Security Life Separate Account L1 S-6/A Registration of securities by unit investment trust (amended)

As filed with the Securities and Exchange Commission on December 19, 2001

Registration No. 333-73464

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

Pre-effective Amendment No. 1
_________________
SECURITY LIFE SEPARATE ACCOUNT L1
(Exact Name of Trust)

SECURITY LIFE OF DENVER INSURANCE COMPANY
(Name of Depositor)
1290 Broadway
Denver, Colorado 80203-5699
(Address of Depositor's Principal Executive Offices)

J. NEIL MCMURDIE, ESQ.

Security Life of Denver Insurance Company

1290 Broadway

Denver, Colorado 80203-5699

(303) 860-2127

(Name and Address of Agent for Service)

____________________________

Approximate date of proposed public offering: as soon as practicable after the effective date of this 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.

Title of securities being registered: Strategic Investor variable life insurance policies.

SECURITY LIFE SEPARATE ACCOUNT L1 (File No. 333-73464)

Cross-Reference Table

Form N-8B-2 Item No.	Caption in Prospectus
1, 2	Cover; Security Life of Denver Insurance Company; Security Life Separate Account L1
3	Inapplicable
4	Security Life of Denver Insurance Company
5, 6	Security Life Separate Account L1
7	Inapplicable
8	Financial Statements
9	Inapplicable
10(a), (b), (c), (d), (e)	Policy Summary; Policy Values, Determining Values in the Variable Investment Option; Charges and Deductions; Surrender; Partial Withdrawals; Guaranteed Interest Division; Transfer of Account Value; Lapse; Reinstatement; Premium Payments
10(f)	Voting Privileges; Right to Change Operations
10(g), (h)	Right to Change Operations
10(i)	Tax Considerations; Detailed Information about the Policy; General Policy Provisions; Guaranteed Interest Division
11, 12	Security Life Separate Account L1
13	Policy Summary; Charges and Deductions; Group, Sponsored or Wrap Fee Arrangements, or Corporate Purchasers
14, 15	Policy Summary; Free Look Period; General Policy Provisions; Applying for a Policy
16	Premium Payments; Allocation of Net Premium; How We Calculate Accumulation Unit Values
17	Premium Payments Affect Your Coverage; Surrender; Partial Withdrawals
18	Policy Summary; Tax Considerations; Detailed Information about the Policy; Security Life Separate Account L1
19	Reports to Owners; Notification and Claims Procedures; Performance Information (Appendix C)
20	See 10(g) & 10(a)
21	Policy Loans
22	Policy Summary; Premium Payments; Grace Period; Security Life Separate Account L1; Detailed Information about the Policy
23	Inapplicable
24	Inapplicable
25	Security Life of Denver Insurance Company
26	Inapplicable
27, 28, 29, 30	Security Life of Denver Insurance Company
31, 32, 33, 34	Inapplicable
35	Inapplicable
36	Inapplicable
37	Inapplicable
38, 39, 40, 41(a)	General Policy Provisions; Distribution of the Policies; Security Life of Denver Insurance Company
41(b), 41(c), 42, 43	Inapplicable
44	Determining Values in the Variable Investment Option; How We Calculate Accumulation Unit Values
45	Inapplicable
46	Partial Withdrawals; Detailed Information about the Policy
47, 48, 49, 50	Inapplicable
51	Detailed Information about the Policy
52	Determining Values in the Variable Investment Option; Right to Change Operations
53(a)	Tax Considerations
53(b), 54, 55	Inapplicable
56, 57, 58	Inapplicable
59	Financial Statements

STRATEGIC INVESTOR VARIABLE UNIVERSAL LIFE
A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
issued by

Security Life of Denver Insurance Company
and
Security Life Separate Account L1

Consider carefully the policy charges and deductions beginning on page 45 in this prospectus.

You should read this prospectus and keep it for future reference. A prospectus for each underlying investment portfolio must accompany and should be read together with this prospectus.

This policy is not available in all jurisdictions. This policy is not offered in any jurisdiction where this type of offering is not legal. Depending on the state where it is issued, policy features may vary. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different.

We and our affiliates offer other products to insure people which may or may not better match your needs.

Replacing your existing life insurance policy(ies) with this policy may not be beneficial to you. Your existing policy may be subject to fees or penalties upon surrender or cancellation.

Your Policy

• is a flexible premium variable universal life insurance policy
• is issued by Security Life of Denver Insurance Company
• is designed primarily for use on a individual life basis but is also available on a multi-life basis when the insured people share a common employment or business relationship.
• is returnable by you during the free look period if you are not satisfied.

Your Premium Payments

• are flexible, so the premium amount and frequency may vary
• are allocated to variable investment options and the guaranteed interest division, based on your instructions
• are subject to specified deductions.

Your Account Value

• is the sum of your holdings in the variable investment options, the guaranteed interest division and the loan division
• has no guaranteed minimum value under the variable investment options. The value varies with the value of the underlying investment portfolio
• has a minimum guaranteed rate of return for amounts in the guaranteed interest division
• is subject to specified expenses and charges.

Death Proceeds

• are paid if the policy is in force when the insured person dies
• are equal to the death benefit minus an outstanding policy loan, accrued loan interest and unpaid charges incurred before the insured person dies
• are calculated under your choice of options:
  * Option 1 - a stated death benefit;
  * Option 2 - a stated death benefit plus your account value;
  * Option 3 - a stated death benefit plus the sum of premium payments we receive minus partial withdrawals you have taken
• are generally not subject to federal income tax if your policy continues to meet the federal income tax definition of life insurance.

Neither the Securities and Exchange Commission ("SEC") nor any state securities commission has approved these securities or determined that this Prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This life insurance policy IS NOT a bank deposit or obligation, federally insured or backed by any bank or government agency.

<R>Date of Prospectus December 26, 2001</R>

ISSUED BY: Security Life of Denver
Insurance Company
ING Security Life Center
1290 Broadway
Denver, CO 80203-5699
(800) 525-9852 UNDERWRITTEN BY: ING America Equities, Inc.
1290 Broadway
Denver, CO 80203-5699
(303) 860-2000

THROUGH ITS: Security Life Separate Account L1

ADMINISTERED BY: Customer Service Center
P.O. Box 173888
Denver, CO 80217-3888
(800) 848-6362

"ING Security Life," "we," "us," "our" and the "company" refer to Security Life of Denver Insurance Company. "You" and "your" refer to the policy owner. The owner is the individual, entity, partnership, representative or party who may exercise all rights over the policy and receive the policy benefits during the insured person's lifetime.

State variations are covered in a special policy form used in that state. This prospectus provides a general description of the policy. Your actual policy and any riders and endorsements are the controlling documents. If you would like to review a copy of the policy and any riders and endorsements, contact our customer service center or your agent/registered representative.

Strategic Investor   			2

TABLE OF CONTENTS

<R>POLICY SUMMARY			4
	Your Policy		4
	Free Look Period		4
	Premium Payments		4
	Charges and Deductions		4
	Guaranteed Interest Division		6
	Variable Investment Options		6
	Policy Values		9
	Transfer of Account Value		9
	Special Policy Features		9
	Policy Modification, Termination and Continuation Features		10
	Death Benefits		10
	Tax Considerations		10
INFORMATION ABOUT ING SECURITY LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT OPTIONS			13
	Security Life of Denver Insurance Company		13
	Security Life Separate Account L1		13
	Guaranteed Interest Division		19
DETAILED INFORMATION ABOUT THE POLICY			20
	Applying for a Policy		20
	Temporary Insurance		20
	Policy Issuance		21
	Premium Payments		21
	Premium Payments Affect Your Coverage		23
	Death Benefits		23
	Riders		28
	Special Features		30
	Refund of Sales Charges		32
	Policy Values		32
	Transfer of Account Value		33
	Dollar Cost Averaging		34
	Automatic Rebalancing		35
	Policy Loans		35
	Lapse		38
	Reinstatement		38
	Surrender		39
	General Policy Provisions		39
		Free Look Period	39
		Your Policy	39
		Guaranteed Issue	39
		Age	40
		Ownership	40
		Beneficiaries	40
		Collateral Assignment	40
		Incontestability	40
		Misstatements of Age or Gender	40
		Suicide	41
		Transaction Processing	41
		Notification and Claims Procedures	41
		Telephone Privileges	42
		Non-participation	42
		Distribution of the Policies	42
		Advertising Practices and Sales Literature	43
		Settlement Provisions	43
	Administrative Information About the Policy		43
CHARGES AND DEDUCTIONS			45
	Deductions from Premium		45
	Monthly Deductions from Account Value		46
	Policy Transaction Fees		48
	Group, Sponsored or Wrap Fee Arrangements, or Corporate Purchasers		48
TAX CONSIDERATIONS			49
	Tax Status of the Policy		49
	Diversification and Investor Control Requirements		49
	Tax Treatment of Policy Death Benefits		50
	Modified Endowment Contracts		50
	Multiple Policies		50
	Distributions Other than Death Benefits		50
	Investment in the Policy		51
	Policy Loans		51
	Accelerated Death Benefit Rider		52
	Continuation of Policy Beyond Age 100		52
	Section 1035 Exchanges		52
	Tax-exempt Policy Owners		52
	Possible Tax Law Changes		52
	Changes to Comply with the Law		52
	Other		52
ADDITIONAL INFORMATION			54
	Directors and Officers		54
	Regulation		55
	Legal Matters		55
	Legal Proceedings		55
	Experts		55
	Registration Statement		55
FINANCIAL STATEMENTS			56
APPENDIX A			232
APPENDIX A - Enhanced			233
APPENDIX B			234
APPENDIX B - Enhanced			235
APPENDIX C			236</R>

Strategic Investor   			3

POLICY SUMMARY

This summary highlights some important points about your policy. The policy is more fully described in the other sections of this prospectus which should be read carefully before you purchase the policy.

Your Policy

Your policy provides life insurance protection on the insured person. The policy includes the basic policy, applications and riders or endorsements. As long as the policy remains in force, we pay a death benefit at the death of the insured person. While your policy is in force, you may access a portion of your policy value by taking loans or partial withdrawals. You may surrender your policy for its net cash surrender value. At the policy anniversary nearest the insured person's 100^th birthday, if the insured person is still alive, you may surrender your policy or it will continue under the continuation of coverage provisions. See Continuation of Coverage, page 30.

We designed the Strategic Investor policy primarily for use on an individual-life basis but it is also available on a multi-life basis when the insured people share a common employment or business relationship. The policy may be owned individually or by a corporation, trust, association or similar entity. The policy may be used for such purposes as informally funding non-qualified executive deferred compensation, salary continuation plans, retiree medical benefits or other purposes.

Life insurance is not a short-term investment. You should evaluate your need for life insurance coverage and this policy's long-term investment potential and risks before purchasing a policy.

We pay compensation to firms for sales of this policy. See Distribution of the Policies, page 42.

Free Look Period

Within the time limits specified by law, you have the right to examine your policy and return it for a refund if you are not satisfied for any reason. Generally, the refund will equal all premium payments we have received or the account value, depending on state law. The policy is then void. See Free Look Period, page 39.

Premium Payments

The policy is a flexible premium policy because the amount and frequency of the premium payments you make may vary within limits. You must make premium payments:

• for us to issue your policy;
• sufficient to keep your policy in force; and
• as necessary to continue certain benefits.

Depending on the amount of premium you choose to pay, it may not be enough to keep your policy or certain riders in force. See Premium Payments Affect Your Coverage, page 23.

Allocation of Net Premium

This policy has premium-based charges which are subtracted from your payments. We add the balance, or net premium, to your policy based on your investment instructions. You may allocate the net premium among one or more variable investment options and the guaranteed interest division. See Allocation of Net Premium, page 22.

Charges and Deductions

All charges presented here are guaranteed unless stated otherwise.

Strategic Investor   			4

Charges

Other Than Investment Portfolio Annual Expenses
(See Charges and Deductions, page 45)

Premium Deductions -- Maximum amount deducted when each premium is received.

Charge	Amount Deducted
Tax Charges	2.5% for state and local taxes; 1.5% for estimated federal income tax treatment of deferred acquisition costs.
Sales Charge	11% of premium up to policy or segment target premium in policy or segment years 1-10. There is no sales charge on premium above the policy or segment target premium, or on any premium after policy or segment year 10.
Monthly Policy Charges -- Maximum amount deducted each month from account value.
Charge	Amount Deducted
Mortality and Expense Risk Charge	Account Value	1st Policy Year		Policy Years 2 - 10		Policy Years 11+
	Less than $25,000	.0625% (0.75% annually)		.0625% (0.75% annually)		.0250% (0.30% annually)
	$25,000 to $250,000	.0625% (0.75% annually)		.0583% (0.6996% annually)		.0167% (0.2004% annually)
	Greater than $250,000	.0625% (0.75% annually)		.0542% (0.6504% annually)		.0083% (0.0996% annually)
Policy Charge	$13 per month in policy years 1 - 3. $3 per month in policy years 4+.
Administrative Charge	Per $1,000 of stated death benefit (or target death benefit, if greater) up to $5 million:
	Issue Ages		Policy Years 1 - 5		Policy Years 6 +
	0 - 14		$0.038		$0.010
	15 - 50		$0.043		$0.010
	51 - 62		$0.049		$0.010
	63 - 73		$0.054		$0.010
	74 - 77		$0.060		$0.010
	78 - 85		$0.065		$0.010
	86 - 89		$0.070		$0.010
	90		$0.076		$0.010
Cost of Insurance Charge	Varies based on current cost of insurance rates for each segment and the net amount at risk. Current cost of insurance rates depend on age, gender, policy duration, amount of target death benefit and premium class. Different cost of insurance rates will apply to each segment.
Rider Charges	Varies depending on the rider benefits you choose.
Transaction Fees -- Maximum amount deducted on the transaction date.
Charge	Amount Deducted
Partial Withdrawal Fee	Two percent of the amount withdrawn, up to $25.
Excess Illustration Fee	$25 per illustration after the first each policy year.

Strategic Investor   			5

Guaranteed Interest Division

The guaranteed interest division guarantees principal and is part of our general account. Amounts you direct into the guaranteed interest division are credited with interest at a fixed rate. See Guaranteed Interest Division, page 19.

Variable Investment Options

The variable investment options under your policy are divisions of Security Life Separate Account L1 (the separate account), a separate account of the company. Each variable investment option invests in a corresponding mutual fund (investment portfolio). If you invest in the variable investment options, you may make or lose money depending on market conditions. You do not invest directly in or hold shares of the investment portfolios.

The variable investment options purchase shares of the investment portfolios at net asset value. This price reflects investment management fees, 12b-1 fees and other direct expenses deducted from the investment portfolio's assets as described in the following table. The fees and expenses are shown in gross amounts and net amounts after waiver or reimbursement of fees or expenses by the investment portfolio adviser.

These fees and expenses are not direct charges against a variable investment option's assets or reductions from policy values; rather, these expenses are included in computing each underlying investment portfolio's net asset value, which is the share price used to calculate the unit values of the variable investment options. For a more complete description of the investment portfolios' fees and expenses, see the prospectuses for each of the investment portfolios.

We receive 12b-1 fees from some investment portfolios. Some investment portfolio advisers and distributors (or their affiliates) may pay us compensation for servicing, distribution, administration or other expenses. The amount of compensation is usually based on the aggregate assets of the investment portfolio from policies that we issue or administer. Some advisers and distributors may pay us more or less than others. We receive compensation from AIM Advisors, Inc., Fred Alger Management Inc., Fidelity Management & Research Company, Directed Services Inc., INVESCO Funds Group Inc., Janus Capital, Neuberger Berman Management, ING Pilgrim Investments, LLC, Putnam Investment Management, LLC and Van Eck Associates Corporation.

Risks Associated with Investing in the Investment Portfolios

Each investment portfolio has its own and risks. Information about the risks associated with investing in the investment portfolios is located in their separate prospectuses. Read the investment portfolio prospectuses in conjunction with this prospectus, and retain the prospectuses for future reference. See also Investment Portfolio Objectives, page 14.

An investment portfolio available through the policy may not be the same as a retail mutual fund with a similar name. Accordingly, the management, expenses and performance of an investment portfolio is likely to differ from a similarly named retail mutual fund.

The information in the following table was provided to us by the investment portfolios and we have not independently verified this information.

