AUSA SERIES LIFE ACCOUNT, S-6, 1997-10-21

AUSA SERIES LIFE ACCOUNT
S-6, 1997-10-21

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As filed with the Securities and Exchange Commission on October 20, 1997
Registration File Nos. ______/811-8878

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------------------------
FORM S-6

---------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2

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

AUSA SERIES LIFE ACCOUNT
------------------------
(Exact Name of Trust)

AUSA LIFE INSURANCE COMPANY, INC.
---------------------------------
(Name of Depositor)

4 Manhattanville Road
Purchase, New York 10577
-------------------------------------------------------------
(Complete Address of Depositor's Principal Executive Offices)

Thomas E. Pierpan, Esq.
Assistant Secretary
AUSA Life Insurance Company, Inc.
P.O. Box 9054
Clearwater, Florida 34618-9054
------------------------------------------------
(Name and Complete Address of Agent for Service)

Copies to:

Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan, LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

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

Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the Registration Statement.

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

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>

CROSS REFERENCE TO ITEMS REQUIRED

BY FORM N-8B-2

N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- -------------------------------------------------------

1 Cover Page; The Series Account

2 Cover Page; AUSA Life Insurance Company, Inc.

3 Not Applicable

4 Distribution of the Policies

5 The Series Account

6 The Series Account

7 Not Applicable

8 Not Applicable

9 Legal Proceedings

10 Introduction; Policy Benefits; Payment and Allocation of
Premiums; Investments of the Series Account; Policy
Rights

11 The Series Account; WRL Series Fund, Inc.

12 The Series Account; WRL Series Fund, Inc.

13 Charges and Deductions; The Series Account; Investments
of the Series Account

14 Introduction; Allocation of Premiums and Cash Values

15 Allocation of Premiums and Cash Value

16 The Series Account

17 Cash Value; The Series Account; Policy Rights

18 Payment and Allocation of Premiums; Cash Value

19 Voting Rights of the Series Account; Reports and Records

20 Not Applicable

<PAGE>

N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- --------------------------------------------------------

21 Loan Privileges

22 Not Applicable

23 Safekeeping of the Series Account's Assets

24 Policy Rights

25 AUSA Life Insurance Company, Inc.

26 Not Applicable

27 AUSA Life Insurance Company, Inc.; The Series
Account; WRL Series Fund, Inc.

28 AUSA Life Insurance Company, Inc.; Executive Officers
and Directors of AUSA Life

29 AUSA Life Insurance Company, Inc.

30 Not Applicable

31 Not Applicable

32 Not Applicable

33 Not Applicable

34 Not Applicable

35 AUSA Life Insurance Company, Inc.

36 Not Applicable

37 Not Applicable

38 Distribution of the Policies

39 Distribution of the Policies

40 Not Applicable

41 Distribution of the Policies; AUSA Life Insurance
Company, Inc.

42 Not Applicable

43 Not Applicable

<PAGE>

N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- --------------------------------------------------------
44 Cash Value

45 Not Applicable

46 Cash Value

47 Introduction; Allocation of Premiums and Cash Values

48 Not Applicable

49 Not Applicable

50 Not Applicable

51 Introduction; AUSA Life Insurance Company, Inc.;

Policy Benefits; Charges and Deductions

52 The Series Account; WRL Series Fund, Inc.

53 Federal Tax Matters

54 Not Applicable

55 Not Applicable

56 Not Applicable

57 Not Applicable

58 Not Applicable

59 Not Applicable

iii

<PAGE>

AUSA FINANCIAL FREEDOM BUILDERSM
INDIVIDUAL FLEXIBLE
PREMIUM VARIABLE LIFE
INSURANCE POLICY

Issued by
AUSA LIFE INSURANCE COMPANY, INC.
4 Manhattanville Road
Purchase, New York 10577
(800) 322-7160

The individual flexible premium variable life insurance policy ("Policy")
issued by AUSA Life Insurance Company, Inc. ("AUSA Life") and described in this
Prospectus is designed to provide lifetime insurance protection and maximum
flexibility in connection with premium payments and death benefits. A
Policyowner may, subject to certain restrictions, vary the timing and amount of
premium payments and increase or decrease the level of life insurance benefits
payable under the Policy. This flexibility allows a Policyowner to provide for
changing insurance needs under a single life insurance policy. The minimum
Specified Amount for Issue Ages 0-45 is $50,000, declining to $25,000 for Issue
Ages 46 to 80.

The Policy provides a death benefit payable at the Insured's death, and a
Net Surrender Value that can be obtained by completely or partially
surrendering the Policy. Net premiums are allocated according to the
Policyowner's directions among the Sub-Accounts of the AUSA Series Life Account
("Series Account"), or to a fixed interest account ("Fixed Account"), or a
combination of both. With respect to amounts allocated to Sub-Accounts of the
Series Account, the amount of the death benefit may, and the Cash Value will,
vary to reflect both the investment experience of the Sub-Accounts and the
timing and amount of additional premium payments. However, as long as the
Policy remains In Force, AUSA Life guarantees that the death benefit will never
be less than the Specified Amount of the Policy. While additional premium
payments are not required under the Policy, additional premium payments may be
necessary to prevent Lapse if there is insufficient Net Surrender Value.

The Policy provides a free-look period allowing the Policyowner to cancel
the Policy within 10 days after receipt.

The assets of each Sub-Account of the Series Account will be invested
solely in a corresponding Portfolio of the WRL Series Fund, Inc. (the "Fund").
The Prospectus for the Fund describes the investment objectives and the risks
of investing in the Portfolios of the Fund corresponding to the Sub-Accounts
currently available under the Policy. The Policyowner bears the entire
investment risk for all amounts allocated to the Series Account; there is no
guaranteed minimum Cash Value.

It may not be to your advantage to replace existing insurance or
supplement an existing flexible premium variable life insurance policy with a
Policy described in this Prospectus.

Please read this Prospectus and the Prospectus for the Fund carefully and
retain for future reference.

THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK OR DEPOSITORY INSTITUTION, AND THE POLICY IS NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED.

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

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY THE CURRENT PROSPECTUS FOR
THE WRL SERIES FUND, INC. CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE IN ALL
STATES. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.

Prospectus Dated __________
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
DEFINITIONS ................................. 1
INTRODUCTION ................................. 3
INVESTMENT EXPERIENCE
INFORMATION ................................. 7
Rates of Return .............................. 7
Death Benefit, Cash Value and Net Surrender
Value Illustrations ..................... 8
Other Performance Data ..................... 13
AUSA LIFE AND THE
SERIES ACCOUNT .............................. 14
AUSA Life Insurance Company, Inc. ............ 14
The Series Account ........................... 14
POLICY BENEFITS .............................. 14
Death Benefit .............................. 14
When Insurance Coverage Takes Effect ......... 17
Cash Value ................................. 18
INVESTMENTS OF THE SERIES
ACCOUNT ....................................... 18
WRL Series Fund, Inc. ........................ 18
Addition, Deletion, or Substitution
of Investments ........................... 21
PAYMENT AND ALLOCATION OF
PREMIUMS .................................... 22
Issuance of a Policy ........................ 22
Premiums .................................... 22
Allocation of Premiums and Cash Value ...... 23
Dollar Cost Averaging ........................ 24
Asset Rebalancing Program .................. 24
Policy Lapse and Reinstatement ............... 25
CHARGES AND DEDUCTIONS ........................ 26
Premium Expense Charge ..................... 26
Surrender Charge ........................... 26
Pro Rata Decrease Charge ..................... 27
Cash Value Charges ........................... 27
Optional Cash Value Charges .................. 27
Charges Against the Series Account ......... 27
Expenses of the Fund ........................ 28
Group or Sponsored Policies .................. 28
Associate Policies ........................... 29
Builder Plus Programsm ..................... 29
POLICY RIGHTS ................................. 30
Loan Privileges .............................. 30
Surrender Privileges ........................ 31
Examination of Policy Privilege
("Free-Look") ........................... 32
Conversion Rights ........................... 32
Benefits at Maturity ........................ 32
Payment of Policy Benefits .................. 32

PAGE
-----
<S> <C>
GENERAL PROVISIONS ........................... 32
Postponement of Payments ..................... 32
The Contract ................................. 33
Suicide .................................... 33
Incontestability ........................... 33
Change of Owner or Beneficiary ............... 33
Assignment ................................. 33
Misstatement of Age or Sex .................. 33
Reports and Records ........................ 33
Optional Insurance Benefits .................. 33
Terminal Illness Accelerated Death
Benefit Rider ........................... 34
THE FIXED ACCOUNT ........................... 35
Fixed Account Value ........................ 35
Minimum Guaranteed and Current
Interest Rates ........................... 35
Allocations, Transfers and Withdrawals ...... 35
DISTRIBUTION OF THE POLICIES .................. 36
FEDERAL TAX MATTERS ........................... 36
Introduction ................................. 36
Tax Charges ................................. 36
Tax Status of the Policy ..................... 36
Tax Treatment of Policy Benefits ............ 37
Employment-Related Benefit Plans ............ 39
SAFEKEEPING OF THE SERIES
ACCOUNT'S ASSETS .............................. 39
VOTING RIGHTS OF THE SERIES
ACCOUNT ....................................... 39
STATE REGULATION OF AUSA LIFE ............... 39
REINSURANCE ................................. 40
EXECUTIVE OFFICERS AND DIRECTORS
OF AUSA LIFE ................................. 40
LEGAL MATTERS ................................. 41
LEGAL PROCEEDINGS ........................... 41
EXPERTS ....................................... 41
ADDITIONAL INFORMATION ........................ 41
INFORMATION ABOUT
AUSA LIFE'S
FINANCIAL STATEMENTS ........................ 41
APPENDIX A - ILLUSTRATION
OF BENEFITS ................................. 42
APPENDIX B - LONG TERM
MARKET TRENDS ................................. 45
INDEX TO FINANCIAL
STATEMENTS .................................... 47
APPENDIX C - SURRENDER CHARGE ............... 48
</TABLE>

The Policy is available only in the State of New York.

i
<PAGE>

DEFINITIONS

ACCOUNTS -- Allocation options including the Fixed Account and
Sub-Accounts of the Series Account.

ADMINISTRATIVE OFFICE - The mailing address of the Administrative Office
of AUSA Life is P.O. Box 9054, Clearwater, Florida 34618-9054.

ATTAINED AGE -- The Issue Age plus the number of completed Policy years.

ANNIVERSARY -- The same day and month as the Policy Date for each
succeeding year the Policy remains In Force.

BENEFICIARY -- The person or persons specified by the Owner as entitled
to receive the death benefit proceeds under the Policy.

CASH VALUE -- The sum of the values in each Sub-Account plus the Policy's value
in the Fixed Account.

FIXED ACCOUNT -- An allocation option other than the Series Account. The
Fixed Account is part of AUSA Life's General Account.

FUND -- WRL Series Fund, Inc., a registered management investment company
in which the assets of the Series Account are invested.

GENERAL ACCOUNT -- The assets of AUSA Life other than those allocated to
the Series Account or any other separate account.

IN FORCE -- Condition under which the coverage is active and the
Insured's life remains insured.

INITIAL PREMIUM -- The amount which must be paid before coverage begins.

INSURED -- The person upon whose life the Policy is issued.

ISSUE AGE -- Issue Age refers to the age on the Insured's birthday
nearest the Policy Date.

LAPSE -- Termination of the Policy at the end of the grace period.

LOAN RESERVE -- A part of the Fixed Account to which amounts are
transferred as collateral for Policy loans.

MATURITY DATE -- The date when coverage under the Policy will terminate
if the Insured is living and the Policy is In Force.

MINIMUM MONTHLY GUARANTEE PREMIUM -- During the No Lapse Period, an
amount as shown on the Policy Schedule Page, used to determine whether a grace
period will begin whenever Net Surrender Value is insufficient to meet monthly
deductions for cost of insurance, the Policy Charge and any optional cash value
charges.

MONTHLY ANNIVERSARY OR MONTHIVERSARY -- The same date in each succeeding
month as the Policy Date. For purposes of the Series Account, whenever the
Monthly Anniversary falls on a date other than a Valuation Date, the Monthly
Anniversary will be deemed to be the next Valuation Date.

NET SURRENDER VALUE -- The amount payable upon surrender of the Policy
equal to the Cash Value as of the date of surrender, less any surrender charge,
and less any outstanding Policy loan, plus any unearned loan interest.

NET PREMIUM -- The portion of the premium available for allocation to
either the Fixed Account or the Sub-Accounts of the Series Account equal to the
premium paid by the Policyowner less the applicable premium expense charges.

NO LAPSE DATE -- The No Lapse Date as specified in the Policy, which is
the fifth Policy Anniversary.

NO LAPSE PERIOD -- The period of time between the Policy Date and the No
Lapse Date, during which the Policy will not Lapse if certain conditions are
met, even though Net Surrender Value is insufficient to meet the monthly
deductions.

PLANNED PERIODIC PREMIUM -- A scheduled premium of a level amount at a
fixed interval over a specified period of time.

POLICY -- The flexible premium variable life insurance policy offered by
AUSA Life and described in this Prospectus.

POLICY DATE -- The date set forth in the Policy when insurance coverage
is effective and monthly deductions commence under the Policy. The Policy Date
is used to determine Policy years and Policy Months. Policy Anniversaries are
measured from the Policy Date.

POLICY MONTH -- A month beginning on the Monthly Anniversary.

POLICYOWNER ("OWNER") -- The person who owns the Policy and who may
exercise all rights under the Policy while living.

PORTFOLIO -- A separate investment portfolio of the Fund.

RECORD DATE -- The date the Policy is recorded on the books of AUSA Life
as an In Force Policy.

SERIES ACCOUNT -- AUSA Series Life Account, a separate investment account
established by AUSA Life to receive and invest Net Premiums allocated under the
Policy.

SPECIFIED AMOUNT -- The minimum death benefit payable under the Policy as
long as the Policy remains In Force. The death benefit proceeds will be reduced
by any outstanding indebtedness and any due and unpaid charges.

SUB-ACCOUNT -- A sub-division of the Series Account. Each Sub-Account
invests exclusively in the shares of a specified Portfolio of the Fund.

1
<PAGE>

TERMINATION -- Condition when the Insured's life is no longer insured
under the coverage provided.

VALUATION DATE -- Each day on which the New York Stock Exchange is open
for business.

VALUATION PERIOD -- The period commencing at the end of one Valuation
Date and continuing to the end of the next succeeding Valuation Date.

2
<PAGE>

INTRODUCTION

1. WHAT IS THE DIFFERENCE BETWEEN THE POLICY AND A CONVENTIONAL
FIXED-BENEFIT LIFE INSURANCE POLICY?

Like conventional fixed-benefit life insurance, as long as the
Policy remains In Force, the Policy will provide: (1) the payment of a
minimum death benefit to a Beneficiary upon the Insured's death; (2) the
accumulation of Cash Value; and (3) surrender rights and Policy loan
privileges.

The Policy differs from conventional fixed-benefit life insurance by
allowing Policyowners to allocate Net Premiums to one or more
Sub-Accounts of the Series Account, or to the Fixed Account, or to a
combination of both. Each Sub-Account invests in a designated Portfolio
of the Fund. The amount and/ or duration of the life insurance coverage
and the Cash Value of the Policy are not guaranteed and may increase or
decrease depending upon the investment experience of the Sub-Accounts.
Accordingly, the Policyowner bears the investment risk of any
depreciation in value of the underlying assets of the Series Account but
reaps the benefits of any appreciation in value. (See Allocation of
Premiums and Cash Value - Allocation of Net Premiums, p. 23.) Unlike
conventional fixed-benefit life insurance, a Policyowner also has the
flexibility, subject to certain restrictions (see Premiums - Premium
Limitations, p. 22), to vary the frequency and amount of premium payments
and to decrease the Specified Amount. Thus, unlike conventional
fixed-benefit life insurance, the Policy does not require a Policyowner
to adhere to a fixed premium schedule. Moreover, the failure to pay a
scheduled premium ("Planned Periodic Premium") will not itself cause the
Policy to Lapse, although additional premium payments may be necessary to
prevent Lapse if Net Surrender Value is insufficient to pay certain
monthly charges, and a grace period expires without a sufficient payment.
(See Policy Lapse and Reinstatement - Lapse, p. 25.)

2. WHAT DEATH BENEFIT OPTIONS ARE AVAILABLE UNDER THE POLICY?

The Policy provides the payment of benefits upon the death of the
Insured. The Policy contains three death benefit options. Under Death
Benefit Option A, the death benefit is the greater of the Specified
Amount of the Policy, or a specified percentage times the Cash Value of
the Policy on the date of death of the Insured. Under Death Benefit
Option B, the death benefit is the greater of the Specified Amount of the
Policy plus the Cash Value of the Policy on the date of death of the
Insured, or a specified percentage times the Cash Value of the Policy on
the date of death of the Insured. Under Death Benefit Option C, the death
benefit is equal to the greater of the amount payable under Death Benefit
Option A, or the Specified Amount times a factor equal to the lesser of
1.0, and four one-hundredths (.04) times the result of 95 minus the
Insured's Attained Age at death, plus the Cash Value of the Policy as of
the date of death of the Insured.

As long as the Policy remains In Force, the minimum death benefit
payable under any option will be the current Specified Amount. The amount
of death benefit will be reduced by any outstanding indebtedness and any
due and unpaid charges, and increased by any additional insurance
benefits added by rider and any unearned loan interest. Under AUSA Life's
current rules, the minimum Specified Amount for a Policy at issue for
Issue Ages 0-45 is $50,000, declining to $25,000 for Issue Ages 46 to 80.
The minimum Specified Amount will be set forth in the Policyowner's
Policy. (See Policy Benefits - Death Benefit, p. 14.)

Optional insurance benefits offered under the Policy include a
Children's Insurance Rider; an Other Insured Rider; an Accidental Death
Benefit Rider; a Disability Waiver Rider; a Disability Waiver and Monthly
Income Rider; a Primary Insured Rider, and a Primary Insured Rider Plus
Rider. (See Optional Cash Value Charges - Optional Insurance Benefits, p.
27.) The cost of these optional insurance benefits will be deducted from
Cash Value as part of the monthly deduction. (See Charges and Deductions
- Cash Value Charges, p. 27.)

A Terminal Illness Accelerated Death Benefit Rider is automatically
included with every Policy at no additional charge. This rider makes a
"Single Sum Benefit" available prior to the Insured's death if the
Insured has incurred a condition resulting from illness which, as
determined by a Physician, has reduced the Insured's life expectancy as
defined in the rider. (See General Provisions - Terminal Illness
Accelerated Death Benefit Rider, p. 34.)

Benefits under the Policy may be paid in a lump sum or under one of
the settlement options set forth in the Policy. (See Payment of Policy
Benefits - Settlement Options, p. 32.)

3. HOW MAY THE AMOUNT OF THE DEATH BENEFIT AND CASH VALUE VARY?

Under any of the death benefit options, as long as the Policy
remains In Force, the death benefit will not be less than the current
Specified Amount of the Policy. The amount of death benefit will be
reduced by any outstanding policy loan, plus any unearned loan interest,
and any due and unpaid charges. The death benefit may, however, exceed
the Specified Amount under certain circumstances. The amount by which the
death benefit exceeds the Specified Amount depends upon the option chosen
and the Cash Value of the Policy. (See Policy Benefits - Death Benefit,
p. 14.)

The Policy's Cash Value in the Series Account will reflect the
amount and frequency of premium payments, the investment experience of
the chosen

3
<PAGE>

Sub-Accounts of the Series Account, any cash withdrawals, and any
charges imposed in connection with the Policy. The entire investment
risk for amounts allocated to the Sub-Accounts of the Series Account is
borne by the Policyowner; AUSA Life does not guarantee a minimum Cash
Value. (See Policy Benefits - Cash Value, p. 18.)

4. WHAT FLEXIBILITY DOES A POLICYOWNER HAVE TO ADJUST THE AMOUNT OF THE
DEATH BENEFIT?

The Policyowner has significant flexibility to adjust the death
benefit payable by changing the Death Benefit Option, by decreasing the
Specified Amount of the Policy or by adding riders to increase the total
death benefit payable. No such change or decrease may be made during the
first three Policy years. The Policyowner may either change the Death
Benefit Option or decrease the Specified Amount, but not both, only once
each Policy year after the third Policy year. (See Policy Benefits -
Change in Death Benefit Option, p. 16, and Death Benefit - Decrease in
Specified Amount, p. 17.)

5. WHAT FLEXIBILITY DOES A POLICYOWNER HAVE IN CONNECTION WITH PREMIUM
PAYMENTS?

A Policyowner has considerable flexibility concerning the amount and
frequency of premium payments. AUSA Life will require the Policyowner to
pay an Initial Premium, at least equal to a minimum monthly guarantee
premium set forth in the Policy, before insurance coverage is In Force.
Thereafter, a Policyowner may, subject to certain restrictions, make
premium payments in any amount and at any frequency. (See Payment and
Allocation of Premiums - Premiums, p. 22.) Each Policyowner will also
determine a Planned Periodic Premium schedule. The schedule will provide
a premium payment of a level amount at a fixed interval over a specified
period of time. The amount and frequency of Planned Periodic Premium
payments will be set forth in the Policy. The amount and frequency of
Planned Periodic Premium payments may be changed upon written request.
(See Premiums - Planned Periodic Premiums, p. 22.)

6. HOW LONG WILL THE POLICY REMAIN IN FORCE?

The Policy will lapse only when Net Surrender Value is insufficient
to pay the monthly deduction (see Charges and Deductions - Cash Value
Charges, p. 27), and a grace period expires without a sufficient payment
by the Policyowner. (See Loan Privileges - Indebtedness, p. 31.) However,
until the No Lapse Date as provided in the Policy, the Policy will remain
In Force and no grace period will begin provided there has been no
addition of any riders, the total premiums received (minus any
withdrawals, any outstanding loans, and any pro rata Decrease Charge
deducted from the Cash Value) equals or exceeds the Minimum Monthly
Guarantee Premium shown in the Policy times the number of months since
the Policy Date, including the current month. The Minimum Monthly
Guarantee Premium is set forth in the Policy, unless changed due to a
requested change under the Policy by the Policyowner, at which time the
Policyowner will be notified of the new Minimum Monthly Guarantee Premium
and its effective date. The Policy, therefore, differs in two important
respects from a conventional life insurance policy. First, the failure to
pay a Planned Periodic Premium will not automatically cause the Policy to
lapse. Second, after the No Lapse Date, the Policy can lapse even if
Planned Periodic Premiums or premiums in other amounts have been paid, if
Net Surrender Value is insufficient to pay the monthly deduction, and a
grace period expires without a sufficient payment. Such a Lapse could
happen if the investment experience has been sufficiently unfavorable to
have resulted in a decrease in the Net Surrender Value, or the Net
Surrender Value has decreased because not enough premiums have been paid
to offset the monthly deductions. If the Insured is alive and the Policy
is In Force on the Maturity Date, which is the Insured's 95th birthday,
the Policy will then terminate and no longer be In Force. Upon request,
AUSA Life will extend the Maturity Date, as long as there appears to be
no unfavorable tax consequences. The Net Surrender Value as of the
Maturity Date will be paid to the Policyowner. (See Policy Rights -
Benefits at Maturity, p. 32.)

7. HOW ARE NET PREMIUMS ALLOCATED?

The portion of the premium available for allocation ("Net Premium")
equals the premium paid less the Premium Expense Charge. (See Charges and
Deductions - Premium Expense Charge, p. 26.) The Policyowner initially
determines the allocation of the Net Premium among the Sub-Accounts of
the Series Account, each of which invests in shares of a designated
Portfolio of the Fund, or to the Fixed Account, or a combination. Each
Portfolio has a different investment objective. (See Investments of the
Series Account - WRL Series Fund, Inc., p. 18.) The allocation of future
Net Premiums may be changed without charge at any time by providing AUSA
Life with written notification from the Policyowner, or by calling AUSA
Life's toll-free number, 1-800-322-7160. AUSA Life reserves the right to
impose a charge of $25 for each change in allocation instructions in
excess of one per Policy quarter.

8. IS THERE A "FREE-LOOK" PERIOD?

Yes, the Policy provides a free-look period. The Policyowner may
cancel the Policy within 10 days after the Policyowner receives it. AUSA
Life will make a refund in accordance with a calculation described under
Policy Rights - Examination of Policy Privilege ("Free-Look"), p. 32. If
the Policy is returned within the Free-Look period, it will be void from
the beginning and a refund will be made to the Owner. The refund will
equal the total of all premiums paid for this Policy.

4
<PAGE>

9. MAY THE POLICY BE SURRENDERED?

Yes, the Policyowner may totally surrender the Policy at any time
and receive the Net Surrender Value of the Policy. Subject to certain
limitations, the Policyowner may also make cash withdrawals from the
Policy at any time after the first Policy year and prior to the Maturity
Date. (See Policy Rights - Surrender Privileges, p. 31.) If Death Benefit
Option A is in effect, cash withdrawals will reduce the Policy's
Specified Amount by the amount of the cash withdrawal.

10. WHAT IS THE LOAN PRIVILEGE?

After the first Policy Anniversary, a Policyowner may obtain a
Policy loan in any amount which is not greater than 90% of the Cash
Value, less any surrender charge and any already outstanding loan. AUSA
Life reserves the right to permit a Policy Loan prior to the first Policy
Anniversary for Policies issued pursuant to a transfer of cash values
from another life insurance policy, under Section 1035(a) of the Internal
Revenue Code of 1986, as amended. It should be noted, however, that a
loan taken from, or secured by, a Policy may be treated as a taxable
distribution, and also may be subject to a penalty tax. (See Federal Tax
Matters, p. 36.)

The interest rate on a Policy loan is 5.2% payable annually in
advance (equivalent to an effective annual rate of 5.5%). The requested
loan amount, plus interest in advance, will be transferred from the
Accounts to the Loan Reserve and credited at the end of each Policy year
with guaranteed interest at a rate of 4% per year. AUSA Life may from
time to time, and in its sole discretion, credit the Loan Reserve with
additional interest at a rate higher than 4% per year. The Loan Reserve
is currently credited with a rate higher than 4% per year. The minimum
loan amount is generally $500. (See Policy Rights - Loan Privileges, p.
29.) Upon repayment of a loan, amounts in the Loan Reserve in excess of
the outstanding value of the loan are currently transferred to the
Accounts in the same manner as Net Premium allocations; however, AUSA
Life may in the future require these amounts to be transferred to the
Fixed Account. (See The Fixed Account, p. 35.)

There are risks involved in taking a Policy loan, including the
potential for a Policy to lapse if anticipated earnings, taking into
account any outstanding loans, are not achieved, as well as adverse tax
consequences which occur if a Policy lapses with loans outstanding. (See
Federal Tax Matters - Tax Treatment of Policy Benefits, p. 37.)

11. WHAT CHARGES ARE ASSESSED IN CONNECTION WITH THE POLICY?

Certain charges are deducted from each premium. A Premium Expense
Charge equal to 6.0% of the premiums paid through the end of the tenth
Policy year is deducted to compensate AUSA Life for distribution expenses
incurred in connection with the Policy and for state premium taxes. After
the tenth Policy year, the Premium Expense Charge reduces to 2.5%. In
addition, $3.00 per premium payment is deducted to compensate AUSA Life
for costs associated with premium billing and collection. (See Charges
and Deductions - Premium Expense Charge, p. 26.)

A "surrender charge" is deducted if the Policy is surrendered during
the first fifteen Policy years. The Surrender Charge imposed upon early
surrender or a decrease in Specified Amount will be significant. As a
result, you should purchase a Policy only if you have the financial
capability to keep it In Force for a substantial period of time. The
surrender charge is calculated by multiplying the Specified Amount as of
the Policy Date by the Surrender Charge per $1,000 of Specified Amount as
shown in the Policy for the Policy year during which surrender occurs. In
addition, a pro rata Decrease Charge equal to a pro rata portion of the
Surrender Charge will be calculated and charged to the Cash Value for any
decreases in the Policy's Specified Amount which occur during the first
fifteen Policy years. Any future Surrender Charges will be reduced
proportionately according to the amount of any previous pro rata Decrease
Charge. (See Charges and Deductions - Surrender Charge, p. 26 and Pro
Rata Decrease Charge, p. 27.)

Cost of insurance charges and a current $5.00 monthly Policy Charge,
guaranteed never to exceed $7.50, are deducted monthly from the Cash
Value of each Policy to compensate AUSA Life for the cost of insurance
and the cost of administering the Policy. Cost of insurance charges will
vary with the Policy's Specified Amount, the death benefit Option chosen
and the investment experience of the Portfolios in which the Policy is
invested. (See Charges and Deductions - Cash Value Charges, p. 27.)

Optional Cash Value charges are deducted from the Policy as a result
of Policyowner changes or elections made to the Policy. Optional Cash
Value charges include charges for: optional insurance benefits, certain
Cash Value transfers and cash withdrawals. (See Charges and Deductions -
Optional Cash Value Charges, p. 27.)

AUSA Life charges the Sub-Accounts of the Series Account for the
mortality and expense risks AUSA Life assumes. The charge is made daily
at an effective annual rate of 0.90% of the average daily net assets of
each Sub-Account of the Series Account. AUSA Life currently intends to
reduce this charge to 0.75% after the first fifteen Policy years.
However, such reduction is not guaranteed, and AUSA Life reserves the
right to maintain this charge at the 0.90% level after the first fifteen
Policy years. (See Charges and Deductions - Charges Against the Series
Account, p. 27.)

5
<PAGE>

Each Sub-Account invests in a corresponding Portfolio of the Fund.
Each Portfolio pays investment management fees based on a percentage of
the Portfolio's average daily net assets. The annual management fees and
other Fund expenses for the Portfolios are provided on p. 7, under the
heading Fund Annual Expenses. Effective January 1, 1997, the Fund adopted
a Plan of Distribution pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "1940 Act") ("Distribution Plan")
and, pursuant to the Plan, has entered into a Distribution Agreement with
InterSecurities, Inc. ("ISI"), principal underwriter for the Fund.

Under the Distribution Plan, the Fund, on behalf of the Portfolios,
is authorized to pay to various service providers, as direct payment for
expenses incurred in connection with the distribution of a Portfolio's
shares, amounts equal to actual expenses associated with distributing a
Portfolio's shares, up to a maximum rate of 0.15% (fifteen one-hundredths
of one percent) on an annualized basis of the average daily net assets.
This fee is measured and accrued daily and paid monthly. ISI has
determined that it will not seek payment by the Fund of distribution
expenses incurred with respect to any Portfolio during the fiscal year
ending December 31, 1998. Prior to ISI's seeking reimbursement,
Policyowners will be notified in advance. In addition, the Portfolios
incur certain operating expenses. (See Investments of the Series Account
- WRL Series Fund, Inc., p. 18.)

No charges are currently made from the Series Account for Federal or
state income taxes. Should AUSA Life determine that such taxes may be
imposed by Federal or state agencies, AUSA Life may make deductions from
the Series Account to pay these taxes. (See Federal Tax Matters, p. 36.)

12. ARE TRANSFERS PERMITTED AMONG THE ACCOUNTS?

Yes. A Policyowner may transfer Cash Value among the Sub-Accounts of
the Series Account or from the Sub-Accounts to the Fixed Account.
Transfers may also be made from the Fixed Account to the Sub-Accounts
subject to certain restrictions. (See The Fixed Account - Allocations,
Transfers and Withdrawals, p. 35.) AUSA Life reserves the right to charge
a $25 fee for each transfer in excess of one per Policy month or twelve
per Policy year. This charge will not be increased. (See Payment and
Allocation of Premiums - Allocation of Premiums and Cash Value -
Transfers, p. 23.)

13. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING A POLICY?

At present, there is limited guidance for determining whether a
Policy meets the requirements prescribed by tax legislation for tax
treatment as a life insurance contract under Section 7702 of the Internal
Revenue Code. With respect to a Policy that is issued on the basis of a
rate class using Ultimate Select, non-tobacco use, Select, non-tobacco
use, Ultimate Standard, tobacco use, Standard, tobacco use, while there
is some uncertainty due to the limited guidance on Section 7702, AUSA
Life nonetheless believes that a Policy should meet the Section 7702
definition of a life insurance contract. With respect to a Policy that is
issued on a substandard rate class, there is less guidance to determine
whether such a Policy meets the Section 7702 definition of a life
insurance contract. Thus, it is not clear whether such a Policy would
satisfy Section 7702, particularly if the Policyowner pays the full
amount of premiums permitted under the Policy. If it is subsequently
determined that a Policy does not qualify as a life insurance contract,
AUSA Life will take whatever steps are appropriate and reasonable to
attempt to have such a Policy comply with Section 7702. For these
reasons, AUSA Life reserves the right to modify the Policy as necessary
to attempt to qualify it as a life insurance contract under Section 7702.
Assuming that a Policy qualifies as a life insurance contract for Federal
income tax purposes, the death benefit paid under the Policy generally
should be fully excludable from the gross income of the Beneficiary for
Federal income tax purposes. Moreover, the Owner should not be deemed in
constructive receipt of Cash Values under a Policy until there is a
distribution from the Policy.

A Policy may be treated as a "modified endowment contract" depending
upon the amount of premiums paid in relation to the death benefit. (See
Tax Treatment of Policy Benefits - Modified Endowment Contracts, p. 37.)
If the Policy is a modified endowment contract, then all pre-death
distributions, including Policy loans and loans secured by a Policy, will
be treated first as a distribution of taxable income to the extent of any
gain and then as a return of basis or investment in the contract. In
addition, prior to age 591/2 any distributions of gains generally will be
subject to a 10% penalty tax.

If the Policy is not a modified endowment contract, distributions
generally will be treated first as a return of basis or investment in the
contract and then as disbursing taxable income. Moreover, loans and loans
secured by a Policy will not be treated as distributions. Finally,
neither distributions nor loans from a Policy that is not a modified
endowment contract are subject to the 10% penalty tax. For further
elaboration on the tax consequences of a Policy, see Federal Tax Matters,
p. 36.

