts any replacement forms required by the insurance laws of the
various states. Insurer will notify Investment Services promptly of any
material changes in the required replacement forms or of any forms newly
required by a state. Insurer will maintain in accordance with the
recordkeeping requirements of the applicable state copies of any replacement
forms received in connection with the Contracts.

5.4 SERVICE AND QUALITY STANDARDS. Security Benefit and Investment Services
have agreed to implement certain additional service and quality standards as set
forth in EXHIBIT B, which may be amended from time to time.

ARTICLE 6
PROPRIETARY MATTERS

6.1 TRADEMARKS

(A) T. ROWE PRICE LICENSED MARKS. Investment Services is a wholly owned
subsidiary of Price Associates, which acts as the investment adviser to a
number of registered investment companies (such investment companies,
Investment Services, Rowe Price-Fleming and Price Associates being referred to
herein as the "T. Rowe Price Family"). Investment Services acts as principal
underwriter for each registered investment company in the T. Rowe Price
Family, including T. Rowe Price Equity Series, Inc., T. Rowe Price
International Series, Inc. and T. Rowe Price Fixed Income Series, Inc., the
underlying investment media for the Contracts. Entities in the T. Rowe Price
Family own all right, title and interest in and to the names, trademarks and
service marks "T. Rowe Price," "Invest with Confidence," "Tele Access," "T.
Rowe Price Variable Annuity Analyzer," "Variable Annuity Analyzer," and the
"Bighorn Sheep" logo in the style shown in EXHIBIT C attached hereto, and any
other names, trademarks, service marks or logos later specified by Investment
Services or Price Associates (the "T. ROWE PRICE LICENSED MARKS" or the
"LICENSOR'S LICENSED MARKS"). Entities within the T. Rowe Price Family use the
T. Rowe Price licensed marks pursuant to various agreements with one another.
Investment Services and Price Associates hereby grant to Security Benefit a
non-exclusive license to use the T. Rowe Price licensed marks in connection
with its performance of the services contemplated under this Agreement and the
Related Agreements, subject to the terms and conditions set forth in paragraph
(c) hereof.

(B) SECURITY BENEFIT LICENSED MARKS. Security Benefit is the owner of all
right, title and interest in and to the name, trademark and service mark
"Security Benefit" used in connection with the sale and promotion of financial
and insurance products and any other names, trademarks, service marks or logos
later specified by Security Benefit (the "SECURITY BENEFIT LICENSED MARKS" or
the "LICENSOR'S LICENSED MARKS"). Security Benefit hereby grants to Investment
Services, Price Associates and their Affiliates a non-exclusive license to use
the Security Benefit licensed marks in connection with their performance of
the services contemplated by this Agreement and the Related Agreements,
subject to the terms and conditions set forth in paragraph (c) hereof.

(I) TERM. The grant of license by Investment Services and Security
Benefit (each, a "LICENSOR") to the other and Affiliates thereof (the
"LICENSEES") shall terminate automatically when the Contracts shall cease to
be outstanding or invested in a Fund or Fund Series or sooner upon
termination by the licensor, unless otherwise agreed in writing by the
parties. Upon automatic termination, every licensee shall cease to use a
licensor's licensed marks. Upon Investment Services' termination of the
grant of license, Security Benefit shall immediately cease to issue new
annuity contracts or life insurance contracts or service existing Contracts
under any of the Investment Services licensed marks, and shall likewise
cease any activity which suggests that it has any right under any of the
Investment Services licensed marks or that it has any association with
Investment Services or an Affiliate thereof in connection with any such
contracts. Similarly, upon Security Benefit's termination of the grant of
license, Investment Services shall immediately cease to distribute new
annuity contracts or life insurance contracts or promotional, sales or
advertising material relating to any such contract under the Security
Benefit licensed marks and shall likewise cease any activity which suggests
that it has any right under the Security Benefit licensed marks or that it
has any association with Security Benefit or an Affiliate thereof in
connection with any such contracts.

(II) PRE-RELEASE APPROVAL OF TRADEMARK-BEARING MATERIALS. In addition to
any pre-release approvals that may be required under a Related Agreement or
a participation agreement, a licensee shall obtain the prior written
approval of the licensor for the public release by such licensee of any
materials bearing the licensor's licensed marks. Such material shall
include, but not be limited to, samples of each Contract form and
application, form correspondence with Contract owners, Contract owner
reports and any other materials that bear any of the licensor's licensed
marks.

(III) RECALL. During the term of this grant of license, a licensor may
request that a licensee submit samples of any materials bearing any of the
licensor's licensed marks which were previously approved by the licensor
but, due to changed circumstances, the licensor may wish to reconsider, or
which were not previously approved in the manner set forth above. If, on
reconsideration or on initial review, respectively, any such samples fail to
meet with the written approval of the licensor, then the licensee shall
immediately cease distributing such disapproved materials. The licensee
shall obtain the prior written approval of the licensor for the use of any
new materials developed to replace the disapproved materials, in the manner
set forth above.

(IV) ACKNOWLEDGMENT OF OWNERSHIP. Each licensee hereunder: (1)
acknowledges and stipulates that the licensor's licensed marks are valid and
enforceable trademarks and/or service marks; and that such licensee does not
own the licensor's licensed marks and claims no rights therein other than as
a licensee under this Agreement; (2) agrees never to contend otherwise in
legal proceedings or in other circumstances; and (3) acknowledges and agrees
that the use of the licensor's licensed marks pursuant to this grant of
license shall inure to the benefit of the licensor.

6.2 OWNERSHIP OF PROPRIETARY INFORMATION; CONFIDENTIALITY.

(A) INFORMATION AND PROSPECTS. The names, addresses and other information
relating to prospects or leads for the Contracts acquired by Investment
Services or its Affiliates or its agents or representatives in connection with
marketing activities shall be the exclusive property of, and shall be
exclusively owned by, Investment Services or its Affiliates, as the case may
be. The records created and maintained by Security Benefit, or by any
subcontractor on behalf of such Company, that pertain to Contract owners and
the servicing and administration of the Contracts shall be the exclusive
property of, and shall be exclusively owned by, Security Benefit. However, to
the extent that any information may come to the attention of Security Benefit
or any Affiliate thereof, or be entered into the records created or maintained
by or on behalf of such Company or an Affiliate thereof, as a result of its
relationship with Investment Services or an Affiliate thereof and not from an
independent source, such information shall be kept confidential and shall not
be used by Security Benefit or its Affiliates, or their respective agents or
employees for any purpose, including but not limited to any marketing purpose,
except in connection with the performance of its duties and responsibilities
hereunder or under a Related Agreement or under the Contracts. In no event
shall the names and addresses of such customers and prospective customers be
furnished by Security Benefit or its Affiliate, or any agent or subcontractor
thereof, to any other company or person (except as required by law or
regulation and then only upon prior written notice to Investment Services).