Strategic Investor   			6

Investment Portfolio Annual Expenses (As a Percentage of Portfolio Average Net Assets)

<R>Investment Portfolio	Investment Management Fees	12b-1 Fees	Other Expenses	Total Portfolio Expenses
AIM Variable Insurance Funds
AIM V.I. Capital Appreciation Fund	0.61%	N/A	0.21%	0.82%
AIM V.I. Government Securities Fund 1	0.50%	N/A	0.47%	0.97%
The Alger American Fund
Alger American Growth Portfolio	0.75%	0.0%	0.04%	0.79%
Alger American Leveraged AllCap Portfolio	0.85%	0.0%	0.05%	0.90%
Alger American MidCap Growth Portfolio	0.80%	0.0%	0.04%	0.84%
Alger American Small Capitalization Portfolio	0.85%	0.0%	0.05%	0.90%
Fidelity Variable Insurance Products Fund
VIP Growth Portfolio - Service Class 2	0.57%	0.10%	0.09%	0.76%
VIP Overseas Portfolio - Service Class 2	0.72%	0.10%	0.17%	0.99%
Fidelity Variable Insurance Products Fund II
VIP II Asset Manager Portfolio - Service Class	0.53%	0.10%	0.09%	0.72%
VIP II Index 500 Portfolio - Initial Class 3	0.24%	N/A	0.09%	0.33%
The GCG Trust 4
Fully Managed Portfolio	0.94%	N/A	0.01%	0.95%
Liquid Asset Portfolio	0.54%	N/A	0.01%	0.55%
Mid-Cap Growth Portfolio	0.88%	N/A	0.01%	0.89%
INVESCO Variable Investment Funds, Inc.
INVESCO VIF-Equity Income Fund 5	0.75%	N/A	0.33%	1.08%
INVESCO VIF-High Yield Fund 5	0.60%	N/A	0.45%	1.05%
INVESCO VIF-Small Company Growth Fund 5, 6	0.75%	N/A	0.68%	1.43%
INVESCO VIF-Total Return Fund 5, 7	0.75%	N/A	0.69%	1.44%
INVESCO VIF-Utilities Fund 5, 8	0.60%	N/A	0.81%	1.41%
Janus Aspen Series
Janus Aspen Aggressive Growth - Service Shares 9	0.65%	0.25%	0.02%	0.92%
Janus Aspen Growth - Service Shares 9	0.65%	0.25%	0.02%	0.92%
Janus Aspen International Growth - Service Shares 9	0.65%	0.25%	0.06%	0.96%
Janus Aspen Worldwide Growth - Service Shares 9	0.65%	0.25%	0.05%	0.95%
Neuberger Berman Advisers Management Trust
Growth Portfolio 10	0.82%	N/A	0.08%	0.90%
Limited Maturity Bond Portfolio 10	0.65%	N/A	0.11%	0.76%
Partners Portfolio 10	0.82%	N/A	0.10%	0.92%
Pilgrim Variable Products Trust 11
Growth Opportunities Portfolio - Class R Shares 12	0.75%	N/A	1.44%	2.19%
MagnaCap Portfolio - Class R Shares 12	0.75%	N/A	7.15%	7.90%
MidCap Opportunities Portfolio - Class R Shares 12	0.75%	N/A	5.01%	5.76%
SmallCap Opportunities Portfolio - Class R Shares 12	0.75%	N/A	0.23%	0.98%
Putnam Variable Trust
Putnam VT Growth and Income Fund - Class IB Shares13	0.46%	0.25%	0.04%	0.75%
Putnam VT New Opportunities Fund - Class IB Shares13	0.52%	0.25%	0.05%	0.82%
Putnam VT Small Cap Value Fund - Class IB Shares13	0.80%	0.25%	0.30%	1.35%
Putnam VT Voyager Fund - Class IB Shares13	0.51%	0.25%	0.05%	0.81%
Van Eck Worldwide Insurance Trust 14
Worldwide Bond Fund 15	1.00%	N/A	0.21%	1.21%
Worldwide Emerging Markets Fund 16	1.00%	N/A	0.33%	1.33%
Worldwide Hard Assets Fund 17	1.00%	N/A	0.16%	1.16%
Worldwide Real Estate Fund 18	1.00%	N/A	1.27%	2.27%

Strategic Investor   			7

____________________________

¹ Included in AIM V.I. Government Securities Fund's "Other Expenses" is 0.12% of interest expense.

² Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses, and/or because through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce a portion of the fund's custodian expenses. See the accompanying fund prospectus for details.

³ The fund's manager has voluntarily agreed to reimburse the class's expenses if they exceed a certain level. Including this reimbursement, the annual class operating expenses were 0.28%. This arrangement may be discontinued by the fund's manager at any time.

⁴ The GCG Trust pays Directed Services, Inc. ("DSI") a monthly management fee for their services based on the annual rates of the average daily net assets of the investment portfolios. DSI (and not the GCG Trust) in turn pays each portfolio manager a monthly fee for managing the assets of the portfolios.

⁵ The Portfolios' "Other Expenses" and "Total Portfolio Expenses" were lower than the figure shown because their custodian fees were reduced under expense offset arrangements.

⁶ INVESCO assumed a portion of VIF-Small Company Growth Fund's "Other Expenses" and "Total Portfolio Expenses." After this, these expenses are 0.62% and 1.37%, respectively.

⁷ INVESCO assumed a portion of VIF-Total Return Fund's "Other Expenses" and "Total Portfolio Expenses." After this, these expenses are 0.46% and 1.21%, respectively.

⁸ INVESCO assumed a portion of VIF-Utilities Fund's "Other Expenses" and "Total Portfolio Expenses." After this, these expenses are 0.62% and 1.22%, respectively.

⁹ Janus Aspen Service Shares has a distribution plan or "Rule 12b-1 plan" which is described in the funds' prospectuses. Expenses are based on expenses for the fiscal year that ended on December 31, 2000, restated to reflect a reduction in the management fee for those portfolios. All expenses are shown without the effect of any expense offset arrangements.

¹⁰ Neuberger Berman Management Inc. ("NBMI") has undertaken through April 30, 2002 to reimburse certain operating expenses, excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 1% of the Portfolios' average daily net asset value.

¹¹ The table shows the estimated operating expenses for each Portfolio as a ratio of expenses to average daily net assets. These estimates are based on each Portfolio's actual operating expenses for its most recently completed fiscal year and do not include fee waivers to which the Adviser has agreed for each Portfolio.

¹² ING Pilgrim Investments has entered into written expense limitation agreements with each Portfolio which it advises under which it will limit expenses of the Portfolio, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Pilgrim Investments within three years. The expense limit for each such Fund is 0.90%. For each Portfolio, the expense limits will continue through at least December 31, 2001.

¹³ Restated to reflect an increase in 12b-1 fees currently payable to Putnam Investment Management, LLC ("Putnam Management"). The Trustees currently limit payments on class IB shares to 0.25% of average net assets. Actual 12b-1 fees during the most recent fiscal year were 0.15% of average net assets.

¹⁴ Operating Expenses for the Worldwide Hard Assets Fund, the Worldwide Emerging Markets Fund and the Worldwide Real Estate Fund were reduced by a brokerage agreement where the Funds direct certain portfolio trades to a broker that, in return, pays a portion of the Funds' operating expenses.

¹⁵ The Adviser may sometimes waive fees and/or reimburse certain expenses of the fund.

¹⁶ The Adviser may sometimes waive fees and/or reimburse certain expenses of the fund. After Advisory fee waiver and expense reimbursements with brokers, the total net fund expenses were 1.31%. These fee waivers are not contractual and may be discontinued at the discretion of the Adviser.

¹⁷ The Adviser may sometimes waive fees and/or reimburse certain expenses of the fund, but is not obligated to do so. After expense reimbursement agreement with brokers, the total net fund expenses were 1.14%.

¹⁸The Adviser may sometimes waive fees and/or reimburse certain expenses of the fund. After Advisory fee waiver and expense reimbursements with brokers, the total net fund expenses were 1.48%. These fee waivers are not contractual and may be discontinued at the discretion of the Adviser. </R>

Strategic Investor   			8

Policy Values

Your policy account value is the amount you have in the guaranteed interest division, plus the amount you have in each variable investment option. If you have an outstanding policy loan, your account value includes the amount in the loan division. See Policy Values, page 32, and Partial Withdrawals, page 36.

Your Account Value in the Variable Investment Options

Accumulation units are the way we measure value in the variable investment options. Accumulation unit value is the value of one unit of a variable investment option on a valuation date. Each variable investment option has a different accumulation unit value. See Determining Values in the Variable Investment Options, page 32.

The accumulation unit value for each variable investment option reflects the investment performance of the underlying investment portfolio during the valuation period. Each accumulation unit value reflects the expenses of the investment portfolio. See Determining Values in the Variable Investment Options, page 32, and How We Calculate Accumulation Unit Values, page 33.

Transfer of Account Value

You may make an unlimited number of free transfers among the variable investment options or to the guaranteed interest division each policy year. There are restrictions on transfers from the guaranteed interest division. The minimum transfer amount is $100. See Transfer of Account Value, page 33.

Special Policy Features

Designated Deduction Option

You may designate one investment option from which we will deduct all of your monthly deductions. See Designated Deduction Option, page 30.

Riders

You may attach additional benefits to your policy by rider. In most cases, we deduct a monthly charge from your account value for these benefits. See Riders, page 28.

Dollar Cost Averaging

Dollar cost averaging is a systematic plan of transferring account values to selected variable investment options. It is intended to protect your policy's value from short-term price fluctuations. However, dollar cost averaging does not assure a profit, nor does it protect against a loss in a declining market. Dollar cost averaging is free. See Dollar Cost Averaging, page 34.

Automatic Rebalancing

Automatic rebalancing periodically reallocates your net account value among your selected investment options to maintain your specified distribution of account value among those investment options. Automatic rebalancing is free. See Automatic Rebalancing, page 35.

Loans

You may take loans against your policy's net account value. We charge an annual loan interest rate of 3.75% in policy years 1 - 10 and 3.15% thereafter. We credit an annual interest rate of 3.00% on amounts held in the loan division as collateral for your loan. See Policy Loans, page 35.

Policy loans reduce your policy's death benefit and may cause your policy to lapse.

Loans may have tax consequences. See Tax Considerations, page 49.

Partial Withdrawals

You may withdraw part of your net account value after your first policy anniversary. You may make twelve partial withdrawals per policy year. Partial

Strategic Investor   			9

withdrawals may reduce your policy's death benefit and will reduce your account value. We assess a fee for each withdrawal. See Partial Withdrawals, page 36.

Some policies with a high account value may qualify for a partial withdrawal before the first policy anniversary. Partial withdrawals may have tax consequences. See Partial Withdrawals, page 36, and Tax Considerations, page 49.

Refund of Sales Charges

If you surrender your policy within the first two policy years and it has not lapsed, we may refund a portion of the sales charges we previously deducted from your premium payments. See Refund of Sales Charges, page 32.

Policy Modification, Termination and Continuation Features

Right to Change Policy

For 24 months after the policy date you may change your policy to a guaranteed policy, unless state law requires differently. There is no charge for this change. See Right to Change Policy, page 30.

Surrender

You may surrender your policy for its net cash surrender value at any time before the death of the insured person. All insurance coverage ends on the date we receive your request. See Surrender, page 39.

A surrender may have tax consequences. See Tax Considerations, page 49.

Lapse

In general, insurance coverage continues as long as your net account value is enough to pay the monthly deductions. See Lapse, page 38.

Reinstatement

You may reinstate your policy and riders within five years of its lapse if you still own the policy and the insured person is still insurable. You will also need to pay the required reinstatement premium.

If you had a policy loan existing when coverage ended, we will reinstate it with accrued loan interest to the date of the lapse. See Reinstatement, page 38.

Continuation of Coverage

If the policy is in force on the policy anniversary nearest the insured person's 100^th birthday, the policy will continue pursuant to the terms of the policy unless you surrender it. See Continuation of Coverage, page 30.

Death Benefits

After the insured person's death, we pay death proceeds to the beneficiaries if your policy is in force. Based on the death benefit option you have chosen and whether or not you have coverage under an adjustable term insurance rider, your policy's death benefit may vary.

Generally we require a minimum total death benefit of $100,000 ($50,000 for guaranteed issue policies) to issue your policy.

We may lower this minimum for group, sponsored or wrap fee arrangements, or corporate purchasers. A separate cost of insurance applies to your base death benefit.

Tax Considerations

Under current federal income tax law, death benefits of life insurance policies generally are not subject to income tax. In order for this treatment to apply, the policy must qualify as a life insurance contract. We believe it is reasonable to conclude that the policy will qualify as a life insurance contract. See Tax Status of the Policy, page 49.

Assuming the policy qualifies as a life insurance contract under current federal income tax law, your account value earnings are generally not subject to income tax as long as they remain within your policy. However depending on circumstances, the following events may cause taxable consequences for you:

• partial withdrawals
• loans
• surrender
• lapse.

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In addition, if your policy is a modified endowment contract, a loan against or secured by the policy may cause income taxation. A penalty tax may be imposed on a distribution from a modified endowment contract as well. See Modified Endowment Contracts, page 50.

In recent years, Congress has adopted new rules relating to life insurance owned by businesses. A business contemplating the purchase of a new policy or a change in an existing policy should consult a tax adviser.

You should consult a qualified legal or tax adviser before you purchase your policy.

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How the Policy Works

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INFORMATION ABOUT ING SECURITY LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT OPTIONS

Security Life of Denver Insurance Company

We are a stock life insurance company organized under the laws of the State of Colorado in 1929. Our headquarters are located at 1290 Broadway, Denver, Colorado 80203-5699. We are admitted to do business in the District of Columbia and all states except New York. At the close of 2000, we had over $41.5 billion of life insurance in force. As of December 31, 2000 our total assets were over $8.8 billion and capital and surplus were over $491 million measured on a statutory basis of accounting, as prescribed or permitted by the Colorado Division of Insurance.

We are a wholly owned indirect subsidiary of ING Groep, N.V. ("ING"), a global financial institution active in the field of insurance, banking and asset management. ING ranks 10^th among the top 20 global financial institutions by market capitalization and is headquartered in Amsterdam, The Netherlands.

ING companies offer a complete line of life insurance products, including:

• annuities
• individual life
• group life
• pension products
• market life reinsurance.

The principal underwriter and distributor for our policies is ING America Equities, Inc. ING America Equities is a stock corporation organized under the laws of the State of Colorado in 1993. It is a wholly owned subsidiary of ING Security Life and is registered as a broker-dealer with the SEC and the National Association of Securities Dealers, Inc. ("NASD"). ING America Equities, Inc., is located at 1290 Broadway, Denver, Colorado 80203-5699.

Security Life Separate Account L1

Separate Account Structure

We established separate account on November 3, 1993, under Colorado insurance law. It is a unit investment trust, registered with the SEC under the Investment Company Act of 1940. The SEC does not supervise our management of the separate account or ING Security Life.

The separate account is used to support our variable life insurance policies and for other purposes allowed by law and regulation. We may offer other variable life insurance policies with different benefits and charges that invest in the separate account. We do not discuss these policies in this prospectus. The separate account may invest in other securities not available for the policy described in this prospectus.

We own all the assets in the separate account. We credit gains to or charge losses against the separate account without regard to performance of other investment accounts.

Order of Separate Account Liabilities

State law provides that we may not charge general account liabilities against the separate account's assets equal to its reserves and other liabilities. This means that if we ever became insolvent, the separate account assets will be used first to pay separate account policy claims. Only if separate account assets remain after these claims have been satisfied can these assets be used to pay other policy owners and creditors.

The separate account may have liabilities from assets credited to other variable life policies offered by the separate account. If the assets of the separate account are greater than required reserves and policy liabilities, we may transfer the excess to our general account.

Investment Options

Investment options include the variable and the guaranteed interest divisions, but not the loan division. The separate account has several variable investment options which invest in shares of underlying investment portfolios. The investment

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performance of a policy depends on the performance of the investment portfolios you choose.

Investment Portfolios

Each of the investment portfolios is a separate series of an open-end management investment company. The investment company receives investment advice from a registered investment adviser who, other than Directed Services, Inc., is not affiliated with us.

The investment portfolios sell shares to separate accounts of insurance companies. These insurance companies may or may not be affiliated with us. This is known as "shared funding." Investment portfolios may sell shares as the underlying investment for both variable annuity and variable life insurance contracts. This process is known as "mixed funding."

The investment portfolios may sell shares to certain qualified pension and retirement plans that qualify under Section 401 of the Internal Revenue Code of 1986, as amended ("IRC"). As a result, a material conflict of interest may arise between insurance companies, owners of different types of contracts and retirement plans, or their participants.

If there is a material conflict, we will consider what should be done, including removing the investment portfolio from the separate account. There are certain risks with mixed and shared funding, and with selling shares to qualified pension and retirement plans. See the investment portfolios' prospectuses.

Investment Portfolio Objectives

Each investment portfolio has a different investment objective that it tries to achieve by following its own investment strategy. The objectives and policies of each investment portfolio affect its return and its risks. With this prospectus, you must receive the current prospectus for each investment portfolio. We summarize the investment objectives for each investment portfolio here, but you should carefully read each investment portfolio prospectus.

Certain investment portfolios offered under this policy have investment objectives and policies similar to other funds managed by the portfolio's investment adviser. The investment results of a portfolio may be higher or lower than those of other funds managed by the same adviser. There is no assurance, and no representation is made, that the investment results of any investment portfolio will be comparable to those of another fund managed by the same investment adviser.

INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
AIM V.I. Capital Appreciation Fund	Investment Company: AIM Variable Insurance Funds Investment Adviser: A I M Advisors, Inc.	Seeks growth of capital.
AIM V.I. Government Securities Fund	Investment Company: AIM Variable Insurance Funds Investment Adviser: A I M Advisors, Inc.	Seeks to achieve a high level of current income consistent with reasonable concern for safety of principal.
Alger American Growth Portfolio	Investment Company: The Alger American Fund Investment Manager: Fred Alger Management, Inc.	Seeks long-term capital appreciation by focusing on growing companies that generally have broad product lines, markets, financial resources and depth of management.