6
<PAGE>

FUND ANNUAL EXPENSES* (AS A % OF FUND AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
Aggressive Emerging C.A.S.E.
Growth Growth Growth Global Balanced Value Equity Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees ..................... 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
Other Expenses (after reimbursement) 0.18% 0.14% 0.08% 0.19% 0.17% 0.20% 0.20%
Total Fund Annual Expenses ......... 0.98% 0.94% 0.88% 0.99% 0.97% 1.00% 1.00%
</TABLE>

<TABLE>
<CAPTION>
Third
Avenue Strategic
Value Bond Total Return
Portfolio** Portfolio Portfolio
------------- ----------- --------------
<S> <C> <C> <C>
Management Fees ..................... 0.80% 0.50% 0.80%
Other Expenses (after reimbursement) 0.20% 0.14% 0.11%
Total Fund Annual Expenses ......... 1.00% 0.64% 0.91%

<CAPTION>
Tactical
Growth & Money Asset International
Income Market Allocation Equity U.S. Equity
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Management Fees ..................... 0.75% 0.40% 0.80% 1.00% 0.80%
Other Expenses (after reimbursement) 0.25% 0.12% 0.10% 0.30% 0.25%
Total Fund Annual Expenses ......... 1.00% 0.52% 0.90% 1.30% 1.05%
</TABLE>

* Effective January 1, 1997, the Fund adopted a Plan of Distribution pursuant
to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to the
Plan, has entered into a Distribution Agreement with ISI, principal
underwriter for the Fund. Under the Distribution Plan, the Fund, on behalf
of the Portfolios, is authorized to pay to various service providers, as
direct payment for expenses incurred in connection with the distribution of
a Portfolio's shares, amounts equal to actual expenses associated with
distributing a Portfolio's shares, up to a maximum rate of 0.15% (fifteen
one-hundredths of one percent) on an annualized basis of the average daily
net assets. This fee is measured and accrued daily and paid monthly. ISI
has determined that it will not seek payment by the Fund of distribution
expenses incurred with respect to any Portfolio during the fiscal year
ending December 31, 1998. Prior to ISI's seeking reimbursement,
Policyowners will be notified in advance.
** Because the Third Avenue Value Portfolio commenced operations on January 2,
1998, the percentages set forth as "Other Expenses" and "Total Fund Annual
Expenses" are estimates.

The purpose of the preceding Table is to assist the Policyowner in
understanding the various costs and expenses that a Policyowner will bear
directly and indirectly. The Table reflects charges and expenses of the
Portfolios of the Fund for the fiscal year ended December 31, 1997, except that
the "Other Expenses" and "Total Fund Annual Expenses" for the Third Avenue
Value Portfolio are estimates. Expenses of the Fund may be higher or lower in
the future. Certain states and other governmental entities may impose a premium
tax, which the Table does not include. For more information on the charges
described in this Table, see Charges And Deductions on page 26 and the Fund
Prospectus which accompanies this Prospectus.

WRL Investment Management, Inc. ("WRL Management") has undertaken, until
at least April 30, 1998, to pay Fund expenses on behalf of the Portfolios to
the extent normal operating expenses of a Portfolio exceed a stated percentage
of each Portfolio's average daily net assets. The expense limitation for the
Aggressive Growth, Emerging Growth, Growth, Global, Balanced, Strategic Total
Return, Growth & Income, Tactical Asset Allocation, Value Equity, C.A.S.E.
Growth and Third Avenue Value Portfolio is 1.00% of the average daily net
assets; 0.70% of the average daily net assets of the Bond and Money Market
Portfolios; 1.50% of the average daily net assets of the International Equity
Portfolio; and 1.30% of the average daily net assets of the U.S. Equity
Portfolio. In 1997, WRL Management, reimbursed the C.A.S.E. Growth Portfolio in
the amount of $ . Without such reimbursement, the total annual Fund
expenses during 1997 for the C.A.S.E. Growth Portfolio would have been %.

INVESTMENT EXPERIENCE INFORMATION

The information provided in this section shows the historical investment
experience of the Fund and hypothetical illustrations of the Policy based on
the historical investment experience of the Fund. It does not represent or
project future investment performance.

The Policies became available for sale in of 1998. The Series
Account was established on October 24, 1994 and commenced operations on ,
1998. The Fund commenced operations on October 2, 1986. The rates of return
shown below depict the actual investment experience of each Portfolio of the
Fund for the periods shown. The illustrations of death benefits, Cash Values
and Net Surrender Values shown below depict these Policy features for a
hypothetical Policy as if it had been purchased on January 1, 1987 by an
Insured in the age and risk classes indicated, based on the historical
investment experience of the Portfolio indicated since January 1, 1987. The
actual rate of return for each Portfolio in each calendar year was assumed to
be uniformly earned throughout that year. The actual performance of the
Portfolios, however, has and will vary throughout the year.

RATES OF RETURN

The rates of return shown below are based on the actual investment
performance, as described above, after the deduction of investment management
fees and direct Fund expenses, of the Portfolios of the Fund. The rates are
average annual compounded rates of return for the periods ended on December 31,
1997. (See Investments of the Series Account - WRL Series Fund, Inc., p. 18.)

These rates of return do not reflect the annual charge against the assets
of the Series Account of 0.90% for mortality and expense risks. These rates of
return also do not reflect the charges deducted from premiums, monthly
deductions from Cash Value, or surrender charges. (See

7
<PAGE>

Charges and Deductions - Premium Expense Charges, p. 26; Surrender Charge, p.
26; and Cash Value Charges, p. 27.) Accordingly, these rates of return do not
illustrate how actual investment performance will affect benefits under the
Policies. (See, however, Death Benefit, Cash Value and Net Surrender Value
Illustrations, below.) Moreover, these rates of return are not an estimate,
projection or guarantee of future performance.

Also shown are comparable figures for the unmanaged Standard & Poor's
Index of 500 Common Stocks (S&P 500), a widely used measure of stock market
performance. As an unmanaged index, the S&P 500 does not reflect any deduction
for the expenses of operating and managing an investment portfolio.

AVERAGE ANNUAL COMPOUNDED RATES OF RETURN
FOR THE PERIODS ENDED ON DECEMBER 31, 1997

<TABLE>
<CAPTION>
Fund Portfolio Inception* 5 Years 3 Years 1 Year
- ------------------------ ------------ --------- --------- -------
<S> <C> <C> <C> <C>
Growth % % % %
Global % % % %
Bond % % % %
Money Market % % % %
Emerging Growth % N/A % %
Strategic Total Return % N/A % %
Aggressive Growth % N/A % %
Balanced % N/A % %
Growth & Income % N/A % %
Tactical Asset
Allocation % N/A N/A %
C.A.S.E Growth % N/A N/A %
Value Equity % N/A N/A %
U.S. Equity % N/A N/A %
International Equity % N/A N/A %
S&P 500 % % % %
</TABLE>

* The Growth, Bond and Money Market Portfolios of the Fund commenced operations
on October 2, 1986. The Global Portfolio commenced operations on December
3, 1992. The Emerging Growth and Strategic Total Return Portfolios
commenced operations on March 1, 1993. The Aggressive Growth, Balanced and
Growth & Income Portfolios commenced operations on March 1, 1994. The
Tactical Asset Allocation Portfolio commenced operations on January 3,
1995. The C.A.S.E. Growth Portfolio commenced operations on May 1, 1995.
The Value Equity Portfolio commenced operations on May 1, 1996. The U.S.
Equity and International Equity Portfolios commenced operations on January
2, 1997. The S&P 500 returns are based on an inception date of October 2,
1986.

Because the Third Avenue Value Portfolio had not yet commenced operations as of
December 31, 1997, the above chart does not reflect rates of return for this
Portfolio.

Additional information regarding the investment performance of the
Portfolios of the Fund appears in the attached Prospectus for the Portfolios of
the Fund.

DEATH BENEFIT, CASH VALUE AND NET SURRENDER VALUE ILLUSTRATIONS

In order to demonstrate how the actual investment experience of the
Portfolios will affect the Option A death benefits, the Policy Cash Value and
the Net Surrender Value, the following hypothetical illustrations are based on
the actual investment experience of each Portfolio as if the Policy had been
available for sale and issued on January 1, 1987. The actual rate of return in
each calendar year was assumed to be uniformly earned throughout that year. The
actual performance of the Portfolios, however, has and will vary throughout the
year, resulting in variable monthly deductions from Cash Value that could
affect performance. These illustrations do not represent what may happen in the
future.

The illustrations show Option A based on the payment of annual premiums
of $2,000 at the beginning of each Policy year, and a Specified Amount of
$165,000 for a male age 35. The illustrations assume that the Insured is placed
in AUSA Life's Ultimate Select, non-tobacco use, underwriting rate class. (See
Cash Value Charges - Cost of Insurance, p. 27.) The illustrations also assume
that the Policy's entire Cash Value is allocated to the Sub-Account
corresponding to the Portfolio shown. These illustrated values would be
different if the Policyowner had chosen Death Benefit Option B or C.

The amounts shown for death benefits, Cash Values and Net Surrender
Values take into account all charges and deductions from the Policy, the Series
Account and the Fund (see Charges and Deductions - Premium Expense Charge, p.
26, Charges Against the Series Account, p. 27, and Investments of the Series
Account - WRL Series Fund, Inc., p. 18).

For each Portfolio of the Fund, one illustration is based on the
guaranteed cost of insurance rates, while the other illustration is based on
the current cost of insurance rates. These examples of Policy performance are
for the specific age, sex, rate class, premium payment pattern and Policy set
forth above. The amount and timing of premium payments would affect individual
Policy benefits as would any withdrawals or loans.

This Prospectus also contains illustrations based on assumed rates of
return. See Appendix A, pages 42-44.

The following example shows how the hypothetical net return of the Growth
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1987. This example assumes that the Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

8
<PAGE>

GROWTH PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------ -----------------------
Policy Anniversary on January 1 of Current Guaranteed Current Guaranteed
- ------------------------------------ --------- ------------ --------- -----------
<S> <C> <C> <C> <C>
1988 .............................. $ $ $ $
1989* ..............................
1990* ..............................
1991* ..............................
1992* ..............................
1993* ..............................
1994* ..............................
1995* ..............................
1996* ..............................
1997* ..............................
1998* ..............................
</TABLE>

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Bond
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1987. This example assumes that Net Premiums and related Cash Values were in
the Sub-Account for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.

BOND PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------ -----------------------
Policy Anniversary on January 1 of Current Guaranteed Current Guaranteed
- ------------------------------------ --------- ------------ --------- -----------
<S> <C> <C> <C> <C>
1988 .............................. $ $ $ $
1989* ...........................
1990* ...........................
1991* ...........................
1992* ...........................
1993* ...........................
1994* ...........................
1995* ...........................
1996* ..............................
1997* ..............................
1998* ..............................
</TABLE>

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

9
<PAGE>

The following example shows how the hypothetical net return of the Money
Market Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1987. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
MONEY MARKET PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

<TABLE>
<CAPTION>
Cash Value Net Surrender Value
------------------------ -----------------------
Policy Anniversary on January 1 of Current Guaranteed Current Guaranteed
- ------------------------------------ --------- ------------ --------- -----------
<S> <C> <C> <C> <C>
1988 .............................. $ $ $ $
1989* ...........................
1990* ...........................
1991* ...........................
1992* ...........................
1993* ...........................
1994* ...........................
1995* ...........................
1996* ..............................
1997* ..............................
1998* ..............................
</TABLE>

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the Global
Portfolio of the Fund would have affected benefits for a Policy dated January
1, 1993, if the Global Portfolio had been offered by the Policy as of January
1, 1993. This example assumes that Net Premiums and related Cash Values were in
the Sub-Account for the entire period and that the values were determined on
the first Valuation Date following January 1st of each year.

GLOBAL PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Emerging Growth Portfolio of the Fund would have affected benefits for a Policy
dated January 1, 1994. This example assumes that Net Premiums and related Cash
Values were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

EMERGING GROWTH PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

10
<PAGE>

The following example shows how the hypothetical net return of the
Strategic Total Return Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1994. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.
STRATEGIC TOTAL RETURN PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Aggressive Growth Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1995. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.
AGGRESSIVE GROWTH PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Balanced Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1995. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
BALANCED PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

11
<PAGE>

The following example shows how the hypothetical net return of the Growth
& Income Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1995. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

GROWTH & INCOME PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
Tactical Asset Allocation Portfolio of the Fund would have affected benefits
for a Policy dated January 1, 1995. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

TACTICAL ASSET ALLOCATION PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
C.A.S.E. Growth Portfolio of the Fund would have affected benefits for a Policy
dated January 1, 1997, if the C.A.S.E. Growth Portfolio had been offered by the
Policy as of January 1, 1996. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.

C.A.S.E. GROWTH PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

12
<PAGE>

The following example shows how the hypothetical net return of the Value
Equity Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1997, if the Value Equity Portfolio had been offered by the Policy
as of January 1, 1996. This example assumes that Net Premiums and related Cash
Values were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.

VALUE EQUITY PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

* For each year shown, benefits and values reflect only premiums paid during
previous Policy years.

The following example shows how the hypothetical net return of the
International Equity Portfolio of the Fund would have affected benefits for a
Policy dated January 1, 1997. This example assumes that Net Premiums and
related Cash Values were in the Sub-Account for the entire period and that the
values were determined on the first Valuation Date following January 1st of
each year.
INTERNATIONAL EQUITY PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

The following example shows how the hypothetical net return of the U.S.
Equity Portfolio of the Fund would have affected benefits for a Policy dated
January 1, 1997. This example assumes that Net Premiums and related Cash Values
were in the Sub-Account for the entire period and that the values were
determined on the first Valuation Date following January 1st of each year.
U.S. EQUITY PORTFOLIO
Male, Issue Age 35, $2,000 Annual Premium
($165,000 Specified Amount, Ultimate Select Risk)
Death Benefit Option A
Both Current and Guaranteed Cost of Insurance Rates

Because the Third Avenue Value Portfolio had not yet commenced operations
as of December 31, 1997, there are no hypothetical illustrations for this
Portfolio.

OTHER PERFORMANCE DATA

AUSA Life may compare the performance of each Sub-Account in advertising
and sales literature to the performance of other variable life issuers in
general, or to the performance of particular types of variable life insurance
policies investing in mutual funds, or investment series of mutual funds, with
investment objectives similar to each of the Sub-Accounts whose performance is
reported by Lipper Analytical Services, Inc. ("Lipper") and Morningstar, Inc.
("Morningstar") or reported by other services, companies, individuals or other
industry or financial publications of general interest, such as Forbes, Money,
The Wall Street Journal, Business Week, Barron's, Kiplinger's Personal Finance
and Fortune. Lipper and Morningstar are widely used independent research
services which monitor and rank the performance of variable life insurance
policies in each of the major categories of investment objectives on an
industry-wide basis.

Lipper's and Morningstar's rankings include variable annuity contracts as
well as variable life insurance policies. The performance analyses prepared by
Lipper and Morningstar rank such policies and contracts on the basis of total
return, assuming reinvestment of distributions,

13
<PAGE>

but do not take sales charges, redemption fees or certain expense deductions at
the separate account level into consideration.

AUSA Life may also compare the performance of each Sub-Account in
advertising and sales literature to the Standard & Poor's Index of 500 Common
Stocks, a widely used measure of stock market performance, or other widely
recognized indices. Unmanaged indices may assume the reinvestment of dividends,
but usually do not reflect any "deduction" for the expense of operating or
managing an investment portfolio.

In addition, AUSA Life may, as appropriate, compare each Sub-Account's
performance to that of other types of investments such as certificates of
deposit, savings accounts and U.S. Treasuries, or to certain interest rate and
inflation indices, such as the Consumer Price Index, which is published by the
U.S. Department of Labor and measures the average change in prices over time of
a fixed "market basket" of certain specified goods and services. Similar
comparisons of Sub-Account performance may also be made with appropriate
indices measuring the performance of a defined group of securities widely
recognized by investors as representing a particular segment of the securities
markets. For example, Sub-Account performance may be compared with Donoghue
Money Market Institutional Average (money market rates), Lehman Brothers
Corporate Bond Index (corporate bond interest rates) or Lehman Brothers
Government Bond Index (long-term U.S. Government obligation interest rates).

AUSA LIFE AND THE SERIES ACCOUNT

AUSA LIFE INSURANCE COMPANY, INC.

AUSA Life is incorporated under the laws of New York. AUSA Life is a
stock life insurance company engaged in the business of writing life insurance
policies and annuity contracts. AUSA Life is admitted to do business in 39
states and the District of Columbia. AUSA Life's principal business office is
located in Purchase, New York; however, the Administrative Office and mailing
address for all Policy transactions is P.O. Box 9054, Clearwater, FL
34618-9054. AUSA Life is a wholly-owned subsidiary of First AUSA Life Insurance
Company ("First AUSA"), a stock life insurance company which is wholly-owned by
AEGON USA, Inc. ("AEGON USA"). AEGON USA is a financial services holding
company whose primary emphasis is on life and health insurance and annuity and
investment products. AEGON USA is a wholly-owned indirect subsidiary of AEGON
nv, a Netherlands corporation, which is a publicly traded international
insurance group.

PUBLISHED RATINGS OF AUSA LIFE. AUSA Life may from time to time publish
in advertisements, sales literature and reports to Policyowners, the ratings
and other information assigned to it by one or more independent rating
organizations such as A.M. Best Company ("A.M. Best"), Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Insurance Rating Services
("Standard & Poor's"), and Duff & Phelps Credit Rating Co. ("Duff & Phelps").
A.M. Best's and Moody's 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. Standard &
Poor's and Duff & Phelps provide ratings which measure the claims-paying
ability of insurance companies. These ratings are opinions of an operating
insurance company's financial capacity to meet the obligations of its insurance
policies in accordance with their terms. Claims-paying ability ratings do not
refer to an insurer's ability to meet non-policy obligations (i.e., debt/
commercial paper).

THE SERIES ACCOUNT

AUSA Series Life Account ("Series Account") was established by AUSA Life
as a separate account on October 24, 1994. The Series Account meets the
definition of a "separate account" under the Federal securities laws. The
Series Account will receive and invest the Net Premiums paid under this Policy
and other flexible premium variable life insurance policies issued by AUSA
Life.

Although the assets of the Series Account are the property of AUSA Life,
the New York Law, under which the Series Account was established, provides that
the assets in the Series Account attributable to the Policies are not
chargeable with liabilities arising out of any other business which AUSA Life
may conduct. The assets of the Series Account shall, however, be available to
cover the liabilities of the General Account of AUSA Life to the extent that
the Series Account's assets exceed its liabilities arising under the Policies
supported by it.

The Series Account is currently divided into fifteen Sub-Accounts. Each
Sub-Account invests exclusively in shares of a single Portfolio of the Fund.
Income and both realized and unrealized gains or losses from the assets of each
Sub-Account of the Series Account are credited to or charged against that
Sub-Account without regard to income, gains or losses from any other
Sub-Account of the Series Account or arising out of any other business AUSA
Life may conduct.

POLICY BENEFITS

DEATH BENEFIT

Policyowners designate in the initial application one of three death
benefit options offered under the Policy: Death Benefit Option A ("Option A"),
Death Benefit Option B ("Option B") and Death Benefit Option C ("Option C"). As
long as the Policy remains In Force, (see Policy Lapse and Reinstatement -
Lapse, p. 25), AUSA Life will, upon receiving due proof of the Insured's death,
pay the death benefit proceeds of a Policy to the named Beneficiary in
accordance with the designated death benefit option. The amount of the death
benefit proceeds payable will be determined at the end of the Valuation Period
during which the Insured dies. The proceeds may be paid in a lump sum or under
one or more of the settlement options set forth in the Policy. (See Payment of
Policy Benefits - Settlement

14
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Options, p. 32.) AUSA Life guarantees that as long as the Policy remains In
Force (see Policy Lapse and Reinstatement - Lapse, p. 25), the death benefit
proceeds under any option will never be less than the Specified Amount of the
Policy, but the proceeds will be reduced by any outstanding indebtedness and
any due and unpaid charges. These proceeds will be increased by any additional
insurance In Force provided by rider and any unearned loan interest.

OPTION A. The death benefit is the greater of (i) the Specified Amount
of the Policy, or (ii) a specified percentage (the "limitation percentage")
times the Cash Value of the Policy on the date of death of the Insured. The
limitation percentage is 250% for an Insured age 40 or below on the Policy
Anniversary prior to the date of death. For an Insured with an Attained Age
over 40 on a Policy Anniversary, the percentage declines as shown in the
following Limitation Percentage Table. Accordingly, under Option A the death
benefit will remain level unless the limitation percentage times the Cash Value
exceeds the Specified Amount, in which case the amount of the death benefit
will vary as the Cash Value varies.

ILLUSTRATION OF OPTION A. For purposes of this illustration, assume that
the Insured's Attained Age is under 40 and that there is no outstanding
indebtedness. Under Option A, a Policy with a $50,000 Specified Amount will
generally pay $50,000 in death benefits. However, because the death benefit
must be equal to or be greater than 250% of Cash Value, any time the Cash Value
of the Policy exceeds $20,000, the death benefit will exceed the $50,000
Specified Amount. Each additional dollar added to the Cash Value above $20,000
will increase the death benefit by $2.50.

Similarly, so long as the Cash Value exceeds $20,000, each dollar taken
out of the Cash Value will reduce the death benefit by $2.50. If at any time,
however, the Cash Value multiplied by the limitation percentage is less than
the Specified Amount, the death benefit will equal the Specified Amount of the
Policy.

LIMITATION PERCENTAGE TABLE

ATTAINED AGE PER YEAR
OF INSURED LESS OVER AGE
---------------- ---- --------
under 40 ...... 250%
41 - 45 ......... 250% 7% 40
46 - 50 ...... 215% 6% 45
51 - 55 ...... 185% 7% 50
56 - 60 ...... 150% 4% 55
61 - 65 ...... 130% 2% 60
66 - 70 ...... 120% 1% 65
71 - 75 ...... 115% 2% 70
76 - 90 ...... 105% 0% 75
91 - 95 ...... 105% 1% 90

OPTION B. The death benefit is equal to the greater of (i) the Specified
Amount plus the Cash Value of the Policy on the date of death of the Insured or
(ii) the limitation percentage times the Cash Value of the Policy on the date
of death of the Insured. The applicable percentage is 250% for an Insured age
40 or below on the Policy Anniversary prior to the date of death. For Insureds
with an Attained Age over 40 on a Policy Anniversary, the percentage declines
as shown in the Limitation Percentage Table above. Accordingly, under Option B
the amount of the death benefit will always vary as the Cash Value varies.

ILLUSTRATION OF OPTION B. For purposes of this illustration, assume that
the Insured is under the age of 40 and that there is no outstanding
indebtedness. Under Option B, a Policy with a Specified Amount of $50,000 will
generally pay a death benefit of $50,000 plus Cash Value. Thus, for example, a
Policy with a Cash Value of $10,000 will have a death benefit of $60,000
($50,000 + $10,000). The death benefit, however, must be at least 250% of Cash
Value. As a result, if the Cash Value of the Policy exceeds $33,333, the death
benefit will be greater than the Specified Amount plus Cash Value. Each
additional dollar of Cash Value above $33,333 will increase the death benefit
by $2.50.

Similarly, any time Cash Value exceeds $33,333, each dollar taken out of
Cash Value will reduce the death benefit by $2.50. If at any time, however,
Cash Value multiplied by the limitation percentage is less than the Specified
Amount plus the Cash Value, then the death benefit will be the Specified Amount
plus the Cash Value of the Policy.

OPTION C. The death benefit is equal to the greater of (i) the Option A
death benefit; or (ii) the Specified Amount times a "Factor", plus the Cash
Value of the Policy on the Insured's date of death. The "Factor" is equal to
the lesser of 1.0, and, four one-hundreths (0.04) times the difference of 95
minus the Insured's Attained Age on the date of death.

Accordingly, under Option C the amount of the death benefit will vary as
the Cash Value and the Insured's Attained Age varies.

THREE ILLUSTRATIONS OF OPTION C.

First illustration: assume that the Insured is under the age of 40 and
that there is no outstanding indebtedness. Under Option C, a Policy with a
Specified Amount of $50,000 and with a Cash Value of $10,000 will have a death
benefit of $60,000 ($50,000 x the minimum of (1.0 and (0.04 x (95-40))) +
$10,000). So long as the Insured is under age 71, this benefit is the same as
the Option B benefit.

Second illustration: assume that the Insured is Attained Age 75 and that
there is no outstanding indebtedness. Under Option C, a Policy with a Specified
Amount of $50,000 and with a Cash Value of $12,000 will have a death benefit of
$52,000 ($50,000 x the minimum of (1.0 and (0.04 x (95 - 75))) + $12,000). The
death benefit, however, must be at least 105% of Cash Value as shown in the
Limitation Percentage Table above.

Third illustration: assume that the Insured is Attained Age 75 and that
there is no outstanding indebtedness. Under Option C, a Policy with a Specified

15
<PAGE>

Amount of $50,000 and with a Cash Value of $9,000 will have a death benefit
equal to the Specified Amount of $50,000 since the calculation of $50,000 times
the minimum of (1.0 and (0.04 x (95 - 75))) plus $9,000 is less than the
Specified Amount.

CHOOSING DEATH BENEFIT OPTION A, OPTION B OR OPTION C. Assuming the death
benefit is not determined by reference to the limitation percentage, Option A
will provide a Specified Amount of death benefit which does not vary with
changes in Cash Value. Thus, under Option A, as Cash Value increases, AUSA
Life's net amount at risk and therefore the pure insurance protection under the
Policy will decline. In contrast, Option B involves a constant net amount at
risk, assuming that the death benefit is not determined by reference to the
limitation percentage. Therefore, assuming positive investment experience, the
deduction for cost of insurance under a Policy with an Option A death benefit
will be less than under a corresponding Policy with an Option B death benefit.
Option C involves a constant net amount at risk at Attained Ages 70 or less,
assuming that the death benefit is not determined by reference to the
limitation percentage. At Attained Ages greater than 70, the net amount at risk
under Option C will decline, assuming that the death benefit is not determined
by reference to the limitation percentage.

Assuming positive investment experience, the deduction for cost of
insurance under a Policy with an Option C death benefit will ultimately be less
than under a Policy with an Option B death benefit. Because of this, if
investment performance is positive, Cash Value under Option A will increase
faster than under Option B or Option C, but the total death benefit under
Option B and Option C will generally be greater. Thus, Option A could be
considered more suitable for Policyowners whose goal is increasing Cash Value
based upon positive investment experience while Option B could be considered
more suitable for Policyowners whose goal is increasing total death benefit,
and Option C could be considered more suitable for Policyowners whose goal is
increasing total death benefit prior to Attained Age 70 and increasing Cash
Value based upon positive investment experience after Attained Age 70.

CHANGE IN DEATH BENEFIT OPTION. Generally, the death benefit Option in
effect may be changed by the Policyowner once each Policy year after the third
Policy year, provided that no decrease in Specified Amount is made that year. A
change in the Option may be made by sending AUSA Life a written request for
change. A change in death benefit Option may have Federal income tax
consequences. (See Federal Tax Matters, p. 36.)

Under AUSA Life's current rules, no change may be made if it would result
in a Specified Amount less than the minimum Specified Amount set forth in the
Policy. The effective date of any change will be the Monthly Anniversary on or
following receipt of the request. No charges will be imposed for making a
change in death benefit option.

On the effective date of change to a new Option the Specified Amount will
be adjusted so that the Monthly Cost of Insurance on the effective date of
change under the new Option will be equal to the Monthly Cost of Insurance that
would have been deducted on that date under the prior Option. Upon such change,
the Policyowner will be notified by AUSA Life of the new Specified Amount.

CORRIDOR PERCENTAGE. If, pursuant to requirements of the Internal
Revenue Code of 1986, as amended, the death benefit under a Policy is
determined by reference to the limitation percentages discussed above, the
Policy is described as "in the corridor," and an increase in the Cash Value of
the Policy will increase the net amount at risk assumed by AUSA Life and
consequently increase the cost of insurance deducted from the Cash Value of the
Policy. (See Cash Value Charges - Cost of Insurance, p. 27.)

INSURANCE PROTECTION. A Policyowner may decrease the pure insurance
protection provided by a Policy (i.e., the difference between the death benefit
and the Cash Value) in one of several ways as insurance needs change. These
ways include decreasing the Specified Amount of insurance, changing the level
of premium payments, and, to a lesser extent, making a cash withdrawal from the
Policy. Although the consequences of each of these methods will depend upon the
individual circumstances, they may be generally summarized as follows:

(a) A decrease in the Specified Amount will, subject to the limitation
percentage (see Policy Benefits - Death Benefit, p. 14), in
general decrease the insurance protection and the charges under
the Policy. A pro rata Decrease Charge will be assessed against
Cash Value at the time of decrease during the first fifteen Policy
years. (See Charges and Deductions - Pro Rata Decrease Charge, p.
27.)

(b) If Option A is elected, an increased level of premium payments will
reduce the pure insurance protection, until the limitation
percentage times the Cash Value exceeds the Specified Amount.
Increased premiums should increase the amount of funds available
to keep the Policy In Force.

(c) A cash withdrawal will reduce the death benefit. (See Surrender
Privileges - Cash Withdrawals, p. 31.) It has no effect on the
amount of pure insurance protection and charges under the Policy,
unless the death benefit payable is governed by the limitation
percentages. It results in a reduced amount of Cash Value and
increases the possibility that the Policy will Lapse.

(d) A reduced level of premium payments also generally increases the
amount of pure insurance protection if Option A is elected, or
maintains the same amount of pure insurance protection if Option B
or Option C is elected, again depending on the limitation
percentage. It results in a

16
<PAGE>

reduced amount of Cash Value and increases the possibility that the
Policy will Lapse.

An Owner may increase insurance protection without increasing the
Policy's Specified Amount by purchasing a lower cost Primary Insured Rider
("PIR") at any time, or Primary Insured Rider Plus ("PIR Plus") at the time of
application for the Policy. PIR or PIR Plus increases the death benefit under a
Policy by the face amount of the rider. In addition, PIR or PIR Plus may be
canceled separately from the Policy (I.E., it can be canceled without causing
the Policy to be canceled or to lapse), and no additional Surrender Charge is
assessed in connection with cancellation of these riders (see Optional
Insurance Benefits - Primary Insured Rider and Primary Insured Plus Rider, p.
34).

HOW DEATH BENEFITS MAY VARY IN AMOUNT. As long as the Policy remains In
Force, AUSA Life guarantees that the death benefit will never be less than the
Specified Amount of the Policy. These proceeds will be reduced by any policy
loan, plus any unearned loan interest, and any due and unpaid charges.

The death benefit may, however, vary with the Policy's Cash Value. Under
Option A, the death benefit will only vary when the Cash Value multiplied by
the limitation percentage exceeds the Specified Amount of the Policy. The death
benefit under Option B will always vary with the Cash Value because the death
benefit equals either the Specified Amount plus the Cash Value or the
limitation percentage times the Cash Value. The death benefit under Option C
will vary with the Cash Value and the Insured's Attained Age because the death
benefit equals either the Factor times the Specified Amount plus the Cash
Value, or the Specified Amount, or the limitation percentage times the Cash
Value.

DECREASE IN SPECIFIED AMOUNT. Subject to certain limitations, a
Policyowner may decrease the Specified Amount of a Policy. A decrease in
Specified Amount may affect the net amount at risk, which may affect a
Policyowner's cost of insurance charge. (See Cash Value Charges - Cost of
Insurance, p. 27.) A decrease in Specified Amount may also have Federal income
tax consequences. (See Federal Tax Matters, p. 36.) The Policyowner may either
change the death benefit Option or decrease the Specified Amount, but not both,
only once each Policy year after the third Policy year. A pro rata Decrease
Charge will be assessed against Cash Value at the time of decrease during the
first fifteen Policy years. (See Charges and Deductions - Pro Rata Decrease
Charge, p. 27.)

No requested decrease in the Specified Amount will be permitted during
the first three Policy years. Thereafter, any decrease in the Specified Amount
will become effective on the Monthly Anniversary on or following receipt of a
written request from the Policyowner by AUSA Life. The Specified Amount
remaining In Force after any requested decrease may not be less than the
minimum Specified Amount set forth in the Policy. AUSA Life reserves the right
to limit any decrease to no more than 20% of the Specified Amount immediately
prior to the decrease. If, following the decrease in Specified Amount, the
Policy would not comply with the maximum premium limitations required by
Federal tax law (see Premiums - Premium Limitations, p. 22), the decrease may
be limited to the extent necessary to meet these requirements.

WHEN INSURANCE COVERAGE TAKES EFFECT

No life insurance coverage shall take effect unless the proposed Insured
and all additional Insureds proposed for coverage are alive and in the same
condition of health as described in the application when the policy is
delivered to the Policyowner and the full Initial Premium is paid. However, if
the full Initial Premium is paid as set forth in the conditional receipt
attached to the application, and the conditional receipt is delivered to the
Policyowner, the terms of the conditional receipt shall apply.

CONDITIONAL INSURANCE COVERAGE. Each and every person proposed for
insurance must be insurable and acceptable to AUSA Life under its underwriting
rules for the amount, plan and risk classification applied for on the later of:
(a) the date of application, or (b) the date of completion of all medical tests
and examinations required by AUSA Life. Any check given for payment must be
honored on first presentation. The conditional receipt and all coverages
applied for on the application are void if a check or draft received for
payment of the Initial Premium is not honored when first presented for payment.

AMOUNT OF CONDITIONAL LIFE INSURANCE COVERAGE. If conditional insurance
coverage becomes effective under the terms of the conditional receipt, then the
amount of conditional life insurance coverage on any person proposed for
insurance is the lesser of: (a) the amount of life insurance applied for on
such person, or (b) $300,000 reduced by the amounts payable under all other
life insurance or accidental death benefits then in force or pending with AUSA
Life.

WHEN CONDITIONAL LIFE INSURANCE COVERAGE BEGINS. If the conditions listed
above are fulfilled, then the amount of conditional insurance coverage
specified above shall take effect on the later of: (a) the date of the
application, or (b) the date of the completion of all medical tests and
examinations required by AUSA Life. All conditional coverages for each and
every person proposed for insurance will be deemed void if the application
contains material misrepresentation or is fraudulently completed. Benefits
under the conditional receipt coverage will be denied if any person proposed
for insurance commits suicide.

WHEN CONDITIONAL LIFE INSURANCE COVERAGE ENDS. Conditional life insurance
coverage shall terminate automatically, without notice, on the earliest of the
following dates: (a) the date AUSA Life approves the Policy as applied for, or
(b) 10 days following any counteroffer by AUSA Life to offer insurance to any
person proposed for insurance under a different plan or at an increased

17
<PAGE>

premium or on a different rate class or (c) at the end of the fraction of a
year which the payment bears to the premium required to provide one month of
insurance coverage in the amount as described above, or (d) at the beginning of
the 60th day following the date of the conditional receipt.

CASH VALUE

At the end of any Valuation Period, the Cash Value of the Policy is equal
to the sum of the Policy's value in each Sub-Account of the Series Account plus
the Fixed Account Value. There is no guaranteed minimum Cash Value.