(B) CONFIDENTIALITY. Each party to this Agreement shall keep confidential
the terms and provisions of this Agreement (except as otherwise required by
law or regulation), the parties' respective methods of doing business, the
names, addresses and other personal information relating to customers or
prospective customers for the Contracts, the names, addresses and other
personal information relating to Contract owners, and any other information
proprietary to any party to this Agreement, and shall not reproduce,
disseminate or otherwise publish the same to any person not a party to this
Agreement, without the prior written approval of the other parties to this
Agreement (except as required by law or regulation and then only upon prior
written notice to the other party).

(C) RETURN OF INFORMATION. Upon a party's written request to another party,
such other party shall return to the requesting party any information or
materials of a proprietary nature obtained by or on behalf of such other party
in the course of the performance of this Agreement or any Related Agreement.

(D) OWNERSHIP OF CONTRACT, FORMS AND OTHER MATERIALS. Any Contract forms,
riders or materials developed or used by Security Benefit in connection with
the relationship between Security Benefit, Investment Services, and Price
Associates under this Agreement and the Related Agreements shall remain the
exclusive property of Security Benefit.

(E) GENERAL. The intent of this Section 6.2 is that no party or any
Affiliate thereof shall utilize, or permit to be utilized, its knowledge of
any other party or of any Affiliate thereof which is derived as a result of
the relationship created through the funding and sale of the Contracts or the
solicitation of sales of any product or service, except to the extent
necessary by the terms of this Agreement or to further the purposes of this
Agreement, or except as expressly permitted with the written consent of the
other parties. This Section 6.2 shall remain operative and in full force and
effect regardless of the termination of this Agreement, and shall survive any
such termination.

6.3 PUBLIC ANNOUNCEMENTS. To the extent reasonably feasible, the parties shall
confer with one another prior to the issuance of any reports, statements or
releases pertaining to this Agreement, the Contracts and the transactions
contemplated hereby, except that a party will in any event have the right to
issue any such reports, statements or releases if upon advice of its counsel
such issuance is required in order to comply with the requirements of any
applicable federal, state or local laws and regulations.

ARTICLE 7
REPRESENTATIONS AND WARRANTIES

7.1 ORGANIZATION AND GOOD STANDING. Each party hereto represents that it is a
corporation duly organized, validly existing and in good standing under the laws
of that jurisdiction set forth on page one of this Agreement; has all requisite
corporate power to carry on its businesses as it is now being conducted and is
qualified to do business in each jurisdiction in which it is required to be so
qualified; and is in good standing in each jurisdiction in which such
qualification is necessary under applicable law.

7.2 AUTHORIZATION. Each party hereto represents that the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate action by such
party, and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.

7.3 NO CONFLICTS. Each party hereto represents that the consummation of the
transactions contemplated herein, and the fulfillment of the terms of this
Agreement, shall not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of such party, or any indenture,
agreement, mortgage, deed of trust, or other instrument to which such party is a
party or by which it is bound, or violate any law, or, to the best of such
party's knowledge, any order, rule or regulation applicable to such party of any
court or of any federal or state regulatory body, administrative agency or any
other governmental instrumentality having jurisdiction over such party or any of
its properties.

7.4 ADMINISTRATIVE SYSTEM. Security Benefit represents and warrants to
Investment Services and Price Associates that it has implemented the
administrative systems and procedures necessary to issue, underwrite for
insurance purposes, service and administer the Contracts and administer the
Separate Accounts in accordance with the terms and provisions of this Agreement.

ARTICLE 8
INDEMNIFICATION, REMEDIES AND DISPUTE RESOLUTION

8.1 INDEMNIFICATION

(A) INDEMNIFICATION BY SECURITY BENEFIT. In addition to any indemnification
liability Security Benefit may have under any of the Related Agreements or
otherwise, Security Benefit shall indemnify and hold harmless Investment
Services, Price Associates, and their Affiliates and any officer, director,
employee or agent of any of the foregoing, against any and all losses,
liabilities, damages, claims or expenses, joint or several (including the
reasonable costs of settling a claim, investigating or defending any alleged
loss, liability, damage, claim or expense and reasonable legal counsel fees
incurred in connection therewith), to which Investment Services, Price
Associates and/or any such person may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses, liabilities,
damages, claims or expenses result because of a material breach by Security
Benefit of any provision of this Agreement or which proximately result from
any acts or omission of Security Benefit or Security Benefits's officers,
directors, employees, agents (which for these purposes shall not include an
Underwriter Representative or Distributor Representative as those terms are
defined in the Distribution Agreement) or subcontractors that are not in
accordance with this Agreement, including but not limited to any violation of
any federal or state statute or regulation. Further, Security Benefit shall
indemnify Investment Services, Price Associates and any Affiliate thereof
under this Agreement to the extent that SBL-N.Y. is unable to fulfill its
indemnification obligations under the N.Y. Agreements. Notwithstanding the
above, no person shall be entitled to indemnification pursuant to this Section
8.1(a) if such loss, liability, damage, claim or expense is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.

(B) INDEMNIFICATION BY INVESTMENT SERVICES. In addition to any
indemnification liability Investment Services may have under any of the
Related Agreements, Investment Services shall indemnify and hold harmless
Security Benefit and any Affiliate and any officer, director, employee or
agent of any of the foregoing, against any and all losses, liabilities,
damages, claims or expenses, joint or several (including the reasonable costs
of settling a claim, investigating or defending any alleged loss, liability,
damage, claim or expense and reasonable legal counsel fees incurred in
connection therewith), to which Security Benefit and/or any such person may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, liabilities, damages, claims or expenses result
because of a material breach by Investment Services of any provision of this
Agreement, or which proximately result from any acts or omission of Investment
Services's officers, directors, employees, agents or subcontractors that are
not in accordance with this Agreement, including but not limited to any
violation of any federal or state statute or regulation. Notwithstanding the
above, no person shall be entitled to indemnification pursuant to this Section
8.1(b) if such loss, liability, damage, claim or expense is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.