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INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
Alger American Leveraged AllCap Portfolio	Investment Company: The Alger American Fund Investment Manager: Fred Alger Management, Inc.	Seeks long-term capital appreciation by investing, under normal circumstances, in the equity securities of companies of any size which demonstrate promising growth potential.
Alger American MidCap Growth Portfolio	Investment Company: The Alger American Fund Investment Manager: Fred Alger Management, Inc.	Seeks long-term capital appreciation by focusing on midsize companies with promising growth potential.
Alger American Small Capitalization Portfolio	Investment Company: The Alger American Fund Investment Manager: Fred Alger Management, Inc.	Seeks long-term capital appreciation by focusing on small, fast-growing companies that offer innovative products, services or technologies to a rapidly expanding marketplace.
VIP Growth Portfolio - Service Class	Investment Company: Fidelity Variable Insurance Products Fund Investment Manager: Fidelity Management & Research Company	Seeks capital appreciation by normally investing in common stocks of companies that it believes have above-average growth potential.
VIP Overseas Portfolio - Service Class	Investment Company: Fidelity Variable Insurance Products Fund Investment Manager: Fidelity Management & Research Company	Seeks long-term growth of capital by normally investing at least 65% of total assets in foreign securities.
VIP II Asset Manager Portfolio - Service Class	Investment Company: Fidelity Variable Insurance Products Fund II Investment Manager: Fidelity Management & Research Company	Seeks high total return with reduced risk over the long term by allocating its assets among stocks, bonds, and short-term instruments.
VIP II Index 500 Portfolio - - Initial Class	Investment Company: Fidelity Variable Insurance Products Fund II Investment Manager: Fidelity Management & Research Company Sub-Advisor: Bankers Trust Company	Seeks investment results that correspond to the total return of common stocks publicly traded in the United States as represented by the S&P® 500.

Strategic Investor   			15

INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
Fully Managed Portfolio	Investment Company: The GCG Trust Investment Manager: Directed Services, Inc. Portfolio Manager: T. Rowe Price Associates, Inc.	Seeks, over the long term, a high total investment return consistent with the preservation of capital and with prudent investment risk.
Liquid Asset Portfolio	Investment Company: The GCG Trust Investment Manager: Directed Services, Inc. Portfolio Manager: ING Investment Management, LLC	Seeks high level of current income consistent with the preservation of capital and liquidity.
Mid-Cap Growth Portfolio	Investment Company: The GCG Trust Investment Manager: Directed Services, Inc. Portfolio Manager: Massachusetts Financial Services Company	Seeks long-term growth of capital by normally investing at least 65% of its total assets in common stocks and related securities of companies with medium market capitalization which the portfolio manager believes have above-average growth potential.
INVESCO VIF-Equity Income Fund	Investment Company: INVESCO Variable Investment Funds, Inc. Investment Adviser: INVESCO Funds Group, Inc.	Seeks high total return through both growth and current income by investing in a mix of equity securities and debt securities, as well as options and other investments whose value is based on the values of these securities.
INVESCO VIF-High Yield Fund	Investment Company: INVESCO Variable Investment Funds, Inc. Investment Adviser: INVESCO Funds Group, Inc.	Seeks to provide a high level of current income through investments in debt securities and preferred stocks. It also seeks capital appreciation.
INVESCO VIF-Small Company Growth Fund	Investment Company: INVESCO Variable Investment Funds, Inc. Investment Adviser: INVESCO Funds Group, Inc.	Seeks to make an investment grow by investing primarily in equity securities that it believes will rise in price faster than other securities, as well as in options and other investments whose values are based upon the values of equity securities.
INVESCO VIF-Total Return Fund	Investment Company: INVESCO Variable Investment Funds, Inc. Investment Adviser: INVESCO Funds Group, Inc.	Seeks to provide high total return through both growth and current income by investing in a mix of equity securities and debt securities, as well as in options and other investments whose values are based upon the values of these securities.

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INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
INVESCO VIF-Utilities Fund	Investment Company: INVESCO Variable Investment Funds, Inc. Investment Adviser: INVESCO Funds Group, Inc.	Seeks investment growth and current income by investing primarily in equity securities of companies that produce, generate, transmit or distribute natural gas or electricity or that provide telecommunications services.
Janus Aspen Aggressive Growth Portfolio - Service Shares	Investment Company: Janus Aspen Series Investment Adviser: Janus Capital	Seeks long-term growth of capital by investing primarily in common stocks selected for their growth potential, and normally investing at least 50% of its equity assets in medium-sized companies which fall within the range of companies in the S&P® MidCap 400 Index.
Janus Aspen Growth Portfolio - Service Shares	Investment Company: Janus Aspen Series Investment Adviser: Janus Capital	Seeks long-term growth of capital in a manner consistent with preservation of capital by investing primarily in common stocks selected for their growth potential. Although the portfolio can invest in companies of any size, it generally invests in larger, more established companies.
Janus Aspen International Growth Portfolio - Service Shares	Investment Company: Janus Aspen Series Investment Adviser: Janus Capital	Seeks long-term growth of capital by normally investing at least 65% of its total assets in securities of issuers from at least five different countries, excluding the United States.
Janus Aspen Worldwide Growth Portfolio - Service Shares	Investment Company: Janus Aspen Series Investment Adviser: Janus Capital	Seeks long-term growth of capital in a manner consistent with preservation of capital by investing primarily in common stocks of companies of any size throughout the world.
Growth Portfolio	Investment Company: Neuberger Berman Advisers Management Trust Investment Adviser: Neuberger Berman Management Inc. Sub-Adviser: Neuberger Berman, LLC	Seeks growth of capital by investing mainly in common stock mid-capitalization companies.
Limited Maturity Bond Portfolio	Investment Company: Neuberger Berman Advisers Management Trust Investment Adviser: Neuberger Berman Management Inc. Sub-Adviser: Neuberger Berman, LLC	Seeks the highest available current income consistent with liquidity and low risk to principal by investing mainly in investment-grade bonds and other debt securities from U.S. Government and corporate issuers. Total return is a secondary goal.

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INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
Partners Portfolio	Investment Company: Neuberger Berman Advisers Management Trust Investment Adviser: Neuberger Berman Management Inc. Sub-Adviser: Neuberger Berman, LLC	Seeks growth of capital by investing mainly in common stock of mid- to large-capitalization companies.
Pilgrim VP Growth Opportunities Portfolio - Class R Shares	Investment Company: Pilgrim Variable Products Trust Investment Adviser: ING Pilgrim Investments, LLC	Seeks long-term growth of capital.
Pilgrim VP MagnaCap Portfolio - Class R Shares	Investment Company: Pilgrim Variable Products Trust Investment Adviser: ING Pilgrim Investments, LLC	Seeks growth of capital with dividend income as a secondary consideration.
Pilgrim VP MidCap Opportunities Portfolio - Class R Shares	Investment Company: Pilgrim Variable Products Trust Investment Adviser: ING Pilgrim Investments, LLC	Seeks long-term capital appreciation.
Pilgrim VP SmallCap Opportunities Portfolio - Class R Shares	Investment Company: Pilgrim Variable Products Trust Investment Adviser: ING Pilgrim Investments, LLC	Seeks long-term capital appreciation.
Putnam VT Growth and Income Fund - Class IB Shares	Investment Company: Putnam Variable Trust Investment Adviser: Putnam Investment Management, LLC	Seeks capital growth and current income by investing mainly in common stocks of U.S. companies with a focus on value stocks that offer the potential for capital growth, current income or both.
Putnam VT New Opportunities Fund - Class IB Shares	Investment Company: Putnam Variable Trust Investment Adviser: Putnam Investment Management, LLC	Seeks long-term capital appreciation by investing mainly in commons stocks of U.S. companies with a focus on growth stocks within sectors of the economy believed to have high growth potential.
Putnam VT Small Cap Value Fund - Class IB Shares	Investment Company: Putnam Variable Trust Investment Adviser: Putnam Investment Management, LLC	Seeks capital appreciation by investing in common stocks of U.S. companies with a focus on value stocks.

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INVESTMENT PORTFOLIO OBJECTIVES
Investment Portfolios	Investment Company/ Adviser/ Manager/ Sub-Adviser	Investment Objective
Putnam VT Voyager Fund - Class IB Shares	Investment Company: Putnam Variable Trust Investment Adviser: Putnam Investment Management, LLC	Seeks to provide capital appreciation by investing mainly in stocks of U.S. companies with a focus on growth stocks.
Worldwide Bond Fund	Investment Company: Van Eck Worldwide Insurance Trust Investment Adviser and Manager: Van Eck Associates Corporation	Seeks high total return--income plus capital appreciation--by investing globally, primarily in a variety of debt securities.
Worldwide Emerging Markets Fund	Investment Company: Van Eck Worldwide Insurance Trust Investment Adviser and Manager: Van Eck Associates Corporation	Seeks long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.
Worldwide Hard Assets Fund	Investment Company: Van Eck Worldwide Insurance Trust Investment Adviser and Manager: Van Eck Associates Corporation	Seeks long-term capital appreciation by investing primarily in "hard asset securities." Hard assets securities are stocks, bonds and other securities of companies that derive at least 50% of gross revenue or profit from exploration, development, production or distribution of precious metals, natural resources, real estate and commodities.
Worldwide Real Estate Fund	Investment Company: Van Eck Worldwide Insurance Trust Investment Adviser and Manager: Van Eck Associates Corporation	Seeks to maximize return by investing in equity securities of companies that own significant real estate or that principally do business in the real estate industry.

Guaranteed Interest Division

You may allocate all or a part of your net premium and transfer your net account value into the guaranteed interest division. The guaranteed interest division guarantees principal and is part of our general account. It pays interest at a fixed rate that we declare.

The general account contains all of our assets other than those held in the separate account variable investment options or other separate accounts.

The general account supports our non-variable insurance and annuity obligations. We have not registered interests in the guaranteed interest division under the Securities Act of 1933. Also, we have not registered the guaranteed interest division or the general account as an investment company under the Investment Company Act of 1940 (because of exemptive and exclusionary provisions). This means that the general account, the guaranteed interest division and its interests are generally not subject to regulation under these Acts.

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The SEC staff has not reviewed the disclosures in this prospectus relating to the general account and the guaranteed interest division. These disclosures, however, may be subject to certain requirements of the federal securities law regarding accuracy and completeness of statements made.

The amount you have in the guaranteed interest division is the net premium you allocate to that division, plus amounts you transfer to it, plus interest earned, minus amounts you transfer out or withdraw. It may be reduced by deductions for charges based on your account value allocated to it.

We declare the interest rate that applies to all amounts in the guaranteed interest division. This interest rate is never less than the minimum guaranteed interest rate of 3.0%. Interest compounds daily at an effective annual rate that equals the declared rate. We credit interest to the guaranteed interest division on a daily basis. We pay interest regardless of the actual investment performance of our general account. We bear all of the investment risk for the guaranteed interest division.

DETAILED INFORMATION ABOUT THE POLICY

This prospectus describes our standard Strategic Investor variable universal life insurance policy. There may be differences in the policy features, benefits and charges because of state requirements where we issue your policy. We describe all such differences in your policy.

If you would like to know about variations specific to your state, please ask your agent/registered representative. ING Security Life can provide him/her with the list of variations that will apply to your policy.

Applying for a Policy

You purchase a Strategic Investor variable universal life policy by submitting an application to us. The policy is issued on a guaranteed issue, fully-underwritten or simplified-underwritten basis. On the policy date, the insured person must be no less than age 15. For a guaranteed issue policy, the insured person generally can be no more than age 70. For a fully-underwritten policy, the insured person generally can be no more than age 85. For a simplified-underwritten policy, the insured person generally can be no more than age 70 and certain other conditions/restrictions may apply. The insured person is the person on whose life we issue the policy. See Age, page 40.

You may request that we back-date the policy up to six months to allow the insured person to give proof of a younger age for the purposes of your policy.

From time to time, we may accept an insured person who exceeds our normal maximum age limit. We will not unfairly discriminate in determining the maximum age at issue. All exceptions to our normal limits are dependent upon our ability to obtain acceptable reinsurance coverage for our risk with an older insured.

We and our affiliates offer other products to insure people which may or may not better match your needs.

Temporary Insurance

If you apply and qualify, we may issue temporary insurance in an amount equal to the face amount of insurance for which you applied. The maximum amount of temporary insurance for binding limited life insurance coverage is $3 million, which includes other in-force coverage you have with us.

Temporary coverage begins when all of the following events have occurred:

• you have completed and signed our binding limited life insurance coverage form
• we receive and accept a premium payment of at least your scheduled premium (selected on your application)
• part I of the application is complete.

Temporary life insurance coverage ends on the earliest of:

• the date we return your premium payments
• five days after we mail notice of termination to the address on your application
• the date your policy coverage starts
• the date we refuse to issue a policy based on your application
• 90 days after you sign our binding limited life insurance coverage form.

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There is no death benefit under the temporary insurance agreement if any of the following events occurs:

• there is a material misrepresentation in your answers on the binding limited life insurance coverage form
• there is a material misrepresentation in statements on your application
• the person or persons intended to be insured die by suicide or self-inflicted injury
• the bank does not honor your premium check.

Policy Issuance

Before we issue a policy, we require satisfactory evidence of insurability of the insured person and payment of your initial premium. This evidence may include completion of underwriting and issue requirements.

The policy date shown on your policy schedule determines:

• monthly processing dates
• policy months
• policy years
• policy anniversaries.

It is not affected by when you receive the policy. The policy date may be different from the date we receive your first premium payment. Generally, we charge monthly deductions from your policy date.

The policy date is determined one of three ways:

1. the date you designate on your application, subject to our approval.
2. the back-date of the policy to save age, subject to our approval and law.
3. if there is no designated date or back-date, the policy date is:

• the date all underwriting and administrative requirements have been met if we receive your initial premium before we issue your policy; or
• the date we receive your initial premium if it is after we approve your policy for issue.

If you choose to have your policy date be earlier than the date we issue your policy (called back-dating), then the following monthly policy charges will be charged from that earlier date on your first monthly processing date:

• mortality and expense risk charge
• policy charge
• administrative charge
• cost of insurance charges
• rider charges

If you have elected to backdate your policy which enables you to gain benefit of a lower age for the purposes of calculating the cost of insurance charges on your policy, you should understand there are some inherent costs associated with your decision to backdate. For each month that your policy is backdated, the applicable cost of insurance charges are accumulated and deducted from your initial premium payment. Thus, backdating your policy has the effect of lowering your initial net premium and thus the amount available to be allocated to the investment options. On backdated policies the accrued cost of insurance charges deducted from the initial premium result in policy values being lower than those in any policy illustrations you have received.

Definition of Life Insurance

At policy issue, you may choose one of two tests for the federal income tax definition of life insurance. You cannot change your choice later.

The tests are the cash value accumulation test and the guideline premium/cash value corridor test. If you choose the guideline premium/cash value corridor test, we may limit premium payments relative to your policy death benefit under this test. See Tax Status of the Policy, page 49.

Premium Payments

You may choose the amount and frequency of premium payments, within limits. You cannot make premium payments after the death of the insured person or after the continuation of coverage period begins. See Continuation of Coverage, page 30.

We consider payments we receive to be premium payments if you do not have an outstanding loan and your policy is not in the continuation of coverage period. After we deduct certain charges from your premium payment, we add the remaining net premium to your policy.

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A payment is received by us when it is received at our offices. After you have paid your initial premium, we suggest you send payments directly to the Company, rather than through your agent/registered representative, to assure the earliest crediting date.

Scheduled Premium

Your premium payments are flexible. You may select your scheduled (planned) premium (within our limits) when you apply for your policy. The scheduled premium, shown in your policy and schedule, is the amount you choose to pay over a stated time period. This amount may or may not be enough to keep your policy in force. You may receive premium reminder notices for the scheduled premium on a quarterly, semi-annual or annual basis. You are not required to pay the scheduled premium.

You may choose to pay your premium by electronic funds transfer each month. Your financial institution may charge for this service. If you choose to pay your initial premium by electronic transfer, please be sure to include the appropriate information as part of your application to avoid a delay in making your coverage effective.

You can change the amount of your scheduled premium within our minimum and maximum limits at any time. If you fail to pay your scheduled premium or if you change the amount of your scheduled premium, your policy performance will be affected.

Unscheduled Premium Payments

Generally speaking, you may make unscheduled premium payments at any time, however:

• We may limit the amount of your unscheduled premium payments that would result in an increase in the base death benefit amount required by the federal income tax law definition of life insurance. We may require satisfactory evidence that the insured person is insurable at the time that you make the unscheduled premium payment if the death benefit is increased due to your unscheduled premium payments.
• We may require proof that the insured person is insurable if your unscheduled premium payment will cause the net amount at risk to increase.
• We will return premium payments which are greater than the "seven-pay" limit for your policy if your payment would cause your policy to become a modified endowment contract, unless you have acknowledged in writing the new modified endowment contract status for your policy. The "seven-pay" limit is defined by the Internal Revenue Code and actuarially determined. It varies based on the age, gender and premium class of each insured, as well as the death benefit and additional benefits or riders on the policy. It is generally the maximum possible premium that we may receive during the first seven policy years in order for the policy not to be classified as a modified endowment contract.

See Modified Endowment Contracts, page 50, and Changes to Comply with the Law, page 52.

If you have an outstanding policy loan and you make an unscheduled payment, we will consider it a loan repayment, unless you tell us otherwise. If your payment is a loan repayment, we do not take tax or sales charges.

Target Premium

Target premium is not based on your scheduled premium. Target premium is actuarially determined based on the age and gender of the insured person. The target premium is used to determine your initial sales charge and the sales compensation we pay. It may or may not be enough to keep your policy in force. You are not required to pay the target premium and there is no penalty for paying more or less. The target premium for your policy and additional segments is listed in your policy schedule pages.

Allocation of Net Premium

The net premium is the balance remaining after we deduct tax and sales charges from your premium payment.

Insurance coverage does not begin until we receive your initial premium. It must be at least the sum of the scheduled premium payments due from your policy date through your investment date.