NET SURRENDER VALUE. A Policyowner may at any time surrender the Policy
and receive the Policy's Net Surrender Value. (See Policy Rights - Surrender
Privileges, p. 31.) The Net Surrender Value as of any date is equal to:

(1) the Cash Value as of such date; minus
(2) any surrender charge as of such date (as described on p. 26); minus
(3) any outstanding Policy loan; plus
(4) any unearned loan interest.

DETERMINATION OF VALUES IN THE SERIES ACCOUNT. On the Record Date, the
Policy's value in a Sub-Account of the Series Account will equal the portion of
any Net Premium allocated to the Sub-Account, reduced by the portion of the
first monthly deduction allocated to that Sub-Account. (See Payment and
Allocation of Premiums - Allocation of Premiums and Cash Value, p. 23.)
Thereafter, on each Valuation Date, the Policy's value in a Sub-Account of the
Series Account will equal the number of units in the Sub-Account, multiplied by
the unit value of that Sub-Account.

The number of units that a Policy has in each Sub-Account is equal to:

(1) The initial units purchased on the Policy Date; plus

(2) Units purchased at the time additional Net Premiums are allocated to
the Sub-Account; plus

(3) Units purchased through transfers from another Sub-Account or the
Fixed Account; minus

(4) Units that are redeemed to pay for monthly deductions as they are
due; minus

(5) Units that are redeemed to pay for any cash withdrawals; minus

(6) Units that are redeemed as part of any transfer to another
Sub-Account or the Fixed Account; minus

(7) Units that are redeemed to pay any pro rata Decrease Charge incurred
as a result of a decrease in the Specified Amount.

The Policy's total value in the Series Account equals the sum of the
Policy's value in each Sub-Account. (For a description of how the values of the
Fixed Account are calculated, see The Fixed Account - Fixed Account Value, p.
35.) Because the Cash Value is dependent upon a number of variables, including
the investment experience of the chosen Sub-Accounts of the Series Account, the
frequency and amount of premium payments, transfers and surrenders, and charges
assessed in connection with the Policy, a Policy's Cash Value cannot be
predetermined.

UNIT VALUE. The unit value of each Sub-Account was originally
established at $10 per unit. The unit value may increase or decrease from one
Valuation Period to the next. Unit values also will vary between Sub-Accounts.
The unit value of any Sub-Account at the end of a Valuation Period is the
result of:

(1) The total value of the assets held in the Sub-Account,
determined by multiplying the number of shares of the designated
Portfolio owned by the Sub-Account times the Portfolio's net asset
value per share; minus

(2) A deduction for the charge for mortality and expense risks. This
charge is used to compensate AUSA Life for its assumption of
certain mortality and expense risks. The daily amount of this
charge is equal to the net assets of the Sub-Account times the
daily pro rata portion of the annual Mortality and Expense Risk
Charge rate. This annual rate is equal to ninety one-hundredths of
one percent (0.90%). AUSA Life currently intends to reduce this
rate to 0.75% after the first fifteen Policy years, however, such
reduction is not guaranteed; minus

(3) The accrued amount of reserve for any taxes or other economic burden
resulting from the application of tax laws that are determined by
AUSA Life to be properly attributable to the Sub-Account; and the
result divided by

(4) The number of outstanding units in the Sub-Account.

VALUATION DATE AND VALUATION PERIOD. The net asset value per share of
shares of the Fund is determined, once daily, as of the close of the regular
session of business on the New York Stock Exchange ("Exchange") (usually 4:00
p.m., Eastern time), on each day the Exchange is open.

INVESTMENTS OF THE SERIES ACCOUNT

WRL SERIES FUND, INC.

The Series Account invests in shares of the Fund, a series mutual fund
which is registered with the Securities and Exchange Commission ("SEC") as an
open-end diversified management investment company. Such registration does not
involve supervision of the management or investment practices or policies of
the Fund by the Commission.

Currently, the Portfolios of the Fund corresponding to the Sub-Accounts
of the Series Account are: Aggressive Growth Portfolio, Emerging Growth
Portfolio, Growth Portfolio, Global Portfolio, Balanced Portfolio,

18
<PAGE>

Strategic Total Return Portfolio, Bond Portfolio, Growth & Income Portfolio,
Money Market Portfolio, Tactical Asset Allocation Portfolio, C.A.S.E. Growth
Portfolio, Value Equity Portfolio, U.S. Equity Portfolio, International Equity
Portfolio and Third Avenue Value Portfolio. The assets of each Portfolio are
held separate from the assets of the other Portfolios, and each Portfolio has
investment objectives and policies which are different from those of the other
Portfolios. Thus, each Portfolio operates as a separate investment fund, and
the income or losses of one Portfolio have no effect on the investment
performance of any other Portfolio. Pending any prior approval by a state
insurance regulatory authority, certain Sub-Accounts and corresponding
Portfolios may not be available to residents of some states.

The investment objectives and policies of each Portfolio are summarized
below. THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ACHIEVE ITS STATED
OBJECTIVE. More detailed information, including a description of risks, can be
found in the Prospectus for the Fund which should be read carefully.

AGGRESSIVE GROWTH PORTFOLIO: This Portfolio seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of
equity securities.

EMERGING GROWTH PORTFOLIO: This Portfolio seeks capital appreciation by
investing primarily in common stocks of small and medium sized companies.

GROWTH PORTFOLIO: This Portfolio seeks growth of capital by investing
primarily in common stocks listed on a national securities exchange or traded
on NASDAQ.

GLOBAL PORTFOLIO: This Portfolio seeks long-term growth of capital in a
manner consistent with preservation of capital, primarily through investments
in common stocks of foreign and domestic issuers.

BALANCED PORTFOLIO: This Portfolio seeks preservation of capital,
reduced volatility, and superior long-term risk adjusted returns by investing
primarily in common stock, convertible securities and fixed-income securities.

STRATEGIC TOTAL RETURN PORTFOLIO: This Portfolio seeks to provide
current income, long-term growth of income and capital appreciation by
investing primarily in common stocks, income producing securities convertible
into common stocks, and fixed-income securities.

BOND PORTFOLIO: This Portfolio seeks the highest possible current income
within the confines of the primary goal of insuring the protection of capital.

GROWTH & INCOME PORTFOLIO: This Portfolio's objective is to seek total
return by investing in securities that have defensive characteristics. The
Portfolio will invest primarily in a diversified portfolio of equity and debt
securities with an emphasis on sector investing.

MONEY MARKET PORTFOLIO: This Portfolio seeks to obtain maximum current
income consistent with preservation of principal and maintenance of liquidity.
The Portfolio maintains a dollar-weighted average portfolio maturity of not
more than 90 days by investing in U.S. dollar-denominated securities which have
effective maturities of not more than 13 months and present minimal credit
risks.

TACTICAL ASSET ALLOCATION PORTFOLIO: This Portfolio seeks preservation
of capital and competitive investment returns by investing primarily in stocks,
United States Treasury bonds, notes and bills, and money market funds.

C.A.S.E. GROWTH PORTFOLIO: This Portfolio's objective is annual growth
of capital through investment in companies whose management, financial
resources and fundamentals appear attractive on a scale measured against each
company's present value.

VALUE EQUITY PORTFOLIO: This Portfolio seeks to achieve maximum,
consistent total return with minimum risk to principal by investing primarily
in common stocks with above-average statistical value which, in the Sub-
Adviser's opinion, are in fundamentally attractive industries and are
undervalued at the time of purchase.

INTERNATIONAL EQUITY PORTFOLIO: This Portfolio seeks long-term growth of
capital by investing primarily in the common stock of foreign issuers traded on
overseas exchanges and in foreign over-the-counter markets.

U.S. EQUITY PORTFOLIO: This Portfolio seeks long-term growth of capital by
investing primarily in equity securities of U.S. companies.

THIRD AVENUE VALUE PORTFOLIO: This Portfolio seeks long-term capital
appreciation, primarily through equity securities of well financed companies
believed to be priced below their private market values and debt securities
providing strong protective covenants and high, effective yields.

WRL Management, located at 201 Highland Avenue, Largo, FL 33770, a
wholly-owned subsidiary of Western Reserve Life Assurance Co. of Ohio ("Western
Reserve"), serves as investment adviser to the Fund and manages its assets in
accordance with policies, programs and guidelines established by the Board of
Directors of the Fund. AUSA Life, WRL Management and Western Reserve are
affiliates.

Each Sub-Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. The Sub-Advisers for the Portfolios of the
Fund are:

Janus Capital Corporation ("Janus") serves as sub-adviser to the Growth and
Global Portfolios of the Fund. WRL Management and Janus will divide equally
monthly compensation at current annual rate 0.80% of the aggregate average
daily net assets each of the Growth Portfolio and Global Portfolio.

AEGON USA Investment Management, Inc. ("AIMI") is sub-adviser to the
Balanced and Bond Portfolios of the Fund. AIMI is a wholly-owned subsidiary of
AEGON USA and thus is an affiliate of AUSA Life. WRL Management and AIMI will
divide equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the

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Balanced Portfolio and WRL Management will receive monthly compensation at the
current annual rate of 0.45% of the aggregate average daily net assets of the
Bond Portfolio. From this amount, as compensation for its services, AIMI will
receive 0.20% of the aggregate average daily net assets. AIMI's compensation
will be reduced by 50% of the amount paid by WRL Management on behalf of the
Balanced and Bond Portfolios pursuant to any expense limitation or other
reimbursement.

Van Kampen American Capital Asset Management, Inc. ("Van Kampen American
Capital") is sub-adviser to the Emerging Growth Portfolio of the Fund. Van
Kampen American Capital is an indirect wholly-owned subsidiary of VK/AC
Holding, Inc. ("VK/AC Holding"). VK/AC Holding is a wholly-owned subsidiary of
MSAM Holdings II, Inc., which, in turn, is a wholly-owned subsidiary of Morgan
Stanley Group, Inc. WRL Management and Van Kampen American Capital will divide
equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the Emerging Growth Portfolio. Van Kampen
American Capital's compensation will be reduced by 50% of the amount paid by
WRL Management on behalf of the Emerging Growth Portfolio pursuant to any
expense limitation or other reimbursement.

Luther King Capital Management Corporation ("Luther King") is sub-adviser
to the Strategic Total Return Portfolio of the Fund. Ultimate control of Luther
King is exercised by J. Luther King, Jr. WRL Management and Luther King will
divide equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the Strategic Total Return Portfolio.

Federated Investment Counseling ("Federated") is sub-adviser to the
Growth & Income Portfolio of the Fund. Federated is a wholly-owned subsidiary
of Federated Investors. WRL Management will receive monthly compensation at the
current annual rate of 0.75% of the aggregate average daily net assets of the
Growth & Income Portfolio. From this amount, as compensation for its services,
Federated will receive payment of fees equal to 0.50% of the first $30 million
of average daily net assets, 0.35% of the next $20 million of average daily net
assets, and 0.25% of average daily net assets in excess of $50 million of the
Growth & Income Portfolio.

Fred Alger Management, Inc. ("Fred Alger") is sub-adviser to the
Aggressive Growth Portfolio of the Fund. Fred Alger is a wholly-owned subsidiary
of Fred Alger & Company, Incorporated, which, in turn, is a wholly-owned
subsidiary of Alger Associates, Inc., a financial services holding company
controlled by Fred M. Alger. WRL Management and Fred Alger will divide equally
monthly compensation at the current annual rate of 0.80% of the aggregate
average daily net assets of the Aggressive Growth Portfolio.

Dean Investment Associates, a Division of C.H. Dean and Associates, Inc.
("Dean") is sub-adviser to the Tactical Asset Allocation Portfolio of the Fund.
Dean is wholly-owned by C.H. Dean and Associates, Inc. WRL Management and Dean
will divide equally monthly compensation at the current annual rate of 0.80% of
the aggregate average daily net assets of the Tactical Asset Allocation
Portfolio. Dean's compensation will be reduced by 50% of the amount paid by WRL
Management on behalf of the Tactical Asset Allocation Portfolio pursuant to any
expense limitation or other reimbursement.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") is sub-adviser to
the Money Market Portfolio of the Fund. J.P. Morgan is a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated. WRL Management will receive
monthly compensation at the current annual rate of 0.40% of the aggregate
average daily net assets of the Money Market Portfolio. From this amount, as
compensation for its services, J.P. Morgan will receive 0.15% of the average
daily net assets of the Money Market Portfolio.

C.A.S.E. Management, Inc. ("C.A.S.E.") is sub-adviser to the C.A.S.E.
Growth Portfolio of the Fund. C.A.S.E. is a wholly-owned subsidiary of C.A.S.E.
Inc. C.A.S.E. Inc. is indirectly controlled by William Edward Lange, president
and chief executive officer of C.A.S.E. WRL Management and C.A.S.E. will divide
equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the C.A.S.E. Growth Portfolio.

NWQ Investment Management Company, Inc. ("NWQ Investment") is sub-adviser
to the Value Equity Portfolio of the Fund. NWQ Investment is a wholly-owned
subsidiary of United Asset Management Corporation. WRL Management and NWQ
Investment will divide equally monthly compensation at the current annual rate
of 0.80% of the aggregate average daily net assets of the Value Equity
Portfolio. NWQ Investment's compensation will be reduced by 50% of the amount
paid by WRL Management on behalf of the Value Equity Portfolio pursuant to any
expense limitation or other reimbursement.

Scottish Equitable Investment Management Limited ("Scottish Equitable")
is a co-sub-adviser to the International Equity Portfolio. Scottish Equitable
is a wholly-owned subsidiary of Scottish Equitable plc, successor to Scottish
Equitable Life Assurance Society, which was founded in Edinburgh in 1831.
Scottish Equitable is also an indirect wholly-owned subsidiary of AEGON nv. WRL
Management receives monthly compensation at the annual rate of 1.00% of the
aggregate average daily net assets of the International Equity Portfolio. From
this amount, Scottish Equitable receives 0.50% of average daily net assets of
the Portfolio managed by Scottish Equitable, less 50% of the amount of excess
expenses attributable to such assets.

GE Investment Management Incorporated ("GEIM") also is a co-sub-adviser
to the International Equity Portfolio and as sub-adviser to the U.S. Equity
Portfolio. GEIM is a wholly-owned subsidiary of General

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<PAGE>

Electric Company ("GE"). GEIM's principal officers and directors serve in
similar capacities with respect to General Electric Investment Corporation
("GEIC," and, together with GEIM, collectively referred to as "GE
Investments"), which like GEIM is a wholly-owned subsidiary of GE. WRL
Management receives monthly compensation at the annual rate of 1.00% of the
aggregate average daily net assets of the International Equity Portfolio. From
this amount, GEIM, receives 0.50% of average daily net assets managed by GEIM,
less 50% of amount of excess expenses attributable to such assets.

With respect to the U.S. Equity Portfolio, WRL Management and GEIM will
divide equally monthly compensation at the current annual rate of 0.80% of the
aggregate average daily net assets of the U.S. Equity Portfolio. GEIM's
compensation will be reduced by 50% of the amount paid by WRL Management on
behalf of the U.S. Equity Portfolio pursuant to any expense limitation or other
reimbursement. Any amount borne by GEIM pursuant to any expense limitation
constitutes an agreement between the Investment Adviser and GEIM only for the
first twelve months following each Portfolio's commencement of operations.
Thereafter, any such arrangements will be as mutually agreed upon by GEIM and
the Investment Adviser.

EQSF Advisers, Inc. ("EQSF") is sub-adviser to the Third Avenue Value
Portfolio. EQSF is a New York corporation organized in 1988 and is controlled
by Martin J. Whitman. WRL Management and EQSF will divide equally monthly
compensation at the current annual rate of 0.80% of the aggregate average daily
net assets of the Third Avenue Value Portfolio, EQSF's compensation will be
reduced by 50% of the amount paid by WRL Management on behalf of the Third
Avenue Value Portfolio, pursuant to any expense limitation or other
reimbursement.

In addition to the Series Account, shares of the Fund are also sold to
the WRL Series Life Account and WRL Series Annuity Account, separate accounts
established by Western Reserve for its variable life insurance policies and
variable annuity contracts; the PFL Endeavor Variable Annuity Account, PFL
Endeavor Platinum Variable Annuity Account, and the PFL Life Variable Annuity
Account A, separate accounts of PFL Life Insurance Company; the AUSA Endeavor
Variable Annuity Account, a separate account of AUSA Life, all affiliates of
AUSA Life. Shares of the Fund may in the future be sold to other separate
accounts, including separate accounts established for variable life insurance
policies or variable annuity contracts issued by AUSA Life or its affiliates.
It is conceivable that, in the future, it may become disadvantageous for
variable life insurance separate accounts and variable annuity separate
accounts to invest in the Fund simultaneously. Although neither AUSA Life nor
the Fund currently foresees any such disadvantages, either to variable life
insurance policyowners or to variable annuity contract owners, the Fund's Board
of Directors intends to monitor events in order to identify any material
conflicts between the interests of such variable life insurance policyowners
and variable annuity contract owners and to determine what action, if any, it
should take. Such action could include the sale of Fund shares by one or more
of the separate accounts, which could have adverse consequences. Material
conflicts could result from, for example, (1) changes in state insurance laws,
(2) changes in Federal income tax laws, or (3) differences in voting
instructions between those given by variable life insurance policyowners and
those given by variable annuity contract owners. If the Board of Directors were
to conclude that separate funds should be established for variable life and
variable annuity separate accounts, AUSA Life will bear the attendant expenses,
but variable life insurance policyowners and variable annuity contract owners
would no longer have the economies of scale resulting from a larger combined
fund.

ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS

AUSA Life reserves the right to transfer assets of the Series Account to
another separate account which AUSA Life determines to be associated with the
class of contracts to which the Policy belongs. AUSA Life also reserves the
right, subject to compliance with applicable law, to make additions to,
deletions from, or substitutions for the investments that are held by any
Sub-Account or that any Sub-Account may purchase. Any such addition, deletion,
or substitution by AUSA Life of shares of another Portfolio of the Fund or of
another open-end, registered investment company, will only be taken if the
shares of a Portfolio are no longer available for investment, or if in AUSA
Life's judgment further investment in any Portfolio should become inappropriate
in view of the purposes of the Series Account. AUSA Life will not add, delete
or substitute any shares attributable to a Policyowner's interest in a
Sub-Account of the Series Account without notice to and prior approval of the
Commission, to the extent required by the 1940 Act or other applicable law.
Nothing contained herein shall prevent the Series Account from purchasing other
securities for other Portfolios or classes of policies, or from permitting a
conversion between Portfolios or classes of policies on the basis of requests
made by Policyowners.

AUSA Life also reserves the right to establish additional Sub-Accounts of
the Series Account, each of which would invest in a new Portfolio of the Fund,
or in shares of another investment company, with a specified investment
objective. New Sub-Accounts may be established when, in the sole discretion of
AUSA Life, marketing, tax or investment conditions warrant, and any new Sub-
Accounts will be made available to existing Policyowners on a basis to be
determined by AUSA Life. AUSA Life may also eliminate one or more Sub-Accounts
if, in its sole discretion, marketing, tax, or investment conditions warrant.

In the event of any such substitution or change, AUSA Life may make such
changes in this and other policies as may be necessary or appropriate to
reflect such substitution or change. If deemed by AUSA Life to

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<PAGE>

be in the best interests of persons having voting rights under the Policies,
and when permitted by law, the Series Account may be (1) operated as a
management company under the 1940 Act, (2) deregistered under the 1940 Act in
the event such registration is no longer required, (3) managed under the
direction of a committee, or (4) combined with one or more other separate
accounts, or sub-accounts.

PAYMENT AND ALLOCATION OF PREMIUMS

ISSUANCE OF A POLICY

Individuals wishing to purchase a Policy must send a completed
application to AUSA Life, P.O. Box 9054, Clearwater, Florida 34618-9054. Under
AUSA Life's current rules, the minimum Specified Amount of a Policy at issue
for Issue Ages 0-45 is generally $50,000, declining to $25,000 for Issue Ages
46 to 80. Policies will generally be issued only to Insureds who supply
evidence of insurability satisfactory to AUSA Life. AUSA Life may, however, at
its sole discretion, issue a Policy to an individual above the age of 80.
Acceptance is subject to AUSA Life's underwriting rules and AUSA Life reserves
the right to reject an application for any reason permitted by law.

PREMIUMS

Subject to certain limitations, a Policyowner has flexibility in
determining the frequency and amount of premiums.

PREMIUM FLEXIBILITY. Unlike conventional insurance policies, this Policy
frees the Policyowner from the requirement that premiums be paid in accordance
with a rigid and inflexible premium schedule. AUSA Life may require the
Policyowner to pay an Initial Premium at least equal to a minimum monthly
guarantee premium set forth in the Policy before issuing the Policy. (See
Charges and Deductions - Premium Expense Charge, p. 26.) Thereafter, subject to
the minimum and maximum premium limitations described below, a Policyowner may
make unscheduled premium payments at any time in any amount.

PLANNED PERIODIC PREMIUMS. Each Policyowner will determine a Planned
Periodic Premium schedule that provides for the payment of a level premium at a
fixed interval over a specified period of time. The Policyowner is not required
to pay premiums in accordance with this schedule. Furthermore, the Policyowner
has considerable flexibility to alter the amount, frequency, and the time
period over which Planned Periodic Premiums are paid.

The payment of a Planned Periodic Premium will not guarantee that the
Policy remains In Force. Instead, the duration of the Policy depends upon the
Policy's Net Surrender Value. Thus, even if Planned Periodic Premiums are paid
by the Policyowner, the Policy will nonetheless lapse any time Net Surrender
Value is insufficient to pay certain monthly charges, and a grace period
expires without a sufficient payment. However, until the No Lapse Date as
provided in the Policy, the Policy will remain In Force and no grace period
will begin provided there has been no addition of any riders and the total of
the premiums received (minus any withdrawals, any outstanding loans, and any
pro rata Decrease Charge deducted from the Cash Value) is equal to or exceeds
the minimum monthly guarantee premium set forth in the Policy times the number
of months since the Policy Date, including the current month. (See Policy Lapse
and Reinstatement - Lapse, p. 25.) The minimum monthly guarantee premium is set
forth in the Policy unless changed due to a requested change under the Policy
by the Policyowner, at which time the Policyowner will be notified of the new
minimum monthly guarantee premium.

PREMIUM LIMITATIONS. In no event may the total of all premiums paid,
both scheduled and unscheduled, exceed the current maximum premium limitations
which qualify the Policy as life insurance according to Federal tax laws. If at
any time a premium is paid which would result in total premiums exceeding the
current maximum premium limitation, AUSA Life will only accept that portion of
the premium which will make total premiums equal the maximum. Any part of the
premium in excess of that amount will be returned and no further premiums will
be accepted until allowed by the current maximum premium limitations set forth
in the Policy. Every premium payment, whether scheduled or unscheduled, must be
at least the minimum payment amount required. Under AUSA Life's current rules,
the minimum payment amount is $50. Premium payments less than this minimum
amount may be returned to the Policyowner.

PAYMENT OF PREMIUMS. Payments made by the Policyowner will be treated as
a premium payment unless clearly marked as loan repayments. Certain charges
will be deducted from each premium payment. (See Charges and Deductions -
Premium Expense Charge, p. 26.)

As an accommodation to Policyowners, AUSA Life will accept transmittal of
initial and subsequent premiums of at least $1,000 by wire transfer. For an
Initial Premium, the wire transfer must be accompanied by a simultaneous
telephone facsimile transmission ("FAX") of a completed application. An Initial
Premium accepted via wire transfer with FAX will be allocated in accordance
with current procedures explained in the next section entitled, Allocation of
Premiums and Cash Value - Allocation of Net Premiums, p. 23. An Initial Premium
made by wire transfer not accompanied by a simultaneous FAX, or accompanied by
a FAX of an incomplete application, will be retained for a period up to five
business days while AUSA Life attempts to obtain the FAX or complete the
essential information required to establish the Policy and allocate the Initial
Premium at the unit value next determined after receipt of the FAX or
information necessary to complete the application. If AUSA Life cannot obtain
the FAX or essential information within five business days, AUSA Life will
return the Initial Premium to the applicant, unless the applicant consents to
allow AUSA Life to retain the Initial Premium until the required FAX or
essential information is received.

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In the event the application with original signature is later received
and the allocation instructions in that application, for any reason, are
inconsistent with those previously designated on the FAX, the Initial Premium
will be reallocated on the first Valuation Date on or following the Record Date
in accordance with the allocation instructions in the application with original
signature.

Policyowners wishing to make payments via bank wire should instruct their
banks to wire Federal Funds as follows:

Barnett Bank of Pinellas County
ABA #
For credit to: AUSA Life
Account #: Policyowner's Name:
Policy Number:
Attention: General Accounting
Fax Number: (813) 588-1620

ALLOCATION OF PREMIUMS AND CASH VALUE

NET PREMIUMS. The Net Premium equals the premium paid less the premium
expense charges. (See Charges and Deductions - Premium Expense Charge, p. 26.)
When an Initial Premium accompanies the application, monthly deductions from
the Cash Value of the Policy commence on the Policy Date.

ALLOCATION OF NET PREMIUMS. In the application for a Policy, the
Policyowner will allocate Net Premiums to one or more of the Sub-Accounts of
the Series Account, to the Fixed Account, or to a combination of both.
Notwithstanding the allocation in the application, the Initial Premium, less
charges, will first be allocated, on the first Valuation Date on or following
the Policy Date, to the Sub-Account of the Series Account that invests
exclusively in shares of the Money Market Portfolio, and will be reallocated in
accordance with the Policyowner's directions in the application on the first
Valuation Date on or following the Record Date. The Record Date of the Policy
will be the date on which the Policy is recorded on AUSA Life's books as an In
Force Policy. (See Payment and Allocation of Premiums beginning on page 22,
and Policy Benefits - When Conditional Life Insurance Coverage Begins, p. 17.)

Net premiums paid after the Record Date will be allocated in accordance
with the Policyowner's instructions. AUSA Life does not currently require that
allocation of Net Premiums to an Account meet a minimum percentage. AUSA Life
does reserve the right to limit allocation of Net Premiums to any Account to no
less than 10% of each Net Premium payment. No fractional percentages are
permitted. The allocation of future Net Premiums may be changed currently
without charge at any time by providing AUSA Life with written notification
from the Policyowner, or by calling AUSA Life's toll-free number,
1-800-322-7160. AUSA Life will employ the same procedures to confirm that such
telephone instructions are genuine as it employs regarding transfers among
Sub-Accounts and the Fixed Account by telephone. Upon instructions from the
Policyowner, the registered representative/agent of record may also change the
allocation of future Net Premiums. AUSA Life reserves the right to limit the
number of changes of the allocation of Net Premiums to one per year. AUSA Life
also reserves the right to impose a charge of $25 for each change of allocation
in excess of one per quarter. INVESTMENT RETURNS FROM THE AMOUNTS ALLOCATED TO
SUB-ACCOUNTS OF THE SERIES ACCOUNT WILL VARY WITH THE INVESTMENT EXPERIENCE OF
THESE SUB-ACCOUNTS AND THE POLICYOWNER BEARS THE ENTIRE INVESTMENT RISK.

TRANSFERS. Cash Value may be transferred among the Sub-Accounts of the
Series Account or from the Sub-Accounts to the Fixed Account. Transfers may
also be made from the Fixed Account to the Sub-Accounts, subject to certain
restrictions. (See The Fixed Account - Allocations, Transfers and Withdrawals,
p. 35.) The amount of Cash Value available for transfer from any Sub-Account,
or the Fixed Account, is determined at the end of the Valuation Period during
which the transfer request is received at AUSA Life's Administrative Office.
The net asset value for each share of the corresponding Portfolio of any
Sub-Account is determined, once daily, as of the close of the regular business
session of the New York Stock Exchange ("Exchange") (usually 4:00 p.m. Eastern
time), which coincides with the end of each Valuation Period. (See Policy
Benefits - Cash Value - Valuation Date and Valuation Period, p. 18.) Therefore,
any transfer request received after the close of the regular business session
of the Exchange, on any day the Exchange is open, will be processed on the next
day the Exchange is open for business utilizing the net asset value for each
share of the applicable Portfolio determined as of the close of the regular
business session of the Exchange. Cash Value available for transfer from the
Fixed Account will be determined in the same manner.

Policyowners may make transfer requests in writing, or by telephone.
Written requests must be in a form acceptable to AUSA Life. The registered
representative/ agent of record for the Policy may, upon instructions from the
Policyowner for each transfer, make telephone transfers upon request without
the necessity for the Policyowner to have previously authorized telephone
transfers in writing. If, for any reason, a Policyowner does not want the
ability to make transfers by telephone, the Policyowner should provide written
notice to AUSA Life at its Administrative Office. All telephone transfers
should be made by calling AUSA Life at its toll-free number 1-800-322-7160.
AUSA Life will not be liable for complying with telephone instructions it
reasonably believes to be authentic, nor for any loss, damage, cost or expense
in acting on such telephone instructions, and Policyowners will bear the risk
of any such loss. AUSA Life will employ reasonable procedures to confirm that
telephone instructions are genuine. If AUSA Life does not employ such
procedures, it may be liable for losses

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<PAGE>

due to unauthorized or fraudulent instructions. Such procedures may include,
among others, requiring forms of personal identification prior to acting upon
such telephone instructions, providing written confirmation of such
transactions to Policyowners, and/or tape recording of telephone instructions
received from Policyowners. AUSA Life may, at any time, revoke or modify the
transfer privilege. Under AUSA Life's current procedures, it will effect
transfers and determine all values in connection with transfers at the end of
the Valuation Period during which the transfer request is received at AUSA
Life's Administrative Office.

AUSA Life reserves the right to charge a $25 fee for each transfer in
excess of one per Policy month or twelve per Policy year. The transfer charge
will not be increased. (See Optional Cash Value Charges - Cash Value Transfers,
p. 28.) All transfers made in any one day will be considered a single transfer
and any transfer charges will be deducted in an equal amount from each
Sub-Account from which a transfer was made. Transfers resulting from policy
loans, the exercise of conversion rights, and the reallocation of Cash Value
immediately after the Record Date, will not be treated as a transfer for the
purpose of this charge. No transfer charge will apply to transfers from the
Fixed Account to a Sub-Account.

AUSA Life or an affiliate may provide administrative or other support
services to independent third parties authorized by Policyowners to conduct
transfers on a Policyowner's behalf, or who provide recommendations as to how
Sub-Account values should be allocated. This includes, but is not limited to,
transferring Sub-Account values among Sub-Accounts in accordance with various
investment allocation strategies such third party may employ. Such independent
third parties may or may not be appointed AUSA Life agents for the sale of
Policies. However, AUSA LIFE DOES NOT ENGAGE ANY THIRD PARTIES TO OFFER
INVESTMENT ALLOCATION SERVICES OF ANY TYPE, SO THAT PERSONS OR FIRMS OFFERING
SUCH SERVICES DO SO INDEPENDENT FROM ANY AGENCY RELATIONSHIP THEY MAY HAVE WITH
AUSA LIFE FOR THE SALE OF POLICIES. AUSA LIFE THEREFORE TAKES NO RESPONSIBILITY
FOR THE INVESTMENT ALLOCATIONS AND TRANSFERS TRANSACTED ON A POLICYOWNER'S
BEHALF BY SUCH THIRD PARTIES OR ANY INVESTMENT ALLOCATION RECOMMENDATIONS MADE
BY SUCH PARTIES. AUSA Life does not currently charge a Policyowner extra for
providing these support services.

DOLLAR COST AVERAGING

The Policyowner may direct AUSA Life to automatically transfer specified
amounts from the Money Market Sub-Account, the Bond Sub-Account, the Fixed
Account or any combination of these Accounts on a monthly basis to a
Sub-Account. This service is intended to allow the Owner to utilize "Dollar
Cost Averaging," a long-term investment method which provides for regular,
level investments over time. AUSA Life makes no guarantees that Dollar Cost
Averaging will result in a profit or protect against loss. To qualify for
Dollar Cost Averaging a minimum of $5,000 must be in each Account from which
transfers will be made and at least $1,000, in the aggregate, must be
transferred each month, unless AUSA Life consents to a smaller amount.

To further qualify for Dollar Cost Averaging from the Fixed Account, no
more than one-tenth (1/10) of the amount in the Fixed Account at the
commencement of Dollar Cost Averaging can be transferred each month. Other
types of transfers from the Fixed Account may also be subject to certain other
restrictions. (See The Fixed Account - Allocations, Transfers and Withdrawals
on p. 35.)

A written election of this service, on a form provided by AUSA Life, must
be completed by the Policyowner in order to begin transfers. The first transfer
will occur during the month which follows receipt of the form, providing the
form is received by the 25th day of the month. Once elected, transfers from the
Money Market or Bond Sub-Accounts, or the Fixed Account, will be processed
monthly until the entire value of each Account from which transfers are made is
completely depleted or the Policyowner instructs AUSA Life in writing to cancel
the monthly transfers. For example, if $15,000 was allocated to the Money
Market Sub-Account and $10,000 was allocated to the Bond Sub-Account and
transfers of $500 are made each month from each of these Sub-Accounts to the
Growth Sub-Account, transfers of $500 per month would continue to be made from
the Money Market Sub-Account even though transfers from the Bond Sub-Account
had ceased as a result of depletion of value. There is no charge for Dollar
Cost Averaging. However, each transfer which occurs under the Dollar Cost
Averaging service will be counted towards the twelve free transfers allowed
during each Policy year. (See Payment and Allocation of Premiums - Allocation
of Premiums and Cash Value - Transfers on p. 23.) AUSA Life may discontinue,
modify, or suspend Dollar Cost Averaging at any time, following prior written
notice to Policyowners. Dollar Cost Averaging is not available if the Owner has
elected the Asset Rebalancing Program, or has elected an asset allocation
service provided by a third party.

ASSET REBALANCING PROGRAM

AUSA Life will offer a program under which the Policyowner may authorize
AUSA Life to transfer automatically Cash Value periodically to maintain a
particular percentage allocation among the Sub-Accounts. The Cash Value
allocated to each Sub-Account will grow or decline in value at different rates.
The Asset Rebalancing Program automatically reallocates the Cash Value in the
Sub-Accounts at the end of each period to match the Contract's currently
effective Net Premium allocation schedule. The Asset Rebalancing Program is
intended to transfer Cash Value from those Sub-Accounts that have increased in
value to those Sub-Accounts that have declined in value. Over time, this method
of investing may help an Owner buy low and sell high. This investment method
does not guarantee gains, nor does it assure that any Sub-Account will not have
losses.