(C) INDEMNIFICATION BY PRICE ASSOCIATES. Price Associates shall indemnify
and hold harmless Security Benefit and any Affiliate and any officer,
director, employee or agent of any of the foregoing, against any and all
losses, liabilities, damages, claims or expenses, joint or several (including
the reasonable costs of settling a claim, investigating or defending any
alleged loss, liability, damage, claim or expense and reasonable legal counsel
fees incurred in connection therewith), to which Security Benefit and/or any
such person may become subject under any statute or regulation, at common law
or otherwise, insofar as such losses, liabilities, damages, claims or expenses
result because of the material breach by Price Associates of any provision of
this Agreement, including but not limited to any violation of any federal or
state statute or regulation. Further, Price Associates shall indemnify
Security Benefit under this Agreement and the Related Agreements to the extent
that its Affiliates are unable to fulfill their indemnification obligations
under this Agreement or any Related Agreements. Notwithstanding the above, no
person shall be entitled to indemnification pursuant to this Section 8.1(c) if
such loss, liability, damage, claim or expense is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
person seeking indemnification.

(D) GENERAL. After receipt by a party entitled to indemnification
("indemnified party") under this Section 8.1 of notice of the commencement of
any action, if a claim in respect thereof is to be made against any person
obligated to provide indemnification under this Section 8.1 ("indemnifying
party"), such indemnified party will notify the indemnifying party in writing
of the commencement thereof within a reasonable time after the summons or
other first written notification giving information of the nature of the claim
shall have been served upon the indemnified party; provided that the failure
to so notify the indemnifying party shall not relieve the indemnifying party
from any liability under this Section 8.1 except to the extent that the
indemnifying party shall have been prejudiced as a result of the failure or
delay in giving such notice. The indemnifying party shall be entitled to
participate, at its own expense, in the defense, or, if the indemnifying party
so elects, to assume the defense of any suit brought to enforce any such
claim, but, if the indemnifying party elects to assume the defense, such
defense shall be conducted by legal counsel chosen by the indemnifying party
and satisfactory to the indemnified party, to its Affiliates and any officer,
director, employee or agent of any of the foregoing, in the suit. In the event
that the indemnifying party elects to assume the defense of any such suit and
retain such legal counsel, the indemnified party, its Affiliates and any
officer, director, employee or agent of any of the foregoing in the suit,
shall bear the fees and expenses of any additional legal counsel retained by
them. If the indemnifying party does not elect to assume the defense of any
such suit, the indemnifying party will reimburse the indemnified party, such
Affiliates, officers, directors, employees or agents in such suit for the
reasonable fees and expenses of any legal counsel retained by them.

(E) SUCCESSORS. A successor by law of Investment Services or Security
Benefit, as the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 8.1.

8.2 RIGHTS, REMEDIES, ETC. ARE CUMULATIVE. The rights, remedies and
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of a party
to insist upon strict compliance with any of the conditions of this Agreement
shall not be construed as a waiver of any of the conditions, but the same shall
remain in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.

8.3 INTERPRETATION, JURISDICTION, ETC. This Agreement, together with the
Related Agreements, constitutes the whole agreement between the parties hereto
with respect to the subject matter hereof, and supersedes all prior oral or
written understandings, agreements or negotiations between the parties with
respect to such subject matter. No prior writings by or between the parties with
respect to the subject matter hereof shall be used by a party in connection with
the interpretation of any provision of this Agreement. This Agreement shall be
construed and its provisions interpreted under and in accordance with the
internal laws of the state of Maryland without giving effect to principles of
conflict of laws. This Section 8.3 shall not be construed to deny Security
Benefit, or an Affiliate thereof, of any rights to which it is entitled as an
owner of shares of the Fund.

8.4 SEVERABILITY. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action required
by applicable federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced only to the extent permitted under
the law, and, in any event, that all other provisions of this Agreement shall
remain valid and duly enforceable as if the provision at issue had never been a
part hereof.

ARTICLE 9
TERM AND TERMINATION

9.1 TERMINATION. This Agreement shall terminate of its own accord when all
Contracts issued pursuant to this Agreement and the Related Agreements are no
longer outstanding and no owner, annuitant, or beneficiary thereof is receiving
any annuity benefits from Security Benefit, or after five years from the
Effective Date may be terminated by any party upon six months written notice to
the other parties. Upon termination of this Agreement, Articles 3, 6 and 8 shall
nevertheless survive and continue in full force and effect.

9.2 CHANGES RELATING TO SECURITY BENEFIT. Upon the occurrence of any of the
following events, Investment Services shall have the right, in its sole
discretion, to make arrangements for an exchange of all or a portion of the
Contracts then outstanding, into insurance contracts issued by another insurance
carrier mutually acceptable to the parties, and, upon being notified of
Investment Services' exercise of such right, Security Benefit shall cooperate in
effecting transactions entitled by such exchange in an expeditious manner, it
being understood that Security Benefit may structure the exchange as a
reinsurance or similar transaction, and that Security Benefit shall be entitled
to reasonable compensation from such insurance carrier in connection with such
transaction:

(a) Security Benefit shall have become insolvent or its surplus shall have
become impaired as such terms are defined under applicable insurance law
of Security Benefit's state of domicile;

(b) the A.M. Best & Co. rating of Security Benefit is not "A" (or if such
rating organization changes its rating system after the Effective Date,
an equivalent rating) or better;

(c) the Standard & Poor's claims paying ability rating of Security Benefit
is not "A-" (or if such rating organization changes its rating system
after the Effective Date, an equivalent rating) or better;

(d) Investment Services determines that Security Benefit is in material
breach of any provision of this Agreement or of any Related Agreement,
unless such breach has been cured within ten (10) days after receipt of
notice of such breach;

(e) in Investment Services' good faith judgment, there is an event,
occurrence or circumstance (including the enactment of federal or state
legislation, court decision, a change in circumstances which makes the
Contracts or insurance contracts of that type (E.G., annuity contracts
or life insurance policies) an unsuitable investment for prospective
customers of Investment Services, or any event, occurrence or
circumstance which results or is likely to result in material adverse
publicity to any party to this Agreement or an Affiliate thereof) which
substantially and materially undermines the distribution or servicing of
the Contracts or the reputation and goodwill of any party to this
Agreement;

(f) an assignment or transfer of this Agreement by Security Benefit that
does not comply with the provisions of Section 9.4 of this Agreement;

9.3 CHANGES RELATING TO INVESTMENT SERVICES. Security Benefit shall have the
right, in its sole discretion, to make changes in the Contracts, including
causing a substitution of a Fund or Fund Series, upon the occurrence or
determination of any of the following events:

(a) Investment Services, Price Associates, or an Affiliate thereof files a
voluntary petition in bankruptcy or for reorganization or shall be the
subject of an involuntary petition in bankruptcy for liquidation or
reorganization;

(b) Investment Services, Price Associates, or an Affiliate thereof has a
receiver, liquidator or trustee appointed over its affairs;

(c) Security Benefit determines that Investment Services or Price Associates
is in material breach of any provision of this Agreement or of any
Related Agreement, unless such breach is cured with ten (10) days after
receipt of notice of such breach;

(d) an assignment or transfer of this Agreement by Investment Services or
Price Associates that does not comply with the provisions of Section 9.4
of this Agreement; or

(e) in Security Benefit's good faith judgment, there is an event, occurrence
or circumstance (including the enactment of federal or state
legislation, court decision, a change in circumstances which makes the
Contracts or insurance contracts of that type (E.G., annuity contracts
or life insurance policies) an unsuitable investment for prospective
customers of Security Benefit, or any event, occurrence or circumstance
which results or is likely to result in material adverse publicity to
any party to this Agreement or an Affiliate thereof) which substantially
and materially undermines the distribution or servicing of the Contracts
or the reputation and goodwill of any party to this Agreement.