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The investment date is the first date we apply net premium to your policy. If we receive your initial premium after we approve your policy for issue, the investment date is the date we receive your initial premium.

We apply the initial net premium to your policy after all of the following conditions have been met:

• we receive the required amount of premium
• all issue requirements have been received by our customer service center
• we approve your policy for issue.

Amounts you designate for the guaranteed interest division will be allocated to that division on the investment date. If your state requires return of your premium during the free look period, we initially invest amounts you have designated for the variable investment options in the variable investment option which invests in the GCG Trust Liquid Asset investment portfolio. We later transfer these amounts from this variable investment option to your selected variable investment options, based on your most recent premium allocation instructions, at the earlier of the following dates:

• five days after the date we mailed your policy plus the length of your state free look period; or
• the date we have received your delivery receipt plus the length of your state free look period.

If your state provides for return of account value during the free look period (or provides no free look period), we invest amounts you designated for the variable investment options directly into your selected variable investment options.

We allocate all later premium payments to your policy on the valuation date of receipt. We will use your most recent premium allocation instructions specified in percentages stated to the nearest tenth and totaling 100%. A payment is received by us when it is received at our offices. After you have paid your initial premium, we suggest you send payments directly to us, rather than through your agent/registered representative, to assure the earliest crediting date.

Premium Payments Affect Your Coverage

Your coverage lasts only as long as your net account value is enough to pay the monthly charges and your account value is more than your outstanding policy loan plus accrued loan interest. If you do not meet these conditions, your policy will enter the 61-day grace period and you must make a premium payment to avoid lapse. See Lapse, page 38, and Grace Period, page 38.

Modified Endowment Contracts

There are special federal income tax rules for distributions from life insurance policies which are modified endowment contracts. These rules apply to policy loans, surrenders and partial withdrawals. Whether or not these rules apply depends upon whether or not the premium we receive is greater than the "seven-pay" limit.

If we find that your scheduled premium causes your policy to be a modified endowment contract on your policy date, we will require you to acknowledge that you know the policy is a modified endowment contract. We will issue your policy based on the scheduled premium you selected. If you do not want your policy to be issued as a modified endowment contract, you may reduce your scheduled premium to a level which does not cause your policy to be a modified endowment contract. We will then issue your policy based on the revised scheduled premium. See Modified Endowment Contracts, page 50.

Death Benefits

You decide the amount of insurance you need, now and in the future. You can combine the long-term advantages of permanent life insurance (base coverage) with the flexibility and short-term advantages of term life insurance. Both permanent and term life insurance are available with one policy. The stated death benefit is the permanent element of your policy. The adjustable term insurance rider is the term insurance element of your policy. See Adjustable Term Insurance Rider, page 28.

Generally, we require a minimum total death benefit of $100,000 ($50,000 for guaranteed issue policies). Our underwriting procedures in effect at the time

Strategic Investor   			23

you apply may limit the maximum stated death benefit.

It may be to your economic advantage to include part of your insurance coverage under the adjustable term insurance rider. The adjustable term insurance rider has no cash value, though, and provides no growth potential. Both the cost of insurance under the adjustable term insurance rider and the cost of insurance for the base death benefit are deducted monthly from your account value and generally increase with the age of the insured person. Use of the adjustable term insurance rider may reduce sales compensation, but may increase the monthly cost of insurance. See Adjustable Term Insurance Rider, page 28.

Your death benefit is calculated as of the date of death of the insured person.

Death Benefit Summary

This chart assumes no death benefit option changes and that partial withdrawals are less than the premium we receive.

	Option 1	Option 2	Option 3
Stated Death Benefit	The sum of death benefit segments under the policy. The stated death benefit changes when there is an increase or decrease or when a policy transaction causes it to change.	The sum of death benefit segments under the policy. The stated death benefit changes when there is an increase or decrease or when a policy transaction causes it to change.	The sum of death benefit segments under the policy. The stated death benefit changes when there is an increase or decrease or when a policy transaction causes it to change.
Base Death Benefit	The greater of: the stated death benefit; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.	The greater of: the stated death benefit plus the account value; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.	The greater of: the stated death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.
Target Death Benefit	Stated death benefit plus adjustable term insurance rider benefit, if any.	Stated death benefit plus adjustable term insurance rider benefit, if any.	Stated death benefit plus adjustable term insurance rider benefit, if any.

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	Option 1	Option 2	Option 3
Total Death Benefit	It is the greater of: the target death benefit; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.	It is the greater of: the target death benefit plus the account value; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.	It is the greater of: the target death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken; or the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors.
Adjustable Term Insurance Rider Benefit	The total death benefit minus the base death benefit provided by the policy, but not less than zero   <R>If the account value plus the refund of sales charges, if any, multiplied by the death benefit factor is greater than the stated death benefit, the adjustable term insurance benefit will be decreased. It will be decreased so that the sum of the base death benefit and the adjustable term insurance rider benefit is not greater than the target death benefit. If the base death benefit becomes greater than the target death benefit, then the adjustable term insurance rider benefit is zero.</R>	The total death benefit minus the base death benefit provided by the policy, but not less than zero.   <R>If the account value plus the refund of sales charges, if any, multiplied by the death benefit factor is greater than the stated death benefit plus the account value, the adjustable term insurance rider benefit will be decreased. It will be decreased so that the sum of the base death benefit and the adjustable term insurance rider benefit is not greater than the target death benefit plus the account value. If the base death benefit becomes greater than the target death benefit plus the account value, then the adjustable term insurance rider benefit is zero.</R>	The total death benefit minus the base death benefit provided by the policy, but not less than zero.   <R>If the account value plus the refund of sales charges, if any, multiplied by the death benefit factor is greater than the stated death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken, the adjustable term insurance rider benefit will be decreased. It will be decreased so that the sum of the base death benefit and the adjustable term insurance rider benefit is not greater than the target death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken. If the base death benefit becomes greater than the target death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken, then the adjustable term insurance rider benefit is zero.</R>

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Base Death Benefit

Your base death benefit can be different from your stated death benefit as a result of:

• your choice of death benefit option
• increases or decreases in the stated death benefit
• a change in your death benefit option.

Federal income tax law requires that your death benefit be at least as much as your account value multiplied by a factor defined by law. This factor is based on:

• the insured person's age
• the insured person's gender
• the cash value accumulation test or the guideline premium/cash value corridor test for the federal income tax law definition of life insurance. See Appendix A, page 232, or Appendix B, page 234.

As long as your policy is in force, we will pay the death proceeds to your beneficiaries after the insured person dies. The beneficiaries are the people you name to receive the death proceeds from your policy. The death proceeds are:

• your base death benefit on the date of the insured person's death; plus
• the amount of any rider benefits; minus
• any outstanding policy loan with accrued loan interest; minus
• any outstanding policy charges incurred before the death of the insured person.

There could be outstanding policy charges if the insured person dies while your policy is in the grace period.

Death Benefit Options

You have a choice of three death benefit options. Your choice may result in your base death benefit being greater than your stated death benefit.

Option 1: Under death benefit option 1, your base death benefit is the greater of:

• your stated death benefit on the date of the insured person's death; or
• your account value on the date of the insured person's death plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors shown in Appendix A or B.

With option 1, positive investment performance generally reduces your net amount at risk, which lowers your policy's cost of insurance charge. Option 1 offers insurance coverage at a set amount with potentially lower cost of insurance charges over time.

Option 2: Under death benefit option 2, your base death benefit is the greater of:

• your stated death benefit plus your account value on the date of the insured person's death; or
• your account value on the date of the insured person's death plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors shown in Appendix A or B.

With option 2, investment performance is reflected in your insurance coverage.

Death benefit option 2 is not available during the continuation of coverage period. If you have option 2 on your policy, it automatically converts to death benefit option 1 when the continuation of coverage period begins. See Continuation of Coverage, page 30.

Option 3: Under death benefit option 3, your base death benefit is the greater of:

• your stated death benefit on the date of the insured person's death plus the sum of all premium payments we receive minus partial withdrawals you have taken; or
• the account value on the date of the insured person's death plus the refund of sales charges, if any, multiplied by the appropriate factor from the definition of life insurance factors shown in Appendix A or B.

With option 3, the base death benefit generally will increase as we receive premium and decrease if you take partial withdrawals. In no event will your base death benefit be less than your stated death benefit.

Death benefit option 3 is not available during the continuation of coverage period. If you have option 3 on your policy, it automatically converts to death

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benefit option 1 when the continuation of coverage period begins. See Continuation of Coverage, page 30.

Changes in Death Benefit Options

You may request a change in your death benefit option on or after your first monthly processing date and before the continuation of coverage period begins.

Your death benefit option change is effective on your next monthly processing date after we approve it, so long as at least one day remains before your monthly processing date. If less than one day remains before your monthly processing date, your change will be effective on the second following monthly processing date.

After we approve your request, we send a new policy schedule page to you. You should attach it to your policy. We may ask you to return your policy to our customer service center so that we can make this change for you.

A death benefit option change applies to your entire stated or base death benefit. Changing your death benefit option may reduce or increase your target death benefit, as well as your stated death benefit. We may not approve a death benefit option change if it reduces the target or stated death benefit below the minimum we require to issue your policy.

You may change from death benefit option 1 to option 2, from option 2 to option 1, and from option 3 to option 1. For you to change from death benefit option 1 to option 2 we may require proof that the insured person is insurable under our normal rules of underwriting.

On the effective date of your option change, your stated death benefit changes as follows:

Change From	Change To	Stated Death Benefit Following Change:
Option 1	Option 2	your stated death benefit before the change minus your account value as of the effective date of the change.
Option 2	Option 1	your stated death benefit before the change plus your account value as of the effective date of the change.
Option 3	Option 1	your stated death benefit before the change plus the sum all premium payments we have received minus all partial withdrawals you have taken as of the effective date of the change.

We increase or decrease your stated death benefit to keep the net amount at risk the same. There is no change to the amount of term insurance if you have an adjustable term insurance rider. See Cost of Insurance Charge, page 47.

If you change your death benefit option, we adjust the stated death benefit for each of your segments by allocating your account value to each benefit segment. For example, if you change from death benefit option 1 to option 2, your stated death benefit is decreased by the amount of your account value allocation to that segment. If you change from death benefit option 2 to option 1, your stated death benefit is increased by the amount allocated to that segment.

Changing your death benefit option may have tax consequences. You should consult a tax adviser before making changes.

Changes in Death Benefit Amounts

Contact your agent/registered representative or our customer service center to request a change in your policy's death benefit. The change is effective on the next monthly processing date after we receive and approve your request. There may be underwriting or other requirements which must be met before your request can be approved. Your requested change must be for at least $1,000.

After we make your requested change, we will send you a new policy schedule page. Keep it with your policy. We may ask you to send your policy to us so that we can make the change for you. You may change your target death benefit once a policy year.

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We may not approve a requested change if it will disqualify your policy as life insurance under federal income tax law. If we disapprove a change for any reason, we provide you with a notice of our decision. See Tax Considerations, page 49.

You may change your policy's stated death benefit on or after your first policy anniversary (first monthly processing date for an increase). You may not decrease the stated death benefit below the minimum we require to issue your policy.

Requested reductions in the death benefit will first decrease the target death benefit. We decrease your stated death benefit only after your adjustable term insurance rider coverage is reduced to zero. If you have more than one segment, we divide decreases in stated death benefit among your benefit segments pro rata unless law requires differently.

You must provide satisfactory evidence that the insured person is still insurable to increase your death benefit. Unless you tell us differently, we assume your request for an increase in your target death benefit is a request for an increase to your stated death benefit. Thus, the amount of your adjustable term insurance rider will not change.

<R>A segment is a block of death benefit coverage. The initial segment, or first segment, is the stated death benefit on your policy's effective date. A requested increase in stated death benefit will cause a new segment to be created. Once we create a new segment, it is permanent unless law requires differently. The segment year runs from the segment effective date to its anniversary.</R>

Each new segment may have:

• a new sales charge
• new cost of insurance charges, guaranteed and current
• a new incontestability period
• a new suicide exclusion period
• a new target premium.

<R>We allocate the net amount at risk among death benefit segments in the same proportion that each segment bears to the total stated death benefit. Premium we receive after an increase is applied to your segments in the same proportion as the target premium for each segment bears to the total target premium for all segments. Sales charges are deducted from each segment's premium based on the length of time that segment has been effective.</R>

If a death benefit option change causes the stated benefit to increase, no new segment is created. Instead, the size of each existing segment(s) is (are) changed. If it causes the stated death benefit to decrease, each segment is decreased.

There may be tax consequences as a result of a change in your death benefit. You should consult a tax adviser before changing your death benefit amount. See Tax Status of the Policy, page 49, and Modified Endowment Contracts, page 50.

Riders

Your policy may include benefits, attached by rider. A rider may have an additional cost. You may cancel riders at any time.

We may offer riders not listed here. Not all riders may be available under your policy. Contact your agent/registered representative for a list of riders and their availability.

Adding or canceling riders may have tax consequences. See Modified Endowment Contracts, page 50.

Adjustable Term Insurance Rider

You may increase your death proceeds by adding an adjustable term insurance rider. This rider allows you to schedule the pattern of death benefits appropriate for your anticipated needs. As the name suggests, the adjustable term insurance rider adjusts over time to maintain your desired level of coverage.

You specify a target death benefit when you apply for this rider. The target death benefit can be level for the life of your policy or can be scheduled to change at the beginning of a selected policy year(s). See Death Benefits, page 23.

The adjustable term insurance rider death benefit is the difference between your target death benefit and your base death benefit, but not less than zero. The rider's death benefit automatically adjusts daily as your base death benefit changes. Your death benefit depends on which death benefit option is in effect:

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<R>Option 1: If option 1 is in effect, the total death benefit is the greater of:

• the target death benefit; or
• the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the death benefit factors in the applicable Appendix B.

Option 2: If option 2 is in effect, the total death benefit is the greater of:

• the target death benefit plus the account value; or
• the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the death benefit factors in the applicable Appendix B.

Option 3: If option 3 is in effect, the total death benefit is the greater of:

• the target death benefit plus the sum of all premium payments we receive minus partial withdrawals you have taken; or
• the account value plus the refund of sales charges, if any, multiplied by the appropriate factor from the death benefit factors in the applicable Appendix B.</R>

For example, under option 1, assume your base death benefit changes as a result of a change in your account value. The adjustable term insurance rider adjusts to provide a death benefit equal to your target death benefit in each year:

Base Death Benefit	Target Death Benefit	Adjustable Term Insurance Rider Amount
$201,500	$250,000	$48,500
202,500	250,000	47,500
202,250	250,000	47,750

It is possible that the amount of your adjustable term insurance may be zero if your base death benefit increases enough. Using the same example, if the base death benefit under your policy grew to $250,000 or more, the adjustable term insurance would be zero.

Even when the adjustable term insurance is reduced to zero, your rider remains in effect until you remove it from your policy. Therefore, if the base death benefit later drops below your target death benefit, the adjustable term insurance rider coverage reappears to maintain your target death benefit.

You may change the target death benefit schedule after it is issued, based on our rules. See Changes in Death Benefit Amounts, page 27.

We may deny future, scheduled increases to your target death benefit if you cancel a scheduled change or if you ask for an unscheduled decrease in your target death benefit.

Partial withdrawals, changes from death benefit option 1 to option 2, and base decreases may reduce your target death benefit. See Partial Withdrawals, page 36, and Changes in Death Benefit Options, page 27.

There is no defined premium for a given amount of adjustable term insurance coverage. Instead, we deduct a separate monthly cost of insurance charge from your account value. The cost of insurance for this rider is calculated as the monthly cost of insurance rate for the rider coverage multiplied by the adjustable term death benefit in effect at the monthly processing date. The cost of insurance rates are determined by us from time to time. They are based on the issue age, gender and premium class of the insured person, as well as the length of time since your policy date.

If the target death benefit is increased by you after the adjustable term insurance rider is issued, we use the same cost of insurance rate schedule for the entire coverage for this rider. These rates are based on the original premium class even though satisfactory new evidence of insurability is required for the increased schedule. Although the maximum cost of insurance rates for this rider are greater than the maximum cost of insurance rates for the base death benefit, the current rates for this rider may be lower than current cost of insurance rates for the base death benefit. Guaranteed maximum cost of insurance rates will be stated in the policy. See Cost of Insurance Charge, page 47.

Not all policy features apply to the adjustable term insurance rider. The rider does not contribute to the policy account value nor to surrender value. It does not affect investment performance and cannot be used for a policy loan. The adjustable term insurance rider provides benefits only at the insured person's death.

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Accelerated Death Benefit Rider

This rider pays part of the death benefit to you if a qualified doctor diagnoses a terminal illness of the insured person. Receipt of such an accelerated payment reduces the death benefit of your policy and its net cash surrender value. There is no charge for this rider. There may be tax consequences to requesting payment under this rider. See Tax Status of the Policy, page 49.

Waiver of Cost of Insurance Rider

If the insured person becomes totally disabled while your policy is in force, this rider provides that we waive the monthly expense, cost of insurance and rider charges during the disability period. The insured person must be no less than age 15 and no more than age 55. If you add this rider to your policy, you may not add the waiver of specified premium rider. This rider is not available if your policy is issued based on guaranteed issue or simplified underwriting. The rider charges are included as part of your monthly cost of insurance charge. See Cost of Insurance Charge, page 47.