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<PAGE>

To qualify for Asset Rebalancing, a minimum Cash Value of $5,000 for an
existing Policy, or a minimum Initial Premium of $5,000 for a new Policy, is
required. To participate in the Asset Rebalancing Program, a properly completed
Asset Rebalancing Request Form must be received by AUSA Life at its
Administrative Office. An Asset Rebalancing Request Form is available upon
request.

Owners may elect rebalancing to occur on each quarterly, semi-annual or
annual anniversary of the Policy Date. Following receipt of the Asset
Rebalancing Request Form, AUSA Life will effect the initial rebalancing of Cash
Value on the next such anniversary, in accordance with the Policy's current Net
Premium allocation schedule. The amounts transferred will be credited at the
unit value next determined on the dates the transfers are made. If a day on
which rebalancing would ordinarily occur falls on a day on which the New York
Stock Exchange is closed, rebalancing will occur on the next day the New York
Stock Exchange is open. The Asset Rebalancing Program is available only before
the Maturity Date, and is not available if the Policyowner has elected Dollar
Cost Averaging, or has elected an asset allocation service provided by a third
party. There is no charge for the Asset Rebalancing Program. However, each
reallocation which occurs under the Asset Rebalancing Program will be counted
towards the twelve free transfers allowed during each Policy year. (See Payment
and Allocation of Premiums - Allocation of Premiums and Cash Value - Transfers
on p. 23.)

The Policyowner may terminate participation at any time in the Asset
Rebalancing Program by oral or written request to AUSA Life. Participation in
the Asset Rebalancing Program will terminate automatically if any transfer is
made to, or from, any Sub-Account, other than on account of a scheduled
rebalancing. If the Policyowner wishes to resume the Asset Rebalancing Program
after it has been canceled, a new Asset Rebalancing Request Form must be
completed and sent to AUSA Life. The Policyowner may start and stop
participation in the Asset Rebalancing Program at any time; however, AUSA Life
reserves the right to restrict entry into the Asset Rebalancing Program to once
per Policy Year. Cash Value allocated to the Fixed Account may not be included
in the Asset Rebalancing Program.

AUSA Life may discontinue, modify, or suspend, the Asset Rebalancing
Program at any time, following prior written notice to Policyowners.

POLICY LAPSE AND REINSTATEMENT

LAPSE. Unlike conventional life insurance policies, the failure to make
a Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will only occur where Net Surrender Value is insufficient to cover the
monthly deduction, and a grace period expires without a sufficient payment by
the Policyowner. If the Net Surrender Value on any Monthly Anniversary is
insufficient to cover the monthly deduction on such day, AUSA Life will mail a
notice to the last known address of the Policyowner and any assignee of record.
A grace period of 61 days after the mailing date of the notice will be allowed
for the payment of premiums. The notice will specify the minimum payment and
the final date on which such payment must be received by AUSA Life to keep the
Policy In Force. (See Charges and Deductions, p. 26.) If AUSA Life does not
receive a sufficient payment within the grace period, Lapse of the Policy will
result. If a sufficient payment is received during the grace period, any
resulting Net Premium will be allocated among the Accounts, and any monthly
deductions due will be charged to such Accounts, in accordance with the
Policyowner's then current instructions. (See Allocation of Premiums and Cash
Value - Allocation of Net Premiums, p. 23, and Charges and Deductions - Cash
Value Charges, p. 27.) If the Insured dies during the grace period, the death
benefit proceeds will equal the amount of the death benefit proceeds
immediately prior to the commencement of the grace period, reduced by any due
and unpaid charges.

However, until the No Lapse Date as provided in the Policy, the Policy
will not lapse and no grace period will begin provided (1) no riders have been
added since the Policy Date, including the current month, and (2) the total of
the premiums received (minus any withdrawals, any outstanding loans and any pro
rata Decrease Charge deducted from the Cash Value) equals or exceeds the
minimum monthly guarantee premium shown in the Policy times the number of
months since the Policy Date, including the current month. Should the
Policyowner request the addition of any rider after the Policy Date but prior
to the No Lapse Date, the Policyowner will be notified as to the effect on
grace period processing prior to the date the rider is effective.

Essentially, the Policy will not lapse during the No Lapse Period, as
long as the conditions in (1) and (2) above have been met, and even though Net
Surrender Value at any point during the No Lapse Period is insufficient to
cover the monthly deduction and a grace period has expired without a payment
sufficient to cover the monthly deduction. Such a Lapse could happen if the
investment experience has been sufficiently unfavorable to have resulted in a
decrease in the Net Surrender Value, or the Net Surrender Value has decreased
because not enough premiums have been paid to offset the monthly charges.

REINSTATEMENT. A lapsed Policy may be reinstated any time within five
years after the date of Lapse and before the Maturity Date by submitting the
following items to Western Reserve:

1. A written application for reinstatement from the Policyowner;
2. Evidence of insurability satisfactory to AUSA Life; and
3. A premium that, after the deduction of premium expense charges, is
large enough to cover:
(a) one monthly deduction at the time of termination;

25
<PAGE>

(b) the next two monthly deductions which will become due after the
time of reinstatement; and

AUSA Life reserves the right to decline a reinstatement request. Any
indebtedness on the date of Lapse will not be reinstated. The Cash Value of the
Loan Reserve on the date of reinstatement will be zero. The amount of Net
Surrender Value on the date of reinstatement will be equal to the Net Premiums
paid at reinstatement, less the amounts paid in accordance with (a) and (c)
above.

Upon approval of the application for reinstatement, the effective date of
reinstatement will be the first Monthly Anniversary on or next following the
date AUSA Life approves the application for reinstatement.

CHARGES AND DEDUCTIONS

Charges will be deducted in connection with the Policy to compensate AUSA
Life for: (1) providing the insurance benefits set forth in the Policy and any
optional insurance benefits added by rider; (2) administering the Policy; (3)
assuming certain risks in connection with the Policy; and (4) incurring
expenses in distributing the Policy. The nature and amount of these charges are
described more fully below.

PREMIUM EXPENSE CHARGE

Prior to allocation of Net Premiums among the Accounts, premiums paid
will be reduced by a Premium Expense charge of 6.00% to compensate AUSA Life
for distribution expenses and state premium taxes incurred in connection with
the Policy and a premium collection charge of $3.00 per premium payment that
will compensate AUSA Life for costs associated with premium billing and
collection. The premium collection charge will not be increased in the future.

SURRENDER CHARGE

During the first fifteen Policy years, a Surrender Charge will be
incurred upon surrender of the Policy. The Surrender Charge consists of the
SURRENDER CHARGE PER THOUSAND multiplied by the applicable SURRENDER CHARGE
FACTOR.

(a) SURRENDER CHARGE PER THOUSAND. The Surrender Charge Per Thousand
Dollars of initial Specified Amount varies with the Insured's Issue Age, gender
and classification. See Appendix C for a table of the charges per thousand
dollars of initial Specified Amount.

(b) SURRENDER CHARGE FACTOR. As stated above, the factor is applied to
the charge per thousand dollars of initial Specified Amount due upon any
Surrender of a Policy during the first fifteen Policy years. In Policy years
1-5 this factor is 1.00 for Insureds at Issue Ages 0 - 39 and then declines at
a rate of 0.10 per year until reaching zero at the end of the fifteenth (15th)
Policy year as shown below. For Insureds with Issue Ages older than 39, this
factor is less than 1.00 at the end of the first (1st) Policy year and declines
to zero at the end of the fifteenth (15th) Policy year. Therefore, application
of the factor to the Surrender Charge Per Thousand in the event of any
surrender during the second through fifteenth Policy years will result in the
same or reduced surrender charges. If a surrender occurs after the fifteenth
(15th) Policy year, there is no Surrender Charge Per Thousand due. See the
example below. Factors for the Builder Plus ProgramSM are different than those
shown below. (See Charges And Deductions - Builder Plus ProgramSM, p. 29.)

SURRENDER CHARGE FACTORS
ISSUE AGES 0 - 39

<TABLE>
<CAPTION>
Surrender Charge Factor
End of Policy Year* Factor
- ------------------------- -------
<S> <C>
At Issue ............... 1.00
1-5 ..................... 1.00
6 ..................... .90
7 ..................... .80
8 ..................... .70
9 ..................... .60
10 ..................... .50
11 ..................... .40
12 ..................... .30
13 ..................... .20
14 ..................... .10
15 ..................... 0
16+ ..................... 0
</TABLE>

* THE FACTOR ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE INTERPOLATED BETWEEN
THE TWO END OF YEAR FACTORS.

(c) EXAMPLE: Assume a male tobacco user purchases the Policy at Issue Age
35. The Surrender Charge Per Thousand is $16.48 (see Appendix C). This is
multiplied by the Surrender Charge Factor resulting in the following Table of
Surrender Charges:

<TABLE>
<CAPTION>
TABLE OF SURRENDER CHARGES PER $1,000 OF
SPECIFIED AMOUNT AS OF THE POLICY DATE
SURRENDER SURRENDER
CHARGE CHARGE
PER $1,000 PER $1,000
OF SPECIFIED OF SPECIFIED
END OF AMOUNT ON END OF AMOUNT ON
POLICY POLICY POLICY POLICY
YEAR* PAGE 3A YEAR* PAGE 3A
- ----------- -------------- -------- -------------
<S> <C> <C> <C>
At Issue $ 16.48 9 $ 9.89
1 16.48 10 8.24
2 16.48 11 6.59
3 16.48 12 4.94
4 16.48 13 3.30
5 16.48 14 1.65
6 14.83 15 0.00
7 13.18 16+ 0.00
8 11.54
</TABLE>

* THE SURRENDER CHARGE ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE
INTERPOLATED BETWEEN THE TWO END OF YEAR CHARGES.

26
<PAGE>

PRO RATA DECREASE CHARGE

If, during the first 15 Policy years, the Specified Amount is decreased,
a pro rata Decrease Charge will be deducted from the Cash Value. The pro rata
Decrease Charge is equal to:

(1) the amount of the Specified Amount decrease; multiplied by

(2) the Surrender Charge Per Thousand of Specified Amount as of the date
of the decrease applicable to the Specified Amount as of the
Policy Date. See Appendix C for a table of Surrender Charges.

This pro rata Decrease Charge will not be deducted from the Cash Value
when a Specified Amount decrease results from (a) a change in the death benefit
Option, or (b) a withdrawal when the death benefit is Option A, as described in
the Cash Withdrawals section below. If a pro rata Decrease Charge is deducted
due to a decrease in Specified Amount, any future Surrender Charges incurred
during the first fifteen Policy years will be reduced proportionately.

CASH VALUE CHARGES

Charges will be deducted monthly from the Cash Value of each Policy
("monthly deduction") to compensate AUSA Life for certain administrative costs,
the cost of insurance and optional benefits added by rider. The monthly
deduction will be deducted on each Monthly Anniversary and will be allocated
among the Accounts on the same basis as Net Premiums are allocated. If the
value of any Account is insufficient to pay its part of the monthly deduction,
the monthly deduction will be taken on a pro rata basis from all Accounts.
Because portions of the monthly deduction, such as the cost of insurance, can
vary from month-to-month, the monthly deduction itself will vary in amount from
month-to-month.

COST OF INSURANCE. AUSA Life will determine the monthly cost of
insurance charge by multiplying the applicable cost of insurance rates by the
net amount at risk for each Policy Month. The net amount at risk for a Policy
Month is (a) the death benefit at the beginning of the Policy Month divided by
1.0032737 (which reduces the net amount at risk, solely for purposes of
computing the cost of insurance, by taking into account assumed monthly
earnings at an annual rate of 4%), less (b) the Cash Value at the beginning of
the Policy Month.

Cost of insurance rates will be based on the sex, Attained Age and rate
class of the Insured, and the length of time a Policy has been In Force. The
actual monthly cost of insurance rates will be based on AUSA Life's
expectations as to future experience. They will not, however, be greater than
the guaranteed cost of insurance rates set forth in the Policy. These
guaranteed rates are based on the 1980 Commissioners Standard Ordinary (C.S.O.)
Mortality Tables and the Insured's sex, Attained Age and rate class. For
standard rate classes, these rates will not exceed rates contained in the 1980
C.S.O. Tables. AUSA Life also may guarantee that actual cost of insurance rates
will not be changed for a specified period of time (e.g., one year). Any change
in the cost of insurance rates will apply to all Insureds of the same age, sex,
and rate class whose Policies have been In Force for the same length of time.

The Policies offered by this Prospectus are based on mortality tables
that distinguish between men and women. As a result, the Policy pays different
benefits to men and women of the same age.

The rate class of an Insured will affect the cost of insurance rate. AUSA
Life currently places Insureds into the following four standard rate classes:
Ultimate Select, non-tobacco use, Select, non-tobacco use, Ultimate Standard,
tobacco use, and Standard, tobacco use; as well as various other sub-standard
rate classes involving a higher mortality risk. In an otherwise identical
Policy, the cost of insurance rate is generally higher for tobacco use than for
non-tobacco use and, within these two categories, higher for Insureds not in
the Ultimate category than for Insureds in the Ultimate category.

AUSA Life may also issue certain Policies on a "simplified" or expedited
basis to certain categories of individuals (for example, Policies issued at a
predetermined Specified Amount or underwritten on a group basis). Policies
issued on this basis will have guaranteed cost of insurance rates no higher
than the guaranteed rates for Select, non-tobacco use, or Standard, tobacco
use, categories (as appropriate); however, due to the special underwriting
criteria established for these issues, actual rates may be higher or lower than
the current cost of insurance rates charged under otherwise identical Policies
that are underwritten using standard underwriting criteria.

MONTHLY POLICY CHARGE. AUSA Life has primary responsibility for the
administration of the Policy and the Series Account. Annual administrative
expenses include recordkeeping, processing death benefit claims, Policy
changes, reporting and overhead costs. As reimbursement for administrative
expenses related to the maintenance of each Policy and the Series Account, AUSA
Life assesses a monthly administration charge from each Policy. This charge is
currently $5.00 per Policy Month and is guaranteed never to exceed $7.50 per
Policy Month.

OPTIONAL CASH VALUE CHARGES

The following optional Cash Value charges will be deducted from the
Policy as the result of changes or elections made to the Policy and initiated
by the Policyowner.

OPTIONAL INSURANCE BENEFITS. The monthly deduction will include charges
for any optional insurance benefits added to the Policy by rider.

CHANGE IN NET PREMIUM ALLOCATION. AUSA Life does not currently levy or
charge when changes are made to allocation of Net Premium. However, AUSA Life
reserves the right to impose a $25 charge for each change of Net Premium
allocation in excess of one change per

27
<PAGE>

Policy year quarter. If AUSA Life decides to impose this charge, Policyowners
will be notified in writing in advance.

CASH VALUE TRANSFERS. AUSA Life reserves the right to charge a $25 fee
for each transfer in excess of one per month or twelve transfers per Policy
year. If charged, this fee will be imposed and deducted from each amount
transferred to compensate AUSA Life for the costs in effectuating the transfer.
The transfer charge will not be increased in the future.

CASH WITHDRAWALS. A processing fee equal to the lesser of $25 or 2% of
the amount withdrawn will be deducted from amounts withdrawn from the Policy
and the balance will then be paid to the Policyowner. This fee will not be
increased.

CHARGES AGAINST THE SERIES ACCOUNT

Certain expenses will be deducted as a percentage of the value of the net
assets of the Series Account to compensate AUSA Life for certain risks assumed
in connection with the Policy.

MORTALITY AND EXPENSE RISK CHARGE. AUSA Life will deduct a daily charge
from the Series Account at an annual rate of 0.90% of the average daily net
assets of the Series Account. AUSA Life currently intends to reduce this charge
to 0.75% after the first fifteen Policy years. However, such reduction is not
guaranteed, and AUSA Life reserves the right to maintain this charge at the
0.90% level after the first fifteen Policy years. Under AUSA Life's current
procedures, these amounts are paid to the General Account monthly.

The mortality risk assumed by AUSA Life is that Insureds may live for a
shorter time than projected. The expense risk assumed is that expenses incurred
in issuing and administering the Policies will exceed the limits on
administrative charges set in the Policies. AUSA Life also assumes risks with
respect to other contingencies including the incidence of Policy loans, which
may cause AUSA Life to incur greater costs than anticipated when designing the
Policies.

TAXES. Currently no charge is made to the Series Account for Federal
income taxes that may be attributable to the Series Account. AUSA Life may,
however, make such a charge in the future. Charges for other taxes, if any,
attributable to the Series Account may also be made. (See Federal Tax Matters,
p. 36.)

EXPENSES OF THE FUND

Because the Series Account purchases shares of the Portfolios of the
Fund, the net assets of the Series Account will reflect the investment
management fee and other expenses incurred by the Portfolios of the Fund. (See
p. 7 for a table of the Fund Annual Expenses.) (See pp. 19-20 for a discussion
of the investment management fees of each Portfolio.)

Effective January 1, 1997, the Fund adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to
the Plan, has entered into a Distribution Agreement with ISI, principal
underwriter for the Fund.

Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for expenses
incurred in connection with the distribution of a Portfolio's shares, amounts
equal to actual expenses associated with distributing a Portfolio's shares, up
to a maximum rate of 0.15% (fifteen one-hundredths of one percent) on an
annualized basis of the average daily net assets. This fee is measured and
accrued daily and paid monthly. ISI has determined that it will not seek
payment by the Fund of distribution expenses incurred with respect to any
Portfolio during the fiscal year ending December 31, 1998. Prior to ISI's
seeking reimbursement, Policyowners will be notified in writing in advance.

GROUP OR SPONSORED POLICIES

A different form of the Policy may be purchased under group or sponsored
arrangements ("Group/ Sponsored Policies"). Under Group/Sponsored Policies, a
trustee, employer or similar entity purchases individual policies covering a
group of individuals on a group basis. Examples of such arrangements are
employer-sponsored benefit plans which are qualified under Section 401 of the
Internal Revenue Code and deferred compensation plans. A "sponsored
arrangement" includes a program under which an employer permits group
solicitation of its employees or an association permits group solicitation of
its members for the purchase of Policies on an individual basis.

For Group/Sponsored Policies the premium expense charges, contingent
surrender charges, minimum premium and minimum Specified Amount described in
"Charges and Deductions" may be reduced. AUSA Life will issue Group/Sponsored
Policies in accordance with its rules in effect as of the date an application
for a Policy is approved. To qualify for Group/Sponsored Policies, a group or
sponsored arrangement must satisfy certain criteria as to, for example, size
and number of years in existence. Generally, the sales contacts and effort,
administrative costs and mortality cost for Group/Sponsored Policies take into
account such factors as the size of the group or sponsored arrangement, its
stability as indicated by its term of existence, the purposes for which Group/
Sponsored Policies are purchased and certain characteristics of its members.
The Group/Sponsored Policy's amount of reduction and the criteria for
qualification will reflect the reduced sales effort resulting from sales to
qualifying groups and sponsored arrangements. Group/ Sponsored Policies may
not be available in certain states.

AUSA Life may modify from time to time on a uniform basis the criteria
for qualification for Group/ Sponsored Policies. In no event, however, will
group or sponsored arrangements established for the sole purpose of purchasing
Group/Sponsored Policies, or which have been in existence for less than six
months, qualify for such Policies. Group/Sponsored Policies will not be
unfairly discriminatory against any person, including the

28
<PAGE>

affected Policyowners and all other Policyowners of other forms of Policies
funded by the Series Account.

In 1983 the United States Supreme Court held that certain insurance
policies, the benefits under which vary based on sex, may not be used to fund
certain employer-sponsored benefit plans and fringe benefit programs. AUSA Life
recommends that any employer proposing to offer the Group/Sponsored Policies to
employees under a group or sponsored arrangement consult his or her attorney
before doing so. (See Federal Tax Matters - Employment-Related Benefit Plans,
p. 39.)

ASSOCIATE POLICIES

Certain employees, field associates, directors and their relatives may
purchase a different form of the Policy ("Associate Policy") under which AUSA
Life, in addition to waiving or reducing the premium expense charges,
contingent surrender charges, minimum premium and minimum Specified Amount, may
waive or reduce the Monthly Policy Charge and the Surrender Charge. The
Associate Policy is available to: (a) current and retired directors, officers,
full-time employees and agents of AUSA Life and its affiliates; (b) current and
retired directors, officers, full-time employees and registered representatives
of ISI and any broker-dealer which has a sales agreement with ISI; (c) any
Trust, pension, profit-sharing or other employee benefit plan of any of the
foregoing persons or entities; (d) current and retired directors, officers and
full-time employees of WRL Series Fund, Inc. and any IDEX mutual fund, and any
investment adviser or investment sub-adviser thereto; and (e) any member of a
family of any of the foregoing (e.g., spouse, child, sibling, parent-in-law).
AUSA Life reserves the right to modify or terminate this arrangement at any
time.

BUILDER PLUS PROGRAMSM

AUSA Life also offers a different form of the Policy to Policyowners who
make an Initial Premium payment of at least $10,000 or more, and which is at
least 90% of the maximum allowable single premium ("Builder Plus Program
Policies"). Under a Builder Plus Program Policy, the underwriting process is
both expedited and shortened in length by reducing the number and extent of the
items required to determine the risk assumed by AUSA Life. The Builder Plus
Program Policy entails fewer administrative costs for AUSA Life and also
reduces distribution costs by relieving sales representatives from some of the
burden of assisting in the underwriting.

A Builder Plus Program Policy sold under this simplified underwriting
arrangement differs from a standard Policy in six principal respects: (1) a
minimum Initial Premium payment which is at least $10,000 and which is at least
90% of the maximum allowable premium, (2) no premium expense charges are
assessed, (3) the underwriting process is shorter and simpler, (4) the cost of
insurance charges may be different for certain policyowners, (5) premium
payment provisions may be more restricted than for Policies issued on a
standard basis, and (6) most policies will be "modified endowment contracts"
for Federal income tax purposes. (See Tax Treatment of Policy Benefits -
Modified Endowment Contracts, p. 37.)

Due to the lower administrative and distribution expenses associated with
the Builder Plus Program Policies, no premium expense charges (i.e., sales
charge, premium tax charge and premium collection charge) are made. (See
Charges and Deductions - Premium Expense Charge, p. 26.) Depending on age of
issue and Specified Amount, certain medical underwriting requirements will be
waived.

Additionally, the length of time the Surrender Charge Factor applies is
reduced, as follows:

SURRENDER CHARGE FACTORS
ISSUE AGES 0 - 39

* THE SURRENDER CHARGE ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE
INTERPOLATED BETWEEN THE TWO END OF YEAR SURRENDER CHARGES.

For Insureds Issue Ages older than 39, this factor is less than 1.00 at the end
of the first (1st) Policy year and declines to zero at the end of the ninth
(9th) Policy year. Therefore, application of the factor to the Surrender Charge
Per Thousand in the event of any surrender during the second through ninth
Policy years will result in the same or reduced surrender charges. If a
surrender occurs after the ninth (9th) Policy year, there is no Surrender
Charge Per Thousand due.

For a full explanation of the Surrender Charge, see Charges and
Deductions - Surrender Charge, p. 26.

Although for non sub-standard rate classes the guaranteed cost of
insurance rates for policies will not be greater than those for standard
Policies, current rates for policies during the first ten policy years may be
higher for certain policyowners (i.e., those who are assigned to Ultimate
Select, non-tobacco use, or Ultimate Standard, tobacco use, rate classes) than
would be the case for standard Policies. (See Cash Value Charges - Cost of
Insurance, p. 27.)

Under AUSA Life's current rules, the minimum possible Specified Amount
for a Builder Plus Program Policy at issue is the amount of insurance that the
$10,000 Initial Premium payment will purchase based on the Insured's age, sex,
and rate class and certain Federal tax law guidelines. Likewise, for any larger
Initial Premium payment there will be a correspondingly larger minimum
Specified Amount at issue.

29
<PAGE>

The maximum Specified Amount for a Builder Plus Program Policy is a
function of the size of the Initial Premium payment and is approximately 111%
of the lowest possible minimum Specified Amount available for the same amount
of Initial Premium payment.

Depending on the Specified Amount selected by the policyowner, a large
Initial Premium payment, such as that required for a Builder Plus Program
Policy, will generally limit the ability to make additional premium payments.
This limit exists because the total of all premiums paid under a Builder Plus
Program Policy may not exceed the maximum premium limitation imposed by Federal
tax laws. (See Premiums - Premium Limitations, p. 22.) Of course, under a
policy, there are no Planned Periodic Premiums.

Most Builder Plus Program Policies will be modified endowment contracts.
Distributions from modified endowment contracts are generally treated as
ordinary income subject to tax up to the amount equal to the excess of the Cash
Value before the distribution over the investment in the policy. In addition,
the portion of any such distribution that is included in income is subject to a
10% penalty tax, except where the distribution is made on or after the
policyowner attains age 591/2, is attributable to the policyowner becoming
disabled or is part of a series of substantially equal periodic payments for
the life (or the life expectancy) of the policyowner. Such distributions
include surrenders, cash withdrawals and policy loans. (See Tax Treatment of
Policy Benefits - Distributions From Policies Classified as Modified Endowment
Contracts, p. 37.)

POLICY RIGHTS

LOAN PRIVILEGES

POLICY LOAN. After the first Policy year and so long as the Policy
remains In Force, the Policyowner may borrow money from AUSA Life using the
Policy as the only security for the loan. AUSA Life reserves the right to
permit a Policy loan prior to the first Policy Anniversary for Policies issued
pursuant to a transfer of cash values from another life insurance policy under
Section 1035(a) of the Internal Revenue Code of 1986, as amended. The maximum
amount that may be borrowed is 90% of the Cash Value, less any surrender charge
and any already outstanding Policy loan. AUSA Life reserves the right to limit
the amount of any Policy loan to not less than $500. Outstanding loans have
priority over the claims of any assignee or other person. The loan may be
repaid totally or in part before the Maturity Date of the Policy and while the
Policy is In Force. A loan which is taken from, or secured by, a Policy may
have Federal income tax consequences. (See Federal Tax Matters, p. 36.)

An amount equal to the loan plus interest in advance until the next
Policy Anniversary will be withdrawn from the Account or Accounts specified and
transferred to the Loan Reserve until the loan is repaid. The Loan Reserve is a
portion of the Fixed Account used as collateral for any Policy loan. The
Sub-Accounts of the Series Account may be specified. If no Account is
specified, the loan amount will be withdrawn from each Account in the same
manner as the current allocation instructions.

The amount of the loan will normally be paid within seven days after
receipt of a proper request in a manner permitted by AUSA Life. Postponement of
loans may take place under certain conditions. (See General Provisions -
Postponement of Payments, p. 32.) Under AUSA Life's current procedures, at each
Anniversary, AUSA Life will compare the amount of the outstanding loan
(including loan interest in advance until the next Policy Anniversary, if not
paid) to the amount in the Loan Reserve (including interest credited to the
Loan Reserve during the previous Policy year). AUSA Life will also make this
comparison any time the Policyowner repays all or part of the loan, or makes a
request to borrow an additional amount. At each such time, if the amount of the
outstanding loan exceeds the amount in the Loan Reserve, AUSA Life will
withdraw the difference from the Accounts and transfer it to the Loan Reserve
in the same manner as when a loan is made. If the amount in the Loan Reserve
exceeds the amount of the outstanding loan, AUSA Life will withdraw the
difference from the Loan Reserve and transfer it to the Accounts in accordance
with the Policyowner's current allocation instructions. AUSA Life reserves the
right to require the transfer of such amounts to the Fixed Account, if such
loans were originally transferred from the Fixed Account. (See The Fixed
Account, p. 35.) No charge will be imposed for these transfers.

INTEREST RATE CHARGED. The interest rate charged on Policy loans is 5.2%
payable annually in advance (equivalent to an effective annual rate of 5.5%).
If unpaid when due, interest will be added to the amount of the loan and will
become part of the loan and bear interest at the same rate.

LOAN RESERVE INTEREST RATE CREDITED. The amount transferred to the Loan
Reserve will accrue interest at a minimum effective annual rate not less than
4%. AUSA Life may credit a higher rate, but it is not obligated to do so.
Currently, AUSA Life is crediting an effective annual interest rate of 4.75% on
all amounts borrowed during the first ten Policy years. On amounts borrowed,
after the tenth Policy year, that are part of the Cash Value in excess of the
cost basis (premiums less withdrawals) of the Policy the interest rate credited
is currently equal to the interest rate being charged on the total loan while
the remaining portion, if any, of the loan is credited the current rate of
4.75%.

EFFECT OF POLICY LOANS. A Policy loan affects the Policy, because the
death benefit and Net Surrender Value under the Policy are reduced by the
amount of the loan. Repayment of the loan causes the death benefit and Net
Surrender Value to increase by the amount of the repayment.

As long as a loan is outstanding, an amount equal to the loan plus
interest in advance until the next Policy Anniversary is held in the Loan
Reserve. This amount

30
<PAGE>

will not be affected by the Series Account's investment performance. Amounts
transferred from the Series Account to the Loan Reserve will affect the Series
Account value because such amounts will be credited with an interest rate
declared by AUSA Life rather than a rate of return reflecting the investment
performance of the Series Account. (See The Fixed Account - Minimum Guaranteed
and Current Interest Rates, p. 35.)

There are risks involved in taking a Policy loan, a few of which include
the potential for a Policy to lapse if projected earnings, taking into account
outstanding loans, are not achieved, as well as adverse tax consequences which
occur if a Policy lapses with loans outstanding. (See Federal Tax Matters - Tax
Treatment of Policy Benefits, p. 37.)

INDEBTEDNESS. Indebtedness equals the total of all Policy loans less any
unearned loan interest on the loans. If indebtedness exceeds the Cash Value
less the then applicable surrender charge, AUSA Life will notify the
Policyowner and any assignee of record. If a sufficient payment equal to excess
indebtedness is not received by AUSA Life within 61 days from the date notice
is sent, the Policy will Lapse and terminate without value. The Policy,
however, may later be reinstated. (See Policy Lapse and Reinstatement, p. 25.)

REPAYMENT OF INDEBTEDNESS. Indebtedness may be repaid any time before
the Maturity Date of the Policy and while the Policy is In Force. Payments made
by the Policyowner while there is indebtedness will be treated as premium
payments unless the Policyowner indicates that the payment should be treated as
a loan repayment. (See Policy Rights - Benefits at Maturity, p. 32.) If not
repaid, AUSA Life may deduct indebtedness from any amount payable under the
Policy. As indebtedness is repaid, the Policy's value in the Loan Reserve
securing the indebtedness repaid will be transferred from the Loan Reserve to
the Accounts in the same manner as Net Premiums are allocated. However, AUSA
Life reserves the right to require the transfer to the Fixed Account. AUSA Life
will allocate the repayment of indebtedness at the end of the Valuation Period
during which the repayment is received.

SURRENDER PRIVILEGES

At any time before the earlier of the death of the Insured or the
Maturity Date, the Policyowner may totally surrender or, after the first Policy
year, make a cash withdrawal from the Policy by sending a written request to
AUSA Life. The amount available for surrender is the Net Surrender Value at the
end of the Valuation Period during which the surrender request is received at
AUSA Life's Administrative Office. The Net Surrender Value is equal to the Cash
Value as of the date of Surrender, less any surrender charge, and less any
outstanding Policy loan, plus any unearned loan interest. A Surrender Charge
may apply. (See Charges and Deductions - Surrender Charge, p. 26.) Surrenders
from the Series Account will generally be paid within seven days of receipt of
the written request. Postponement of payments may, however, occur in certain
circumstances. (See General Provisions - Postponement of Payments, p. 32.)
Additional restrictions may be applied to surrenders from the Fixed Account.
(See The Fixed Account - Allocations, Transfers and Withdrawals, p. 35.) For
the protection of Policyowners, all requests for cash withdrawals or total
surrenders of more than $100,000, or where the withdrawal or surrender proceeds
are to be sent to an address other than the address of record will require a
signature guarantee. All required guarantees of signatures must be made by a
national or state bank, a member firm of a national stock exchange or any other
institution which is an eligible guarantor institution as defined by rules and
regulations of the Commission. If the Policyowner is a corporation,
partnership, trust or fiduciary, evidence of the authority of the person
seeking redemption is required before the request for withdrawal is accepted,
including withdrawals under $100,000. For additional information, Policyowners
may call AUSA Life at (800) 322-7160. A cash withdrawal or total surrender may
have Federal income tax consequences. (See Federal Tax Matters, p. 36.)

TOTAL SURRENDERS. When the Policy is totally surrendered, the Policy
itself must be returned to AUSA Life along with the request. A Policyowner may
elect to have the amount paid in a lump sum or under a settlement option. (See
Payment of Policy Benefits - Settlement Options, p. 32.)

CASH WITHDRAWALS. Cash withdrawals are available after the first Policy
year. Cash withdrawals are allowed only once each Policy year. For a cash
withdrawal, the amount available may be limited to no less than $500 and to no
more than 10% of the Net Surrender Value. The amount paid plus a processing fee
equal to the lesser of $25 or 2% of the amount withdrawn will be deducted from
the Policy's Cash Value at the end of the Valuation Period during which the
request is received. The amount will be deducted from the Accounts in the same
manner as the current allocation instructions unless the Policyowner directs
otherwise.

Cash withdrawals will affect both the Policy's Cash Value and the death
benefit payable under the Policy. The Policy's Cash Value will be reduced by
the amount of the cash withdrawal. Moreover, the death benefit proceeds payable
under a Policy will generally be reduced by at least the amount of the cash
withdrawal.

In addition, when death benefit Option A is in effect, the Specified
Amount will be reduced by the cash withdrawal. No cash withdrawal will be
permitted which would result in a Specified Amount lower than the minimum
Specified Amount set forth in the Policy or would deny the Policy status as
life insurance under the Internal Revenue Code and applicable regulations. (See
Cash Value Charges - Cost of Insurance, p. 27; Death Benefit - Insurance
Protection, p. 16; and Federal Tax Matters - Tax Treatment of Policy Benefits,
p. 37.)

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EXAMINATION OF POLICY PRIVILEGE ("FREE-LOOK")

The Policyowner may cancel the Policy within 10 days after the
Policyowner receives it. The Policyowner should mail or deliver the Policy to
either AUSA Life or the agent who sold it. If the Policy is cancelled in a
timely fashion, a refund will be made to the Policyowner. If the Policy is
returned within the 10 day "Free-Look" period, it will be void from the
beginning and a refund will be made to the Owner. The refund will equal the
total of all premiums paid for this Policy.

CONVERSION RIGHTS

At any time upon written request within 24 months of the Policy Date, the
Policyowner may elect to transfer all Sub-Account values to the Fixed Account.
No transfer charge will be assessed.