9.4 ASSIGNMENT AND TRANSFER. This Agreement may not be assigned or transferred
by any party without the prior written consent of the other party hereto.

ARTICLE 10
GENERAL PROVISIONS

10.1 NOTICE, CONSENT AND REQUEST. Any notice, consent or request required or
permitted to be given by a party to any other party shall be deemed sufficient
if sent by facsimile transmission followed by Federal Express or other overnight
carrier, or if sent by registered or certified mail, postage prepaid, addressed
by the party giving notice to the other party at the following addresses (or at
such other address for a party as shall be specified by like notice);

if to Security Benefit, to:

Security Benefit Life Insurance Company
Attn: Amy J. Lee, Esq.
700 Harrison Street
Topeka, Kansas 66636

if to Investment Services, to:

T. Rowe Price Investment Services, Inc.
Attn: Henry H. Hopkins, Esq.
100 East Pratt Street
Baltimore, Maryland 21202

if to Price Associates, to:

T. Rowe Price Associates, Inc.
Attn: Henry H. Hopkins, Esq.
100 East Pratt Street
Baltimore, Maryland 21202

10.2 CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.

10.3 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which taken together shall be deemed to be one and the same instrument.

10.4 AMENDMENT. No provisions of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.

IN WITNESS WHEREOF, the parties hereto have each duly executed this Agreement
as of the day and year first above written.

SECURITY BENEFIT LIFE INSURANCE COMPANY
By its authorized officer

By: BRANDT BROCK
---------------------------
Brandt Brock
Title: VICE PRESIDENT
Date: MAY 1, 1998

T. ROWE PRICE INVESTMENT SERVICES, INC.
By its authorized officer

By: DARRELL N. BRAMAN
---------------------------
Darrell N. Braman
Title: VICE PRESIDENT
Date: MAY 1, 1998

T. ROWE PRICE ASSOCIATES, INC.
By its authorized officer

By: JOSEPH P. HEALY
--------------------------
Joseph P. Healy
Title: VICE PRESIDENT
Date: MAY 1, 1998
<PAGE>
SCHEDULE 1

CLASSES OF CONTRACTS
SUPPORTED BY SEPARATE ACCOUNTS
LISTED ON SCHEDULE 3

Effective as of the Effective Date, the following classes of Contracts are
subject to the Agreement:

================================================================================
Policy SEC 1933 Act Name of Annuity
Marketing Registration Supporting or
Name Number Account Life
- -------------------- ------------------- ------------------- -------------------
T. Rowe Price 33-83238 T. Rowe Price Annuity
No-Load Variable Annuity
Variable Annuity Account
================================================================================

Effective as of May 1, 1998, the following classes of Contracts are hereby added
to this Schedule 1 and made subject to the Agreement:

================================================================================
Policy SEC 1933 Act Name of Annuity
Marketing Registration Supporting or
Name Number Account Life
- -------------------- ------------------- ------------------- -------------------
T. Rowe Price No- 33-83238 T. Rowe Price Annuity
Load Immediate Variable Annuity
Variable Annuity Account
================================================================================

IN WITNESS WHEREOF, Investment Services, Price Associates, and Security Benefit
hereby amend this Schedule 1 in accordance with Article II of the Agreement.

BRANDT BROCK DARRELL N. BRAMAN
- --------------------- ---------------------
Security Benefit Investment Services

JOSEPH P. HEALY
- ---------------------
Price Associates
<PAGE>
SCHEDULE 2

FUNDS AVAILABLE UNDER
EACH CLASS OF CONTRACTS

Effective as of the Effective Date and January 2, 1997, the following Funds are
available under the Contracts:

================================================================================
Contracts Fund Fund Series
Marketing
Name
- ------------------- ------------------- ----------------------------------------
T. Rowe Price T. Rowe Price Equity Income Portfolio
No-Load Equity New America Growth Portfolio
Variable Annuity Series, Inc. T. Rowe Price Personal Strategy Balanced
Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
- ------------------- ------------------- ----------------------------------------
T. Rowe Price International Stock Portfolio
International
Series, Inc.
- ------------------- ------------------- ----------------------------------------
T. Rowe Price Limited-Term Bond Portfolio
Fixed Income T. Rowe Price Prime Reserve Portfolio
Series, Inc.
================================================================================

Effective as of May 1, 1998 this Schedule 2 is hereby amended to reflect the
following changes in Fund or Fund Series available under the Contracts:

================================================================================
Contracts Fund Fund Series
Marketing
Name
- ------------------- ------------------- ----------------------------------------
T. Rowe Price T. Rowe Price Equity Income Portfolio
No-Load Immediate Equity Series, Inc. New America Growth Portfolio
Variable Annuity T. Rowe Price Personal Strategy Balanced
Portfolio
T. Rowe Price Mid-Cap Growth Portfolio
- ------------------- ------------------- ----------------------------------------
T. Rowe Price International Stock Portfolio
International
Series, Inc.
- ------------------- ------------------- ----------------------------------------
T. Rowe Price Fixed Limited-Term Bond Portfolio
Income Series, Inc. T. Rowe Price Prime Reserve Portfolio
================================================================================

IN WITNESS WHEREOF, Investment Services, Price Associates and Security Benefit
hereby amend this Schedule 2 in accordance with Article II of the Agreement.