Waiver of Specified Premium Rider

If the insured person becomes totally disabled while your policy is in force, this rider provides that after a waiting period, we credit a specified premium amount monthly to your policy during the disability period. Subject to our underwriting, you specify this amount on the application for the policy. The insured person must be no less than age 15 and no more than age 55. The minimum coverage under this rider is $25 monthly. The monthly charge for this rider is $1.70 to $12.70 per $100 of rider coverage depending on the insured person's age. If your policy is a guaranteed issue policy, the monthly charge for this rider is $3.40 to $25.40 per $100 of coverage depending on issue age. This rider is not available if your policy is issued based on simplified underwriting.

A policy may contain either the Waiver of Cost of Insurance Rider or the Waiver of Specified Premium Rider, but not both.

Special Features

Designated Deduction Option

You may designate one investment option from which we will deduct your monthly charges. You may make this designation at any time. You may not use the loan division as your designated deduction option.

If you elect not to choose a designated deduction investment option or if the amount in your designated deduction investment option is not enough to cover the monthly deductions, then your monthly charges are taken from the variable investment options and guaranteed interest division in the same proportion that your account value in each has to your total net account value on the monthly processing date.

Right to Change Policy

During the first 24 months after your policy date, you have the right to permanently change your policy to a guaranteed policy, unless state law requires differently. If you elect to make this change, unless state law requires that we issue to you a new guaranteed policy, we will transfer the amount you have in the variable investment options to the guaranteed interest division and allocate all future net premium to the guaranteed interest division. We do not allow future payments or transfers to the variable investment options after you exercise this right. We do not charge for this change. See Guaranteed Interest Division, page 19.

Continuation of Coverage

The continuation of coverage feature continues your insurance coverage in force beyond the policy anniversary nearest the insured person's 100^th birthday. If you do not surrender your policy before this date, on this date we:

• convert target death benefit to stated death benefit
• convert death benefit options 2 and 3 to death benefit option 1, if applicable
• terminate all riders
• transfer your net account value (excluding the amount in the loan division) into the guaranteed interest division
• terminate dollar cost averaging and automatic rebalancing.

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Your insurance coverage continues in force until the death of the insured person, unless the policy lapses or is surrendered. However we accept no more premium payments, we deduct no further charges and we cease monthly deductions.

You may not make transfers into the variable investment options during the continuation of coverage period but you may take a policy loan or partial withdrawals.

If you have an outstanding policy loan, interest continues to accrue. If you fail to make sufficient loan or loan interest payments, it is possible that the loan balance plus accrued interest may become greater than your account value and cause your policy to lapse. To avoid lapse, you may repay the loan and loan interest during the continuation of coverage period.

If you wish to stop coverage during the continuation of coverage period, you may surrender your policy and receive the net account value. All other normal consequences of surrender apply. See Surrender, page 39.

The continuation of coverage feature is not available in all states. If a state has approved this feature, it is an automatic feature and you do not need to take any action to activate it. In certain states the death benefit during the continuation of coverage period is the account value. Contact your agent/registered representative or our customer service center to find out if this feature is available in your state and which type of death benefit applies in your state.

The tax consequences of coverage continuing beyond the insured person's 100^th birthday are uncertain. You should consult a tax adviser as to those consequences. See Continuation of Policy Beyond Age 100, page 52.

Enhanced Death Benefit Corridor Option

For policies issued with select guaranteed issue rates, an additional benefit option is available. The policyowner may elect, at any time prior to policy issuance, the enhanced death benefit corridor option.

Existing group or corporate owners of Strategic Investor policies who have select guaranteed issue rates can add this option to their policies if it is added to all policies within that issue group. If you would like to do this, contact your agent/ registered representative or our customer service center for instructions.

This option generally provides an opportunity for an increased death benefit on the life of the insured person at certain ages. Under death benefit options 1 and 2 the account value plus the refund of sales charges, if any, is multiplied by a factor shown in Appendix A or B. The result of this calculation is the base death benefit if it exceeds the stated death benefit. Under the enhanced death benefit corridor option, the calculation uses the factor shown on the attached Appendix A and Appendix B (depending on which definition of life insurance is in effect for your policy). The result of this calculation is then used to determine the base death benefit as described under Death Benefit Options, page 26.

There is no separate charge for this feature. However, the same account value may generate a higher base death benefit under policies with this option than on policies not electing the option. Cost of insurance charges are based on the net amount at risk, which is the difference between the account value and the base death benefit. Therefore, as a result of the increased death benefit, the cost of insurance charges may be higher for policies electing this option. Your registered representative/agent can provide you with a personalized illustration to show the difference between a policy with this option and one without it. If your policy does not have sufficient account value, electing this option may have no effect on the base death benefit.

Adding this option to your policy does not affect the operation of your policy's riders, including the Adjustable Term Insurance Rider. When the base death benefit exceeds the stated death benefit, transactions which reduce your account value (such as a partial withdrawal) also reduce the death benefit. The dollar reduction to the death benefit under these circumstances is greater for policies with the enhancement option than on those without the option.

Once elected, this option cannot be deleted. Once elected, this option continues as long as coverage on the original insured person continues. You may lose the benefit of this option if your account value falls below the minimum level needed to keep it in effect.

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Refund of Sales Charges

If you surrender your policy within the first two policy years and your policy has not lapsed, we may refund a portion of the sales charges we previously deducted from your premium payments. In the first policy year, the amount of the refund will not be less than 3.00% of the premium we received. In the second policy year, the refund will not be less than 2.5% of the premium we received in the first policy year. The refund of sales charge is guaranteed only for the first two policy years. We reserve the right to extend the refund of sales charges beyond the first two policy years.

The refund of sales charge is not available if your policy was purchased with the proceeds of a policy issued by us or one of our affiliates. Also, the refund of sales charge is not available if your policy is surrendered to another insurer as part of a Section 1035 exchange.

Policy Values

Account Value

Your account value is the total amount you have in the guaranteed interest division, the variable investment options and the loan division. Your account value reflects:

• net premium applied
• charges deducted
• partial withdrawals taken
• investment performance of the investment portfolios
• interest earned on the guaranteed interest division
• interest earned on the loan division.

Net Account Value

Your policy's net account value is your account value minus the amount of your outstanding policy loan and accrued loan interest, if any.

Cash Surrender Value

Your cash surrender value is your account value plus any refund of sales charge due.

Net Cash Surrender Value

Your net cash surrender value is your cash surrender value minus the amount of your outstanding policy loan and accrued loan interest, if any.

Determining Values in the Variable Investment Options

The amounts in the variable investment options are measured by accumulation units and accumulation unit values. The value of each variable investment option is the accumulation unit value for that option multiplied by the number of accumulation units you own in that option. Each variable investment option has a different accumulation unit value.

The accumulation unit value is the value determined on each valuation date. The accumulation unit value of each variable investment option varies with the investment performance of the underlying investment portfolio. It reflects:

• investment income
• realized and unrealized gains and losses
• investment portfolio expenses
• taxes, if any.

A valuation date is one on which the net asset value of the investment portfolio shares and unit values of the variable investment options are determined. Valuation dates are each day the New York Stock Exchange and the company's customer service center are open for business, except for days on which an investment portfolio does not value its shares or any other day as required by law. Each valuation date ends at 4:00 p.m. Eastern time. Our customer service center may not be open on major holidays.

You purchase accumulation units when you allocate premium or make transfers to a variable investment option, including transfers from the loan division.

We redeem accumulation units:

• when amounts are transferred from a variable investment option (including transfers to the loan division)
• for the monthly deductions from your account value
• for policy transaction fees
• when you take a partial withdrawal
• if you surrender your policy
• to pay the death proceeds.

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To calculate the number of accumulation units purchased or sold we divide the dollar amount of your transaction by the accumulation unit value for the variable investment option calculated at the close of business on the valuation date of the transaction.

The date of a transaction is the date we receive your premium or transaction request at our customer service center, so long as the date of receipt is a valuation date. We use the accumulation unit value which is next calculated after we receive your premium or transaction request and we use the number of accumulation units attributable to your policy on the date of receipt.

We take monthly deductions from your account value on the monthly processing date. If your monthly processing date is not a valuation date, the monthly deduction is processed on the next valuation date.

The value of amounts allocated to the variable investment options goes up or down depending on investment performance of the corresponding investment portfolios.

For amounts in the variable investment options, there is no guaranteed minimum value.

How We Calculate Accumulation Unit Values

We determine accumulation unit values on each valuation date.

We generally set the accumulation unit value for a variable investment option at $10 when the division is first opened. After that, the accumulation unit value on any valuation date is:

• the accumulation unit value for the preceding valuation date multiplied by
• the variable investment option's accumulation experience factor for the valuation period.

Every valuation period begins at 4:00 p.m. Eastern time on a valuation date and ends at 4:00 p.m. Eastern time on the next valuation date.

We calculate an accumulation experience factor for each variable investment option every valuation date as follows:

• We take the net asset value of the underlying investment portfolio shares as reported to us by the investment portfolio managers as of the close of business on that valuation date.
• We add dividends or capital gain distributions declared and reinvested by the investment portfolio during the current valuation period.
• We subtract a charge for taxes, if applicable.
• We divide the resulting amount by the net asset value of the shares of the underlying investment portfolio at the close of business on the previous valuation date.

Transfer of Account Value

You generally may make transfers of your account value among the variable investment options and the guaranteed interest division. If your state requires a refund of premium during the free look period, you may not make transfers until after your free look period ends.

Currently, we do not limit your number of transfers, but we reserve the right to do so if we determine the trading within your policy is excessive. You may not make transfers during the continuation of coverage period. See Excessive Trading, page 34, and Continuation of Coverage, page 30.

You may make transfer requests in writing, or by telephone if you have telephone privileges, to our customer service center. You may fax your request to us. Telephone and facsimile transfers may not always be available. Telephone or fax systems, whether yours, your service provider's or your agent's, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request in writing.

Your transfer takes effect on the valuation date we receive your request. The minimum amount you may transfer is $100. This minimum does not need to come from one investment option or be transferred to one investment option as long as the total amount you transfer is at least $100. However, if the amount remaining in an investment option is less than $100 and you make a transfer request, we transfer the entire amount.

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Excessive Trading

Excessive trading activity can disrupt investment portfolio management strategies and increase portfolio expenses through:

• increased trading and transaction costs
• forced and unplanned portfolio turnover
• lost opportunity costs
• large asset swings that decrease the investment portfolio's ability to provide maximum investment return to all policyowners.

In response to excessive trading, we may place restrictions or refuse transfers and impose a fee for each future transfer of up to $25. We will take such actions when we determine, in our sole discretion, that transfers are harmful to the investment portfolios or to policyowners as a whole.

Guaranteed Interest Division Transfers

Transfers into the guaranteed interest division are not restricted.

You may transfer amounts from the guaranteed interest division only in the first 30 days of each policy year. Transfer requests received within 30 days before your policy anniversary will occur on your policy anniversary. A request received by us within 30 days after your policy anniversary is effective on the valuation date we receive it. Transfer requests made at any other time will not be processed. The minimum amount you may transfer is $100.

Dollar Cost Averaging

If your policy has at least $10,000 invested in the underlying GCG Trust Liquid Asset investment portfolio, you may elect dollar cost averaging. There is no charge for this feature.

Dollar cost averaging does not assure a profit nor does it protect you against a loss in a declining market.

The main goal of dollar cost averaging is to protect your policy values from short-term price changes. This systematic plan of transferring account values is intended to reduce the risk of investing too much when the price of an investment portfolio's shares is high. It also reduces the risk of investing too little when the price of an investment portfolio's shares is low. Since you transfer the same dollar amount to the variable investment options each period, you purchase more units when the unit value is low and you purchase fewer units when the unit value is high.

You may add dollar cost averaging to your policy at any time. The first dollar cost averaging date must be at least one day after we receive your dollar cost averaging request. If your state requires a refund of all premium received during the free look period, dollar cost averaging begins after the end of your free look period.

With dollar cost averaging, you designate either a dollar amount or a percentage of your account value to be automatically transferred at regular intervals from the variable investment option investing in the GCG Trust Liquid Asset investment portfolio to one or more other variable investment options. Fractional percentages, stated to the nearest tenth, are permitted. You may not use the guaranteed interest division or the loan division in dollar cost averaging.

The minimum percentage you may transfer to one investment division is 1% of the total amount you transfer. You must transfer at least $100 on each dollar cost averaging transfer date.

Dollar cost averaging may occur on the same day of the month on a monthly, quarterly, semi-annual or annual basis. Unless you tell us otherwise, dollar cost averaging automatically takes place monthly on the monthly processing date.

You may have both dollar cost averaging and automatic rebalancing at the same time. However, your dollar cost averaging source portfolio cannot be included in your automatic rebalancing program.

Changing Dollar Cost Averaging

If you have telephone privileges, you may change the program by telephoning our customer service center or you may fax your request to us. Telephone and facsimile transfers may not always be available. Telephone or fax systems, whether yours, your service provider's or your agent's, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have

Strategic Investor   			34

taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request in writing. See Telephone Privileges, page 42.

Terminating Dollar Cost Averaging

You may cancel dollar cost averaging by sending satisfactory notice to our customer service center. We must receive it at least one day before the next dollar cost averaging date.

Dollar cost averaging will terminate on the date:

• you specify
• your balance in the GCG Trust Liquid Asset investment portfolio reaches a dollar amount you set
• the amount in the GCG Trust Liquid Asset investment portfolio is equal to or less than the amount to be transferred. We will transfer the remaining amount and dollar end cost averaging ends.

Automatic Rebalancing

Automatic rebalancing is a method of maintaining a consistent approach to investing account values over time and simplifying the process of asset allocation among your chosen investment options. There is no charge for this feature.

If you choose this feature, on each rebalancing date we transfer amounts among the investment options to match your pre-set automatic rebalancing allocation. You may select allocation percentages stated to the nearest tenth. After the transfer, the ratio of your account value in each investment option to your total account value for all investment options included in automatic rebalancing matches the automatic rebalancing allocation percentage you set for that investment option. This action rebalances the amounts in the investment options that do not match your set allocation. This mismatch can happen if an investment option outperforms the other investment options for that time period.

You may choose automatic rebalancing on your application or later by completing our customer service form. Automatic rebalancing may occur on the same day of the month on a monthly, quarterly, semi-annual or annual basis. If you do no specify a frequency, automatic rebalancing will occur quarterly.

The first transfer occurs on the date you select (after your free look period if your state requires return of premium during the free look period). If you do not request a date, processing is on the last valuation date of the calendar quarter in which we receive your request.

You may have both automatic rebalancing and dollar cost averaging at the same time. However, the source portfolio for your dollar cost averaging cannot be included in your automatic rebalancing program. You may not include the loan division.

Changing Automatic Rebalancing

You may change your allocation percentages for automatic rebalancing at any time. Your allocation change is effective on the valuation date that we receive it at our customer service center. If you reduce the amount allocated to the guaranteed interest division, it is considered a transfer from that division. You must meet the requirements for the maximum transfer amount and time limitations on transfers from the guaranteed interest division. See Transfers of Account Value, page 33.

Terminating Automatic Rebalancing

You may terminate automatic rebalancing at any time, as long as we receive your notice of termination at least one day before the next automatic rebalancing date.

Policy Loans

You may borrow from your policy at any time after the first monthly processing date, by using your policy as security for a loan, or as otherwise required by law.

The amount you borrow (policy loan) is:

• the total amount you borrow from your policy; plus
• policy loan interest that is capitalized when due; minus
• policy loan or interest repayments you make.

Unless law requires differently, a new policy loan must be at least $100. The maximum amount you

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may borrow on any valuation date, unless required differently by law, is your net account value minus the monthly deductions to your next policy anniversary or 13 monthly deductions if you take a

loan within thirty days before your next policy anniversary.

Your request for a policy loan must be directed to our customer service center. If you have telephone privileges, you may request a policy loan for less than $25,000 by telephone or fax. Telephone and facsimile transfers may not always be available. Telephone or fax systems, whether yours, your service provider's or your agent's, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request in writing. See Telephone Privileges, page 42.

When you request a loan you may specify the investment options from which the loan will be taken. If you do not specify the investment options, the loan will be taken proportionately from each active investment option you have, including the guaranteed interest division.

Loan interest charges on your policy loan accrue daily at an annual interest rate of 3.75% during policy years 1 through 10 and 3.15% thereafter (3.00% on a current basis). Interest is due in arrears on each policy anniversary. If you do not pay it when due, we add it to your policy loan balance.

When you take a policy loan, we transfer an amount equal to your policy loan to the loan division. We follow this same process for loan interest due at your policy anniversary. The loan division is part of our general account specifically designed to hold collateral for policy loans and interest. We credit the loan division with interest at an annual rate of 3.00%.

If you request an additional loan, we add the new loan amount to your existing policy loan. This way, there is only one loan outstanding on your policy at any time.

Loan Repayment

You may repay your policy loan at any time. We assume that payments you make, other than scheduled premium payments, are policy loan repayments. You must tell us if you want payments to be premium payments.

When you make a loan repayment, we transfer an amount equal to your payment from the loan division to the variable investment options and the guaranteed interest division in the same proportion as your current premium allocation, unless you tell us otherwise.

Effects of a Policy Loan

Taking a loan decreases the amount you have in the investment options. Accruing loan interest will change your net account value as compared to what it would have been if you did not take a loan.

Even if you repay your loan, it has a permanent effect on your account value. The benefits under your policy may be affected.

The loan is a first lien on your policy. If you do not repay your policy loan, we deduct your outstanding policy loan and accrued loan interest from the death proceeds or the cash surrender value when payable.