BENEFITS AT MATURITY

If the Insured is living and the Policy is In Force, AUSA Life will pay
the Net Surrender Value of the Policy on the Maturity Date. (See Cash Value -
Net Surrender Value, p. 18.) The Policy will mature on the Anniversary nearest
the Insured's 95th birthday, if the Insured is living and the Policy is In
Force. AUSA Life is willing to extend the Maturity Date provided the Policy is
still In Force on the Maturity Date and there are no unfavorable tax
consequences. A tax advisor should thus be consulted about the tax consequences
associated with any Maturity Date extension. Extension of the Maturity Date
will be made upon mutual agreement between AUSA Life and the Policyowner,
provided the Policyowner submits a written request to AUSA Life between 90 and
180 days prior to the Maturity Date, and provided the Policy may be extended
with no unfavorable tax consequences to the Policyowner.

PAYMENT OF POLICY BENEFITS

Death benefits under the Policy will ordinarily be paid within seven days
after AUSA Life receives due proof of death, and verifies the validity of the
claim. Other benefits will ordinarily be paid within seven days of receipt of
proper written request (including an election as to tax withholding). Payments
may be postponed in certain circumstances. (See General Provisions -
Postponement of Payments, below and The Fixed Account - Allocations, Transfers
and Withdrawals, p. 35.) The Policyowner may decide the form in which the
benefits will be paid. During the Insured's lifetime, the Policyowner may
arrange for the death benefits to be paid in a lump sum or under one or more of
the settlement options described below. These choices are also available if the
Policy is surrendered or matures. If no election is made, AUSA Life will pay
the benefits in a lump sum.

When death benefits are payable in a lump sum, the Beneficiary may select
one or more of the settlement options. If death benefits become payable under a
settlement option and the Beneficiary has the right to withdraw the entire
amount, the Beneficiary may name and change contingent Beneficiaries.

SETTLEMENT OPTIONS. Policyowners and Beneficiaries, subject to a prior
election of the Policyowner, may elect to have benefits paid in a lump sum or
in accordance with a variety of settlement options offered under the Policy.
Once a settlement option is in effect, there will no longer be value in the
Series Account or the Fixed Account. AUSA Life may make other settlement
options available on the Fixed Account in the future. The effective date of a
settlement provision will be either the date of surrender or the date of death
of the Insured. For additional information concerning these options, see the
Policy itself.

OPTION A - PAYMENTS FOR A FIXED PERIOD. The proceeds plus interest will
be paid in equal monthly installments for the period chosen until the fund has
been paid in full. The period chosen may not exceed 30 years.

OPTION B - LIFE INCOME. The proceeds will be paid in equal installments
for the guaranteed payment period elected and continue for the life of the
person on whose life the option is based. Such installments will be payable:
(a) during the lifetime of the payee or (b) during a fixed period certain and
for the remaining lifetime of the payee or (c) until the sum of installments
paid equals the proceeds applied and for the remaining life of the payee.
Guaranteed payment periods may be elected for 5 and 10 years, or the period in
which the total payments will equal the amount retained.

OPTION C - JOINT AND SURVIVOR LIFE INCOME. The proceeds will be paid
during the joint lifetime of two persons and (a) continue upon the death of the
first payee for the remaining lifetime of the survivor or (b) be reduced by
one-third upon the death of the first payee and continue for the remaining
lifetime of the survivor.

GENERAL PROVISIONS

POSTPONEMENT OF PAYMENTS

GENERAL. Payment of any amount from the Series Account upon complete
surrender, cash withdrawal, Policy loan, or benefits payable at death or
maturity may be postponed whenever: (i) the New York Stock Exchange is closed
other than customary weekend and holiday closing, or trading on the New York
Stock Exchange is restricted as determined by the SEC; (ii) the SEC by order
permits postponement for the protection of Policyowners; or (iii) an emergency
exists, as determined by the SEC, as a result of which disposal of securities
is not reasonably practicable or it is not reasonably practicable to determine
the value of the Series Account's net assets. Transfers may also be postponed
under these circumstances. For restrictions applicable to payments from the
Fixed Account, see The Fixed Account - Allocations, Transfers and Withdrawals,
p. 35.

PAYMENT BY CHECK. Payments under the Policy of any amounts derived from
premiums paid by check or bank draft may be delayed until such time as the
check or bank draft has cleared the Policyowner's bank.

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THE CONTRACT

The Policy and attached copy of the application and any supplemental
applications are the entire contract. Only statements in the application and
any supplemental applications can be used to void the Policy or defend a claim.
The statements are considered representations and not warranties. No Policy
provision can be waived or changed except by endorsement. Only the President or
Secretary of AUSA Life can agree to change or waive any provisions of the
Policy.

SUICIDE

If the Insured, while sane or insane, commits suicide within two years
after the Policy Date, AUSA Life will pay only the premiums received, less any
cash withdrawals and outstanding indebtedness. In the event of Lapse of the
Policy, the suicide period will be measured from the effective date of
reinstatement. If the Insured, while sane or insane, commits suicide within two
years after the effective date of any increase in insurance or any
reinstatement, AUSA Life's total liability with respect to such increase or
reinstatement will be the cost of insurance charges deducted for such increase
or reinstatement.

INCONTESTABILITY

AUSA Life cannot contest the Policy as to the initial Specified Amount
after it has been In Force during the lifetime of the Insured for two years
from the Policy Date. If the Policy is reinstated, a new two year
contestability period (apart from any remaining contestability period) will
apply from the date of the application for reinstatement and will apply only to
statements made in the application for reinstatement.

CHANGE OF OWNER OR BENEFICIARY

The Beneficiary, as named in the Policy application or subsequently
changed, will receive the Policy benefits at the Insured's death. If the named
Beneficiary dies before the Insured, the contingent Beneficiary, if named,
becomes the Beneficiary. If no Beneficiary survives the Insured, the benefits
payable at the Insured's death will be paid to the Policyowner or the
Policyowner's estate. As long as the Policy is In Force, the Policyowner or
Beneficiary may be changed by written request from the Policyowner in a form
acceptable to AUSA Life. The Policy need not be returned unless requested by
AUSA Life. The change will take effect as of the date the request is signed,
regardless of whether the Insured is living when the request is received by
AUSA Life. AUSA Life will not, however, be liable for any payment made or
action taken before receipt of the request.

ASSIGNMENT

The Policy may be assigned by the Policyowner. AUSA Life will not be
bound by the assignment until a written copy has been received at its
Administrative Office and will not be liable with respect to any payment made
prior to receipt. AUSA Life assumes no responsibility for determining whether
an assignment is valid or the extent of the assignee's interest.

MISSTATEMENT OF AGE OR SEX

If the age or sex of the Insured has been misstated, the death benefit
will be adjusted based on what the cost of insurance charge for the most recent
monthly deduction would have purchased based on the correct age and sex.

REPORTS AND RECORDS

AUSA Life will maintain all records relating to the Series Account and
the Fixed Account. AUSA Life will mail to each Policyowner, at the last known
address of record, reports required by applicable laws and or regulations.

AUSA Life will send Policyowners written confirmation within seven days
of the following transactions: unplanned and certain planned premium payments,
Cash Value transfers, change in death benefit option or Specified Amount, total
surrender or cash withdrawals, and Policy loans or repayments. AUSA Life will
also send each Policyowner an annual statement at the end of the Policy year
showing for the year, among other things, the month and amount of each: premium
payment made, monthly deduction, transfer, cash withdrawal and Policy loan or
repayment. The annual statement will also show Policy year-end Net Surrender
Value, death benefit and Policy loan value, as well as other Policy activity
during the year.

OPTIONAL INSURANCE BENEFITS

Subject to certain requirements, one or more of the following optional
insurance benefits may be added to a Policy by rider. The cost of any optional
insurance benefits will be deducted as part of the monthly deduction. (See
Charges and Deductions - Optional Cash Value Charges, p. 27.) For purposes of
the riders, the person insured under the Policy is referred to as the Primary
Insured, and the term "Face Amount" refers to the level term insurance amount
payable at death.

CHILDREN'S INSURANCE RIDER: Provides a Face Amount on each of the
Primary Insured's children, as defined in the rider. Under the terms of the
rider, the death benefit will be payable to the Insured upon receipt of proof
that the death of an insured child occurred while the rider and coverage on
such child was In Force. Upon the Primary Insured's death, while the rider is
in force, the rider will terminate 31 days after such death and a separate life
insurance policy will be offered to each insured child for an amount equal to
the level death benefit amount of the rider at a premium based upon the
Attained Age of each insured child.

ACCIDENTAL DEATH BENEFIT RIDER: Provides a Face Amount if the Primary
Insured's death results from accidental bodily injury, as defined in the rider.
Certain risks, as defined in the rider, are not covered. Under the terms of the
rider, the additional benefits provided in the rider will be paid upon receipt
of proof by AUSA Life that death resulted from bodily injuries effected
directly and independently of all other causes through external, violent and
accidental means; occurred within 90 days from

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the date of accident causing such injuries; and occurred while the rider was In
Force. The rider will terminate on the earliest of the Policy Anniversary
nearest the Primary Insured's 70th birthday, the date the Policy terminates, or
the Monthiversary on which the rider is terminated on request by the
Policyowner.

OTHER INSURED RIDER: Provides that AUSA Life will pay the Face Amount of
the rider to the Primary Insured upon receipt of due proof of the other
Insured's death. On any Monthiversary while the rider is In Force, the
Policyowner may exchange the rider without evidence of insurability for a new
Policy on the other Insured's life upon written request subject to the
following: (a) the rider has not reached the Anniversary nearest the other
Insured's 70th birthday; (b) the new policy is any permanent plan of insurance
then offered by AUSA Life; (c) the amount of insurance upon conversion will
equal the Face Amount then In Force under the rider; and (d) the payment of the
premium will be based on the other Insured's rate class under the rider.

DISABILITY WAIVER RIDER: Provides a waiver of the monthly deductions for
the Policy while the Insured is disabled. Under the terms of the rider, the
monthly deductions will be waived upon receipt of proof adequate to AUSA Life
that: the Insured is totally disabled, as defined in the rider; the disability
commenced while the rider was In Force; the disability began before the
Anniversary nearest the Insured's 60th birthday; and total disability has
existed continuously for at least six months. No monthly deduction will be
waived which falls due more than one year prior to receipt by AUSA Life of
written notice of a claim. Certain risks, as defined in the rider, are not
covered.

DISABILITY WAIVER AND MONTHLY INCOME RIDER: Provides the identical
benefit as the Disability Waiver Rider and, in addition, a monthly income
benefit up to a maximum 120 monthly payments.

PRIMARY INSURED RIDER ("PIR") AND PRIMARY INSURED RIDER PLUS ("PIR
PLUS"): Provides term insurance coverage for the insured on a basis different
from the coverage provided under the Policy. The PIR may be purchased at any
time, either at the time of application for the Policy, or after the Record
Date. The PIR Plus may only be purchased at the time of application.

PIR or PIR Plus increases the death benefit provided under the Policy by
the Face Amount of the rider. The PIR terminates at age 70; the PIR Plus
terminates at age 65. No additional Surrender Charge is assessed in connection
with PIR or PIR Plus coverage. Generally, coverage provided by PIR or PIR Plus
has a lower cost than that provided under the Policy, but has no Cash Value
associated with it. Owners may reduce or cancel coverage under a PIR or PIR
Plus rider separately from reducing the Specified Amount of a Policy. Likewise,
the Specified Amount of a Policy may be decreased, subject to certain minimums,
without reducing the coverage under PIR or PIR Plus.

Because no Surrender Charge is assessed in connection with a reduction of
coverage under PIR or PIR Plus, such a reduction may be less expensive than a
decrease in Specified Amount under the Policy if the increment of Specified
Amount that is reduced is subject to a Surrender Charge. On the other hand,
continuing coverage on an increment of Specified Amount under the Policy may
have a cost of insurance that is higher than the cost of the same amount of
coverage under PIR or PIR Plus.

There may be circumstances in which it will be to your advantage to
obtain a portion of your insurance coverage under PIR or PIR Plus. These
circumstances depend on many factors, including the premium levels, amounts and
duration of coverage needed, as well as the age, sex and risk classification of
the Insured. Your registered representative can provide you with further
information explaining how PIR and PIR Plus coverage can affect your Policy
values under different assumptions. AUSA Life reserves the right to discontinue
the availability of these riders for new Policies at any time, and also
reserves the right to modify the terms of these riders for new Policies,
subject to approval by the state insurance departments.

TERMINAL ILLNESS ACCELERATED DEATH BENEFIT RIDER

In states where this rider has been approved by that state's department
of insurance, upon receipt of proof satisfactory to AUSA Life that the Insured
has incurred a condition resulting from illness which, as determined by a
Physician, has reduced life expectancy to not more than 12 months from the date
of the Physician's Statement (a "Terminal Condition"), AUSA Life will pay to
the Policyowner a "Single Sum Benefit", equal to:

(a) the Death Benefit in effect on the date the Single Sum Benefit is
paid; multiplied by
(b) the Election Percentage; divided by
(c) 1 + i, where i equals the greater of (A) and (B) on the date the
Single Sum Benefit is paid. (A) equals the interest rate determined
under Internal Revenue Code section 846(c)(2), as it may be amended
from time to time; and (B) equals the Policy Loan Interest Rate;
minus
(d) indebtedness, if any, at the time the Single Sum Benefit is paid,
multiplied by the Election Percentage.

"Death Benefit" under the Rider means the amount payable at death of the
Insured under the Policy, plus the benefit payable under any In Force Primary
Insured Rider. (See Optional Insurance Benefits - Primary Insured Rider and
Primary Insured Rider Plus, above.) "Election Percentage" means a percentage,
selected by the Policyowner, not to exceed 100% of the Policy's Death Benefit,
as defined under the rider; however, in no event will the Election Percentage
result in a Single Sum Benefit greater than $500,000. A "Physician" may be a
Doctor of Medicine or a Doctor of Osteopathy, licensed to practice medicine and
treat injury or illness in the state in which treatment is received and who is
acting within the scope of that license, and must be someone

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other than the Insured, the Policyowner, a person who lives with the Insured or
Policyowner, or a person who is part of the Insured's or Policyowner's
"Immediate Family" (spouse, child, brother, sister, parent, grandparent or
grandchild of the Insured). The "Physician's Statement" must be a written
statement signed by a Physician which provides the Physician's diagnosis of the
Insured's non-correctable medical condition. It must state with reasonable
medical certainty that the non-correctable medical condition will result in the
death of the Insured within 12 months of the Physician's Statement, taking into
consideration the ordinary and reasonable medical care, advice and treatment
available in the same or similar communities.

The rider will not pay benefits for a Terminal Condition resulting from
self-inflicted bodily injuries occurring within the same period specified in
the Policy's suicide provision. The rider terminates at the earliest of (a) the
date the Policy terminates, (b) the effective date of a settlement option
elected under the Policy, (c) the date the Single Sum Benefit is paid, or (d)
the date the Policyowner elects to terminate the rider.

Pursuant to the recently enacted Health Insurance Portability and
Accountability Act of 1996, AUSA Life believes that for federal income tax
purposes a Single Sum Benefit payment made under the Terminal Illness
Accelerated Death Benefit Rider should be fully excludable from the gross
income of the beneficiary, as long as the beneficiary is the Insured under the
Policy. However, a Policyowner should consult a qualified tax advisor about the
consequences of adding this rider to a Policy or requesting a Single Sum
Benefit payment under this rider.

There is no additional charge for this rider. This rider may not be
available in all states or, if available, the terms of the rider may vary, in
accordance with the requirements of each state's insurance laws.

THE FIXED ACCOUNT

A Policyowner may allocate Net Premiums and transfer Cash Value to the
Fixed Account, which is part of AUSA Life's General Account. Because of
exemptive and exclusionary provisions, interests in the Fixed Account have not
been registered under the Securities Act of 1933 and neither the Fixed Account
nor the General Account has been registered as an investment company under the
1940 Act. Accordingly, neither the Fixed Account, the General Account nor any
interests therein are generally subject to the provisions of these acts and
AUSA Life has been advised that the staff of the Commission has not reviewed
the disclosures in this Prospectus relating to the Fixed Account. Disclosures
regarding the Fixed Account may, however, be subject to certain generally
applicable provisions of the Federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.

The portion of the Cash Value allocated to the Fixed Account (the "Fixed
Account Value") will be credited with rates of interest, as described below.
Because the Fixed Account Value becomes part of AUSA Life's General Account,
AUSA Life assumes the risk of investment gain or loss on this amount. All
assets in the General Account are subject to AUSA Life's general liabilities
from business operations.

FIXED ACCOUNT VALUE

At the end of any Valuation Period, the Fixed Account Value is equal to:

1. The sum of all Net Premium payments allocated to the Fixed Account;
plus
2. Any amounts transferred from a Sub-Account to the Fixed Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as they are due;
minus
5. Any cash withdrawals or surrenders from the Fixed Account; minus
6. Any amounts transferred to a Sub-Account from the Fixed Account; minus
7. Any amounts withdrawn from the Fixed Account to pay the pro rata
Decrease Charge incurred as a result of a decrease in the Specified
Amount.

MINIMUM GUARANTEED AND CURRENT INTEREST RATES

The Fixed Account Value, including the Loan Reserve, is guaranteed to
accumulate at a minimum effective annual interest rate of 4%. AUSA Life
presently credits the Fixed Account Value with current rates in excess of the
minimum guarantee but it is not obligated to do so. These current interest
rates are influenced by, but do not necessarily correspond to, prevailing
general market interest rates. Because AUSA Life, at its sole discretion,
anticipates changing the current interest rate from time to time, different
allocations to and from the Fixed Account Value will be credited different
current interest rates.

AUSA Life further guarantees that when a higher current interest rate is
declared on an allocation to the Fixed Account, that interest rate will be
guaranteed on such allocation for at least a one year period (the "Guarantee
Period"), unless the Cash Value associated with an allocation has been
transferred to the Loan Reserve. AUSA Life reserves the right to apply a
different current interest rate to that part of the Cash Value equal to the
Loan Reserve. At the end of the Guarantee Period, AUSA Life reserves the right
to declare a new current interest rate on such allocation and accrued interest
thereon (which may be a different current interest rate than the current
interest rate on new allocations to the Fixed Account on that date). The rate
declared on such allocation and accrued interest thereon at the end of each
Guarantee Period will be guaranteed again for another Guarantee Period. At the
end of any Guarantee Period, any interest credited on the Policy's Cash Value
in the Fixed Account in excess of the minimum guaranteed rate of 4% per year
will be determined in the sole

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<PAGE>

discretion of AUSA Life. The Policyowner assumes the risk that interest
credited may not exceed the guaranteed minimum rate.

Allocations from the Fixed Account Value to provide: a) cash withdrawal
amounts, b) transfers to the Series Account, or c) monthly deduction charges
are currently, for the purpose of crediting interest, accounted for on a last
in, first out ("LIFO") method.

AUSA Life reserves the right to change the method of crediting interest
from time to time, provided that such changes will not have the effect of
reducing the guaranteed rate of interest below 4% per annum or shorten the
Guarantee Period to less than one year.

ALLOCATIONS, TRANSFERS AND WITHDRAWALS

Net premium payments and transfers to the Fixed Account will be allocated
to the Fixed Account on the first Valuation Date on or following the date AUSA
Life receives the payment or transfer request at its Administrative Office,
except Net Premium received prior to the Policy Date will take place on the
Policy Date (or the Record Date, if later).

For transfers from the Fixed Account to a Sub-Account, AUSA Life reserves
the right to require that transfer requests be in writing and received at AUSA
Life's Office within 30 days after a Policy Anniversary. The maximum amount that
may be transferred is limited to the greater of (a) 25% of the amount in the
Fixed Account, or (b) the amount transferred in the prior Policy year from the
Fixed Account, unless AUSA Life consents otherwise. Please consult your Policy
for details. No transfer charge will apply to transfers from the Fixed Account
to a Sub-Account. Amounts may be withdrawn from the Fixed Account for cash
withdrawals and surrenders only upon written request of the Policyowner, and are
subject to any applicable requirement for a signature guarantee. (See Policy
Rights -Surrender Privileges, p. 31.) AUSA Life further reserves the right to
defer payment of transfers, cash withdrawals, or surrenders from the Fixed
Account for up to six months. In addition, Policy provisions relating to
transfers, cash withdrawals or surrenders from the Series Account will also
apply to Fixed Account transactions.

DISTRIBUTION OF THE POLICIES

The Policy will be sold by individuals who, in addition to being licensed
as life insurance agents for AUSA Life, are also registered representatives of
ISI, an affiliate of AUSA Life and the principal underwriter of the Policies,
or of broker-dealers who have entered into written sales agreements ("Sales
Agreements") with the principal underwriter for promotion and sale of the
Policies. ISI is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. No amounts have been retained by ISI for acting as
principal underwriter for the Policies. The compensation payable to registered
representatives who are appointed agents of AUSA Life for sales of the Policies
may vary with the Sales Agreement, but is not expected to exceed 65% of all
premiums paid during the first Policy year, plus 3.0% on all premiums paid
thereafter. In addition, certain production, persistency and managerial bonuses
may be paid.

FEDERAL TAX MATTERS

INTRODUCTION

The ultimate effect of federal income taxes on the Cash Value and on the
economic benefit to the Policyowner or Beneficiary depends on AUSA Life's tax
status and upon the tax status of the individual concerned. The discussion
contained herein is general in nature and is not intended as tax advice. For
complete information on Federal and state tax considerations, a qualified tax
advisor should be consulted. No attempt is made to consider any applicable
state or other tax laws. Because the discussion herein is based upon AUSA
Life's understanding of federal income tax laws as they are currently
interpreted, AUSA Life cannot guarantee the tax status of any Policy. AUSA Life
makes no representations regarding the likelihood of continuation of the
current federal income tax laws, Treasury Regulations, or of the current
interpretations by the Internal Revenue Service ("IRS"). AUSA Life reserves the
right to make changes to the Policy in order to assure that it will continue to
qualify as life insurance for tax purposes.

TAX CHARGES

At the present time, AUSA Life makes no charge for any federal, state or
local taxes (other than premium taxes) that the Company incurs that may be
attributable to such Account or to the Policies. AUSA Life, however, reserves
the right in the future to make a charge for any such tax or other economic
burden resulting from the application of the tax laws that it determines to be
properly attributable to the Series Account or to the Policies.

TAX STATUS OF THE POLICY

Section 7702 of the Code sets forth a definition of a life insurance
contract for federal tax purposes. The Secretary of the Treasury (the
"Treasury") has recently issued proposed regulations that would specify what
will be considered reasonable mortality charges under Section 7702. Guidance as
to how Section 7702 is to be applied is, however, limited. If a Policy were
determined not to be a life insurance contract for purposes of Section 7702,
such Policy would not provide most of the tax advantages normally provided by a
life insurance policy.

With respect to a Policy that is issued on the basis of a rate class
using Ultimate Select, non-tobacco use, Select, non-tobacco use, Ultimate
Standard, tobacco use, or Standard, tobacco use, guaranteed rates, while there
is some uncertainty due to the limited guidance on Section 7702, AUSA Life,
nonetheless, believes that such a Policy should meet the Section 7702
definition of a life insurance contract. With respect to a Policy that is
issued on a substandard rate class, there is even less guidance to determine
whether such a Policy meets the Section 7702 definition of a life insurance
contract. Thus, it is not clear

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<PAGE>

whether such a Policy would satisfy Section 7702, particularly if the
Policyowner pays the full amount of premiums permitted under the Policy. If it
is subsequently determined that a Policy does not satisfy Section 7702, AUSA
Life will take whatever steps are appropriate and reasonable to attempt to
cause such a Policy to comply with Section 7702, including possibly refunding
any premiums paid that exceed the limitation allowable under Section 7702
(together with interest or other earnings on any such premiums refunded as
required by law). For these reasons, AUSA Life reserves the right to modify the
Policy as necessary to attempt to qualify it as a life insurance contract under
Section 7702.

Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Series Account to be
"adequately diversified" in order for the Policy to be treated as a life
insurance contract for federal tax purposes. The Series Account, through the
Fund, intends to comply with the diversification requirements prescribed by the
Treasury in Reg. sec. 1.817-5, which affect how the Fund's assets may be
invested. AUSA Life believes that the Fund will be operated in compliance with
the requirements prescribed by the Treasury.

In certain circumstances, owners of variable life insurance policies may
be considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their policies. In those circumstances, income
and gains from the separate account assets would be includable in the owner's
gross income. The IRS has stated in published rulings that the owner of a
variable life insurance policy will be considered the owner of separate account
assets if the owner 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 sub-account without being treated as owners of the
underlying assets."

The ownership rights under the Policy 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 Policyowner has additional flexibility in allocating premium
payments and Policy values. These differences could result in a Policyowner
being treated as the owner of a pro rata portion of the assets of the Series
Account. In addition, AUSA Life 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. AUSA Life therefore reserves the right to modify the
Policy as necessary to attempt to prevent a Policyowner from being considered
the owner of a pro rata share of the assets of the Series Account.

The following discussion assumes that the Policy will qualify as a life
insurance contract for federal income tax purposes.

TAX TREATMENT OF POLICY BENEFITS

1. In general. AUSA Life believes that the proceeds and Cash Value
increases of a Policy should be treated in a manner consistent with a
fixed-benefit life insurance policy for federal income tax purposes. Thus, the
death benefit under the Policy should be excludable from the gross income of
the Beneficiary under section 101(a)(1) of the Code.

A change in a Policy's Specified Amount, the payment of an unscheduled
premium, the taking of a Policy loan, a cash withdrawal, a total surrender, a
Policy Lapse with an outstanding indebtedness, a change in death benefit
options, the exchange of a Policy, or the assignment of a Policy may have tax
consequences depending upon the circumstances. In addition, federal estate and
state and local estate, inheritance, and other tax consequences of ownership or
receipt of Policy proceeds depend upon the circumstances of each Policyowner or
Beneficiary. A competent tax advisor should be consulted for further
information.

The Policy may also be used in various arrangements, including
nonqualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. Therefore, if a
Policyowner is contemplating the use of a Policy in any arrangement the value
of which depends in part on its tax consequences, that Policyowner should be
sure to consult a qualified tax adviser regarding the tax attributes of the
particular arrangement.

Generally, the Policyowner will not be deemed to be in constructive
receipt of the Cash Value, including increments thereof, under the Policy until
there is a distribution. The tax consequences of distributions from, and loans
taken from, or secured by, a Policy depend on whether the Policy is classified
as a "modified endowment contract" under Section 7702A. Section 7702A generally
applies to Policies entered into or materially changed after June 20, 1988.

2. Modified Endowment Contracts. A Policy may be treated as a modified
endowment contract depending upon the amount of premiums paid in relation to
the death benefit provided under such Policy. The premium limitation rules for
determining whether such a Policy is a modified endowment contract are
extremely complex. In general, however, a Policy will be a modified endowment
contract if the accumulated premiums paid at any time during the first seven
Policy years exceeds the sum

37
<PAGE>

of the net level premiums which would have been paid on or before such time if
the Policy provided for paid-up future benefits after the payment of seven
level annual premiums. In addition, if a Policy is "materially changed," it may
cause such Policy to be treated as a modified endowment contract. The material
change rules for determining whether a Policy is a modified endowment contract
are also extremely complex. In general, however, the determination whether a
Policy will be a modified endowment contract after a material change depends
upon the relationship of the death benefit at the time of change to the Cash
Value at the time of such change and the additional premiums paid in the seven
Policy years starting with the date on which the material change occurs.

Under AUSA Life's current procedures, the Policyowner will be notified at
the time a Policy is issued whether, according to AUSA Life's calculations, the
Policy is or is not classified as a modified endowment contract based on the
premium then received. The Policyowner will also be notified of the amount of
the maximum annual premium which can be paid without causing a Policy to be
classified as a modified endowment contract.

Due to the Policy's flexibility, classification of a Policy as a modified
endowment contract will depend upon the circumstances of each Policy.
Accordingly, a prospective Policyowner should contact a competent tax adviser
before purchasing a Policy to determine the circumstances under which the
Policy would be a modified endowment contract. In addition, a Policyowner
should contact a competent tax advisor before making any change to, including
an exchange of, a Policy to determine whether such change would cause the
Policy (or the new policy in the case of an exchange) to be treated as a
modified endowment contract.

If a Policy becomes a modified endowment contract, distributions that
occur during the Policy year it becomes a modified endowment contract and any
subsequent Policy year will be taxed as distributions from a modified endowment
contract. In addition, distributions from a Policy within two years before it
becomes a modified endowment contract will be taxed in this manner. This means
that a distribution made from a Policy that is not a modified endowment
contract could later become taxable as a distribution from a modified endowment
contract. A Builder Plus Program Policy, however, will in most instances be
treated as a Modified Endowment Contract. (See Charges and Deductions - Builder
Plus Program,SM p. 29.)

3. Distributions from Policies Classified as Modified Endowment
Contracts. Policies classified as modified endowment contracts are subject to
the following tax rules: First, all pre-death distributions from such a Policy
(including distributions upon surrender, distributions made in anticipation of
the Policy becoming a modified endowment contract, and benefits paid at
maturity) are treated as ordinary income subject to tax up to the amount equal
to the excess (if any) of the Cash Value immediately before the distribution
over the investment in the Policy (described below) at such time. Second, loans
taken from, or secured by, such a Policy are treated as distributions from such
a Policy and taxed accordingly. (Unpaid Policy loan interest will be treated as
a loan for these purposes.) Third, a 10% additional income tax is imposed on
the portion of any distribution from, or loan taken from, or secured by, such a
Policy that is included in income except where the distribution or loan is made
on or after the Owner attains age 591/2, is attributable to the Policyowner's
becoming disabled, or is part of a series of substantially equal periodic
payments for the life (or life expectancy) of the Policyowner or the joint
lives (or joint life expectancies) of the Policyowner and the Policyowner's
Beneficiary.

4. Distribution from Policies not Classified as Modified Endowment
Contracts. Distributions from a Policy that is not classified as a modified
endowment contract are generally treated as first recovering the investment in
the Policy (described below) and then, only after the return of all such
investment in the Policy, as distributing taxable income. An exception to this
general rule occurs in the case of a cash withdrawal, a decrease in the
Policy's death benefit, or any other change that reduces benefits under the
Policy in the first 15 years after the Policy is issued and results in a cash
distribution to the Policyowner in order for the Policy to continue complying
with the Section 7702 definitional limits. In that case, such distribution will
be taxed in whole or in part as ordinary income (to the extent of any gain in
the Policy) under rules prescribed in Section 7702.

Loans from, or secured by, a Policy that is not a modified endowment
contract are not treated as distributions. Instead, such loans are treated as
indebtedness of the Policyowner.

Finally, distributions (including distributions upon surrender or lapse)
or loans from, or secured by, a Policy that is not a modified endowment
contract are not subject to the 10% additional income tax.

5. Policy loan interest. The deductibility of Policy loan interest may be
limited by the Code. For example, interest paid on any loan under a Policy
which is owned by an individual generally is not deductible. Therefore, a
Policyowner should consult a competent tax advisor as to whether Policy loan
interest will be deductible.

6. Investment in the Policy. Investment in the Policy means (i) the
aggregate amount of any premiums or other consideration paid for a Policy,
minus (ii) the aggregate amount received under the Policy which is excluded
from the gross income of the Policyowner (except that the amount of any loan
from, or secured by, a Policy that is a modified endowment contract, to the
extent such amount is excluded from gross income, will be disregarded), plus
(iii) the amount of any loan from, or secured by, a Policy that is a modified
endowment contract to the extent that such amount is included in the gross
income of the Policyowner.

38
<PAGE>

7. Multiple Policies. All modified endowment contracts that are issued by
AUSA Life (or its affiliates) to the same Policyowner during any calendar year
are treated as one modified endowment contract for purposes of determining the
amount includable in gross income under Section 72(e) of the Code.

8. Terminal Illness Accelerated Death Benefit Rider. Pursuant to the
recently enacted Health Insurance Portability and Accountability Act of 1996,
AUSA Life believes that for federal income tax purposes a Single Sum Benefit
payment made under the Terminal Illness Accelerated Death Rider should be fully
excludable from the gross income of the beneficiary, as long as the beneficiary
is the Insured under the Policy. However, a Policyowner should consult a
qualified tax advisor about the consequences of adding this Rider to a Policy
or requesting a Single Benefit payment under this Rider.

EMPLOYMENT-RELATED BENEFIT PLANS

On July 6, 1983, the Supreme Court held in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women on the basis of sex. The Policy described in this
Prospectus contains guaranteed cost of insurance rates and guaranteed purchase
rates for certain payment options that distinguish between men and women.
Accordingly, employers and employee organizations should consider, in
consultation with legal counsel, the impact of Norris, and Title VII generally,
on any employment-related insurance or benefit program for which a Policy may
be purchased.

SAFEKEEPING OF THE
SERIES ACCOUNT'S ASSETS

AUSA Life holds the assets of the Series Account. The assets are kept
physically segregated and held separate and apart from the General Account.
AUSA Life maintains records of all purchases and redemptions of Fund shares by
each of the Sub-Accounts. Additional protection for the assets of the Series
Account is provided by a blanket bond issued to AEGON U.S. Holding Corporation
("AEGON U.S.") in the amount of $5 million (subject to a $1 million
deductible), covering all of the employees of AEGON U.S. and its affiliates,
including AUSA Life. A Stockbrokers Blanket Bond, issued to AEGON U.S.A.
Securities, Inc. provides additional fidelity coverage, to a limit of $12
million, subject to a $50,000 deductible.

VOTING RIGHTS OF THE SERIES ACCOUNT

To the extent required by law, AUSA Life will vote the Fund shares held
in the Series Account at shareholder meetings of the Fund in accordance with
instructions received from persons having voting interests in the corresponding
Sub-Accounts of the Series Account. Except as required by the 1940 Act, the
Fund does not hold regular or special shareholder meetings. If the 1940 Act or
any regulation thereunder should be amended or if the present interpretation
thereof should change, and as a result AUSA Life determines that it is
permitted to vote the Fund shares in its own right, it may elect to do so.

The number of votes which a Policyowner has the right to instruct will be
calculated separately for each Sub-Account. The number of votes which each
Policyowner has the right to instruct will be determined by dividing a Policy's
Cash Value in that Sub-Account by $100. Fractional shares will be counted. The
number of votes of the Portfolio which the Policyowner has the right to
instruct will be determined as of the date coincident with the date established
by that Portfolio for determining shareholders eligible to vote at the meeting
of the Fund. Voting instructions will be solicited by written communications
prior to such meeting in accordance with procedures established by the Fund.