BRANDT BROCK DARRELL N. BRAMAN
- --------------------- ---------------------
Security Benefit Investment Services

JOSEPH P. HEALY
- ---------------------
Price Associates
<PAGE>
SCHEDULE 3

SEPARATE ACCOUNTS OF THE SECURITY BENEFIT
COMPANIES SUPPORTING THE CONTRACTS

Effective as of the Effective Date, the following separate account and
subaccounts are subject to the Agreement:

================================================================================
Name of Separate Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported
Subaccounts of the Company Number by Account
- -------------------- ------------------- ------------------- -------------------
T. Rowe Price March 28, 1994 811-8724 Variable Annuity
Variable Annuity
Account

Equity Income
Subaccount

International Stock
Subaccount

Limited Term Bond
Subaccount

New America Growth
Subaccount

Personal Strategy
Balanced Portfolio
================================================================================

Effective as of January 2, 1997, the following separate accounts and/or
subaccounts are hereby added to this Schedule 3 and made subject to the
Agreement:

================================================================================
Name of Separate Date Established by SEC 1940 Act Type of Product
Account and Board of Directors Registration Supported
Subaccounts of the Company Number by Account
- -------------------- ------------------- ------------------- -------------------
Prime Reserve - Not applicable 811-8724 Variable Annuity
Subaccount

Mid-Cap Growth
Subaccount
================================================================================

IN WITNESS WHEREOF, Security Benefit, Investment Services, and Price Associates
hereby amend this Schedule 3 in accordance with Article II of the Agreement.

BRANDT BROCK DARRELL N. BRAMAN
- --------------------- ---------------------
Security Benefit Investment Services

JOSEPH P. HEALY
- ---------------------
Price Associates
<PAGE>
SCHEDULE 4

BROKERAGE FIRMS AND MUTUAL FUNDS SPONSORS

American Century
Dreyfus
Fidelity
First Trust
Harbor Capital
Heine Security
Invesco
Jack White
Janus
Neuberger & Berman
Schwab
Scudder
Steinroe
Strong
Vanguard
<PAGE>
SCHEDULE 5

CONTRACT SPECIFICATIONS

IN WITNESS WHEREOF, Investment Services, Price Associates and Security
Benefit hereby approve the attached Contract Specifications in accordance with
accordance with Article 2 of the Agreement.

BRANDT BROCK DARRELL N. BRAMAN
- --------------------- ---------------------
Security Benefit Investment Services

JOSEPH P. HEALY
- ---------------------
Price Associates
<PAGE>
SCHEDULE 6

INTEREST RATE CREDITING PROCEDURES

On Thursday, January 19, 1995, Jim Schmank, Jeff Pantages and Brandt Brock met
in Investment Services' offices with Joe Healy, Ted Weiss, John Cammack, Renee
Christoff and Alan Richman. The purpose of the meeting was to discuss Security
Benefit's investment strategy for the T. Rowe Price No-Load Variable Annuity
(the "ANNUITY") Fixed Account.

Brandt Brock presented the results of the scenario testing performed by
Security Benefit, using assumptions previously discussed with Joe Healy. These
assumptions were based fundamentally on the premise that the fixed account would
not likely be viewed as a long term investment vehicle, but rather as a
temporary holding portfolio during market swings or to take advantage of dollar
cost averaging investment techniques. Accordingly, Security Benefit assumed only
10% of all contributions made to the Annuity would be allocated to the fixed
account. Other assumptions were made as to how long the assets would stay in the
fixed account and the rate of new sales. The overall conclusion from the tests
suggests that investments made for the fixed account should be in bonds with
durations of two to three years to match the estimated net asset flows.

Another significant issue discussed was the anticipated asset size of the
fixed account. With sales projections of $100 million for 1995, $250 million for
1996 and $350 million for 1997, and only 10% assumed to be invested in the fixed
account, the likelihood of the assets reaching $100 million is doubtful until
after six years. It is not deemed to be practical for Security Benefit to
segregate a portfolio of this size.

However, if a segregated portfolio is not maintained by Security Benefit, the
methodology of establishing the monthly crediting rate becomes an issue. In
discussing this matter with Investment Services, Security Benefit concluded that
an acceptable approach in setting the periodic rate would be to start with the
yield on 2 1/2 year duration Treasury notes [(2 yr. T-Note + 3 yr. T-Note)/2],
add 60 basis points for anticipated credit spread and then deduct an agreed upon
pricing spread of 145 basis points. The resulting rate will be compared to
direct market competitor rates and one year CD's and may be adjusted. Security
Benefit believes that once the fixed account reaches approximately $200 million,
it will then consider actually segregating a portfolio if it is deemed
beneficial to the contract.

After a period of one year, Security Benefit and Investment Services will
revisit the scenario testing based upon actual experience. Security Benefit and
Investment Services will revisit the scenario testing sooner if market
conditions warrant. Such experience will then be used to adjust asset movement
assumptions if necessary.
<PAGE>
SCHEDULE 7

STATES AND JURISDICTIONS WHERE SECURITY BENEFIT WILL OFFER THE CONTRACTS

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
<PAGE>
SCHEDULE 8

FIXED ANNUITY PAYMENT CALCULATION

The payment to be made on accounts that elect to annuitize using a fixed
annuity under option 1 through 4 or 8 is based on a 60/40 male/female split of
business and typical payout rates for these 65 year olds. Since there is no
account value or surrender value for life contingent payout options, the payment
is based on the general account reserves. The monthly rate (20bp/12) is applied
to the monthly reserve amounts. These resulting monthly amounts are discounted
to the issue date (at 6.00%), summed and divided by the "Annuity Start Amount."
Based on this methodology a 20bp payment is equivalent to 1.80% of the "Annuity
Start Amount."
<PAGE>
SCHEDULE 9

OTHER EXPENSES

(1) Security Benefit shall pay the costs of printing and mailing the
Separate Account Financial Statement; provided, however, that Security
Benefit may make reasonable inquiry regarding the feasibility of
including such Financial Statement in any mailing to all Contract
owners made by Investment Services, and Investment Services may
determine in its sole judgment to include such Separate Account
Financial Statement in such mailing with no charge to Security Benefit
for mailing expenses unless the parties otherwise agree; and

(2) Security Benefit shall pay to Investment Services by each February 28,
the estimated cost of printing and mailing the Annual Statement of
Account to Contract owners based upon the number of Contract owners and
the cost of preparing Security Benefit's normal statement; provided,
however, that Investment Services shall be responsible for printing and
mailing such Annual Statement of Account to Contract owners.
<PAGE>
EXHIBIT A

AGENT AND ADMINISTRATION MANUAL
TABLE OF CONTENTS

1 T. Rowe Price and Security Benefit Relationship
* Who is SBG?
* Who is T. Rowe Price?
* SBG and TRP Relationship

2 What is an Annuity?
* Annuity Basics
* Fixed and Variable Annuities
* Immediate vs. Deferred Annuities
* Accumulation and Annuitization Period
* Single and Periodic Premiums

3 General Provisions of the Contracts
* Free Look Period/Exchanges
* Dollar Cost Averaging/Asset Rebalancing
* Purchase Payments
* Ownership, Annuitant, and Beneficiary

4 Investment Options
* New America Growth
* International Stock and Equity Income
* Personal Strategy Balanced
* Limited Term Bond
* Fixed Interest Account