If you do not make loan payments your policy could lapse. Policy loans may cause your policy to lapse if your account value minus policy loan amounts and accrued loan interest is not enough to pay your deductions each month. See Lapse, page 38.

Policy loans may have tax consequences. If your policy lapses with a loan outstanding, you may have further tax consequences. See Distributions Other than Death Benefits, page 51.

If you use the continuation of coverage feature and you have a policy loan, loan interest continues to accrue.

Partial Withdrawals

You may request a partial withdrawal to be processed on any valuation date after your first policy anniversary by contacting our customer service center.

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You make a partial withdrawal by withdrawing part of your net account value. If your request is by telephone or fax, it must be for less than $25,000 and may not cause a decrease in your death benefit. Otherwise, your request must be in writing. Telephone and facsimile transfers may not always be available. Telephone or fax systems, whether yours, your service provider's or your agent's, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request in writing. See Telephone Privileges, page 42.

You may take up to twelve partial withdrawals per policy year. The minimum partial withdrawal you may take is $100. The maximum partial withdrawal you may take is the amount which leaves $500 as your net cash surrender value. If you request a withdrawal of more than this maximum, we require you to surrender your policy or reduce the withdrawal.

When you take a partial withdrawal, we deduct your withdrawal amount plus a service fee from your account value. See Charges and Deductions, page 45.

Partial withdrawals do not reduce the stated death benefit if your base death benefit has been increased to qualify your policy as life insurance under the federal income tax laws and if you withdraw an amount that is no greater than the amount that reduces your account value to a level which no longer requires your base death benefit to be increased to qualify as life insurance for federal income tax law purposes. See Tax Status of the Policy, page 49.

We require a minimum death benefit to issue your policy. You are not allowed to take a partial withdrawal if it reduces your death benefit below this minimum.

We will make a partial withdrawal from the guaranteed interest division and the variable investment options in the same proportion that each has to your net account value immediately before your withdrawal, or you may select the investment options from which your partial withdrawal will be taken. If you select the guaranteed interest division, however, the amount withdrawn from it may not be for more than your total withdrawal multiplied by the ratio of your account value in the guaranteed interest division to your total net account value immediately before the partial withdrawal.

Partial withdrawals may have adverse tax consequences. See Distributions Other than Death Benefits, page 51.

Partial Withdrawals under Death Benefit Option 1

Under death benefit option 1, if no more than fifteen years have passed since your policy date and the insured person is not yet age 81, you may make a partial withdrawal of up to the greater of 10% of your account value or 5% of your stated death benefit without decreasing your stated death benefit. Any additional amount withdrawn will reduce your stated death benefit by that additional amount.

Otherwise, amounts you withdraw will reduce your stated death benefit by the amount of the withdrawal unless your policy death benefit has been increased to meet the federal income tax definition of life insurance. Then at least part of your partial withdrawal may be taken without reducing your stated death benefit.

Partial Withdrawals under Death Benefit Option 2

Under death benefit option 2, a partial withdrawal does not reduce your stated death benefit.

Partial Withdrawals under Death Benefit Option 3

Under death benefit option 3, a partial withdrawal will reduce the stated death benefit by the amount of the partial withdrawal in excess of the total premium we have received minus the total of your partial withdrawals.

If a partial withdrawal reduces the stated death benefit, the target death benefit for the current year and all future years will be reduced by an amount equal to the reduction in the stated death benefit.

If your partial withdrawal is more than the total premium we have received minus the total of your prior partial withdrawals, a two step process is used:

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1. Your withdrawal of the amount that makes premium received minus all partial withdrawals equal to zero is taken; then
2. The excess withdrawal amount you requested will reduce your stated death

     benefit if:

• The excess amount is greater than 10% of your account value after step "1" above; or
• The excess amount is greater than 5% of your stated death benefit.

A reduction in the stated death benefit as a result of a partial withdrawal will be pro-rated among the existing coverage segments, unless state law requires otherwise. Target premium will be adjusted for the reduced stated death benefit.

Lapse

Your insurance coverage continues as long as your net account value is enough to pay your deductions each month.

If you have an outstanding policy loan, your policy will lapse if the loan plus accrued interest is more than your account value. Thus, during the continuation of coverage period, the policy could lapse if there is an outstanding policy loan even though there are no further monthly deductions.

Grace Period

Your policy enters a 61-day lapse grace period if, on a monthly processing date your net account value is zero (or less).

We notify you that your policy is in a grace period at least 30 days before it ends. We send this notice to you (or a person to whom you have assigned your policy) at your last known address in our records. We notify you of the premium payment necessary to prevent your policy from lapsing. This amount generally is the past due charges, plus your estimated monthly policy and rider deductions for the next two months. If the insured person dies during the grace period we do pay death proceeds to your beneficiaries with reductions for your policy loan balance, accrued loan interest and monthly deductions owed.

If we receive payment of the required amount before the end of the grace period, we apply it to your account value in the same manner as your other premium payments, then we deduct the overdue amounts from your account balance.

If you do not pay the full amount within the 61-day grace period, your policy and its riders lapse without value. We withdraw your remaining account balance from the variable and guaranteed interest divisions. We deduct amounts you owe us and inform you that your coverage has ended.

Reinstatement

If you do not pay enough premium before the end of the grace period, your policy lapses. You may still reinstate your policy and its riders within five years of the end of the grace period.

Unless state law requires differently, we will reinstate your policy and riders if:

• you are the owner and have not surrendered your policy
• you provide satisfactory evidence that the insured person (including those under your riders) is still insurable according to our normal rules of underwriting
• we receive enough premium to keep your policy and riders in force from the beginning to the end of the grace period and for two months after the reinstatement date.

Reinstatement is effective on the monthly processing date following our approval of your reinstatement application. If you had a policy loan when coverage ended, we reinstate it with accrued loan interest to the date of lapse. The cost of insurance charges at the time of reinstatement are adjusted to reflect the time since the lapse.

We apply net premium received after reinstatement according to your most recent instructions which may be those in effect at the start of the grace period.

A policy that is restated more than 90 days after lapsing will be classified as a modified endowment contract for tax purposes. See Modified Endowment Contract, page 48.

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Surrender

You may surrender your policy for its net cash surrender value any time after the free look period while the insured person is alive. You may take your net cash surrender value in other than one payment.

We compute your net cash surrender value as of the valuation date we receive your written surrender request and policy (or lost policy form) at our customer service center. All insurance coverage ends on the date we receive your surrender request and policy. See Policy Values, page 32, and Settlement Provisions, page 43.

If you surrender your policy within the first two policy years, the net cash surrender value may include a refund of a portion of the sales charges previously deducted. See Refund of Sales Charges, page 32. Otherwise we do not pro-rate or add back to your account value charges or expenses which we deducted before your surrender.

Surrender of your policy may have adverse tax consequences. See Distributions Other than Death Benefits, page 51.

General Policy Provisions

Free Look Period

You have the right to examine your policy and return it (for any reason) to us within the period shown in the policy. The right to examine your policy (also called free look period) starts on the date you receive it. If you return your policy to us within your state's specified time limit, we cancel it as of your policy date.

If you cancel your policy during this free look period, you will receive a refund as determined by state law. Generally, there are two types of free look refunds:

• some states require a return of all premium we receive
• other states require payment of account value plus a refund of all charges deducted.

Your policy will specify what type of free look refund applies in your state. The type of free look refund will affect when premium we receive before the end of the free look period is allocated into the variable investment options. See Allocation of Net Premium, page 22.

Your Policy

The contract between you and us is the combination of:

• your policy
• a copy of your original application and applications for benefit increases or decreases
• your riders
• endorsements
• policy schedule pages
• reinstatement applications.

If you make a change to your coverage, we give you a copy of your changed application and new policy schedules. If you send your policy to us, we attach these items to your policy and return it to you. Otherwise, you need to attach them to your policy.

Unless there is fraud, we consider all statements made in an application to be representations and not guarantees. We use no statement to deny a claim, unless it is in an application.

A president or other officer of our company and our secretary or assistant secretary must sign all changes or amendments to your policy. No other person may change its terms or conditions.

Guaranteed Issue

We may offer policies on a guaranteed issue basis for certain individuals, groups or sponsored arrangements. We issue these policies up to a preset face amount with reduced evidence of insurability. Guaranteed issue policies carry a different mortality risk compared with policies that are fully underwritten. So, we may charge different cost of insurance rates for guaranteed issue policies. The cost of insurance rates under these circumstances may depend on the:

• issue age of the insured people
• risk class of the insured people
• size of the group
• total premium the group pays.

Generally, most guaranteed issued policies have higher overall charges for insurance than a similar underwritten policy issued in the standard tobacco

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non-user or standard tobacco user class. This means that the insured person in a group or sponsored arrangement could get individual, simplified or fully underwritten insurance coverage at a lower overall cost.

Age

We issue your policy at the insured person's age (stated in your policy schedule) based on the nearest birthday to the policy date. The policy is issued on a guaranteed issue, fully-underwritten or simplified-underwritten basis. On the policy date, the insured person must be no less than age 15. For a guaranteed issue policy, the insured person generally can be no more than age 70. For a fully-underwritten policy, the insured person generally can be no more than age 85. For a simplified underwritten policy, the insured person can generally be no more than age 70.

We often use age to calculate rates, charges and values. We determine the insured person's age at a given time by adding the number of completed policy years to the age calculated at issue and shown in the schedule.

Ownership

The original owner is the person named as the owner in the policy application. The owner can exercise all rights and receive benefits during the life of the insured person. These rights include the right to change the owner, beneficiaries or the method designated to pay death proceeds.

As a matter of law, all rights of ownership are limited by the rights of any person who has been assigned rights under the policy and any irrevocable beneficiaries.

You may name a new owner by giving us written notice. The effective date of the change to the new owner is the date the prior owner signs the notice. However, we will not be liable for any action we take before a change is recorded at our customer service center. A change in ownership may cause the prior owner to recognize taxable income on gain under the policy.

Beneficiaries

You, as owner, name the beneficiaries when you apply for your policy. The primary beneficiaries who survive the insured person receives the death proceeds. Other surviving beneficiaries receive death proceeds only if there is no surviving primary beneficiaries. If more than one beneficiary survives the insured person, they share the death proceeds equally, unless you specify otherwise. If none of your policy beneficiaries has survived the insured person, we pay the death proceeds to you or to your estate, as owner.

You may name new beneficiaries during the insured person's lifetime. We pay death proceeds to the beneficiaries whom you have most recently named according to our records. We do not make payments to multiple sets of beneficiaries. The designation of certain beneficiaries may have tax consequences. See Other, page 52.

Collateral Assignment

You may assign your policy by sending written notice to us. After we record the assignment, your rights as owner and the beneficiaries' rights (unless the beneficiaries were made irrevocable beneficiaries under an earlier assignment) are subject to the assignment. It is your responsibility to make sure the assignment is valid. The transfer or assignment of a policy may have tax consequences. See Other, page 52.

Incontestability

After your policy has been in force and the insured person is alive for two years from your policy date, and from the effective date of any new segment, an increase in any other benefit or reinstatement, we will not question the validity of statements in your applicable application.

Misstatements of Age or Gender

Notwithstanding the Incontestability provision above, if the insured person's age or gender has been misstated, we adjust the death benefit to the amount which would have been purchased for the insured person's correct age and gender. We base the adjusted death benefit on the cost of insurance charges deducted from your account value on the

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last monthly processing date before the insured person's death, or as otherwise required by law.

If unisex cost of insurance rates apply, we do not make any adjustments for a misstatement of gender.

Suicide

If the insured person commits suicide (while sane or insane), within two years of your policy date, unless otherwise required by law, we limit death proceeds to:

• the total premium we receive to the time of death; minus
• outstanding policy loan and accrued loan interest; minus
• any partial withdrawals taken.

If the person insured under the policy changed, and the new insured person dies by suicide within two years of the change date, we limit the death proceeds to:

1. your net account value as of the change date; plus
2. premium we received since the change; minus
3. increases in the policy loan balance, accrued loan interest, and partial withdrawals since the change date.

We make a limited payment to the beneficiaries for a new segment or other increase if the insured person commits suicide (while sane or insane), within two years of the effective date of a new segment or within two years of an increase in any other benefit, unless otherwise required by law. The limited payment is equal to the cost of insurance and monthly expense charges which were deducted for the increase.

Transaction Processing

Generally, within seven days of when we receive all information required to process a payment, we pay:

• death proceeds
• net cash surrender value
• partial withdrawals
• loan proceeds.

We may delay processing these transactions if:

• the New York Stock Exchange ("NYSE") is closed for trading
• trading on the NYSE is restricted by the SEC
• the SEC declares that an emergency exists so that it is not reasonably possible to sell securities in the variable investment options or to determine the account value in the variable investment options
• a governmental body with jurisdiction over the separate account allows suspension by its order.

SEC rules and regulations generally determine whether or not these conditions exist.

We execute transfers among the variable investment options as of the valuation date of our receipt of your request at our customer service center.

We determine the death benefit as of the date of the insured person's death. The death proceeds are not affected by subsequent changes in the value of the variable investment options.

We may delay payment from our guaranteed interest division for up to six months, unless law requires otherwise, of surrender proceeds, withdrawal amounts or loan amounts. If we delay payment more than 30 days, we pay interest at our declared rate (or at a higher rate if required by law) from the date we receive your complete request.

Notification and Claims Procedures

Except for certain authorized telephone requests, we must receive in writing any election, designation, change, assignment or request made by the owner.

You must use a form acceptable to us. We are not liable for actions taken before we receive and record the written notice. We may require you to return your policy for policy changes or if you surrender it.

If the insured person dies while your policy is in force, please let us know as soon as possible. We will send you instructions on how to make a claim. As proof of the insured person's death, we may require proof of the deceased insured person's age and a certified copy of the death certificate.

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The beneficiaries and the deceased insured person's next of kin may need to sign authorization forms. These forms allow us to get information such as medical records of doctors and hospitals used by the deceased insured person.

Telephone Privileges

Telephone privileges are automatically provided to you and your agent/registered representative, unless you decline it on the application or contact our customer service center. Telephone privileges allow you or your agent/ registered representative to call our customer service center to:

• make transfers
• change premium allocations
• change your dollar cost averaging and automatic rebalancing programs
• request partial withdrawals
• request a policy loan.

Our customer service center uses reasonable procedures to make sure that instructions received by telephone are genuine. These procedures may include:

• requiring some form of personal identification
• providing written confirmation of any transactions
• tape recording telephone calls.

By accepting telephone privileges, you authorize us to record your telephone calls with us. If we use reasonable procedures to confirm instructions, we are not liable for losses from unauthorized or fraudulent instructions. We may discontinue this privilege at any time.

Non-participation

Your policy does not participate in the surplus earnings of ING Security Life.

Distribution of the Policies

The principal underwriter (distributor) for our policies is ING America Equities, Inc., a wholly owned subsidiary of ING Security Life. It is registered as a broker/dealer with the SEC and the NASD. We pay ING America Equities, Inc., under a distribution agreement.

We sell our policies through licensed insurance agents who are registered representatives of other broker/dealers including, but not limited to:

1. VESTAX Securities Corporation, an indirect affiliate;
2. Locust Street Securities, Inc., an indirect affiliate;
3. Multi-Financial Securities, Corp., an indirect affiliate;
4. IFG Network Securities, Inc., an indirect affiliate;
5. Financial Network Investment Corporation, an indirect affiliate;
6. Washington Square Securities, Inc., an indirect affiliate;
7. Guaranty Brokerage Services, Inc., an indirect affiliate;
8. AETNA Investment Services, LLC, an indirect affiliate;
9. PrimeVest Financial Services, Inc., an indirect affiliate;
10. Granite Investment Services, Inc., an indirect affiliate; and
11. Financial Northeastern Securities, Inc., an indirect affiliate.

All broker/dealers who sell this policy have entered into selling agreements with us. Under these selling agreements, we pay a distribution allowance to broker/dealers, who pay commissions to their agents/registered representatives who sell this policy.

During the first policy year, we may pay a distribution allowance of up to 12% (10% for policies issued based on simplified underwriting) of premium we receive up to target premium and lower thereafter.

Although it varies by policy, we estimate the typical first year compensation payable to a selling broker/dealer if a policy pays target premium to be

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$7.00 per $1,000 of stated death benefit ($6.00 per $1,000 for policies issued based on simplified underwriting).

Broker/dealers receive renewal payments (trails) of up to 0.15% of the average net account value beginning in the second policy month.

We pay wholesaler fees and marketing and training allowances. We may provide repayments or make sponsor payments for broker/dealers to use in sales contests for their registered representatives. We do not hold contests directly based on sales of this product. We do hold training programs from time to time at our own expense. We pay dealer concessions, wholesaling fees, other allowances and the costs of all other incentives or training programs from our resources which include sales charges.

Some broker/dealers receive a slightly lower distribution allowance because we provide them with greater marketing and administrative support. For sales of certain policies with reduced or waived sales and mortality and expense risk charges, distribution allowances and renewal payments may be reduced or eliminated.

Advertising Practices and Sales Literature

We may use advertisements and sales literature to promote this product, including:

• articles on variable life insurance and other information published in business or financial publications
• indices or rankings of investment securities
• comparisons with other investment vehicles, including tax considerations.

We may use information regarding the past performance of the variable investment options and investment portfolios. Past performance is not indicative of future performance of the variable investment options or investment portfolios and is not reflective of the actual investment experience of policyowners.

We may feature certain investment portfolios and their managers, as well as describe asset levels and sales volumes. We may refer to past, current, or prospective economic trends, and, investment performance or other information we believe may be of interest to our customers.