AUSA Life will vote Fund shares as to which no timely instructions are
received and Fund shares which are not attributable to Policyowners in
proportion to the voting instructions which are received with respect to all
Policies participating in that Portfolio. Voting instructions to abstain on any
item to be voted upon will reduce the votes eligible to be cast by AUSA Life.

Each person having a voting interest in a Sub-Account will receive proxy
materials, reports and other materials relating to the appropriate Portfolio.

DISREGARD OF VOTING INSTRUCTIONS. AUSA Life may, when required by state
insurance regulatory authorities, disregard voting instructions if the
instructions require that the shares be voted so as to cause a change in the
sub-classification or investment objective of the Fund or one or more of its
Portfolios or to approve or disapprove an investment advisory contract for a
Portfolio of the Fund. In addition, AUSA Life itself may disregard voting
instructions in favor of changes initiated by a Policyowner in the investment
policy or the investment adviser of a Portfolio of the Fund if AUSA Life
reasonably disapproves of such changes. A change would be disapproved only if
the proposed change is contrary to state law or prohibited by state regulatory
authorities or AUSA Life determined that the change would have an adverse
effect on its General Account in that the proposed investment policy for a
Portfolio may result in overly speculative or unsound investments. In the event
AUSA Life does disregard voting instructions, a summary of that action and the
reasons for such action will be included in the next annual report to
Policyowners.

STATE REGULATION OF AUSA LIFE

As a life insurance company organized and operated under New York law,
AUSA Life is subject to provisions governing such companies and to regulation
by the New York Superintendant of Insurance.

AUSA Life's books and Accounts are subject to review and examination by
the New York Insurance Department at all times and a full examination of its
operations is conducted by the National Association of Insurance Commissioners
at least once every three years.

39
<PAGE>

REINSURANCE

AUSA Life intends to reinsure a portion of the risks assumed under the
Policies.

EXECUTIVE OFFICERS AND DIRECTORS
OF AUSA LIFE

LARRY G. BROWN, CHAIRMAN OF THE BOARD, Senior Vice President, Group General
Counsel (Asset Accumulation Group) (January 1995 - present), Western
Reserve Life Assurance Co. of Ohio, 201 Highland Avenue, Largo, Florida
33770. Senior Vice President, General Counsel and Secretary (January, 1989
- January, 1995, AEGON USA, Inc., 1111 North Charles Street, Baltimore,
Maryland 21201.

WILLIAM BROWN, JR., DIRECTOR, Management Consultant (1992 - present),
Brownstone Management Consultants, Inc., 14 Windward Avenue, White Plains,
NY 10605; Vice President (1987 - 1992), Mututal of New York, Purchase, New
York.

WILLIAM L. BUSLER, DIRECTOR, President, Annuity Division (1980 - present),
AEGON USA, Inc., 4333 Edgewood Rd., N.E., Cedar Rapids, Iowa 52499.

JACK R. DYKHOUSE, DIRECTOR, Senior Vice President (1976 - present), AEGON USA,
INC., 9151 Grapevine Highway, North Richland Hills, Texas 76180.

STEVEN E. FRUSHTICK, DIRECTOR, Partner (1961 - present) Wiener, Frushtick &
Straub, 500 Fifth Avenue New York, NY 10110.

VICE ADMIRAL CARL T. HANSON, DIRECTOR, Retired (Ocotber, 1993 - present),
Director (November, 1982 - present), President and Chief Executive Officer
(November, 1982 - October, 1993), National Multiple Sclerosis Society, 900
Birdseye Road, P. O. Box 112 Orient, NY 11957-0112.

B. LARRY JENKINS, DIRECTOR, Chairman and President (September, 1982 - present),
Monumental Life Insurance Company, 2 East Chase Street, Baltimore,
Maryland 21202.

VERA F. MIHAIC, DIRECTOR AND VICE PRESIDENT, Vice President and Director (July
1, 1996 - present), AUSA Life Insurance Company, Inc., 666 Fifth Avenue,
New York, NY 10103-0001, Vice President and Director (1987 - June 30,
1996) International Life Investors Insurance Company, New York, New York.

PETER P. POST, DIRECTOR, Owner and President (December, 1992 - present),
Emmerling Post, Inc., 415 Madison Avenue, New York, New York 10017;
President and Director (January, 1989 - December, 1992), Lintas: Marketing
Communications, New York, New York.

TOM A. SCHLOSSBERG, DIRECTOR AND PRESIDENT, President (September, 1993 -
present), Diversified Investment Advisors, Inc., 4 Manhattanville Road,
Purchase, NY 10577; Executive Vice President (1983 - September 1993),
Mutual of New York, Purchase, New York.

COLETTE F. VARGAS, DIRECTOR AND CHIEF ACTUARY, Actuary (September, 1993 -
present), Diversified Investment Advisors, 4 Manhattanville Road,
Purchase, New York 10577; Actuary (1982 - September, 1993) Mutual of New
York, Purchase, New York.

COR H. VERHAGEN, DIRECTOR, President and Director (1990 - present), CORPA
Reinsurance Co. of America, 51 JFK Parkway, Short Hills, New Jersey 07078;
President (November 1990 - June 30, 1996), International Life Investors
Insurance Company, New York, New York; Vice President (November, 1993 -
present), AEGON USA, Inc., Baltimore, Maryland; Vice President (July, 1985
- present), AEGON US Holding Company, Short Hills, New Jersey.

E. KIRBY WARREN, DIRECTOR, Professor (January, 1961 - present), Columbia
University School of Business, 725 Uris Hall, 116th Street and Broadway,
New York, New York 10025.

PATRICK S. BAIRD, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, Senior Vice
President and Chief Financial Officer (May, 1992 - present), Vice
President and Chief Tax Officer (November, 1980 - May, 1992), AEGON USA,
Inc., 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499.

BRENDA CLANCY, TREASURER, Senior Vice President and Treasurer (August, 1997 -
present), AEGON USA, Inc., 4333 Edgewood Road NE, Cedar Rapids, Iowa
52499; Vice President and Controller (April, 1992 - August, 1997), AEGON
USA, Inc., Cedar Rapids, Iowa.

PATRICK E. FALCONIO, SENIOR VICE PRESIDENT AND CHIEF INVESTMENT OFFICER, Senior
Vice President and Chief Investment Officer (February, 1989 - present),
AEGON USA, Inc. 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

CHRISTOPHER GARRETT, ACTUARY, Associate Actuary (1983 - present), AEGON USA,
Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

ROBERT J. KONTZ, CONTROLLER, Vice President and Controller (1990 - present),
AEGON USA, Inc., 4333 Edgewood Road N.E., Cedar Rapids, Iowa 52499; Vice
President - Corporate Accounting (1982 - 1989), Life Investors, Inc.,
Cedar Rapids, Iowa.

CRAIG D. VERMIE, SECRETARY, Vice President and General Counsel (September, 1986
- present), AEGON USA, Inc., 4333 Edgewood Road NE, Cedar Rapids, Iowa
52499.

LEGAL MATTERS

Sutherland, Asbill & Brennan LLP, Washington, D.C., has provided advice
on certain legal matters concerning federal securities laws in connection with
the

40
<PAGE>

Policies. All matters of New York law pertaining to the Policy, including the
validity of the Policy and AUSA Life's right to issue the Policy under New York
Insurance Law, have been passed upon by Robert F. Colby, Esq., Vice President,
Associate General Counsel and Assistant Secretary of AUSA Life.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Series Account is a party or
to which the assets of the Series Account are subject. AUSA Life is not
involved in any litigation that is of material importance in relation to its
total assets or that relates to the Series Account.

EXPERTS

There are no financial statements of AUSA Series Life Account since the
Series Account has not yet commenced operations as of the date of this
Prospectus.

The financial statements and schedules of AUSA Life Insurance Company,
Inc. at December 31, 1997 and 1996 and for each of the three years in the
period ended December 31, 1997, appearing in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein. The financial
statements referred to above are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

Actuarial matters included in this Prospectus have been examined by Alan
Yaeger as stated in the opinion filed as an exhibit to the registration
statement.

ADDITIONAL INFORMATION

A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning the Series Account, AUSA Life and the Policy offered
hereby. Statements contained in this Prospectus as to the contents of the
Policy and other legal instruments are summaries. For a complete statement of
the terms thereof reference is made to such instruments as filed.

INFORMATION ABOUT AUSA LIFE'S FINANCIAL STATEMENTS

The financial statements of AUSA Life which are included in this
Prospectus (see p. 91) should be considered only as bearing on the ability of
AUSA Life to meet its obligations under the Policies. They should not be
considered as bearing on the investment performance of the assets held in the
Series Account.

Financial statements for AUSA Life for the years ended December 31, 1997,
1996 and 1995, have been prepared on the basis of statutory accounting
principles, rather than generally accepted accounting principles ("GAAP").

41
<PAGE>

APPENDIX A

ILLUSTRATION OF BENEFITS

The tables in Appendix A illustrate the way in which a Policy operates.
They show how the death benefit, Cash Value and Net Surrender Value of a Policy
issued to an Insured of a given age and a given premium could vary over an
extended period of time assuming hypothetical gross rates of return equivalent
to constant after tax annual rates of 0%, 6% and 12%. The tables illustrate the
Policy values that would result based on the assumptions that the premium is
paid as indicated, that the Owner has not requested a decrease in the Specified
Amount of the Policy, and that no cash withdrawals or Policy loans have been
made.

The death benefits, Cash Values and Net Surrender Values under a Policy
would be different from those shown if the actual rate of return averages 0%,
6% or 12% over a period of years, but fluctuates above and below those averages
for individual Policy years. They would also differ if any Policy loans were
made during the period of time illustrated.

The illustration on page 43 is based on a Policy for an Insured who is a
35 year old male in the Ultimate Select, non-tobacco use, rate class, annual
premiums of $2,000, a $165,000 Specified Amount and death benefit Option A. The
illustration on that page also assume cost of insurance charges based on AUSA
Life's CURRENT cost of insurance rates.

The illustration on page 44 is based on the same factors as those on page
43, except that cost of insurance rates are based on the GUARANTEED cost of
insurance rates (based on the 1980 Commissioners Standard Ordinary Mortality
Table).

The amounts shown for the death benefits, Cash Values and Net Surrender
Values take into account (1) the daily charge for assuming mortality and
expense risks assessed against each Sub-Account which is equivalent to an
annual charge of 0.90% of the average net assets of the Sub-Accounts during the
first 15 Policy years (AUSA Life currently intends to reduce this charge to
0.75% after the first fifteen Policy years. However, such reduction is not
guaranteed, and AUSA Life reserves the right to maintain this charge at the
0.90% level after the first fifteen Policy years); (2) estimated daily expenses
equivalent to an effective average annual expense level of % of the average
daily net assets of the Portfolios of the Fund; and (3) all applicable premium
expense charges and Cash Value charges using the current monthly Policy Charge.
The 0. % average Portfolio expense level assumes an equal allocation of
amounts among the fifteen Sub-Accounts and is based on an average 0. %
investment advisory fee and 1997 average normal operating expenses of 0. % for
each of the Portfolios in operation during 1996. Calculation of the average
annual expense level utilized annualized actual audited expenses incurred
during 1997 as adjusted for anticipated expense modifications incurring in 1998
for the Money Market (0. %), Bond (0. %), Growth (0. %), Strategic Total
Return (0. %), Emerging Growth (0. %), Global (0. %), Aggressive Growth
(0. %), Balanced (0. %), Growth & Income ( %), C.A.S.E. Growth ( %),
Tactical Asset Allocation (0. %) Value Equity (0. %), U.S. Equity (0. %),
and International Equity (0. %) Portfolios. In addition, because the Third
Avenue Value Portfolio had not commenced operations as of December 31, 1997,
the estimated average annual Portfolio expense level reflects estimated
expenses for this Portfolio at % for 1998. WRL Management has undertaken
until to pay Fund expenses of a Portfolio to the extent normal operating
expenses of a Portfolio exceed a stated percentage of the Portfolio's average
daily net assets. Taking into account the assumed charges of %, the gross
annual investment return rates of 0%, 6% and 12% are equivalent to net annual
investment return rates of %, %, and %.

The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the Series Account, because AUSA Life is not
currently making such charges. In order to produce after tax returns of 0%, 6%
or 12% if such charges are made in the future, the Series Account would have to
earn a sufficient amount in excess of 0%, 6% or 12% to cover any tax charges.
(See Charges Against the Series Account - Taxes, p. 28.)

The "Premium Accumulated at 5%" column of each table shows the amount
which would accumulate if an amount equal to the premium were invested to earn
interest at 5% per year, compounded annually.

AUSA Life will furnish, upon request, a comparable illustration
reflecting the proposed Insured's age, sex, risk classification and desired
plan features.

42
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35

<TABLE>
<S> <C>
Specified Amount $165,000 Ultimate Select Class
Annual Premium $2,000 Option Type A
Using Current Cost of Insurance Rates
</TABLE>

<TABLE>
<CAPTION>
END OF PREMIUMS DEATH BENEFIT
POLICY ACCUMULATED ASSUMING HYPOTHETICAL GROSS AND NET
YEAR AT 5% ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68 (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C> <C>
1 165,000 165,000 165,000
2 165,000 165,000 165,000
3 165,000 165,000 165,000
4 165,000 165,000 165,000
5 165,000 165,000 165,000
6 165,000 165,000 165,000
7 165,000 165,000 165,000
8 165,000 165,000 165,000
9 165,000 165,000 165,000
10 165,000 165,000 165,000
15 165,000 165,000 165,000
20 165,000 165,000 165,000
30(AGE 65) 165,000 165,000 354,239
40(AGE 75) 165,000 165,000 850,576
50(AGE 85) * 259,118 2,233,562
60(AGE 95) * 396,293 5,647,972
</TABLE>

<TABLE>
<CAPTION>
END OF CASH VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND NET
YEAR ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68% (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C>
1
10
15
20
30(AGE 65)
40(AGE 75)
50(AGE 85)
60(AGE 95)

<CAPTION>
END OF NET SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND NET
YEAR ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68% (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C>
1
10
15
20
30(AGE 65)
40(AGE 75)
50(AGE 85)
60(AGE 95)
</TABLE>

* In the absence of an additional payment, the Policy would lapse.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN.

ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY AN OWNER
AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE FUND. THE DEATH BENEFIT,
CASH VALUE AND NET SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY AUSA LIFE OR THE FUND THAT THESE
HYPOTHETICAL INVESTMENT RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME. THIS ILLUSTRATION MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.

43
<PAGE>

AUSA LIFE INDSURANCE COMPANY, INC.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATIONS
MALE ISSUE AGE 35

<TABLE>
<S> <C>
Specified Amount $165,000 Ultimate Select Class
Annual Premium $2,000 Option Type A
Using Guaranteed Cost of Insurance Rates
</TABLE>

<TABLE>
<CAPTION>
END OF PREMIUMS DEATH BENEFIT
POLICY ACCUMULATED ASSUMING HYPOTHETICAL GROSS AND NET
YEAR AT 5% ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68% (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C> <C>
1 165,000 165,000 165,000
2 165,000 165,000 165,000
3 165,000 165,000 165,000
4 165,000 165,000 165,000
5 165,000 165,000 165,000
6 165,000 165,000 165,000
7 165,000 165,000 165,000
8 165,000 165,000 165,000
9 165,000 165,000 165,000
10 165,000 165,000 165,000
15 165,000 165,000 165,000
20 165,000 165,000 165,000
30(AGE 65) 165,000 165,000 339,964
40(AGE 75) * 165,000 795,468
50(AGE 85) * 172,935 2,024,898
60(AGE 95) * 257,787 4,837,103
</TABLE>

<TABLE>
<CAPTION>
END OF CASH VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND NET
YEAR ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68% (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C>
10
15
20
30(AGE 65)
40(AGE 75)
50(AGE 85)
60(AGE 95)

<CAPTION>
END OF NET SURRENDER VALUE
POLICY ASSUMING HYPOTHETICAL GROSS AND NET
YEAR ANNUAL INVESTMENT RETURN OF
0.00% (Gross) 6.00% (Gross) 12.00% (Gross)
-1.83% (Net) Years 1-15 4.17% (Net) Years 1-15 10.17% (Net) Years 1-15
-1.68% (Net) Years 16+ 4.32% (Net) Years 16+ 10.32% (Net) Years 16+
<S> <C> <C> <C>
10
15
20
30(AGE 65)
40(AGE 75)
50(AGE 85)
60(AGE 95)
</TABLE>

* In the absence of an additional payment, the Policy would lapse.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN.

44
<PAGE>

APPENDIX B

LONG TERM MARKET TRENDS

The information below is a record of the average annual returns of common
stock, high grade corporate bonds and 30-day U.S. Treasury bills over 20 year
holding periods.* The average annual returns assume the reinvestment of
dividends, capital gains and interest. This is a historical record and is not
intended as a projection of future performance. Charges associated with a
variable life insurance policy are not reflected.

The data indicates that, historically, the investment performance of
common stocks over long periods of time has been positive and has generally
been superior to that of long-term, high grade debt securities. Common stocks
have, however, been subject to more dramatic market adjustments over short
periods of time. These trends indicate the potential advantages of holding a
variable life insurance policy for a long period of time.

The following chart illustrates the average annual returns of the
Standard & Poor's Index of 500 Common Stocks ("S&P 500 Stock Index") for each
of the 20 year periods shown. These returns are compared to the average annual
returns of high grade corporate bonds and U.S. Treasury bills for the same
periods. (The 20-year periods selected for the chart begin in 1936 and have
ending periods at five year intervals.)

AVERAGE ANNUAL RETURNS
TWENTY YEAR HOLDING PERIODS

[GRAPHIC OMITTED]

* Source: (c) Stocks, Bonds, Bills and Inflation 1997 Yearbook/trademark/,
Ibbotson Associates, Chicago (annually updates work by Roger G. Ibbotson and
Rex A. Sinquefield). Used with permission. All rights reserved.

45
<PAGE>

Over the 51 20-year time periods beginning in 1927 and ending in 1996
(i.e. 1927-1946, 1928-1947, and so on through 1977-1996):

-- The average annual return of common stocks was superior to that of
high grade, long-term corporate bonds in 48 of the 51 periods.

-- The average annual return of common stocks surpassed that of U.S.
Treasury bills in each of the 51 periods.

-- Common stock average annual returns exceeded the average annual rate
of inflation in each of the 51 periods.

From 1927 through 1996 the average annual return for common stocks was
10.2%, compared to 5.4% for high grade, long-term corporate bonds, 3.7% for
U.S. Treasury bills and 3.1% for the Consumer Price Index.

SUMMARY: HISTORIC S&P STOCK INDEX RESULTS FOR SPECIFIC HOLDING PERIODS
The following chart categorizes the historical results of the Standard &
Poor's 500 Stock Index, with dividends reinvested, over one-year, five-year,
ten-year and twenty-year periods beginning in 1927 and ending 1996.
The chart shows that, historically, the longer that a portfolio matching
the S&P 500 Stock Index was held, the less likely was the chance of a loss.
Conversely, the shorter the holding period of such a portfolio, the more likely
was the chance of a loss. The chart also shows that shorter term results tend
to be more extreme than longer term results.
The chart is not a projection or representation of future stock market
results. It cannot be taken as representative of the performance of any one
fund. Rather it shows the historic performance of a broad index of stocks.

--------------------
COMPOUND ANNUAL RATES OF RETURN BY DECADE

<TABLE>
<CAPTION>
1920s* 1930s 1940s 1950s 1960s 1970s 1980s 1990s** 1987-97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Large Company ......... 19.2% -0.1% 9.2% 19.4% 7.8% 5.9% 17.5% 14.4% 15.3%
Small Company ......... -4.5 1.4 20.7 16.9 15.5 11.5 15.8 15.6 13.0
Long-Term Corp. ...... 5.2 6.9 2.7 1.0 1.7 6.2 13.0 9.8 9.5
Long-Term Govt. ...... 5.0 4.9 3.2 -0.1 1.4 5.5 12.6 10.0 9.4
Inter-Term Govt. ...... 4.2 4.6 1.8 1.3 3.5 7.0 11.9 8.0 7.8
Treasury Bills ......... 3.7 0.6 0.4 1.9 3.9 6.3 8.9 4.9 5.5
Inflation ............ -1.1 -2.0 5.4 2.2 2.5 7.4 5.1 3.3 3.7
</TABLE>

- ----------------
* Based on the period 1926-1929.

** Based on the period 1990-1996.

Source: (c) Stocks, Bonds, Bills and Inflation 1997 Yearbook/trademark/,
Ibbotson Associates, Inc., Chicago (annually updates work by Roger G. Ibbotson
and Rex A. Sinquefield). Used with permission. All rights reserved.

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

THE AUSA FINANCIAL FREEDOM BUILDERSM
AND THE "DOLLAR COST AVERAGING" INVESTMENT METHOD

As the Long Term Market Trends graph indicates, the investment
performance of many common stocks has generally been positive over certain
relatively long periods. Common stocks have, however, also been subject to
market declines, often dramatic ones, and general volatility of prices over
shorter time periods. The price fluctuations of common stocks has historically
been greater than that of high grade debt securities.

The relative volatility of common stock prices as compared with prices of
high grade debt instruments offers both advantages and disadvantages to
investors. Unfortunately, many investors who otherwise might be interested in
common stocks see only the disadvantages and not the advantages of stock price
fluctuation. The primary disadvantage, of course, is that price declines can be
prolonged and substantial, and when this occurs, investors cannot liquidate
their investments without realizing losses. Price declines, however, also offer
investors important opportunities.

Opportunity arises from the fact that investors can purchase more common
stock for the same amount of money than they would before prices declined.
Investors may take advantage of this if they remain willing to continue
investing in both rising and falling markets. The dollar cost averaging method
of investing demonstrates this.

In this method of investing:

/bullet/ Relatively constant dollar amounts are invested at regular
intervals (monthly, quarterly, or annually),

/bullet/ Stock Market fluctuations, especially the savings on purchases
from price declines, are exploited for the investor's benefit.

46
<PAGE>

HOW DOLLAR COST AVERAGING WORKS

<TABLE>
<CAPTION>
Investments at
Regular Common Stock Shares
Intervals Market Price Purchased
- --------------- -------------- ----------
<S> <C> <C>
$150 $20 7.5
150 15 10.0
150 10 15.0
150 5 30.0
150 10 15.0
150 15 10.0
------------- -----
$900 87.5
</TABLE>

<TABLE>
<S> <C>
Total Value of 87.5 shares @ $15/ $ 1,312.50
share
Less Investment made (900.00)
-----------
Gain/Profit $ 412.50
</TABLE>

Though the market price has not returned to the initial high of $20 per
share, dollar cost averaging has permitted the investor to purchase more shares
at a savings and thus realize a significant gain. Obviously, the dollar cost
averaging method only works if the investor continues to invest relatively
constant amounts over a long period of time.

This plan of investing does not assure a profit or protect against a loss
in declining markets; it does allow investors to take advantage of market
fluctuations. Since the success of this strategy is dependent on systematic
investing, purchasers should consider their ability to sustain their payments
through all periods of market fluctuations.

How does the dollar cost averaging method relate to the AUSA Financial
Freedom BuilderSM? A Policyowner may invest his or her Net Premium in a Sub-
Account, and although a Policy's value in a Sub-Account or Sub-Accounts is
affected by several factors other than investment experience (e.g., Cash Value
charges and charges against the Series Account), the dollar cost averaging
method can be generally applied to the Policy to the extent that the
Policyowner pays a Planned Periodic Premium on a regular basis and he or she
allocates Net Premium resulting from those Planned Periodic Premiums to
Sub-Accounts in relatively constant amounts.

INDEX TO FINANCIAL STATEMENTS

AUSA SERIES LIFE ACCOUNT:

There are no financial statements for the Series Account as of the date
of this Prospectus.

AUSA LIFE INSURANCE COMPANY, INC.:

Report of Independent Auditors dated , 1998

Statutory-Basis Balance Sheets at December 31, 1997 and 1996

Statutory-Basis Statements of Operations for the years ended December 31,
1997, 1996 and 1995

Statutory-Basis Statements of Changes in Capital and Surplus for the
years ended December 31, 1997, 1996 and 1995

Statutory-Basis Statements of Cash Flows for the years ended December 31,
1997, 1996, and 1995

Notes to Statutory-Basis Financial Statements

Statutory-Basis Financial Statement Schedules

47
<PAGE>

APPENDIX C
(BASED ON THE SEX AND RATE CLASS OF THE INSURED)

SURRENDER CHARGE PER THOUSAND

<TABLE>
<CAPTION>
MALE MALE FEMALE FEMALE
ISSUE ULTIMATE SELECT/ ULTIMATE STANDARD/ ULTIMATE SELECT/ ULTIMATE STANDARD/
AGE SELECT STANDARD SELECT STANDARD
<S> <C> <C> <C> <C>
0 N/A 11.76 N/A 11.76
1 N/A 8.16 N/A 8.16
2 N/A 8.16 N/A 8.16
3 N/A 7.92 N/A 7.92
4 N/A 7.68 N/A 7.68
5 N/A 7.68 N/A 7.68
6 N/A 7.68 N/A 7.68
7 N/A 7.68 N/A 7.68
8 N/A 7.68 N/A 7.68
9 N/A 7.68 N/A 7.68
10 N/A 7.68 N/A 7.68
11 N/A 7.68 N/A 7.68
12 N/A 7.68 N/A 7.68
13 N/A 7.92 N/A 7.92
14 N/A 8.16 N/A 8.16
15 N/A 8.40 N/A 8.40
16 N/A 8.52 N/A 8.52
17 0.00 8.88 0.00 8.88
18 8.72 9.20 8.72 9.20
19 8.84 9.32 8.84 9.32
20 8.96 9.44 8.96 9.44
21 9.16 9.88 9.16 9.64
22 9.32 10.04 9.32 9.80
23 9.52 10.24 9.52 10.00
24 9.68 10.40 9.68 10.40
25 9.88 10.84 9.88 10.60
26 10.56 11.28 10.32 11.04
27 11.00 11.72 10.76 11.48
28 11.40 12.12 11.16 12.12
29 12.08 12.80 11.84 12.56
30 12.52 13.24 12.28 13.00
31 13.04 14.00 12.80 13.52
32 13.76 14.48 13.52 14.24
33 14.28 15.24 14.04 14.76
</TABLE>

<TABLE>
<CAPTION>
MALE MALE FEMALE FEMALE
ISSUE ULTIMATE SELECT/ ULTIMATE STANDARD/ ULTIMATE SELECT/ ULTIMATE STANDARD/
AGE SELECT STANDARD SELECT STANDARD
<S> <C> <C> <C> <C>
34 14.76 15.96 14.52 15.48
35 15.52 16.48 15.28 16.00
36 16.20 17.40 15.96 16.92
37 17.20 18.40 16.72 17.92
38 18.12 19.56 17.64 18.60
39 19.08 20.76 18.36 19.56
40 20.28 21.96 19.32 20.52
41 21.64 23.56 20.68 22.12
42 23.08 25.24 22.12 23.80
43 24.44 27.08 23.15 25.40
44 26.04 29.16 23.86 26.96
45 27.44 31.04 24.59 27.83
46 28.72 32.80 25.38 28.76
47 29.84 34.56 26.22 29.73
48 31.00 36.32 27.11 30.75
49 32.24 38.32 28.04 31.84
50 33.56 40.56 29.05 32.99
51 34.98 42.56 30.11 34.20
52 36.49 45.24 31.24 35.48
53 38.10 47.68 32.45 36.84
54 39.83 50.84 33.72 38.28
55 41.68 53.28 35.09 39.79
56 43.63 55.79 36.54 41.39
57 45.74 57.00 38.08 43.06
58 47.98 57.00 39.74 44.88
59 50.38 57.00 41.54 46.85
60 52.97 57.00 43.47 48.97
61 55.74 57.00 45.57 51.26
62 57.00 57.00 47.82 53.73
63 57.00 57.00 50.26 56.41
64 57.00 57.00 52.88 57.00
65 57.00 57.00 55.68 57.00
66 and over 57.00 57.00 57.00 57.00
</TABLE>

WRL -05/98

<PAGE>

PART II.
OTHER INFORMATION

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned 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.

REPRESENTATION PURSUANT TO SECTION 26(E) (2) (A)

AUSA Life Insurance Company, Inc. ("AUSA Life") hereby represents 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 AUSA Life.

STATEMENT WITH RESPECT TO INDEMNIFICATION

Provisions exist under the New York Code and the Amended and Restated
By-Laws of AUSA Life whereby AUSA Life may indemnify certain persons against
certain payments incurred by such persons. The following excerpts contain the
substance of these provisions.

NEW YORK BUSINESS CORPORATION LAW

SECTION 722. AUTHORIZATION FOR INDEMNIFICATION OF DIRECTORS AND OFFICERS

(a) A corporation may indemnify any person made, or threatened to be made, a
party to an action or proceeding (other than one by or in the right of the
corporation to procure a judgment in its favor), whether civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
corporation served in any capacity at the request of the corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to, the best interests of
the corporation and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful.

(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation or that he had reasonable
cause to believe that his conduct was unlawful.

(c) A corporation may indemnify any person made, or threatened to be made, a
party to an action by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he, this testator or intestate, is or
was a director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of any other corporation of
any type or kind, domestic or foreign, of any partnership, joint venture, trust,
employee benefit plan or other enterprise, against amounts paid in settlement
and reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein, if

II-1

<PAGE>

such director or officer acted in good faith, for a purpose which he reasonably
believed to be in, or, in the case of service for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the corporation, except that no
indemnification under this paragraph shall be made in respect of (1) a
threatened action, or a pending action which is settled or otherwise disposed
of, or (2) any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which the action was brought, or, if no action was brought, any court
of competent jurisdiction, determines upon application that, in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnify for such portion of the settlement amount and expenses as the court
deems proper.

(d) For the purpose of this section, a corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance by
such person of his duties to the corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be considered fines; and
action taken or omitted by a person with respect to an employee benefit plan in
the performance of such person's duties for a purpose reasonably believed by
such person to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best
interests of the corporation.

AMENDED AND RESTATED BYLAWS

ARTICLE II

DIRECTORS AND THEIR MEETINGS

SEC.7. Any person made a party to any action, suit, or proceeding by reason
of the fact that he, his testator or intestate, is or was a director, officer,
or employee of the Company or of any Company which he served as such at the
request of the Company, shall be indemnified by the Company against the
reasonable expenses, including attorney's fees, actually and necessarily
incurred by him in connection with the defense of such action, suit or
proceeding, or in connection with appeal therein, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
officer, Director, or employee is liable for negligence or misconduct in the
performance of his duties. The Company may also reimburse to any Director,
officer, or employee the reasonable costs of settlement of any such action,
suit, or proceeding, if it shall be found by a majority of a committee composed
of the Directors not involved in the matter of controversy (whether or not a
quorum) that it was in the interest of the Company that such settlement be made
and that such Director, officer or employee was not guilty of negligence or
misconduct. The amount to be paid, in each instance, pursuant to action of the
Board of Directors, and the stockholders shall be given notice thereof in
accordance with applicable provisions of law. Such right of indemnification
shall not be deemed exclusive of any other rights to which such Director,
officer, or employee may be entitled.

RULE 484 UNDERTAKING

Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant 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 by the
registrant 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 registrant will, unless in
the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question 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.

II-2

<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This registration statement comprises the following papers and documents:

The facing sheet
The Prospectus, consisting of __ pages
The undertaking to file reports Representation Pursuant to Section 26(e)(2)
(A) Statement with respect to indemnification
Rule 484 undertaking
The signatures

Written consent of the following persons:

(a) Alan Yaeger
(b) Robert F. Colby, Esq.
(c) Sutherland, Asbill & Brennan, LLP
(d) Ernst & Young LLP

The following exhibits:

1. The following exhibits correspond to those required by paragraph A to the
instructions as to exhibits in Form N-8B-2:

A. (1) Resolution of the Board of Directors of AUSA Life establishing
the Series Account (2)
(2) Not Applicable
(3) Distribution of Policies:
(a) Form of Participation Agreement Among AUSA Life Insurance
Company, Inc., Western Reserve Life Assurance Co. of Ohio and
WRL Series Fund, Inc. (1)
(b)(i) Form of Master Service and Distribution Compliance Agreement
(2)
(b)(ii) Form of Broker/Dealer Supervisory and Service Agreement (2)
(c) See Exhibit 1.A.(3)(b)(ii)
(4) Not Applicable
(5)(a) Specimen Flexible Premium Variable Life Insurance Policy
(b) Children's Insurance Rider
(c) Disability Waiver Rider
(d) Accidental Death Benefit Rider
(e) Primary Insured Rider
(f) Other Insured Rider
(g) Terminal Illness Accelerated Death Benefit Rider
(h) Endorsement - Asset Rebalancing
(i) Endorsement - Dollar Cost Averaging

(6)(a) Certificate of Incorporation of AUSA Life (2)
(b) Amended and Restated By-Laws of AUSA Life (2)
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Application for Flexible Premium Variable Life Insurance Policy
(2)
(11) Memorandum describing issuance, transfer and redemption
procedures (1)

2. See Exhibit 1.A.

3. Opinion of Counsel as to the legality of the securities being registered

4. No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I

II-3

<PAGE>

5. Not Applicable

6. Opinion and consent of Alan Yaeger as to actuarial matters pertaining to the
securities being registered

7. Consent of Robert F. Colby, Esq. (1)

8. Consent of Sutherland, Asbill & Brennan, LLP (1)

9. Consent of Ernst & Young LLP(1)

10. Powers of Attorney (2)

- ----------------------------------------
(1) To be filed by amendment.
(2) Incorporated by reference to the like - numbered Exhibit to Pre-Effective
Admendment No. 2 to the Form S-6 Registration Statement of AUSA Series Life
Account, File No. 33-86696 (October 20, 1997).

II-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant,
AUSA Series Life Account, has duly caused this Initial Registration Statement to
be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of Largo, County of
Pinellas, Florida on the 17th day of October, 1997.