5 Benefits
* Death Benefit Amount and Distribution
* Periodic Withdrawal
* Systematic Withdrawal

6 Annuity Payout Options
* Dates
* Life Option (1)
* Life Annuity with Periodic Certain (2)
* Unity Refund Annuity (3)/Joint and Survivor Annuity (4)
* Payments for Fixed Period (5)/Payments for Fixed Amount (6)
* Age Recalculation

7 Screens

* User Identification/Client/Alpha Screen
* Values Information/Fixed Interest Account/ACH
* Services/Contract Names and Addresses/Transaction History
* Purchases/Exchanges/Notes
* Forms/DMS/Escheatment

8 Miscellaneous
* Confirmations/Statements of Accounts
* Application Check List
* Letters
* Checks
* Addresses and Writing Instructions
* Processing Questions

9 Administrative Procedures
* Document Handling Procedures
* New Application Procedure-CC Batch Entry Procedures
* New Application Procedure-AA
* Application Approval List
* 1035 Exchanges and Procedures
* DMS Indexing-Records Management

10 Administrative Screen Procedures
* Inquiry
* New Business
* Financial
* Service
* Communications
* Screen Navigation
<PAGE>
EXHIBIT B

SERVICE AND QUALITY STANDARDS

Investment Services and Security Benefit both recognize the importance of
providing accurate and timely service to Variable Annuity Contract owners. The
parties, therefore, agree to measure and monitor performance to service
standards and processing quality, and to report results to each on a quarterly
basis. Investment Services and Security Benefit will meet on an annual basis to
review service levels and if necessary, establish an action plan for improving
performance levels.

1. SALES/NEW CONTRACTS

Security Benefit will:

1. Incoming calls from Investment Services representatives -- Security
Benefit will have a group of representatives adequate in number to answer
incoming calls from Investment Services representatives between the hours
of 9 a.m. - 6 p.m. EST each day the New York Stock Exchange is open. If
Security Benefit representatives are unavailable, the Investment Services
representative will leave a message. The Investment Services
representative should be called back within four hours, provided that
calls received by Security Benefit after 2 p.m. EST may be returned
within the first hour of the next business day. As needed, Security
Benefit representatives will be available for conference calls with
Investment Services representatives and potential Contract owners for
complex issues.

2. Contract Establishment -- New contracts will be established on the day of
application receipt, unless the application is not in good order.
Security Benefit will notify Investment Services weekly with the number
of applications being held (number and days and reason) for further
information from the applicant. The contract and welcome letter will be
issued within 2 days of contract establishment.

3. Confirmation Statements -- Security Benefit will send the Contract owners
a confirmation statement the business day after the contract is
established. For one-time transaction events (does not include automatic
transactions), Security Benefit will send the confirmation the next
business day.

4. Security Benefit will provide a weekly status report (see attached
example #1) for Investment Services.

Investment Services will:

1. Sales Calls -- Investment Services will answer all telephone sales
inquiries within the following timeframes:

80% of the calls will be answered within 20 seconds
The abandonment rate will not exceed 5%
If assistance from an Investment Services Representative is necessary,
and a message is taken, the call will be returned the same day, or if
the message was received late in the day, the following business
morning.

2. Fulfillment Kit -- Investment Services will mail the fulfillment kit the
business day after receiving the fulfillment request.

2. ADMINISTRATION AND OPERATION SERVICE STANDARDS

Security Benefit will:

1. Written Transaction Requests -- Security Benefit will process written
requests for transactions on the day of receipt (if a business day).
Investment Services is to be notified of the quantity of requests held
for further information from the contractholder.

2. Contract Maintenance Requests -- Security Benefit will process
contractholder maintenance (i.e., services options) requests and
Investment Services generated requests within two (2) business days of
receipt.

3. Correspondence -- If Security Benefit rejects a Contract owner
transaction request, Security Benefit will send a letter to the Contract
owner by the next business day. If a maintenance request is rejected,
Security Benefit will send a letter to the Contract owner by the next
business day. If Security Benefit rejects an Investment Services
generated transaction or maintenance request, Security Benefit will
notify the Investment Services representative on the day of receipt of
the request for Investment Services action. All non-system generated
correspondence will be noted on the Security Benefit Software in the
Notes screen of the Contract owner's records.

4. Adjustment Requests -- If a contract's records require adjustment,
Investment Services will notify Security Benefit in writing. Adjustment
requests will be processed by Security Benefit on the day of receipt if
received by 1:00 pm EST. (After 1:00 p.m. EST will be completed by end of
next business day). Security Benefit will notify Investment Services of
any outstanding adjustment requests weekly. Security Benefit to provide
monthly summary of adjustments processed.

5. Regulatory Changes -- Security Benefit will take timely action to comply
with legislation and/or regulations which result in changes to the
administration of the Variable Annuity Plan.

Investment Services will:

1. Service Calls - Investment Services will answer all telephone service
calls within the following timeframes:

2. All financial transactions received via telephone in good order by 4:00
p.m. EST will be processed the same day.

3. All maintenance will be processed within two (2) business days following
receipt. Research requests will be completed within 3 business days. If
not completed by the third day, the request will be forwarded to an
Investment Services Supervisor for follow-up with Security Benefit.

4. Correspondence -- Any correspondence requests handled by Investment
Services will be answered within 3 business days of the requests.
Investment Services will note the correspondence on the Security Benefit
Software in the Notes screen of the contractholder's records.

3. QUALITY TARGET GOALS

Both Security Benefit and Investment Services will maintain the following
quality target goals:

FUNCTION GOAL (%)

Contract Set-up 98
Correspondence Rating Accuracy 98
Contract Maintenance Accuracy 98
Financial Transactions 99
<PAGE>
Newday98
================================================================================
Contracts
Carried 1035 Transaction
Contracts Over-Pdng Exchanges - Purchases Requests Withdrawals
DATE Established & 1035 $ Received Processed Received Processed
- -------- ----------- --------- ----------- --------- ----------- -----------
01/02/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
wkly.
totals 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/05/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/06/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/07/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/08/98 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/09/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
wkly.
totals 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/12/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/13/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/14/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/15/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/16/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
wkly.
totals 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/19/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/20/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/21/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/22/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/23/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
wkly.
totals 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/26/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/27/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/28/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/29/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
01/30/98 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
wkly.
totals 0 0 0 0 0 0
- -------- ----------- --------- ----------- --------- ----------- -----------
Grand Total 0 0 0 0 0 0
================================================================================