Settlement Provisions

You may take your net cash surrender value in other than one payment. Likewise, you may elect to have the beneficiaries receive the death proceeds other than in one payment, if you make this election during the insured person's lifetime. If you have not made this election, the beneficiaries may do so within 60 days after we receive proof of the insured person's death.

The investment performance of the variable investment options does not affect payments under these settlement options. Instead, interest accrues at a fixed rate based on the option you choose. Payment options are subject to our rules at the time you make your selection. Currently, a periodic payment must be at least $20 and the total proceeds must be $2,000 or more.

Option I:	Payouts for a Designated Period
Option II:	Life Income with Payouts Guaranteed for a Designated Period
Option III:	Hold at Interest
Option IV:	Payouts of a Designated Amount
Option V:	Other Options We Offer at the Time We Pay the Benefit

Administrative Information About the Policy

Voting Privileges

We invest the variable investment options' assets in shares of investment portfolios. We are the legal owner of the shares held in the separate account and we have the right to vote on certain issues. Among other things, we may vote on issues described in the fund's current prospectus or issues requiring a vote by shareholders under the Investment Company Act of 1940.

Even though we own the shares, we give you the opportunity to tell us how to vote the number of shares attributable to your policy. We count fractional shares. If you have a voting interest, we send you proxy material and a form on which to give us your voting instructions.

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Each investment portfolio share has the right to one vote. The votes of all investment portfolio shares are cast together on a collective basis, except on issues for which the interests of the portfolios differ. In these cases, voting is on a portfolio-by-portfolio basis.

Examples of issues that require a portfolio-by-portfolio vote are changes in the fundamental investment policy of a particular investment portfolio or approval of an investment advisory agreement.

We vote the shares in accordance with your instructions at meetings of investment portfolio shareholders. We vote any investment portfolio shares that are not attributable to policies and any investment portfolio shares for which the owner does not give us instructions, the same way we vote as if we did receive owner instructions.

We reserve the right to vote investment portfolio shares without getting instructions from policy owners if the federal securities laws, regulations or their interpretations change to allow this.

You may instruct us only on matters relating to the investment portfolios corresponding to those in which you have invested assets as of the record date set by the investment portfolio's Board for the portfolio's shareholders meeting. We determine the number of investment portfolio shares in each variable investment option for your policy by dividing your account value in that division by the net asset value of one share of the matching investment portfolio.

Material Conflicts

We are required to track events to identify material conflicts arising from using investment portfolios for both variable life and variable annuity separate accounts. The Boards of the investment portfolios, ING Security Life, and other insurance companies participating in the investment portfolios, have this same duty. There may be a material conflict if:

• state insurance law or federal income tax law changes
• investment management of an investment portfolio changes
• voting instructions given by owners of variable life insurance policies and variable annuity contracts differ.

The investment portfolios may sell shares to certain qualified pension and retirement plans qualifying under Code Section 401. These include cash or deferred arrangements under Code Section 401(k). Therefore, there is a possibility that a material conflict may arise between the interests of owners in general or between certain classes of owners; and these retirement plans or participants in these retirement plans.

If there is a material conflict, we have the duty to determine appropriate action including removing the portfolios involved from our variable investment options. We may take other action to protect policy owners. This could mean delays or interruptions of the variable operations.

When state insurance regulatory authorities require it, we may ignore voting instructions relating to changes in an investment portfolio's adviser or its investment policies. If we do ignore voting instructions, we give you a summary of our actions in our next semi-annual report to owners.

Under the Investment Company Act of 1940, we must get your approval for certain actions involving our separate account. In this case, you have one vote for every $100 of value you have in the variable investment options. We cast votes credited to amounts in the variable investment options, but not credited to policies in the same proportion as votes cast by owners.

Right to Change Operations

Subject to state and federal law limitations and the rules and regulations thereunder, we may, from time to time, make any of the following changes to our separate account with respect to some or all classes of policies:

• Change the investment objective.
• Offer additional variable investment options which will invest in investment portfolios we find appropriate for policies we issue.
• Eliminate variable investment options.
• Combine two or more variable investment options.
• Substitute a new investment portfolio for a portfolio in which the variable investment option currently invests. A substitution may become necessary if, in our judgment:
  » an investment portfolio no longer suits the purposes of your policy

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          » there is a change in laws or regulations
          » there is a change in an investment portfolio's investment objectives or restrictions
          » the investment portfolio is no longer available for investment
          » a substitution is deemed appropriate for some other reason

• Transfer assets related to your policy class to another separate account.
• Withdraw the separate account from registration under the Investment Company Act of 1940, as amended (the "1940 Act").
• Operate the separate account as a management investment company under the 1940 Act.
• Cause one or more variable investment options to invest in a mutual fund other than, or in addition to, the investment portfolios.
• Stop selling these policies.
• End any employer or plan trustee agreement with us under the agreement's terms.
• Limit or eliminate any voting rights for the separate account.
• Make any changes required by the 1940 Act or its rules or regulations.
• Close an investment option to new investments.

We will not make a change until it is effective with the SEC and approved by the appropriate state insurance departments, if necessary. We will notify you of changes. If you wish to transfer the amount you have in the affected investment option to another variable investment option or to the guaranteed interest division, you may do so free of charge. Just notify us at our customer service center.

Reports to Owners

At the end of each policy year we send a report to you that shows:

• your total net policy death benefit (your stated death benefit plus adjustable term insurance rider death benefit, if any)
• your account value
• your policy loan, if any, plus accrued interest
• your net cash surrender value
• your account transactions during the policy year showing net premium, transfers, deductions, loan amounts and withdrawals.

We send semi-annual reports with financial information on the investment portfolios, including a list of the investment holdings of each portfolio.

We send confirmation notices to you throughout the year for certain policy transactions such as partial withdrawals and loans.

CHARGES AND DEDUCTIONS

The amount of a charge may not correspond to the cost incurred by us to provide the service or benefit. For example, the sales charge may not cover all of our sales and distribution expenses. Some proceeds from other charges, including the mortality and expense risk charge or cost of insurance charges, may be used to cover such expenses.

Deductions from Premium

We treat payments we receive as premium if you do not have an outstanding loan and your policy is not in the continuation of coverage period. After we deduct certain charges from your payment, we add the remaining net premium to your policy.

Initial Sales Charge

We deduct a percentage from each premium payment to help cover the costs of distribution, preparing our sales literature, promotional expenses and other direct and indirect expenses to sell the policy.

We base the percentage on the length of time since your policy or a segment becomes effective:

Segment Charge Percentage
Policy or Segment Year	Up To Policy or Segment Target	Above Policy or Segment Target Premium
1-10 11+	11% 0%	0% 0%

<R>To determine your applicable sales charge, premium payments we receive after an increase in stated death benefit are allocated to your death benefit segments in the same proportion as the target premium for

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each segment bears to the total target premium of your stated death benefit.</R>

We may reduce or waive the sales charge for certain group, sponsored or wrap fee arrangements, or for corporate purchasers. See Group, Sponsored or Wrap Fee Arrangements, or Corporate Purchasers, page 48.

Tax Charges

We pay state and local taxes in almost all states. These taxes vary in amount from state to state and may vary from jurisdiction to jurisdiction within a state. Currently, state and local taxes range from 0% to 5%. We deduct 2.5% of each premium payment to cover these taxes. This rate approximates the average tax rate we expect to pay.

To cover our estimated costs for the federal income tax treatment of deferred acquisition costs we deduct 1.5% of each premium payment. This cost is determined solely by the amount of life insurance premium we receive.

We reserve the right to increase or decrease this charge for taxes if there are changes in the tax law, within limits set by state law. We also reserve the right to increase or decrease the charge for the federal income tax treatment of deferred acquisition costs based on any change in that cost to us.

Monthly Deductions from Account Value

We deduct charges from your account value on each monthly processing date until the policy anniversary nearest the insured person's 100^th birthday.

Mortality and Expense Risk Charge

Each month we deduct from your account value a percentage of the amount in the variable investment options for the mortality and expense risks we assume. This charge appears on your statement or confirmation.

This charge is assessed at the following monthly rates:

Account Value	1st Policy Year	Policy Years 2-10	Policy Years 11+
Less than $25,000	0.0625%	0.0625%	0.0250%
$25,000 to $250,000	0.0625%	0.0583%	0.0167%
More than $250,000	0.0625%	0.0542%	0.0083%

The annualized rates for the mortality and expense risk charge are:

Account Value	1st Policy Year	Policy Years 2-10	Policy Years 11+
Less than $25,000	0.75%	0.75%	0.30%
$25,000 to $250,000	0.75%	0.6996%	0.2004%
More than $250,000	0.75%	0.6504%	0.0996%

The mortality and expense risk charge is assessed each month at each account value level shown in the monthly table above. For example, an account value of $400,000 in the separate account in policy year three would result in a monthly mortality and expense risk charge of $25,000 multiplied by .0625%, plus $225,000 multiplied by .0583%, plus $150,000 multiplied by .0542%.

The mortality risk is that insured people, as a group, may live less time than we estimated. The expense risk is that the costs of issuing and administering the policies and in operating the variable investment options are greater than the amount we estimated.

The mortality and expense risk charge does not apply to your account value in the guaranteed interest division or the loan division.

We may reduce or waive the mortality and expense risk charge for certain group or sponsored arrangements, groups or individuals who purchase the policy through wrap fee arrangements or for corporate purchasers. See Group, Sponsored or Wrap Fee Arrangements, or Corporate Purchasers, page 48.

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Policy Charge

The policy charge is $13.00 per month for the first three policy years and $3.00 per month thereafter.

This charge compensates us for such costs as:

• application processing
• medical examinations
• establishment of policy records
• insurance underwriting costs.

Administrative Charge

We charge a per month administrative charge per $1,000 of stated death benefit (or target death benefit, if greater) as follows:

Issue Ages	Policy Years 1 - 5	Policy Years 6+
0 - 14	$0.038	$0.010
15 - 50	$0.043	$0.010
51 - 62	$0.049	$0.010
63 - 73	$0.054	$0.010
74 - 77	$0.060	$0.010
78 - 85	$0.065	$0.010
86 - 89	$0.070	$0.010
90	$0.076	$0.010

This charge applies to the first $5 million of death benefit. The rate per $1,000 of death benefit is based on the length of time the policy has been in force.

This charge is designed to compensate us for ongoing costs such as:

• premium billing and collections.
• claim processing
• policy transactions
• record keeping
• reporting and communications with policy owners
• other expenses and overhead.

Cost of Insurance Charge

The cost of insurance charge compensates us for the ongoing costs of providing insurance coverage, including the expected cost of paying death proceeds that may be more than your account value.

The cost of insurance charge is equal to our current monthly cost of insurance rate multiplied by the net amount at risk for each segment of your death benefit. We calculate the net amount at risk monthly, on the monthly processing date. For the base death benefit, the net amount at risk is calculated using the difference between the current base death benefit and your account value. We determine your account value after we deduct your policy and rider charges due on that date other than cost of insurance charges.

If your base death benefit on a monthly processing date increases as a requirement of the federal income tax law definition of life insurance, the net amount at risk for your base death benefit for that month also increases. Because your target death benefit did not change, the net amount at risk for your adjustable term insurance rider decreases. The amount of your cost of insurance charge varies from month to month as a result of changes in your net amount at risk, changes in the death benefit and the increasing age of the insured person. We allocate the net amount at risk to segments in the same proportion that each segment has to the total stated death benefit for all coverage as of the monthly processing date.

We base your current cost of insurance rates on the insured person's age, gender and premium class on the policy and each segment date. For fully underwritten policies, we make lower cost of insurance rates available for total death benefit amounts of $250,000 or more.

We apply unisex rates where appropriate under the law. This currently includes the state of Montana and policies purchased by employers and employee organizations in connection with employment-related insurance or benefit programs.

Separate cost of insurance rates apply to each segment of the base death benefit, and your riders.

The cost of insurance or rider charges for a class of insured persons may change from time to time. We base the new charge on changes in expectations about:

• investment earnings
• mortality
• the time policies remain in effect
• expenses
• taxes.

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These rates are never more than the guaranteed maximum rates shown in your policy. The guaranteed maximum rates are based on the 1980 Commissioner's Standard Ordinary Sex Distinct Mortality Table. The guaranteed maximum rates for the adjustable term insurance rider are 125% of the levels in the Commissioner's Standard Ordinary Sex Distinct Mortality Table.

The maximum rates for the initial and each new segment will be printed in your policy schedule pages.

There are no cost of insurance charges during the continuation of coverage period.

Rider Charges

On each monthly processing date, we deduct the cost of your riders. Rider charges do not include those which are charged as a cost of insurance. See Riders, page 28.

Policy Transaction Fees

We charge fees for certain transactions under your policy. We deduct these fees from the variable and guaranteed interest divisions pro rata to the account value in each.

Excess Illustration Fee

Your first policy illustration in each policy year is free. After that, we assess a fee of $25 per illustration.

Partial Withdrawal Fee

We deduct a service fee of 2% of the requested partial withdrawal (but not more than $25) from your account value for each partial withdrawal. See Partial Withdrawals, page 36.

How We Deduct Charges, Loans and Partial Withdrawals

	Monthly Charges: Cost of Insurance Charges, Rider Charges, Administrative Fees	Policy Transactions and Fees: Excess Illustration Fee, Loans and Partial Withdrawals
Choice	May choose a designated deduction investment option, including the guaranteed interest division	May choose any investment option or combination of investment options
Default	Proportionally among variable investment options and guaranteed interest division	Proportionally among variable investment options and guaranteed interest division

Other Charges

Under current law, we pay no tax on investment income and capital gains included in variable life insurance policy reserves. So no charge is currently made for our federal income taxes. If the tax law changes and we have federal income tax chargeable to the variable investment options, we may make such a charge in the future.

Group, Sponsored or Wrap Fee Arrangements, or Corporate Purchasers

Individuals, corporations or other institutions may purchase this policy. For group or sponsored arrangements (including employees and certain family members of employees of ING Security Life, its affiliates and appointed sales agents), corporate purchasers, groups or individuals who purchase the policy through wrap fee arrangements, or special exchange programs which we may offer from time to time, we may reduce or waive the:

• administrative charge
• minimum death benefit
• minimum annual premium
• target premium
• sales charges
• cost of insurance charges
• refund of sales charges
• mortality and expense risk charges
• other charges normally assessed.

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We reduce or waive these items based on expected economies. Our sales, administration and mortality costs generally vary with the size and stability of the group, among other factors. We take all these factors into account when we reduce charges. A group, sponsored or wrap fee arrangement must meet certain requirements to qualify for reduced charges. We make reductions to charges based on our rules in effect when we approve a policy application. We may change these rules from time to time.

Group arrangements include those in which there is a trustee, an employer or an association. The group may purchase multiple policies covering a group of individuals on a group basis or endorse a policy to a group of individuals. Sponsored arrangements include those in which an employer or association allows us to offer policies to its employees or members on an individual basis.

Each sponsored arrangement or corporation may have different group premium payments and premium requirements.

We will not unfairly discriminate in any variation in the administrative charge, or other charges, fees and privileges. These variations are based on differences in costs or services.

TAX CONSIDERATIONS

The following summary provides a general description of the federal income tax considerations associated with the policy and does not purport to be complete or to cover all tax situations. This discussion is not intended as tax advice. Counsel or other competent tax advisers should be consulted for more complete information. This discussion is based upon our understanding of the present federal income tax laws. No representation is made as to the likelihood of continuation of the present federal income tax laws or as to how they may be interpreted by the Internal Revenue Service.

Tax Status of the Policy

This policy is designed to qualify as a life insurance contract under the Internal Revenue Code. All terms and provisions of the policy shall be construed in a manner which is consistent with that design. In order to qualify as a life insurance contract for federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under federal tax law, a policy must satisfy certain requirements which are set forth in the Internal Revenue Code Section 7702. While there is very little guidance as to how these requirements are applied, we believe it is reasonable to conclude that our policies satisfy the applicable requirements. If it is subsequently determined that a policy does not satisfy the applicable requirements, we will take appropriate and reasonable steps to bring the policy into compliance with such requirements and we reserve the right to restrict policy transactions or modify your policy in order to do so.

Section 7702 provides that if one of two alternate tests is met, a policy will be treated as a life insurance policy for federal income tax purposes. These tests are referred to as the "cash value accumulation test" and the "guideline premium/cash value corridor test."

Under the cash value accumulation test, there is no limit to the amount that may be paid in premiums as long as there is enough death benefit in relation to account value at all times. The death benefit at all times must be at least equal to an actuarially determined factor, depending on the insured person's age, sex and premium class at any point in time, multiplied by the account value. See Appendix C, page 236, for a table of the Cash Value Accumulation Test factors.

The guideline premium/cash value corridor test provides for a maximum premium in relation to the death benefit and a minimum "corridor" of death benefit in relation to account value. In most situations, the death benefit that results from the guideline premium/cash value corridor test will ultimately be less than the amount of death benefit required under the cash value accumulation test. See Appendix B, page 234, for a table of the Guideline Premium/Cash Value Corridor Test factors.

We will at all times strive to assure that the policy meets the statutory definition which qualifies the policy as life insurance for federal income tax purposes. See Tax Treatment of Policy Death Benefits, page 50.