(SEAL) AUSA SERIES LIFE ACCOUNT
------------------------
Registrant

AUSA LIFE INSURANCE COMPANY, INC.
---------------------------------
Depositor

ATTEST:

/s/ THOMAS E. PIERPAN By: /s/ LARRY G. BROWN
- -------------------------- --------------------------
Thomas E. Pierpan Larry G. Brown
Assistant Secretary Chairman of the Board
(SEAL) (SEAL)

Pursuant to the requirements of the Securities Act of 1933, this Initial
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

SIGNATURE AND TITLE DATE

/s/ LARRY G. BROWN October 17,1997
- -------------------------
Larry G. Brown, Chairman of the
Board

/s/ WILLIAM BROWN, JR. October 17, 1997
- -------------------------
William Brown, Jr., Director*

/s/ PATRICK S. BAIRD October 17, 1997
- -------------------------
Patrick S. Baird, Vice President
and Chief Financial Officer*

/s/ WILLIAM L. BUSLER October 17, 1997
- -------------------------
William L. Busler, Director*

<PAGE>

/s/ JACK R. DYKHOUSE October 17, 1997
- -------------------------
Jack R. Dykhouse, Director*

/s/ STEVEN E. FRUSHTICK October 17, 1997
- -------------------------
Steven E. Frushtick, Director*

/s/ CARL T. HANSON October 17, 1997
- -------------------------
Carl T. Hanson, Director*

/s/ B. LARRY JENKINS October 17, 1997
- -------------------------
B. Larry Jenkins, Director*

/s/ PETER P. POST October 17, 1997
- -------------------------
Peter P. Post, Director*

/s/ COR H. VERHAGEN October 17, 1997
- -------------------------
Cor H. Verhagen, Director*

/s/ E. KIRBY WARREN October 17, 1997
- -------------------------
E. Kirby Warren, Director*

/s/ TOM A. SCHLOSSBERG October 17, 1997
- -------------------------
Tom A. Schlossberg, Director
and President*

/s/ COLETTE F. VARGAS October 17, 1997
- -------------------------
Colette F. Vargas, Director
and Chief Actuary*

/s/ VERA F. MIHAIC October 17, 1997
- -------------------------
Vera F. Mihaic, Director
and Vice President*

/s/ BRENDA CLANCY October 17, 1997
- -------------------------
Brenda Clancy, Treasurer*

/s/ PATRICK E. FALCONIO October 17, 1997
- -------------------------
Patrick E, Flaconio, Senior
Vice President and Chief
Investment Officer*

* /s/ THOMAS E. PIERPAN
-----------------------
Signed by Thomas E. Pierpan
as Attorney-in-Fact

<PAGE>

Exhibit Index

EXHIBIT DESCRIPTION
NO. OF EXHIBIT

1(A).(5)(a). Specimen Flexible Premium Variable Life Insurance Policy
(b). Children's Insurance Rider
(c). Disability Waiver Rider
(d). Accidental Death Benefit Rider
(e). Primary Insured Rider and Primary Insured Rider Plus
(f). Other Insured Rider
(g). Terminal Illness Accelerated Death Benefit Rider
(h). Endorsement (Asset Rebalancing)
(i). Endorsement (Dollar Cost Averaging)

3. Opinion of Counsel as to the legality of the securities
being registered

6. Opinion and Consent of Alan Yaeger as to actuarial
matters pertaining to the securities being registered

Exhibit 1(A)(5)(a)

Specimen Flexible Premium Variable Life Insurance Policy

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

Home Office: Purchase, New York
Administrative Office: P.O.Box 5068
Clearwater, Florida 34618-5068
813-585-6565

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

IN THIS POLICY the Primary Insured is named on the Policy Schedule Page. The
Primary Insured will be referred to as YOU or YOUR. AUSA Life Insurance Company,
Inc. will be referred to as WE, OUR or US.

IF YOU DIE before the Maturity Date and while this Policy is In Force, WE WILL
PAY the Death Benefit Proceeds to the Beneficiary upon receipt of due proof of
Your death. THE AMOUNT OF THE DEATH BENEFIT PROCEEDS AND THE DURATION OF
COVERAGE WILL INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THE
SUBACCOUNTS IN THE SEPARATE ACCOUNT AND ON THE DEATH BENEFIT OPTION SELECTED AS
DESCRIBED IN THE DEATH BENEFIT PROVISIONS.

IF YOU ARE ALIVE on the Maturity Date and this Policy is In Force, WE WILL PAY
the Net Surrender Value as of the Maturity Date. CASH VALUES WILL INCREASE OR
DECREASE IN ACCORDANCE WITH THE POLICY VALUE PROVISIONS AND THE INVESTMENT
EXPERIENCE OF THE SUBACCOUNTS IN THE SEPARATE ACCOUNT. CASH VALUES ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.

THE PROVISIONS on the following pages are part of this Policy.

IN WITNESS WHEREOF, We have signed this Policy at Our Administrative Office in
Clearwater, Florida as of the Policy Date.

/s/ CRAIG D. VERMIE /s/ TOM A. SCHLOSSBERG

Secretary President

- -------------------------------------------------------------------------------
RIGHT TO EXAMINE POLICY

The Owner may cancel this Policy by returning it to Us at P.O. Box 5068,
Clearwater, Florida 34618 or to the representative through whom it was purchased
within 10 days after receipt. If the Policy is returned within this period, it
will be void from the beginning and a refund will be made to the Owner. The
refund will equal the total of all premiums paid for this Policy.
- -------------------------------------------------------------------------------

Flexible Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Insured Prior to Maturity Date
Net Surrender Value Payable at Maturity Date
Flexible Premiums Payable During Lifetime of Insured Until the Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results

<PAGE>

POLICY GUIDE

POLICY SCHEDULE.......................................................... 3

TABLE OF SURRENDER CHARGES............................................... 3A

RIDER INFORMATION........................................................ 4

TABLE OF GUARANTEED RATES................................................ 4A

DEFINITIONS.............................................................. 5

GENERAL PROVISIONS....................................................... 6

DEATH BENEFIT PROVISIONS................................................. 8

PREMIUM PROVISIONS....................................................... 9

SEPARATE ACCOUNT PROVISIONS.............................................. 10

POLICY VALUE PROVISIONS.................................................. 12

SETTLEMENT OPTIONS....................................................... 15

ENDORSEMENTS

Page2

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

ADMINISTRATIVE OFFICE: CLEARWATER, FLORIDA

POLICY SCHEDULE

PRIMARY INSURED: JOHN DOE POLICY NUMBER: 01-12345678

ISSUE AGE AND SEX: 35 - MALE POLICY DATE: DEC 01, 1996

SPECIFIED AMOUNT: $ 200,000 RECORD DATE: DEC 01, 1996

OPTION TYPE: B NO LAPSE DATE: DEC 01, 2001

PLANNED PREMIUM: $2,400.00 MATURITY DATE: DEC 01, 2056

PAYMENT FREQUENCY: ANNUALLY MINIMUM MONTHLY GUARANTEE
PREMIUM: $ 93.29

INITIAL PREMIUM: $ 2,400.00

RATE CLASS: ULTIMATE STANDARD

MINIMUM SPECIFIED AMOUNT: $ 50,000.00

SEPARATE ACCOUNT PROVISIONS

SEPARATE ACCOUNT: AUSA SERIES LIFE ACCOUNT

MORTALITY AND EXPENSE RISK CHARGE: .00002455

POLICY VALUE PROVISIONS

NET PREMIUM FACTOR

POLICY YEARS 1-10 94.00%

POLICY YEARS 11 + 97.50%

COLLECTION FEE: $3.00 PER PAYMENT

MONTHLY POLICY CHARGE

INITIAL (GUARANTEED FOR THE FIRST
POLICY YEAR): $ 5.00

GUARANTEED: $ 7.50

COVERAGE MAY END BEFORE THE MATURITY DATE IF NO PREMIUMS ARE PAID AFTER THE
FIRST PREMIUM OR IF SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO
THAT DATE. SEE THE CONTINUATION OF INSURANCE PROVISION FOR MORE INFORMATION

PAGE 3

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

ADMINISTRATIVE OFFICE: CLEARWATER, FLORIDA

POLICY SCHEDULE (Continued)

POLICY NUMBER: 01-12345678

TABLE OF SURRENDER CHARGES
PER $ 1,000 OF SPECIFIED AMOUNT AS OF THE POLICY DATE
(APPLICABLE SPECIFIED AMOUNT EQUALS $200,000)

END OF YEAR*
AT ISSUE SURRENDER CHARGE END OF YEAR SURRENDER CHARGE
------------ ---------------- ----------- ----------------
1 16.48 9 9.89
2 16.48 10 8.24
3 16.48 11 6.59
4 16.48 12 4.94
5 16.48 13 3.30
6 16.48 14 1.65
7 14.83 15 0.00
8 13.18 16+ 0.00
11.54

* THE SURRENDER CHARGE ON ANY DATE OTHER THAN AN ANNIVERSARY WILL BE
INTERPOLATED BETWEEN THE TWO END OF YEAR CHARGES.

PAGE 3A

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

ADMINISTRATIVE OFFICE: CLEARWATER, FLORIDA

POLICY NUMBER: 01-12345678

RIDER INFORMATION

NONE

PAGE 4

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

ADMINISTRATIVE OFFICE: CLEARWATER, FLORIDA

POLICY NUMBER: 01-12345678

TABLE OF GUARANTEED
MAXIMUM LIFE INSURANCE RATES

GUARANTEED RATE BASIS FOR INITIAL SPECIFIED AMOUNT ON PRIMARY INSURED

COMMISSIONERS 1980 STANDARD ORDINARY SMOKER AND NONSMOKER MORTALITY TABLE
MALE LIVES
SMOKERS CLASSIFICATION

ANNUAL COST OF INSURANCE RATES PER $1,000

MONTHLY COST OF INSURANCE CALCULATIONS WILL USE ONE-TWELFTH OF THESE RATES

ATTAINED AGE ANNUAL RATE ATTAINED AGE ANNUAL RATE
------------ ----------- ------------ -----------

35 2.63 36 2.81
37 3.04 38 3.30
39 3.60 40 3.94
41 4.34 42 4.75
43 5.22 44 5.71
45 6.27 46 6.83
47 7.44 48 8.08
49 8.80 50 9.56
51 10.44 52 11.42
53 12.54 54 13.80
55 15.14 56 16.59
57 18.09 58 19.69
59 21.35 60 23.19
61 25.26 62 27.59
63 30.23 64 33.14
65 36.29 66 39.57
67 43.01 68 46.55
69 50.32 70 54.48
71 59.09 72 64.33
73 70.23 74 76.66
75 83.77 76 91.10
77 98.52 78 105.91
79 113.49 80 121.59
81 130.41 82 140.20
83 151.03 84 162.49
85 174.20 86 185.78
87 197.06 88 209.37
89 221.52 90 233.69
91 246.12 92 259.33
93 276.30 94 298.15

PAGE 4A

<PAGE>

DEFINITIONS

ACCOUNTS. Allocation options including the Fixed Account and the Subaccounts of
the Separate Account.

AGE. Issue Age refers to the age on the Insured's birthday nearest the Policy
Date. Attained Age refers to the Issue Age plus the number of completed policy
years.

ANNIVERSARY. The same day and month as the Policy Date for each succeeding year
the Policy remains In Force.

BENEFICIARY. The person or persons specified by the Owner to receive the Death
Benefit Proceeds upon Your death.

DEATH BENEFIT PROCEEDS. The amount payable upon Your death in accordance with
the Death Benefit Provisions.

FIXED ACCOUNT. Allocation option(s) other than the Separate Account.

IN FORCE. Condition under which the coverage is active and the Insured's life
remains insured.

INITIAL PREMIUM. The amount which must be paid before coverage begins. The
amount is shown on the Policy Schedule Page.

MATURITY DATE. The Anniversary nearest the Insured's 95th birthday. On this
date, coverage under the Policy will terminate if the Primary Insured is living
and the Policy is In Force.

MONTHIVERSARY. The day of each month coinciding with the Policy Date. If there
is no day in a calendar month which coincides with the Policy Date, the
Monthiversary will be the first day of the next month.

NET PREMIUM. The portion of the premium available for allocation as set forth in
the Policy Value Provisions.

NET SURRENDER VALUE. The amount payable upon surrender in accordance with the
Policy Value Provisions of this Policy

NO LAPSE DATE. The date, as set forth on the Policy Schedule Page, prior to
which this Policy will not lapse if certain conditions are met, even though the
Net Surrender Value is insufficient to meet the monthly deduction.

OFFICE. Refers to Our administrative office located in Clearwater, Florida.

POLICY DATE. The date coverage is effective and monthly deductions commence
under the Policy. Policy months, years and anniversaries are measured from the
Policy Date, as shown on the Policy Schedule Page.

RECORD DATE. The date the Policy is recorded on Our books as an In Force Policy.
The Record Date is shown on the Policy Schedule Page.

RIDER. Any attachment to this Policy which provides additional coverages or
benefits.

SEC. The United States Securities and Exchange Commission.

Page 5

<PAGE>

SEPARATE ACCOUNT. A diversified, open-ended management investment company,
consisting of separate series or investment portfolios. Each sub-account of the
series Account buys shares of a corresponding portfolio of the Series Fund.

SERIES FUND. A designated mutual fund from which each Subaccount of the Separate
Account will buy shares.

SUBACCOUNT. A sub-division of the Separate Account. Each Subaccount invests
exclusively in the shares of a specified Series Fund portfolio.

TERMINATION. Condition when the Insured's life is no longer insured under the
coverage provided.

VALUATION DATE. Any day We are required by law to value the assets of the
Separate Account.

VALUATION PERIOD. The period commencing at the end of one Valuation Date and
continuing to the end of the next succeeding Valuation Date.

WRITTEN NOTICE. Written Notice means a notice by the Owner to Us requesting or
exercising a right of the Owner as provided in the Policy provisions. In order
for a notice to be considered a Written Notice, it must: be in writing, signed
by the Owner; be in a form acceptable to Us; and contain the information and
documentation, as determined in Our sole discretion, necessary for Us to take
the action requested or for the Owner to exercise the right specified. A Written
Notice will not be considered complete until all necessary supporting
documentation required or requested by Us has been received by Us at Our
administrative office.

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

GENERAL PROVISIONS

THE POLICY. This Policy is issued in consideration of the attached application
and payment of the Initial Premium. This Policy, the attached application and
any additional applications at the time of reinstatement constitute the entire
contract. All statements in these applications will be deemed representations
and not warranties. No statement can be used to void this Policy or be used in
defense of a claim unless it is contained in the written application. No policy
provision can be waived or changed except by endorsement. Such endorsement must
be signed by Our President or Secretary.

OWNERSHIP. This Policy belongs to the Owner. The Owner, as named in the
application or subsequently changed, may exercise all rights under this Policy
during Your lifetime including the right to transfer ownership. If the Owner
should die during Your lifetime, ownership of this Policy will pass to the
Owner's estate if no contingent owner is named.

We will not be bound by any change in the ownership designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice is accepted by Us. If We request, this Policy must be returned to Our
administrative office for endorsement.

BENEFICIARY. The Beneficiary, as named in the application or subsequently
changed, will receive the benefits payable at Your death. If the Beneficiary
dies before You, the Contingent Beneficiary, if named, becomes the Beneficiary.
If no Beneficiary or Contingent Beneficiary survives You, the benefits payable
at Your death will be paid to the Owner or the Owner's estate.

We will not be bound by any change in the Beneficiary designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice was signed; however, no change will apply to any payment We made before
the Written Notice is received. If We request, this Policy must be returned to
Our Office for endorsement.

Page 6

<PAGE>

ASSIGNMENT. This Policy may be assigned. We will not be bound by any assignment
unless made by Written Notice. The assignment will be effective on the date the
Written Notice is received at Our Office and accepted by Us. We assume no
responsibility for the validity of any assignment.

INCONTESTABILITY. This Policy shall be incontestable after it has been In Force,
while You are still alive, for two years from the Policy Date.

If this Policy is reinstated, a new two year contestability period (apart from
any remaining contestability period) shall apply from the date of the
application for reinstatement and will apply only to statements made in the
application for reinstatement.

SUICIDE. If You die by suicide within two years from the Policy Date, this
Policy shall terminate and Our total liability, including all Riders attached to
this Policy, will be limited to the total premiums paid, less any loans and
prior withdrawals, during such period.

ISSUE AGE AND SEX. If Your date of birth or sex is not correctly stated, the
death benefit will be adjusted. The death benefit will be adjusted based on what
the cost of insurance charge for the most recent monthly deduction would have
purchased based on Your correct date of birth and sex.

ANNUAL REPORT. We will send a report to the Owner at least once each year. It
will show for the Policy:

1. The current cash value; 4. Any current policy loans;
2. The current net surrender value; 5. Activity since the last report;
3. The current death benefit; 6. Projected values.

Additional activity within each Subaccount showing investment experience will
also be provided. The report will also show any other information required by
the laws or regulations of the state in which the policy is issued.

TERMINATION. This Policy will terminate on the earliest of:

1. The Maturity Date; 3. The end of the grace period;
2. The date of Your death; 4. The date of surrender.

POLICY PAYMENT. All proceeds to be paid upon Termination will be paid in one sum
unless otherwise elected under the Settlement Options of this Policy.

All payments and transfers from the Subaccounts will be processed as provided in
this Policy unless one of the following situations exists:

1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares an emergency; or

We reserve the right to defer the payment of any Fixed Account values for the
period permitted by law, but not for more than six months.

CONVERSION RIGHTS. At any time upon written request within the first two policy
years, the Owner may elect to transfer all Subaccount values to the Fixed
Account without a transfer charge.

PROTECTION OF PROCEEDS. Unless the Owner directs by filing Written Notice, no
Beneficiary may assign any payments under this Policy before the same are due.
To the extent permitted by law, no payments under this Policy will be subject to
the claims of creditors of any Beneficiary.

Page 7

<PAGE>

DEATH BENEFIT PROVISIONS

DEATH BENEFIT. The death benefit is based upon the Specified Amount, Option Type
and the Limitation Percentage applicable at time of death.

SPECIFIED AMOUNT. The Specified Amount is as shown on the Policy Schedule Page,
unless changed in accordance with the Changes section or reduced by a cash
withdrawal.

OPTION TYPE. The Option Type is as shown on the Policy Schedule Page, unless
changed in accordance with the Changes section of this provision.

If Option Type A is in effect, the death benefit is the greater of:

1. the Specified Amount; or
2. the Limitation Percentage times the cash value of this Policy on the
date of Your death.

If Option Type B is in effect, the death benefit is the greater of:

1. the Specified Amount plus the cash value of this Policy on the date of
Your death; or
2. the Limitation Percentage times the cash value of this Policy on the
date of Your death.

If Option Type C is in effect, the death benefit is the greater of:

1. the Option Type A benefit; or
2. the Specified Amount times the factor K plus the cash value of this
Policy on the date of Your death,
where the factor K is equal to the lesser of:
a. 1; or
b. .04 times (95 minus Your Attained Age at death).

LIMITATION PERCENTAGE. The Limitation Percentage is a percentage based on Your
Attained Age at the beginning of the policy year equal to:

ATTAINED AGE LIMITATION PERCENTAGE
-------------------------------------------------------------
40 and under 250%
41 through 45 250% minus 7% for each age over age 40
46 through 50 215% minus 6% for each age over age 45
51 through 55 185% minus 7% for each age over age 50
56 through 60 150% minus 4% for each age over age 55
61 through 65 130% minus 2% for each age over age 60
66 through 70 120% minus 1% for each age over age 65
71 through 75 115% minus 2% for each age over age 70
76 through 90 105%
91 through 95 105% minus 1% for each age over age 90

CHANGES. The Owner may change the Option Type or decrease the Specified Amount
after the third policy year by Written Notice. Either one change or one decrease
may be allowed within each policy year. Increases in Specified Amount are not
permitted. The change will be effective on the first Monthiversary on or next
following the day We receive the request. No change in the type of death benefit
will be allowed if the resulting Specified Amount would be less than the minimum
Specified Amount shown on the Policy Schedule Page.

On the effective date of change to a new Option Type, the Specified Amount will
be adjusted so that the Monthly Cost of Insurance on the effective date of
change under the new Option Type will be equal to the Monthly Cost of Insurance
under the prior Option Type. Upon such change, the Owner will be notified by Us
of the new Specified Amount.

Page 8

<PAGE>

We reserve the right to limit any decrease in the Specified Amount to no more
than 20% of the then current Specified Amount. Any decrease will become
effective on the first Monthiversary on or next following the day We receive the
request. A decrease may not be allowed if: (a) the Specified Amount after any
requested decrease would be less than the minimum Specified Amount shown on the
Policy Schedule Page; or (b) the requested decrease would force a cash
withdrawal in order to maintain compliance with the definition of a life
insurance contract as defined by the United States Internal Revenue Code and
applicable regulations; or (c) the decrease will cause the Policy to enter the
grace period.

DEATH BENEFIT PROCEEDS. The Death Benefit Proceeds is the amount payable by Us
under this Policy provided this Policy has not terminated prior to Your death.
Except as provided in the Suicide section of the General Provisions, the Death
Benefit Proceeds will be equal to:

1. The death benefit; minus
2. Any monthly deductions due during the grace period; minus
3. Any outstanding policy loan; plus
4. Any unearned loan interest.

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

PREMIUM PROVISIONS

PAYMENT. The Initial Premium shown on the Policy Schedule Page must be paid on
or before the Policy Date. All premiums after the Initial Premium are payable at
Our Office.

PREMIUMS. The amount and frequency of Planned Premiums are shown on the Policy
Schedule Page. The amount and frequency may be changed upon request, subject to
Our approval.

While this Policy is In Force, additional premiums may be paid at any time prior
to the Maturity Date. We reserve the right to limit or refund any premium if:

1. The amount is below Our current minimum payment requirement of $50; or
2. The premium would increase the death benefit by more than the amount
of the premium; or
3. The premium would disqualify this Policy as a life insurance contract
as defined by the United States Internal Revenue Code and applicable
regulations.

GRACE PERIOD. If the Net Surrender Value on any Monthiversary is not sufficient
to cover the monthly deductions on such day, We will mail a notice to the last
known address of the Owner and any assignee of record. A grace period of 61 days
will be allowed for the payment of premiums. The notice will specify the minimum
payment and the final date on which such payment must be made to keep the Policy
In Force. The Policy will remain In Force during the grace period. If the amount
due is not paid within the grace period, all coverage under the Policy and any
riders will terminate without value at the end of the grace period.

Until the No Lapse Date shown on the Policy Schedule Page, no grace period will
begin provided the total premiums received (minus any withdrawals, minus any
outstanding loans, and minus any pro rata decrease charge deducted from the cash
value) equals or exceeds the Minimum Monthly Guarantee Premium times the number
of months since the Policy Date, including the current month. The Minimum
Monthly Guarantee Premium is as shown on the Policy Schedule Page unless changed
due to a requested change under the Policy. Upon such change, the Owner will be
notified of the new Minimum Monthly Guarantee Premium and the effective date for
the new premium.

REINSTATEMENT. If this Policy terminates, as provided in the Grace Period
section, it may be reinstated. The reinstatement is subject to:

Page 9

<PAGE>

1. Receipt at Our Office of a Written Notice. Such notice must be within
5 years after the date of Termination and prior to the Maturity Date;
and
2. Receipt of evidence of insurability satisfactory to Us; and
3. Payment of a minimum premium sufficient to provide a Net Premium to
cover (a) one monthly deduction at the time of Termination, plus (b)
the next two monthly deductions which will become due after the time
of reinstatement; and
4. Payment of an additional amount sufficient to cover any surrender
charge as of the date of reinstatement.

The effective date of a reinstatement shall be the first Monthiversary on or
next following the day We approve the application for reinstatement. Any policy
loan as of the date of Termination will not be reinstated. Any cash value equal
to the policy loan on the date of reinstatement will also not be reinstated.

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

SEPARATE ACCOUNT PROVISIONS

THE SEPARATE ACCOUNT. The variable benefits under this Policy are provided
through the Separate Account as shown on the Policy Schedule Page. The assets of
the Separate Account are Our property. Assets equal to the reserve and other
contractual liabilities under all policies issued in connection with the
Separate Account will not be charged with liabilities arising out of any other
business We may conduct. If the assets of the Separate Account exceed the
liabilities arising under the policies supported by the Separate Account, then
the excess may be used to cover the liabilities of Our general account. The
assets of the Separate Account shall be valued as often as any policy benefits
vary, but at least monthly.

SUBACCOUNTS. The Separate Account has various Subaccounts with different
investment objectives. We reserve the right to add or remove any Subaccount of
the Separate Account. Income, if any, and any gains or losses, realized or
unrealized, from assets in each Subaccount are credited to, or charged against,
the amount allocated to that Subaccount without regard to income, gains, or
losses in other Subaccounts. Any amount charged against the investment base for
federal or state income taxes will be deducted from that Subaccount. The assets
of each Subaccount are invested in shares of a corresponding Series Fund
portfolio. The value of a portfolio share is based on the value of the assets of
the portfolio determined at the end of each Valuation Period in accordance with
applicable law.

TRANSFERS. The Owner may transfer all or a portion of this Policy's value in
each Subaccount to other Subaccounts or the Fixed Account. We reserve the right
to charge a $25 fee for each transfer in excess of one per policy month or
twelve per policy year. This charge will be deducted from the funds transferred.
A request for a transfer must be made in a form satisfactory to Us. The transfer
will ordinarily take effect on the first Valuation Date on or following the date
the request is received at Our Office.

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. We reserve the right to
transfer assets of the Separate Account, which We determine to be associated
with the class of contracts to which this Policy belongs, to another Separate
Account. If this type of transfer is made, the term "Separate Account", as used
in this Policy, shall then mean the Separate Account to which the assets were
transferred. We also reserve the right to add, delete, or substitute investments
held by any Subaccount.

We reserve the right, when permitted by law, to:

1. Deregister the Separate Account under the Investment Company Act of
1940;
2. Manage the Separate Account under the direction of a committee at any
time;
3. Restrict or eliminate any voting privileges of owners or other persons
who have voting privileges as to the Separate Account;
4. Combine the Separate Account or any Subaccount(s) with one or more
other Separate Accounts or| Subaccounts;

Page 10

<PAGE>

5. Operate the Separate Account as a management investment company;
6. Establish additional Subaccounts to invest in either a new series of
the Series Fund, or in shares of another diversified, open-end
registered investment company; and
7. Fund additional classes of variable life insurance contracts through
the Separate Account.

CHANGE OF INVESTMENT OBJECTIVE. We reserve the right to change the investment
objective of a Subaccount. If required by law or regulation, an investment
objective of the Separate Account, or of a Series Fund portfolio designated for
a Subaccount, will not be materially changed unless a statement of the change is
filed with and approved by the appropriate insurance official of the state of
Our domicile or deemed approved in accordance with such law or regulation. If
required, approval of or change of any investment objective will be filed with
the Insurance Department of the state where this Policy is delivered.

UNIT VALUE. Some of the policy values fluctuate with the investment results of
the Subaccounts. In order to determine how investment results affect the policy
values, a unit value is determined for each Subaccount. The unit value of each
Subaccount was originally established at $10 per unit. The unit value may
increase or decrease from one Valuation Period to the next. Unit values also
will vary between Subaccounts. The unit value of any Subaccount at the end of a
Valuation Period is the result of:

1. The total value of the assets held in the Subaccount. This value is
determined by multiplying the number of shares of the designated
Series Fund portfolio owned by the Subaccount times the net asset
value per share; minus

2. The accrued charge for mortality and expense experience. The daily
amount of this charge is no greater than the net assets of the
Subaccount multiplied by the Mortality and Expense Risk Charge shown
on the Policy Schedule Page; minus

3. The accrued amount of reserve for any taxes or other economic burden
resulting from the application of tax laws that are determined by Us
to be properly attributable to the Subaccount; and the result divided
by
4. The number of outstanding units in the Subaccount.

The use of the unit value in determining contract values is described in the
Policy Value Provisions.

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

POLICY VALUE PROVISIONS

NET PREMIUM. The Net Premium equals the premium paid multiplied by the Net
Premium Factor shown on the Policy Schedule Page minus the Collection Fee shown
on the Policy Schedule Page.

ALLOCATION OF NET PREMIUMS. Net premiums will be allocated to the Subaccounts of
the Separate Account and the Fixed Account on the first Valuation Date on or
following the date the premium is received at Our Office; except any Net Premium
received prior to the Policy Date will be allocated on the first Valuation Date
on or following the Policy Date. All net premiums allocated prior to the Record
Date will be allocated to the Money Market Subaccount. On the first Valuation
Date on or following the Record Date, the values in the Money Market Subaccount
will be transferred in accordance with the Owner's allocation as shown in the
application.

We reserve the right to limit any allocation to any Account to no less than 10%.
No fractional percentages may be permitted. The allocation may be changed by the
Owner. We reserve the right to impose a charge of $25 for each change of
allocation in excess of one per policy year quarter. The request for change of
allocations must be in a form satisfactory to Us. The allocation change will be
effective on the date the request for change is recorded by Us.

Page 11

<PAGE>

MONTHLY DEDUCTIONS. On each Monthiversary, a monthly deduction for this Policy
will be made equal to the sum of the following:

1. The Monthly Policy Charge;
2. The Monthly Cost of Insurance for this Policy;
3. The charge for benefits provided by riders attached to this Policy;
4. The pro rata decrease charge incurred as a result of a decrease in the
Specified Amount.

Deductions will be withdrawn from each Subaccount and the Fixed Account in
accordance with the Owner's current allocation. If the value of any Account is
insufficient to pay its part of the monthly deduction, the monthly deduction
will be taken on a pro rata basis from all Accounts.

MONTHLY POLICY CHARGE. Both the Initial and Guaranteed Policy Charge are shown
on the Policy Schedule Page. It is Our intention to charge the Initial Monthly
Policy Charge each month; however, We reserve the right to increase the Monthly
Policy Charge up to the Guaranteed Monthly Policy Charge after the first policy
year. Any change in this charge will be applied uniformly to all policies in
effect for the same length of time.

MONTHLY COST OF INSURANCE. The Monthly Cost of Insurance on each Monthiversary
is determined as follows:

1. Divide the death benefit on the Monthiversary by 1.0032737; and
2. Reduce the result by the cash value on the Monthiversary; and
3. Multiply (2) by the appropriate monthly cost of insurance rates.

MONTHLY COST OF INSURANCE RATES. The monthly cost of insurance rates are based
on the sex, Attained Age, plan of insurance and rating class of the person(s)
insured. Monthly cost of insurance rates may be changed by Us from time to time.
A change in the cost of insurance rates will apply to all persons of the same
Attained Age, sex, plan of insurance and rating class and whose policies have
been in effect for the same length of time. Any change in the rates will not
exceed those shown in the Table of Guaranteed Maximum Life Insurance Rates.

SUBACCOUNT VALUE. At the end of any Valuation Period, the Subaccount value is
equal to the number of units that the Policy has in the Subaccount, multiplied
by the unit value of that Subaccount.

The number of units that the Policy has in each Subaccount is equal to:

1. The initial units purchased on the Policy Date; plus
2. Units purchased at the time additional Net Premiums are allocated to
the Subaccount; plus
3. Units purchased through transfers from another Subaccount or the Fixed
Account; minus
4. Those units that are redeemed to pay for monthly deductions as they
are due; minus
5. Any units that are redeemed to pay for cash withdrawals; minus
6. Any units that are redeemed as part of a transfer to another Account;
minus
7. Any units that are redeemed to pay the pro rata decrease charge
incurred as a result of a decrease in the Specified Amount.

FIXED ACCOUNT VALUE. At the end of any Valuation Period, the Fixed Account value
is equal to:

1. The sum of all Net Premiums allocated to the Fixed Account; plus
2. Any amounts transferred from a Subaccount to the Fixed Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as they are due;
minus
5. Any amounts withdrawn from the Fixed Account to pay for cash
withdrawals; minus
6. Any amounts transferred from the Fixed Account to a Subaccount; minus
7. Any amounts withdrawn from the Fixed Account to pay the pro rata
decrease charge incurred as a result of a decrease in the Specified
Amount.

Page 12

<PAGE>

Interest on the Fixed Account will be compounded daily at a minimum guaranteed
effective annual interest rate of 4% per year. We may declare from time to time
various higher current interest rates. We may also apply different current
interest rates to that part of the cash value that equals the loan reserve, but
it will not be less than the loan interest rate less 2%.

On transfers from the Fixed Account to a Subaccount, We reserve the right to
impose the following limitations:

1. Written Notice be received by Us within 30 days after an Anniversary.
2. The transfer will take place on the date We receive such Written
Notice.
3. The maximum amount that may be transferred is the greater of (a) 25%
of the amount in the Fixed Account; or (b) the amount transferred in
the prior policy year from the Fixed Account.

We further reserve the right to defer payment of any amounts from the Fixed
Account for no longer than six months after We receive such Written Notice.

CASH VALUE. At the end of any Valuation Period, the cash value of the Policy is
equal to the sum of the Subaccount values plus the Fixed Account value.

SURRENDER. While this Policy is In Force, the Owner may surrender this Policy
for the Net Surrender Value. Payment will usually be made within seven days of
Written Notice, subject to the Policy Payment section of the General Provisions.

NET SURRENDER VALUE. The Net Surrender Value is the amount payable upon
surrender of this Policy. The Net Surrender Value as of any date is equal to:

1. the cash value as of such date; minus
2. any Surrender Charge as of such date; minus
3. any outstanding policy loan; plus
4. any unearned loan interest.

SURRENDER CHARGE. During the first 15 policy years, a Surrender Charge will be
incurred upon surrender of this Policy. This charge will be based upon the Table
of Surrender Charges shown on the Policy Schedule Page.

PRO RATA DECREASE CHARGE. If during the first 15 policy years the Specified
Amount is decreased, a pro rata portion of the Surrender Charge will be deducted
from the cash value. The pro rata decrease charge is equal to:

1. the amount of the Specified Amount decrease; multiplied by
2. the then current Surrender Charge as of the date of the decrease
applicable to the Specified Amount shown on the Table of Surrender
Charges.

A pro rata decrease charge will not be deducted from the cash value when a
Specified Amount decrease results from (a) a change in Option Type, or (b) a
withdrawal when the death benefit is Option Type A, as described in the
Withdrawals Provision below. If a pro rata decrease charge is deducted due to a
decrease in Specified Amount, any future surrender charges incurred during the
Surrender Charge period will be reduced proportionately.

WITHDRAWALS. Cash withdrawals may be made any time after the first policy year
and while this Policy is In Force. Only one withdrawal is allowed during a
policy year. The amount of a withdrawal may be limited to no less than $500 and
to no more than 10% of the Net Surrender Value. The remaining Net Surrender
Value following a withdrawal may not be less than $500. The request for a
withdrawal must be by Written Notice. A processing fee of the lesser of 2% of
the amount withdrawn or $25 will be deducted from each withdrawal amount and the
balance paid to the Owner.

Page 13

<PAGE>

When a withdrawal is made, the cash value shall be reduced by the amount of the
withdrawal. If the death benefit is Option Type A, the Specified Amount shall
also be reduced by the amount of the withdrawal. These reductions will result in
a reduction in the death benefit, which may be determined from the Death Benefit
section. No withdrawal will be allowed if the resulting Specified Amount would
be less than the minimum Specified Amount shown on the Policy Schedule Page.