================================================================================
Transaction Corres- Adjust-
Corres- Adjust- Requests pondence ments Total
pondence ments Carried Carried Carried Amount
DATE Received Received Over Over Over Received WITHDRAWALS
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/02/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
wkly.
totals 0 0 0 0 0 $
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/05/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/06/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/07/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/08/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/09/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
wkly.
totals 0 0 0 0 0 $
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/12/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/13/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/14/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/15/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/16/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
wkly.
totals 0 0 0 0 0 $
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/19/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/20/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/21/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/22/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/23/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
wkly.
totals 0 0 0 0 0 $
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/26/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/27/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/28/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/29/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
01/30/98 0 0 0 0 0
- -------- -------- -------- ---------- -------- ------- -------- -----------
wkly.
totals 0 0 0 0 0 $
- -------- -------- -------- ---------- -------- ------- -------- -----------
Grand Total 0 0 0 0 0 $
================================================================================
<PAGE>
EXHIBIT C

BIGHORN SHEEP LOGO

<PAGE>
[SBG LOGO]
- --------------------------------------------------------------------------------
Security Benefit Life Insurance Company 700 SW Harrison St.
Security Benefit Group, Inc. Topeka, Kansas 66636-0001
Security Distributors, Inc. (785) 431-3000
Security Management Company, LLC

February 12, 1999

Security Benefit Life Insurance Company
700 SW Harrison Street
Topeka, KS 66636-0001

Dear Sir/Madam:

This letter is with reference to the Registration Statement of T. Rowe Price
Variable Annuity Account of which Security Benefit Life Insurance Company
(hereinafter "SBL") is the Depositor. Said Registration Statement is being filed
with the Securities and Exchange Commission for the purpose of registering the
variable annuity contracts issued by SBL and the interests of T. Rowe Price
Variable Annuity Account under such variable annuity contracts which will be
sold pursuant to an indefinite registration.

I have examined the Articles of Incorporation and Bylaws of SBL, minutes of the
meetings of its Board of Directors and other records, and pertinent provisions
of the Kansas insurance laws, together with applicable certificates of public
officials and other documents which I have deemed relevant. Based on the
foregoing, it is my opinion that:

1. SBL is duly organized and validly existing as a stock life insurance company
under the laws of Kansas.

2. T. Rowe Price Variable Annuity Account has been validly created as a
Separate Account in accordance with the pertinent provisions of the
insurance laws of Kansas.

3. SBL has the power, and has validly and legally exercised it, to create and
issue the variable annuity contracts which are administered within and by
means of T. Rowe Price Variable Annuity Account.

4. The amount of variable annuity contracts to be sold pursuant to the
indefinite registration, when issued, will represent binding obligations of
SBL in accordance with their terms providing said contracts were issued for
the considerations set forth therein and evidenced by appropriate policies
and certificates.

I hereby consent to the inclusion in the Registration Statement of my foregoing
opinion.

Respectfully submitted,

AMY J. LEE

Amy J. Lee, Esq.
Associate General Counsel and Vice President
Security Benefit Life Insurance Company

<PAGE>
CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 6, 1998, with respect to the consolidated
financial statements of Security Benefit Life Insurance Company and Subsidiaries
and the financial statements of T. Rowe Price Variable Annuity Account included
in the Post-Effective Amendment No. 8 to the Registration Statement under the
Securities Act of 1933 (Registration No. 33-83238) and Post-Effective Amendment
No. 9 to the Registration Statement under the Investment Company Act of 1940
(Registration No. 811-8724) on Form N-4 and the related Statement of Additional
Information accompanying the Prospectuses of T. Rowe Price No-Load Variable
Annuities.

Ernst & Young LLP

Kansas City, Missouri
February 12, 1999

<PAGE>
EQUITY INCOME
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,083.86
((1+T)^1)^1 = (1.08386)^1
1+T = 1.08386
T = .0839

4.75 Years (From Date of Inception 3/31/94)

1000 (1+T)^4.75 = 2,304.74
((1+T)^4.75)^4.75 = (2.30474)^4.75
1+T = 1.19218
T = .192

INTERNATIONAL STOCK
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,152.02
((1+T)^1)^1 = (1.15202)^1
1+T = 1.15202
T = .1520

4.75 Years (From Date of Inception 3/31/94)

1000 (1+T)^4.75 = 1,511.02
((1+T)^4.75)^4.75 = (1.51102)^4.75
1+T = 1.09079
T = .0908

LIMITED-TERM BOND
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,064.66
((1+T)^1)^1 = (1.06466)^1
1+T = 1.06466
T = .0647

4.64 Years (From Date of Inception 5/13/94)

1000 (1+T)^4.64 = 1,297.27
((1+T)^4.64)^4.64 = (1.29727)^4.64
1+T = 1.05769
T = .0577

NEW AMERICA GROWTH
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,178.42
((1+T)^1^1 = (1.17842)^1
1+T = 1.17842
T = .1784

4.75 Years (From Date of Inception 3/31/94)

1000 (1+T)^4.75 = 2,561.44
((1+T)^4.75)^4.75 = (2.56144)^4.75
1+T = 1.21898
T = .2190

PERSONAL STRATEGY BALANCED
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,137.45
((1+T)^1)^1 = (1.13745)^1
1+T = 1.13745
T = .1375

4 Years (From Date of Inception 12/30/94)

1000 (1+T)^4 = 1,939.78
((1+T)^4)^4 = (1.93978)^4
1+T = 1.18015
T = .1802

MID-CAP GROWTH
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,214.23
((1+T)^1)1 = (1.21423)^1
1+T = 1.21423
T = .2142

2 Years (From Date of Inception 12/31/96)

1000 (1+T)^2 = 1,434.00
((1+T)^2)^2 = (1.43400)^2
1+T = 1.19750
T = .1975

PRIME RESERVE
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1998

1 Year

1000 (1+T)^1 = 1,046.76
((1+T)^1)^1 = (1.04676)^1
1+T = 1.04676
T = .04676

2 Years (From Date of Inception 12/31/96)

1000 (1+T)^2 = 1,097.00
((1+T)^2)^2 = (1.09700)^2
1+T = 1.04738
T = .0474
<PAGE>
PRIME RESERVE
Money Market Yield as of December 31, 1998

CALCULATION OF CHANGE IN UNIT VALUE:

(Unrounded Unrounded)
( Price Price )

(12-31-98 - 12-24-98 ) = 10.968553225532 - 10.959418422030 = .000833512
----------------------- ---------------------------------
( Unrounded Price ) 10.959418422030
( 12-24-98 )

ANNUALIZED YIELD:

365/7 (.000833512) = 4.35%

EFFECTIVE YIELD:

(1 + .000833512)^365/7 - 1 = 4.44%
<PAGE>
LIMITED - TERM BOND
YIELD CALCULATION AS OF DECEMBER 31, 1998

[ [ (51,401.97) ]6 ]
2 [ [ ----------------------- + 1 ]- 1
[ [ (923,457.0264 x 12.35) ] ]

[ ( (51,401.97) )6 ]
2 [ ( ----------------------- + 1 ) ]- 1
[ ( (11,404,694.28) ) ]

2 [((.00450709 + 1)^6 ) - 1]

2 [((1.00450709)^6) - 1]

2 [(1.02735) - 1]

2 (.02735)

= .0547 or 5.47% December 31, 1998

<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SEDGWICK)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Thomas R. Clevenger, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of January, 1999.

THOMAS R. CLEVENGER
-------------------------------------
Thomas R. Clevenger

SUBSCRIBED AND SWORN to before me this 20th day of January, 1999.

ANNETTE E. CRIPPS
-------------------------------------
Notary Public
My Commission Expires:

7/8/2001
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Sister Loretto Marie Colwell, being a Director of SECURITY BENEFIT LIFE
INSURANCE COMPANY, by these presents do make, constitute and appoint Howard R.
Fricke, James R. Schmank and Roger K. Viola, and each of them, my true and
lawful attorneys, each with full power and authority for me and in my name and
behalf to sign Registration Statements, any amendments thereto and any
applications for exemptive relief filed pursuant to the Investment Company Act
of 1940 or the Securities Act of 1933, as amended, and any instrument or
document filed as part thereof, or in connection therewith or in any way related
thereto, in connection with Variable Annuity Contracts offered, issued or sold
by SECURITY BENEFIT LIFE INSURANCE COMPANY and any T. ROWE PRICE VARIABLE
ANNUITY ACCOUNT with like effect as though said Registration Statements and
other documents had been signed and filed personally by me in the capacity
aforesaid. Each of the aforesaid attorneys acting alone shall have all the
powers of all of said attorneys. I hereby ratify and confirm all that the said
attorneys, or any of them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 16th day of January, 1999.

SISTER LORETTO MARIE COLWELL
-------------------------------------
Sister Loretto Marie Colwell

SUBSCRIBED AND SWORN to before me this 16th day of January, 1999.

JULIA A. SMRHA
-------------------------------------
Notary Public
My Commission Expires:

7/8/2000
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, John C. Dicus, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of January, 1999.

JOHN C. DICUS
-------------------------------------
John C. Dicus

SUBSCRIBED AND SWORN to before me this 20th day of January, 1999.

ANNETTE E. CRIPPS
-------------------------------------
Notary Public
My Commission Expires:

7/8/2001
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Steven J. Douglass, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of January, 1999.

STEVEN J. DOUGLASS
-------------------------------------
Steven J. Douglass

SUBSCRIBED AND SWORN to before me this 19th day of January, 1999.

NANCY A. LEWIS
-------------------------------------
Notary Public
My Commission Expires:

10/16/99
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Howard R. Fricke, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint James R. Schmank and
Roger K. Viola, and each of them, my true and lawful attorneys, each with full
power and authority for me and in my name and behalf to sign Registration
Statements, any amendments thereto and any applications for exemptive relief
filed pursuant to the Investment Company Act of 1940 or the Securities Act of
1933, as amended, and any instrument or document filed as part thereof, or in
connection therewith or in any way related thereto, in connection with Variable
Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE INSURANCE
COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like effect as
though said Registration Statements and other documents had been signed and
filed personally by me in the capacity aforesaid. Each of the aforesaid
attorneys acting alone shall have all the powers of all of said attorneys. I
hereby ratify and confirm all that the said attorneys, or any of them, may do or
cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of January, 1999.

HOWARD R. FRICKE
-------------------------------------
Howard R. Fricke

SUBSCRIBED AND SWORN to before me this 19th day of January, 1999.

ANNETTE E. CRIPPS
-------------------------------------
Notary Public
My Commission Expires:

7/8/2001
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, W. W. Hanna, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of January, 1999.

W. W. HANNA
-------------------------------------
W. W. Hanna

SUBSCRIBED AND SWORN to before me this 19th day of January, 1999.

CAROLYN R. SOUDERS
-------------------------------------
Notary Public
My Commission Expires:

7/21/99
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF FLORIDA )
) ss.
COUNTY OF PINELLAS)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, John E. Hayes, Jr., being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 27th day of January, 1999.

JOHN E. HAYES, JR.
-------------------------------------
John E. Hayes, Jr.

SUBSCRIBED AND SWORN to before me this 27th day of January, 1999.

PAMELA MURRAY
-------------------------------------
Notary Public
My Commission Expires:

3/2/2000
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF DOUGLAS)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Laird G. Noller, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 25th day of January, 1999.

LAIRD G. NOLLER
-------------------------------------
Laird G. Noller

SUBSCRIBED AND SWORN to before me this 25th day of January, 1999.

ANNETTE E. CRIPPS
-------------------------------------
Notary Public
My Commission Expires:

7/8/2001
- ----------------------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Frank C. Sabatini, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of January, 1999.

FRANK C. SABATINI
-------------------------------------
Frank C. Sabatini

SUBSCRIBED AND SWORN to before me this 21st day of January, 1999.

PATRICIA A. CLARK
-------------------------------------
Notary Public
My Commission Expires:

3/5/2002
- -----------------------
<PAGE>
POWER OF ATTORNEY

STATE OF KANSAS )
) ss.
COUNTY OF SHAWNEE)

KNOW ALL MEN BY THESE PRESENTS:

THAT I, Robert C. Wheeler, being a Director of SECURITY BENEFIT LIFE INSURANCE
COMPANY, by these presents do make, constitute and appoint Howard R. Fricke,
James R. Schmank and Roger K. Viola, and each of them, my true and lawful
attorneys, each with full power and authority for me and in my name and behalf
to sign Registration Statements, any amendments thereto and any applications for
exemptive relief filed pursuant to the Investment Company Act of 1940 or the
Securities Act of 1933, as amended, and any instrument or document filed as part
thereof, or in connection therewith or in any way related thereto, in connection
with Variable Annuity Contracts offered, issued or sold by SECURITY BENEFIT LIFE
INSURANCE COMPANY and any T. ROWE PRICE VARIABLE ANNUITY ACCOUNT with like
effect as though said Registration Statements and other documents had been
signed and filed personally by me in the capacity aforesaid. Each of the
aforesaid attorneys acting alone shall have all the powers of all of said
attorneys. I hereby ratify and confirm all that the said attorneys, or any of
them, may do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of January, 1999.

ROBERT C. WHEELER
-------------------------------------
Robert C. Wheeler

SUBSCRIBED AND SWORN to before me this 20th day of January, 1999.

NANCY G. DEBACKER
-------------------------------------
Notary Public
My Commission Expires:

12/15/99
- -----------------------