The Accounts from which the withdrawal will be made may be specified in the
Written Notice. If no Account is specified, the withdrawal amount will be
withdrawn from each Account in accordance with the Owner's current allocation
instructions. Payment will usually be made within seven days of Written Notice,
subject to the Policy Payment section of the General Provisions of this Policy.

CONTINUATION OF INSURANCE. Subject to the Grace Period section of the Premium
Provisions, insurance coverage under this Policy and any benefits provided by
Rider will be continued In Force until the Net Surrender Value is insufficient
to cover the monthly deductions. This provision shall not continue this Policy
beyond the Maturity Date nor continue any Rider beyond the date for its
Termination, as provided in the Rider.

Coverage may not continue to the Maturity Date and is contingent upon:

1. the timing of premium payments;
2. investment experience of the Sub-Accounts;
3. Cost of Insurance charges;
4. charges for any riders attached to this Policy;
5. any loans and partial withdrawals;
6. changes in the amount of insurance provided under this Policy.

INSUFFICIENT VALUE. If the Net Surrender Value on any Monthiversary is not
sufficient to cover the monthly deductions then due, this Policy shall terminate
subject to the Grace Period section of the Premium Provisions.

BASIS OF COMPUTATIONS. Policy values and reserves are at least equal to those
required by law. A detailed statement of the method of computation of values and
reserves has been filed with the insurance department of the state in which this
Policy was delivered.

POLICY LOANS. After the first policy year and during the continuance of this
Policy, the Owner can borrow against this Policy an amount which is not greater
than 90% of the cash value, less any surrender charge and any outstanding policy
loan. The amount of any policy loan may be limited to no less than $500, except
as noted below.

When a loan is made, an amount equal to the loan plus interest in advance until
the next Anniversary will be withdrawn from the Accounts and transferred to the
loan reserve. The loan reserve is a portion of the Fixed Account used as
collateral for any policy loan. The Owner may specify the Account or Accounts
from which the withdrawal will be made. If no Account is specified, the
withdrawal will be made from each Account in accordance with the Owner's current
premium allocation instructions.

The loan date is the date We process a loan request. Payment will usually be
made within seven days of the date We receive proper loan request, subject to
the Policy Payment section of the General Provisions of this Policy. This Policy
will be the sole security for the loan.

While this Policy is In Force, any loan may be repaid. Any amounts received on
this Policy will be considered premiums unless clearly marked as loan
repayments.

Interest on any loan will be at the policy loan rate of 5.2%, payable annually
in advance. Interest is due at each Anniversary. Interest not paid when due will
be added to the loan and will bear interest at the same rate.

Page 14

<PAGE>

At each Anniversary, We will compare the amount of the outstanding loan
(including interest in advance until the next Anniversary, if not paid) to the
amount in the loan reserve. We will also make this comparison anytime the Owner
repays all or part of the loan. At each such time, if the amount of the
outstanding loan exceeds the amount in the loan reserve, We will withdraw the
difference from the Accounts and transfer it to the loan reserve, in the same
fashion as when a loan is made. If the amount in the loan reserve exceeds the
amount of the outstanding loan, We will withdraw the difference from the loan
reserve and transfer it to the Accounts in accordance with the Owner's current
allocation instructions. However, We reserve the right to require the transfer
to the Fixed Account if such loans were originally transferred from the Fixed
Account.

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

SETTLEMENT OPTIONS

EFFECTIVE DATE AND FIRST PAYMENT DUE. The effective date of a settlement
provision will be either the date of surrender or the date of death. The first
payment due will be on the effective date of the settlement provision.

BETTERMENT OF MONTHLY ANNUITY. The payee will receive the greater of:

1. The income rate guaranteed in this Policy; or
2. The income rates in effect for Us at the time income payments are
made.

AVAILABILITY. If the payee is not a natural person, an optional method of
settlement is only available with Our permission. No optional method of
settlement is available if:

1. The payee is an assignee; or
2. The periodic payment is less than $100.

AGE. Age, when required, means age nearest birthday on the effective date of the
option. We will furnish rates for other ages and for two males or two females
upon request.

PROOF OF AGE AND SEX. Prior to making the first payment under this Policy, We
reserve the right to require satisfactory evidence of the birthdate and sex of
any payee. If required by law to ignore the differences in sex of any payee,
annuity payments will be determined using unisex rates.

PROOF OF SURVIVAL. Prior to making any payment under this Policy, We reserve the
right to require satisfactory evidence that any payee is alive on the due date
of such payment.

INTEREST. All settlement options are based on the 1983 Individual Annuity
Mortality Table, if applicable, and a guaranteed annual interest rate of 3%.

TABLE OF OPTIONAL METHODS OF SETTLEMENT
DESCRIPTION AND TABLES OF MONTHLY INSTALLMENT
PER $1,000 OF PROCEEDS.

Option A - Fixed Period. The proceeds will be paid in equal installments. The
installments will be paid over a fixed period determined from the following
table:

Page 15

<PAGE>

FIXED PERIOD
(IN MONTHS) FACTOR
------------- ------
60 17.91
120 9.61
180 6.87
240 5.51

Option B - Life Income. The proceeds will be paid in equal installments
determined from the following table. Such installments are payable:

1. during the payee's lifetime only (Life Annuity); or
2. during a 10-year fixed period certain and for the payee's remaining
lifetime (Certain Period); or
3. until the sum of installments paid equals the annuity proceeds applied
and for the payee's remaining lifetime (Installment Refund).

PAYEE'S LIFE ANNUITY CERTAIN PERIOD INSTALLMENT REFUND
AGE MALE FEMALE UNISEX MALE FEMALE UNISEX MALE FEMALE UNISEX
- ------- -------------------- -------------------- ---------------------
55 4.20 3.81 4.01 4.15 3.79 3.98 4.00 3.71 3.85
60 4.67 4.17 4.43 4.59 4.14 4.37 4.37 4.02 4.19
65 5.33 4.68 5.01 5.17 4.61 4.90 4.84 4.42 4.62
70 6.26 5.39 5.82 5.89 5.24 5.58 5.45 4.94 5.18
75 7.53 6.42 6.97 6.75 6.06 6.42 6.24 5.64 5.91
80 9.33 7.95 8.63 7.66 7.04 7.37 7.25 6.57 6.88
85 11.84 10.21 11.02 8.48 8.04 8.27 8.55 7.78 8.14
90 15.31 13.49 14.40 9.08 8.81 8.96 10.21 9.30 9.74

Option C - Joint and Survivor Life Income. The proceeds will be paid in equal
installments during the joint lifetime of two payees:

1. continuing upon the death of the 2. reduced by one-third upon the
first the death payee for the death of the first payee and
remaining lifetime of the continueing for the remaining
surviror; or lifetime of the survivor

Joint Life Income with Full Joint Life Income with 2/3
Amount to Survivor to Survivor

55 60 65 70 75 55 60 65 70 75
- --------------------------------------------------------------------------------

55 3.97 4.13 4.26 4.38 4.46 55 4.37 4.59 4.83 5.09 5.36
60 4.13 4.35 4.56 4.75 4.89 60 4.59 4.86 5.15 5.48 5.81
65 4.26 4.56 4.87 5.16 5.41 65 4.83 5.25 5.53 5.93 6.36
70 4.38 4.75 5.26 5.60 6.00 70 5.09 5.48 5.93 6.45 7.02
75 4.46 4.89 5.41 6.00 6.61 75 5.36 5.81 6.36 7.02 7.76

Page 16

<PAGE>

THIS PAGE INTENTIONALLY LEFT BLANK

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

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

Exhibit 1(A)(5)(b)

Children's Insurance Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
(A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

CHILDREN'S INSURANCE RIDER

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

IN THIS RIDER, AUSA Life Insurance Company, Inc. will be referred to as WE, OUR
OR US.

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

BENEFIT. We will pay the Face Amount of this rider as shown on Page 4 of the
Policy to the Primary Insured when we receive due proof that the death of an
Insured Child occurred while this rider and coverage on such child was in force.

INSURED CHILD. An Insured Child is a child, step-child or legally adopted child
of the Primary Insured who is:

1. at least 15 days old and no older than 18 years of age on the effective
date of this rider; and
2. named in the application for this benefit and approved by us.

An Insured Child shall also refer to any child born to or legally adopted by the
Primary Insured after the effective date of this rider after such child is 15
days old.

CONSIDERATION. This rider is issued in consideration of:

1. the application for this rider; and
2. the payment of the initial premium.

INCONTESTABILITY. This rider shall be incontestable after it has been in force
while you are still alive, for two years after the effective date of this rider.

SUICIDE. If an Insured Child dies by suicide, within two years after the
effective date of this rider, our liability shall be limited to an amount equal
to the total monthly deductions for that child's coverage under this rider.

ISSUE AGE AND SEX. If an Insured Child's date of birth or sex is not correctly
stated, we will adjust the death benefit to the amount payable had the date of
birth and sex been correctly stated.

CONVERSION PRIVILEGE. On the Monthiversary following an Insured Child's 25th
birthday, such child may exchange their coverage for a new policy on their life.
Such new policy will be issued subject to the following:

1. written request is received prior to such child's 25th birthday; and
2. the new policy is on any permanent plan of insurance then offered by us;
and
3. the amount of insurance upon conversion will equal 5 times the Face Amount
of this rider; and
4. the payment of the initial premium for the plan selected.

<PAGE>

Upon the death of the Primary Insured, this rider will terminate 31 days after
such death and a separate policy will be offered to each Insured Child. Each
policy offered will be for an amount equal to the Face Amount of this rider.

TERMINATION. Coverage for any Insured Child will terminate on the Monthiversary
following such child's 25th birthday.

This rider will terminate on the earliest of:

1. the Maturity Date of the Policy;
2. the date this Policy terminates for any reason except for death of the
Primary Insured;
3. 31 days after the death of the Primary Insured;
4. the Monthiversary on which this rider is terminated on written request by
the Owner;
5. the Monthiversary following the youngest Insured Child's 25th birthday or
the last remaining Insured Child's death.

The Owner must notify us when to terminate this rider due to the youngest
Insured Child's 25th birthday or the last remaining Insured Child's death.

If we make any monthly deductions for this rider after it terminates, we will
recompute the policy values as though such deductions had not occurred. Such
deductions will not provide coverage beyond the intended date of termination.

GENERAL. This rider is part of the Policy. It is subject to all the terms of
this rider and the Policy. This rider has no cash value.

The monthly deduction for this rider, for each of the first 12 policy months, is
shown on Page 4 of the Policy. Each monthly deduction after the first policy
year will not exceed the monthly deduction during the first policy year.

EFFECTIVE DATE. This rider becomes effective on the same date as the Policy
unless a later date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
-------------------------
Craig D. Vermie
Secretary

Exhibit 1(A)(5)(c)

Disability Waiver Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
(A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

DISABILITY WAIVER RIDER

- -------------------------------------------------------------------------------
IN THIS RIDER, the Insured is named on Page 4 of the Policy. The Insured will be
referred to as YOU or YOUR. AUSA Life Insurance Company, Inc. will be referred
to as WE, OUR or US.

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

BENEFIT. We will waive the monthly deductions for this Policy when we receive
due proof that your total disability has existed continuously for at least six
months, as provided in this rider.

TOTAL DISABILITY. Total disability means your complete inability, because of
bodily injury or disease, to engage in any gainful occupation for which you are
qualified by education, training or experience.

We will also recognize as total disability your complete and irrecoverable loss
of any one of the following:

1. sight of both eyes;
2. use of both hands or both feet; or
3. use of one hand and one foot.

RISKS NOT COVERED. We will not waive premiums if your total disability results
from:

1. intentionally self-inflicted bodily injury; or
2. service in the military or naval forces of any country when such country is
engaged in war, whether declared or not; or
3. bodily injury sustained while in or on, or in consequence of having been in
or on any device for aerial navigation, or in descending from or with, or
while adjusting, operating or handling any such device. This restriction
does not apply while actually riding as a fare-paying passenger in an
aircraft operated on regular schedule by an incorporated passenger carrier
over its established air route.

CONSIDERATION. This rider is issued in consideration of:

1. the application for this rider; and
2. the payment of the initial premium.

NOTICE OF CLAIM. Before we waive any monthly deductions, we must receive written
notice of claim at our Office. Notice must be received by us while total
disability continues and while you are still alive, or as soon as reasonably
possible.

PROOF OF DISABILITY. Before we waive any monthly deductions, we must receive
proof that your total disability has existed continuously for at least six
months.

We may require proof at reasonable intervals that total disability continues.
After total disability has continued for two consecutive years we will not
require such proof more than once a year. We may require your physical
examination at our expense by a physician of our choice as part of any proof of
total disability. We will not waive any further monthly deductions if proof is
not furnished as required.

<PAGE>

RECOVERY FROM DISABILITY. If and when you recover from total disability, no
further monthly deductions will be waived for that period of disability.

TERMINATION. This rider will terminate on the earliest of:

1. the Anniversary nearest your 60th birthday, except in respect to benefits
accruing during the continuance of any then existing total disability of
which we received due proof of as set forth above; or
2. the date this Policy terminates; or
3. the Monthiversary on which this rider is terminated on written request by
the Owner.

GENERAL. This rider is part of the Policy. It is subject to all the terms of
this rider and the Policy. This rider has no cash value.

The monthly deduction for this rider, for the first policy month, is shown on
Page 4 of the Policy. Monthly deductions after the first policy month will equal
the Waiver Factor per unit at risk shown on Page 4 times the number of units at
risk at the beginning of each month for each coverage in force.

EFFECTIVE DATE. This rider becomes effective on the same date as the Policy
unless a later date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
-----------------------
Craig D. Vermie
Secretary

Exhibit 1(A)(5)(d)

Accidental Death Benefit Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
( A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

ACCIDENTAL DEATH BENEFIT RIDER

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

IN THIS RIDER, the Insured is named on Page 4 of the Policy. The Insured will be
referred to as YOU or YOUR. AUSA Life Insurance Company, Inc. will be referred
to as WE, OUR or US.

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

BENEFIT. We will pay the ADB Amount of this rider as shown on Page 4 of the
Policy when we receive due proof that your death:

1. resulted from bodily injuries effected directly and independently of all
other causes through external, violent and accidental means; and
2. occurred within 90 days from the date of accident causing such injuries;
and
3. occurred while this rider was in force.

RISKS NOT COVERED. The benefit provided by this Rider is not payable if your
death results from any of the following:

1. Bodily injuries of which there is no visible contusion or wound on the
exterior of the body, except in case of drowning or internal injuries
revealed by autopsy;
2. Suicide or self-destruction while sane or insane;
3. Disease or bodily or mental infirmity;
4. Bodily injury sustained as a result of war, whether declared or not, riot
or insurrection;
5. Bodily injury sustained while operating, riding in, or descending from any
kind of aircraft if you are:
a) a pilot, officer, or member of a crew; or
b) being flown for the purpose of descent from such aircraft while in
flight; or
c) giving or receiving any kind of training or instruction; or
d) having any duties aboard such aircraft.
6. Bodily injuries sustained while participating in or attempting to commit an
assault or felony;
7. Any poison, gas or fumes voluntarily administered, absorbed or inhaled.

CONSIDERATION. This rider is issued in consideration of:

1. the application for this rider; and
2. the payment of the initial premium.

TERMINATION. This rider will terminate on the earliest of:

1. the Anniversary nearest your 70th birthday;
2. the date this Policy terminates;

<PAGE>

3. the Monthiversary on which this rider is terminated on written request by
the Owner. GENERAL. This rider is part of the Policy. It is subject to all
the terms of this rider and the Policy. This rider has no cash value.

We reserve the right and opportunity to:

1. investigate the circumstances of your death; and
2. examine your body upon death; and
3. have an autopsy performed, unless prohibited by law.
4. The monthly deduction for this rider, for each of the first 12 policy
months, is shown on Page 4 of the Policy. Monthly deductions after the
first policy year will not exceed the rates shown below adjusted by the
rating factor for this coverage.

ATTAINED MONTHLY RATE
AGE PER $1,000 ADB AMOUNT
-------- ---------------------
15-45 $.10
46-50 .11
51-55 .12
56-60 .13
61-65 .15
66-69 .18

EFFECTIVE DATE. This rider becomes effective on the same date as the
Policy unless a later date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
-------------------------
Craig D. Vermie
Secretary

Exhibit 1(A)(5)(e)

Primary Insured Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
(A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

PRIMARY INSURED RIDER

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

IN THIS RIDER, the Primary Insured is named on Page 3 of the Policy. The Primary
Insured will be referred to as YOU or YOUR. AUSA Life Insurance Company, Inc.
will be referred to as WE, OUR, or US.

- -------------------------------------------------------------------------------
BENEFIT. We will pay the Face Amount of this Rider as shown on Page 4 of the
Policy when We receive due proof that Your death occurred while this Rider was
In Force.

CONSIDERATION. This Rider is issued in consideration of:

1. the application for this Rider; and
2. the payment of the Initial Premium.

INCONTESTABILITY. This Rider shall be incontestable after it has been In Force
while You are still alive, for two years after the effective date of this Rider.

SUICIDE. If this Rider is issued on the same date as the Policy, the Suicide
Provision of the Policy is applicable to this Rider. If this Rider is issued
after the Policy and if You die by suicide, while sane or insane, within two
years after the effective date of this Rider, Our liability for this Rider shall
be limited to an amount equal to the excess of the total monthly deductions for
this Rider less any premiums being refunded under the Suicide Provision of the
Policy to which this Rider is attached.

CONVERSION PRIVILEGE. On any Monthiversary while this Rider is In Force, the
Owner may exchange this Rider, without evidence of insurability, for a new
policy on Your life. Such new policy will be issued upon written request subject
to the following:

1. The Rider has not reached the Anniversary nearest Your 70th
birthday; and
2. The new policy is on any permanent plan of insurance then offered
by Us; and
3. The amount of insurance upon conversion will equal the Face Amount
then In Force under this Rider; and
4. The payment of the premium based on Your rate class under this
Rider.

TERMINATION. This Rider will terminate on the earliest of:

1. The Anniversary nearest Your 70th birthday;
2. The date this Policy terminates;
3. The date of conversion of this Rider;
4. The Monthiversary on which this Rider is terminated on written
request by the Owner.

GENERAL. This Rider is part of the Policy. It is subject to all the terms of
this Rider and the policy. This Rider has no cash value.

<PAGE>

4. The monthly deduction for this Rider, for each of the first 12 policy months,
is shown on Page 4 of the Policy. Monthly deductions after the first policy year
will be calculated consistent with the monthly cost of insurance and monthly
cost of insurance rates provisions of the Policy to which this Rider is
attached.

EFFECTIVE DATE. This Rider becomes effective on the same date as the Policy
unless a later date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
--------------------------
Craig D. Vermie
Secretary

Exhibit 1(A)(5)(f)

Other Insured Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
(A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

OTHER INSURED RIDER

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

IN THIS RIDER, the Insured is named on Page 4 of the Policy. The Insured will be
referred to as YOU or YOUR. AUSA Life Insurance Company, Inc. will be referred
to as WE, OUR or US.

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

BENEFIT. We will pay the Face Amount of this rider as shown on Page 4 of the
Policy to the Primary Insured when we receive due proof that your death occurred
while this rider was in force.

CONSIDERATION. This rider is issued in consideration of:

1. the application for this rider; and
2. the payment of the initial premium.

INCONTESTABILITY. This rider shall be incontestable after it has been in force
while you are still alive, for two years after the effective date of this rider.

SUICIDE. If you die by suicide, within two years after the effective date of
this rider, our liability shall be limited to an amount equal to the total
monthly deductions for this rider.

ISSUE AGE AND SEX. If your date of birth or sex is not correctly stated, we will
adjust the death benefit to the amount payable had your date of birth and sex
been correctly stated.

CONVERSION PRIVILEGE. On any Monthiversary while this rider is in force, the
Owner may exchange this rider without evidence of insurability for a new policy
on your life. Such new policy will be issued upon written request subject to the
following:

1. the rider has not reached the Anniversary nearest your 70th birthday; and
2. the new policy is on any permanent plan of insurance then offered by us;
and
3. the amount of insurance upon conversion will equal the Face Amount then in
force under this rider; and
4. the payment of the premium based on your rate class under this rider.

The Incontestability and Suicide provisions of the new policy shall be measured
from the date of issue of this rider.

TERMINATION. This rider will terminate on the earliest of:

1. the Maturity Date of the Policy;
2. the date of your 70th birthday;
3. the date this Policy terminates for any reason except for death of the
Primary Insured;

<PAGE>

4. 31 days after the death of the Primary Insured;
5. the date of conversion of this rider;
6. the Monthiversary on which this rider is terminated on written request by
the Owner.

GENERAL. This rider is part of the Policy. It is subject to all the terms of
this rider and the Policy. This rider has no cash value.

The monthly deduction for this rider, for each of the first 12 policy months, is
shown on Page 4 of the Policy. Monthly deductions after the first policy year
will be calculated consistent with the Monthly Cost of Insurance and Monthly
Cost of Insurance Rates provisions of the Policy to which this rider is
attached.

EFFECTIVE DATE. This rider becomes effective on the same date as the Policy
unless a later date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
-------------------------
Craig D. Vermie
Secretary

Exhibit 1(A)(5)(g)

Terminal Illness Accelerated Death Benefit Rider

<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.
(A STOCK COMPANY)

Home Office: Purchase, New York
Administrative Office: Clearwater, Florida

TERMINAL ILLNESS ACCELERATED DEATH BENEFIT RIDER

DEATH BENEFITS, CASH VALUES AND LOAN VALUES WILL BE REDUCED
IF AN ACCELERATED DEATH BENEFIT IS PAID.
AN ACCELERATED DEATH BENEFIT MAY BE TAXABLE.
AS WITH ALL TAX MATTERS, A PERSONAL TAX ADVISOR SHOULD BE CONSULTED.

The Owner may elect to receive a portion of this Policy's Death Benefit, in a
Single Sum, when the Insured has incurred a Terminal Condition, subject to the
terms and conditions defined below.

DEFINITIONS

In addition to the definitions contained in this Policy, the following
definitions apply to this Rider:

DEATH BENEFIT. For purposes of this Rider, Death Benefit means the amount
payable upon the death of the Insured under the base policy, plus:

(a) in the case of a single life policy, the benefit payable under a
Primary Insured Rider, if any; or
(b) in the case of a joint last survivor policy, the benefit payable
under a Joint Insured Term Rider, if any.

Death Benefit does not include amounts payable under any other Riders not
expressly named above, including, but not limited to, any Individual Insured
Rider, Accidental Death Benefit Rider, Other Insured Rider or Disability Waiver
Rider.

ELECTION PERCENTAGE. A percentage, selected by the Owner, not to exceed 100% of
this Policy's Death Benefit.

In no event will the Election Percentage result in a Single Sum Benefit greater
than $500,000.

IMMEDIATE FAMILY. A spouse, child, brother, sister, parent, grandparent or
grandchild of the Insured or Owner.

INSURED. The Insured for a single life policy will be the Insured as shown on
Page 3 of this Policy. The Insured for a joint last survivor policy will be the
Surviving Insured of the two Insureds shown on Page 3 of this Policy.

PHYSICIAN. A Doctor of Medicine or a Doctor of Osteopathy licensed to practice
medicine and treat injury or illness in the state in which treatment is received
and who is acting within the scope of that license. A Physician must be someone
other than:

<PAGE>

(a) the Insured;
(b) the Owner;
(c) a person who lives with the Insured or Owner; or
(d) a person who is part of the Insured's or Owner's Immediate Family.

PHYSICIAN'S STATEMENT. A written statement acceptable to us and signed by a
Physician which:

(a) provides the Physician's diagnosis and prognosis of the Insured's
noncorrectable medical condition; and
(b) states with reasonable medical certainty that the noncorrectable
medical condition will result in the death of the Insured within 12
months from the date of the Physician's Statement. This statement
must take into consideration the ordinary and reasonable medical
care, advice and treatment available in the same or similar
communities.

TERMINAL CONDITION. A condition resulting from injury or illness which, as
determined by a Physician, has reduced life expectancy to not more than 12
months from the date of the Physician's statement.

BENEFITS

SINGLE SUM BENEFIT. We will pay the Single Sum Benefit to the Owner when we
receive proof satisfactory to us that the Insured has incurred a Terminal
Condition while this Policy and Rider are in force. We will make payment when
all of the terms and conditions have been met, subject to the conditions and
limitations contained in this Rider.

The Single Sum Benefit provided by this Rider may only be elected once.

The Single Sum Benefit is equal to:

(a) the Death Benefit in effect on the date the Single Sum Benefit is
paid;

multiplied by

(b) the Election Percentage;

divided by

(c) (1 + i ), where i equals the greater of (A) and (B) on the date the
Single Sum Benefit is paid. (A) equals the interest rate determined
under the Internal Revenue Code section 846(c)(2), as may be amended
from time to time; and (B) equals the Policy Loan Interest Rate;

minus

d) Indebtedness, if any, at the time the Single Sum Benefit is paid,
multiplied by the Election Percentage.

BENEFIT AND VALUE REDUCTION. This Policy's benefits and values, as those amounts
exist on the date the Single Sum Benefit is paid, will be reduced by the
Election Percentage. If the Election Percentage is 100%, this Policy will
terminate without further value.

<PAGE>

At the time of payment, we will provide the Owner with revised Policy
Specification pages and any other pertinent information which reflect the
reduction of all values applicable to this Policy and all benefits it provides.

RIDER CLAIMS PROVISIONS

NOTICE OF CLAIM. The Owner may give us written notice of a claim for this
Benefit any time after the Insured incurs a Terminal Condition as defined in
this Rider. Notice of Claim must be signed by the Owner, identify the Insured,
the Policy and the Election Percentage and be sent to us at our Administrative
Office.

CLAIM FORMS. We will send you claim forms within 15 days of the date we receive
written notice of claim. If we do not do so, the Owner will be considered to
have complied with the Proof of Terminal Condition requirements by giving us a
Physician's Statement acceptable to us and a written statement of the nature and
extent of the Terminal Condition.

PROOF OF TERMINAL CONDITION. Written proof of the Insured's Terminal Condition
must be received by us at our Administrative Office before we will make a Single
Sum Benefit payment. This proof must include a properly completed claim form and
a Physician's Statement acceptable to us. We may request additional medical
information from the Physician submitting the statement.

PHYSICAL EXAMINATION. At our expense, we reserve the right to have a Physician
of our choosing examine the Insured prior to making a Single Sum Benefit
payment. In the event the Physician we choose provides a different prognosis of
the Insured's medical condition, we reserve the right to rely on the statement
from the Physician of our choosing for claim purposes.

TIME PAYMENT OF CLAIMS. All benefits described in this Rider will be available
as soon as we receive satisfactory Proof of Terminal Condition.

CONSENT FOR BENEFIT PAYMENT. We must obtain consent of any irrevocable
beneficiary and any assignee of record before the Single Sum Benefit is paid. An
assignee's consent is required only to the extent that benefits paid would
reduce this Policy's values and benefits below the amounts assigned.

RIDER GENERAL PROVISIONS

ANNUAL STATEMENT. The Annual Statement for this Policy will reflect payment of
the Single Sum Benefit, if paid during the prior year, as well as resulting
reductions and remaining benefits and values.

CONTESTABILITY. This Rider will be contestable, on the same basis as the Policy,
during the lifetime of the Insured, for two years from the Rider Effective Date.

CHARGES. No charges are payable for this Rider.

SELF-INFLICTED INJURY. If the Insured suffers a Terminal Condition which results
from a bodily injury which was intentionally self-inflicted, within the period
specified in the Suicide Provision of this Policy, no benefits will be payable
under this Rider.

<PAGE>

TERMINATION. This Rider will terminate at the earliest of:

(a) the date the Policy terminates;
(b) the effective date of a settlement option elected under the Policy;
(c) the date the Single Sum Benefit is paid; or
(d) the date the Owner elects to terminate this Rider.

RIDER EFFECTIVE DATE. Rider months, years and anniversaries are measured from
the Rider Effective Date. The Rider Effective Date is the Policy effective date
unless a different Rider Effective Date is shown here.

AUSA LIFE INSURANCE COMPANY, INC.

/s/ CRAIG D. VERMIE
-----------------------
Craig D. Vermie
SECRETARY

Exhibit 1(A)(5)(h)

Endorsement
(Asset Rebalancing)

<PAGE>

AUSA Life Insurance Company, Inc.

ENDORSEMENT

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

The following provision is added to this Policy, effective as of the date We
receive Your written request to participate in the Asset Rebalancing Program.

ASSET REBALANCING PROGRAM. You may instruct us to transfer automatically Cash
Values among the Sub-Accounts for purposes of maintaining a particular
percentage allocation among the Sub-Accounts.

The following conditions apply to Asset Rebalancing:

1. You must provide written election of this option on a form provided by
Us;
2. A minimum Cash Value of $5,000 is required;
3. Asset Rebalancing is only available prior to the Maturity Date;
4. Cash Values in the Fixed Account are not eligible for Asset
Rebalancing.

You may elect for rebalancing to occur on each quarter, semi-annual or annual
Anniversary. Following receipt of your written request, the initial rebalancing
will occur on the next such Anniversary, and will occur in accordance with the
current Net Premium allocation.

Asset Rebalancing is not available and will terminate if:

1. You elect Dollar Cost Averaging;
2. You elect to participate in any asset allocation service provided by a
third party.
3. We receive Your request to discontinue participation; or
4. A transfer is made to, or from, any Sub-Account other than under a
scheduled rebalancing.

Each reallocation which occurs under Asset Rebalancing will be counted towards
the number of transfers allowed without charge.

We reserve the right to limit re-entry into the Asset Rebalancing Program
following termination to once per Policy Year.

We reserve the right to discontinue, modify or suspend the Asset Rebalancing
Program at any time, following proper written notification to all policyholders.

/s/ CRAIG D. VERMIE /S/ TOM A. SCHLOSSBERG
- ---------------------- -------------------------
Craig D. Vermie Tom A. Schlossberg
Secretary President

Exhibit 1(A)(5)(i)

Endorsement
(Dollar Cost Averaging)

<PAGE>

AUSA Life Insurance Company, Inc.

ENDORSEMENT

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

The following provision is added to this Policy, effective as of the date We
receive Your Written Notice to participate in the Dollar Cost Averaging option.

DOLLAR COST AVERAGING. You may instruct Us to automatically transfer specified
amounts from the Money Market Sub-Account, Bond Sub-Account, the Fixed Account
or any combination of these accounts on a monthly basis.

The following conditions apply to Dollar Cost Averaging:

1. We must receive Your proper written election of this option, on a form
provided by Us;
2. A minimum amount of $5,000 must be in each Sub-Account from which
transfers are to be made;
3. The total amount to be transferred from all Sub-Accounts each month
must equal, in total, a minimum of $1,000;
4. For transfers from the Fixed Account, no more than one-tenth of the
amount in the Fixed Account at the commencement of Dollar Cost
Averaging may be transferred each month.

Each transfer which occurs under the Dollar Cost Averaging option will be
counted towards the number of transfers allowed without charge.

Dollar Cost Averaging will terminate if:

1. We receive written instruction from You for cancellation;
2. You elect to participate in any Asset Rebalancing Program; or
3. You elect to participate in any asset allocation service provided by a
third party.

We reserve the right to discontinue, modify or suspend Dollar Cost Averaging at
any time, following proper written notification to all policyowners.

/s/ CRAIG D. VERMIE /S/ TOM A. SCHLOSSBERG
---------------------- ----------------------
Craig D. Vermie Tom A. Schlossberg
Secretary President

Exhibit 3

Opinion of Counsel as to the legality of the securities being registered

<PAGE>

AUSA LETTERHEAD

October 15, 1997

Board of Directors
AUSA Life Insurance Company, Inc.
AUSA Series Life Account
4 Manhattanville Road
Purchase, New York 10577

Gentlemen:

In my capacity as Vice President, Assistant Secretary and Counsel of AUSA Life
insurance Company, Inc. ("AUSA Life"), I have participated in the preparation
and review of an Initial Registration Statement on Form S-6 filed with the
Securities and Exchange Commission under the Securities Act of 1933 for the
registration of flexible premium variable life insurance policies (the
"Policies") to be issued with respect to the AUSA Series Life Account (the
"Account"). The Account was established on October 24, 1994, by the Board of
Directors of AUSA Life as a separate account for assets applicable to the
Policies, pursuant to the provisions of the New York Insurance Law.

I am of the following opinion:

1. AUSA Life has been duly organized under the laws of New York and is a
validly existing corporation.

2. The Account has been duly created and is validly existing as a separate
account pursuant to New York Insurance Law.

3. Section 4240 of the New York Insurance Law provides that the portion of the
assets of the Account equal to the reserves and other liabilities for
variable benefits under the Policies is not chargeable with liabilities
arising out of any other business AUSA Life may conduct. Assets allocated
to the Fixed Account under the Policies, however, are part of AUSA Life's
general account and are subject to AUSA Life's general liabilities from
business operations.

4. The Policies, when issued as contemplated by the Registration Statement,
will be legal and binding obligations of AUSA Life in accordance with their
terms.

<PAGE>

AUSA Life Insurance Company, Inc.
October 15, 1997
Page Two

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

/s/ ROBERT F. COLBY
- -------------------------
Robert F. Colby
Vice President,
Assistant Secretary and Counsel

Exhibit 6

Opinion and Consent of Alan Yaeger as to actuarial matters
pertaining to the securities being registered

<PAGE>

October 17, 1997

AUSA Life Insurance Company, Inc.
4 Manhattanville Road
Purchase, New York 10577

RE: REGISTRATION NO. 33-

Gentlemen:

This opinion is furnished in connection with the initial registration by
AUSA Life Insurance Company, Inc. of flexible premium variable life insurance
policies ("Policies") under the Securities Act of 1933. The Prospectus included
in the Registration Statement on Form S-6 describes the Policies. The forms of
Policies were prepared under my direction, and I am familiar with the
Registration Statement and Exhibits thereof.

In my opinion, the illustrations of death benefits, cash values and net
surrender values included in the sections entitled "Death Benefit, Cash Value
and Net Surrender Value Illustrations" and "Illustration of Benefits" (Appendix
A) and the illustrations of death benefits and cash values included in Appendix
B of the Prospectus, based on the assumptions stated in the illustrations, are
consistent with the provisions of the respective forms of the Policies.

I hereby consent to use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
Prospectus.

Very truly yours,

/s/ ALAN YAEGER
- -----------------------
Alan Yaeger
Actuary