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Diversification and Investor Control Requirements

In addition to meeting the Code Section 7702 tests, Code Section 817(h) requires separate account investments, such as our separate account, to be adequately diversified. The Treasury has issued regulations which set the standards for measuring the adequacy of any diversification. To be adequately diversified, each variable investment option must meet certain tests. If your variable life policy is not adequately diversified under these regulations, it is not treated as life insurance under Code Section 7702. You would then be subject to federal income tax on your policy income as you earn it. Our variable investment options' investment portfolios have represented that they will meet the diversification standards that apply to your policy.

In certain circumstances, you, as owner of a variable life insurance policy, may be considered the owner for federal income tax purposes of the separate account assets used to support your policy. Any income and gains from the separate account assets are includable in the gross income from your policy under these circumstances. The IRS has stated in published rulings that a variable contract owner is considered the owner of separate account assets if the contract owner has "indicia of ownership" in those assets. "Indicia of ownership" includes the ability to exercise investment control over the assets.

Your ownership rights under your policy are similar to, but different in some ways from those described by the IRS in rulings in which it determined that policy owners are not owners of separate account assets. For example, you have additional flexibility in allocating your premium payments and in your policy values. These differences could result in the IRS treating you as the owner of a pro rata share of the separate account assets. We do not know what standards will be set forth in the future, if any, in Treasury regulations or rulings. We reserve the right to modify your policy, as necessary, to try to prevent you from being considered the owner of a pro rata share of the separate account assets, or to otherwise qualify your policy for favorable tax treatment.

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

Tax Treatment of Policy Death Benefits

We believe that the death benefit under a policy is generally excludable from the gross income of the beneficiary(ies) under section 101(a)(1) of the Code. However, there are exceptions to this general rule. Additionally, federal and local transfer, estate inheritance and other tax consequences of ownership or receipt of policy proceeds depend on the circumstances of each policy owner or beneficiary(ies). A tax adviser should be consulted about these consequences.

Modified Endowment Contracts

Under the Internal Revenue Code, certain life insurance contracts are classified as "modified endowment contracts" and are given less favorable tax treatment than other life insurance contracts. Due to the flexibility of the policies as to premiums and benefits, the individual circumstances of each policy will determine whether or not it is classified as a modified endowment contract. The rules are too complex to be summarized here, but generally depend on the amount of premiums we receive during the first seven policy years. Certain changes in a policy after it is issued, such as reduction in benefits, could also cause it to be classified as a modified endowment contract. A current or prospective policy owner should consult with a competent adviser to determine whether or not a policy transaction will cause the policy to be classified as a modified endowment contract.

If a policy becomes a modified endowment contract, distributions that occur during the 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.

Multiple Policies

All modified endowment contracts that are issued by us (or our affiliates) to the same policy owner during any calendar year are treated as one modified endowment contract for purposes of determining the

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amount includable in the policy owner's income when a taxable distribution occurs.

Distributions Other than Death Benefits

Generally, the policy owner will not be taxed on any of the policy account value until there is a distribution. When distributions from a policy occur, or when loan amounts are taken from or secured by a policy, the tax consequences depend on whether or not the policy is a "modified endowment contract."

Special rules also apply if you are subject to the alternative minimum tax. You should consult a tax adviser if you are subject to the alternative minimum tax.

Modified Endowment Contracts

Once a policy is classified as a modified endowment contract, the following tax rules apply both prospectively and to any distributions made in the prior two years:

1. All distributions other than death benefits, including distributions upon surrender and withdrawals, from a modified endowment contact will be treated first as distributions of gain taxable as ordinary income and as tax-free recovery of the policy owner's investment in the policy only after all gain has been distributed.
2. Loan amounts taken from or secured by a policy classified as a modified endowment contract are treated as distributions and taxed first as distributions of gain taxable as ordinary income and as tax-free recovery of the policy owner's investment in the policy only after all gain has been distributed.
3. A 10% additional income tax penalty may be imposed on the distribution amount subject to income tax. This tax penalty generally does not apply to distributions (a) made on or after the date on which the taxpayer attains age 59 ½, (b) which are attributable to the taxpayer's becoming disabled (as defined in the Internal Revenue Code), or (c) which are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his or her beneficiary. Consult a tax adviser to determine whether or not you may be subject to this penalty tax.

Policies That Are Not Modified Endowment Contracts

Distributions other than death benefits from a policy that is not classified as a modified endowment contract are generally treated first as a recovery of the policy owner's investment in the policy. Only after the recovery of all investment in the policy, is there taxable income. However, certain distributions which must be made in order to enable the policy to continue to qualify as a life insurance contract for federal income tax purposes, if policy benefits are reduced during the first fifteen policy years, may be treated in whole or in part as ordinary income subject to tax.

Loan amounts from or secured by a policy that is not a modified endowment contract are generally not taxed as distributions. However, the tax consequences of such a loan that is outstanding after policy year 10 are uncertain and a tax advisor should be consulted about such loans. Finally, neither distributions from, nor loan amounts from or secured by, a policy that is not a modified endowment contract are subject to the 10% additional income tax.

Investment in the Policy

Your investment in the policy is generally the total of your aggregate premiums. When a distribution is taken from the policy, your investment in the policy is reduced by the amount of the distribution that is tax free.

Policy Loans

In general, interest on a policy loan will not be deductible. Moreover, the tax consequences associated with a preferred loan available in the policy are uncertain. Before taking out a policy loan, you should consult a tax adviser as to the tax consequences.

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If a loan from a policy is outstanding when the policy is canceled or lapses, then the amount of the outstanding indebtedness will be added to the amount treated as a distribution from the policy and will be taxed accordingly.

Accelerated Death Benefit Rider

We believe that payments under the accelerated death benefit rider should be fully excludable from the gross income of the beneficiary if the beneficiary is the insured under the policy. (See Accelerated Death Benefit Rider, page 30, for more information about this rider.) However, you should consult a qualified tax adviser about the consequences of adding this rider to a policy or requesting payment under this rider.

Continuation of Policy Beyond Age 100

The tax consequences of continuing the policy beyond the policy anniversary nearest the insured person's 100^th birthday are unclear. You should consult a tax adviser if you intend to keep the policy in force beyond the policy anniversary nearest the insured person's 100^th birthday.

Section 1035 Exchanges

Code Section 1035 generally provides that no gain or loss shall be recognized on the exchange of one life insurance policy for another life insurance policy or for an endowment or annuity contract. We accept 1035 exchanges with outstanding loans. Special rules and procedures apply to Section 1035 exchanges. If you wish to take advantage of Section 1035, you should consult your tax adviser.

Tax-exempt Policy Owners

Special rules may apply to a policy that is owned by a tax-exempt entity. Tax-exempt entities should consult their tax adviser regarding the consequences of purchasing and owning a policy. These consequences could include an effect on the tax-exempt status of the entity and the possibility of the unrelated business income tax.

Possible Tax Law Changes

Although the likelihood of legislative action is uncertain, there is always the possibility that the tax treatment of the policy could be changed by legislation or otherwise. You should consult a tax adviser with respect to legislative developments and their effect on the policy.

Changes to Comply with the Law

So that your policy continues to qualify as life insurance under the Code, we reserve the right to refuse to accept all or part of your premium payments or to change your death benefit. We may refuse to allow you to make partial withdrawals that would cause your policy to fail to qualify as life insurance. We also may make changes to your policy or its riders or take distributions from your policy to the degree that we deem necessary to qualify your policy as life insurance for tax purposes.

If we make any change of this type, it applies the same way to all affected policies.

Any increase in your death benefit will cause an increase in your cost of insurance charges.

Other

The policy is not available for sale to and cannot be acquired with funds that are assets of (i) an employee benefit plan as defined in section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and that is subject to Title I of ERISA; (ii) a plan described in section 4975(e)(1) of the Internal Revenue Code of 1986 or (iii) an entity whose underlying assets include plan assets by reason of the investment by an employee benefit plan or other plan in such entity within the meaning of 29 C.F.R. Section 2510.3-101 or otherwise.

Policy owners may use our policies in various other arrangements, including:

• non-qualified deferred compensation or salary continuance plans
• split dollar insurance plans
• executive bonus plans
• retiree medical benefit plans
• other plans.

The tax consequences of these plans may vary depending on the particular facts and circumstances of each arrangement. If you want to use any of your

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policies in this type of arrangement, you should consult a qualified tax adviser regarding the tax issues of your particular arrangement.

In recent years, Congress has adopted new rules relating to life insurance owned by businesses. Any business contemplating the purchase of a new policy or a change in an existing policy should consult a tax adviser.

The IRS requires us to withhold income taxes from any portion of the amounts individuals receive in a taxable transaction. We do not withhold income taxes if you elect in writing not to have withholding apply. If the amount withheld for you is insufficient to cover income taxes, you may have to pay income taxes and possibly penalties later.

The transfer of the policy or designation of a beneficiary may have federal, state and/or local transfer and inheritance tax consequences, including the imposition of gift, estate and generation-skipping transfer taxes. For example the transfer of the policy to, or the designation as a beneficiary of, or the payment of proceeds to a person who is assigned to a generation which is two or more generations below the generation assignment of the policy owner may have generation skipping transfer tax consequences under federal tax law. The individual situation of each policy owner or beneficiary will determine the extent, if any, to which federal, state and local transfer and inheritance taxes may be imposed and how ownership or receipt of policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation skipping and other taxes.

You should consult qualified legal or tax advisers for complete information on federal, state, local and other tax considerations.

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ADDITIONAL INFORMATION

Directors and Officers

Set forth below is information regarding the directors and principal officers of Security Life of Denver Insurance Company. Security Life's address, and the business address of each person named, except as noted with one or two asterisks (*/**), is Security Life Center, 1290 Broadway, Denver, Colorado 80203-5699. The business address of each person denoted with one asterisk (*) is 5780 Powers Ferry Road, Atlanta, Georgia 30327-4390. The business address of each person denoted with two asterisks (**) is 20 Washington Avenue South, Minneapolis, MN 55401.

Name and Principal Business and Address	Position and Offices with Security Life of Denver Insurance Company
Robert C. Salipante**	Chief Executive Officer, Director
Wayne R. Huneke*	Chief Financial Officer, Director
Mark A. Tullis	Director
P. Randall Lowery	Director
Thomas J. McInerney	Director
Chris D. Schreier**	President
James L. Livingston, Jr.	Executive Vice President
Douglas W. Campbell	Senior Vice President, Agency Sales
Paula Cludray-Engelke**	Secretary
Eric G. Banta	Assistant Secretary
Rita J. Kummer	Assistant Secretary

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Regulation

We are regulated and supervised by the Division of Insurance of the Department of Regulatory Agencies of the State of Colorado which periodically examines our financial condition and operations. In addition, we are subject to the insurance laws and regulations in every jurisdiction in which we do business. As a result, the provisions of this policy may vary somewhat from jurisdiction to jurisdiction.

We are required to submit annual statements, including financial statements, of our operations and finances to the insurance departments of the various jurisdictions in which we do business to determine solvency and compliance with state insurance laws and regulations.

We are also subject to various federal securities laws and regulations.

Legal Matters

The legal matters in connection with the policy described in this prospectus and certain matters relating to the federal securities laws have been passed on by Counsel of ING Security Life.

Legal Proceedings

ING Security Life, as an insurance company, is ordinarily involved in litigation. We do not believe that any current litigation is material to ING Security Life's ability to meet its obligations under the policy or to the separate account and we do not expect to incur significant losses from such actions. ING America Equities, Inc., the principal underwriter and distributor of the policy, is not engaged in any litigation of any material nature.

Experts

<R>The statutory basis financial statements of Security Life of Denver Insurance Company at December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, and the financial statements of the Security Life Separate Account L1 at December 31, 2000, and for each of the three years in the period ended December 31, 2000, appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. Other financial statements included in the prospectus are unaudited.</R>

Actuarial matters in this prospectus have been examined by James L. Livingston, Jr., F.S.A., M.A.A.A., who is Executive Vice President of ING Security Life. His opinion on actuarial matters is filed as an exhibit to the Registration Statement we filed with the SEC.

Registration Statement

We have filed a Registration Statement relating to the separate account and the variable life insurance policy described in this prospectus with the SEC. The Registration Statement, which is required by the Securities Act of 1933, includes additional information that is not required in this prospectus under the rules and regulations of the SEC. The additional information may be obtained from the SEC's principal office in Washington, DC. There is a charge for this material.

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FINANCIAL STATEMENTS

<R>The statutory-basis financial statements of Security Life of Denver Insurance Company ("Security Life") at December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, are prepared in conformity with accounting practices prescribed or permitted by the Division of Insurance of the Department of Regulatory Agencies of the State of Colorado (Colorado Division of Insurance), which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States, and start on page 57. The financial statements included for the Security Life Separate Account L1 at December 31, 2000, and for each of the three years in the period ended December 31, 2000, are prepared in accordance with accounting principles generally accepted in the United States and represent those divisions that had commenced operations by that date. The financial statements of Security Life, as well as the financial statements included for the Security Life Separate Account L1 referred to above, have been audited by Ernst & Young LLP. The financial statements of Security Life should be distinguished from the financial statements of the Security Life Separate Account L1 and should be considered only as bearing upon the ability of Security Life to meet its obligations under the policies. They should not be considered as bearing upon the investment experience of the divisions of Security Life Separate Account L1. Other financial statements included in the prospectus are unaudited.

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Security Life of Denver Insurance Company
Financial Statements -- Statutory Basis
Years ended December 31, 2000, 1999, and 1998
with Report of Independent Auditors

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Security Life of Denver Insurance Company

Financial Statements - Statutory Basis

Years ended December 31, 2000, 1999 and 1998

Contents

Report of Independent Auditors      59

Audited Financial Statements - Statutory Basis

Balance Sheets - Statutory Basis     60
Statements of Operations - Statutory Basis     62
Statements of Changes in Capital and Surplus - Statutory Basis     64
Statements of Cash Flow - Statutory Basis     65
Notes to Financial Statements - Statutory Basis     67

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Report of Independent Auditors

Board of Directors and Stockholder
Security Life of Denver Insurance Company

We have audited the accompanying statutory-basis balance sheets of Security Life of Denver Insurance Company (a wholly owned subsidiary of ING America Insurance Holdings, Inc.) as of December 31, 2000 and 1999, and the related statutory-basis statements of operations, changes in capital and surplus, and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, the Company presents its financial statements in conformity with accounting practices prescribed or permitted by the Division of Insurance of the Department of Regulatory Agencies of the State of Colorado (Colorado Division of Insurance), which practices differ from accounting principles generally accepted in the United States. The variances between such practices and accounting principles generally accepted in the United States are described in Note 1. The effects on the financial statements of these variances are not reasonably determinable but are presumed to be material.

In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States, the financial position of Security Life of Denver Insurance Company at December 30, 2000 and 1999 or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2000.

However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Security Life of Denver Insurance Company at December 31, 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting practices prescribed or permitted by the Colorado Division of Insurance.

March 23, 2001

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Security Life of Denver Insurance Company

Balance Sheets--Statutory Basis

(In Thousands)

	September 30, 2001	December 31
		2000	1999
Admitted assets	(Unaudited)
Cash and invested assets:
Bonds	$   6,601,832	$4,573,658	$3,418,381
Preferred stocks	12,819	13,524	2,560
Common stocks	19,112	15,483	4,977
Subsidiaries	88,870	85,324	77,127
Mortgage loans	2,191,673	1,672,169	983,087
Real estate, less accumulated depreciation          (2001 - $11,469; 2000 - $10,961;           1999 - $10,069)	33,702	34,066	31,363
Policy loans	1,056,246	992,911	943,185
Other invested assets	58,530	42,926	35,666
Cash and short-term investments	354,643	203,664	226,054
Total cash and invested assets	10,417,427	7,633,725	5,722,400
Deferred and uncollected premiums, less loading     (2001 - $995; 2000 - $1,814; 1999 - $2,684)	119,891	135,041	101,343
Accrued investment income	115,864	95,887	75,101
Reinsurance balances recoverable	863,261	54,559	43,179
Data processing equipment, less accumulated     depreciation (2001 - $1,386; 2000 - $1,340;     1999 - $8,381)	171	216	202
Indebtedness from related parties	35,769	69,338	42,451
Federal income tax recoverable	63,436	32,108	25,626
Separate account assets	772,267	799,966	644,975
Other assets	13,894	14,902	15,930
Total admitted assets	$12,401,980	$8,835,742	$6,671,207

Strategic Investor   			60

	September 30, 2001	December 31
		2000	1999
	(Unaudited)	(In Thousands, except share amounts)
Liabilities and capital and surplus
Liabilities:
Policy and contract liabilities:
Life and annuity reserves	$    6,193,466	$5,247,418	$4,924,746
Accident and health reserves	23	23	11
Deposit type contracts	3,877,860	-	-
Guaranteed investment contracts	-	1,685,391	335,507
Policyholders' funds	100,482	71,669	91,920
Dividends left on deposit	8,800	8,748	8,647
Dividends payable	4,129	2,755	2,626
Unpaid claims	245,875	182,051	126,172
Total policy and contract liabilities	10,430,635	7,198,055	5,489,629
Accounts payable and accrued expenses	206,494	126,512	86,580
Reinsurance balances due	13,951	15,520	14,565
Indebtedness to related parties	15,000	8,016	18,329
Litigation reserve	18,912	20,449	37,538
Asset valuation reserve	70,071	52,125	29,875
Interest maintenance reserve	-	-	1,523
Borrowed money	228,673	127,993	15,200
Other liabilities	131,833	(4,226)	(25,008)
Separate account liabilities	772,267	799,966	644,975
Total liabilities	11,887,836	8,344,410	6,313,206
Commitments and contingencies
Capital and surplus:
Common stock, $20,000 par value:
Authorized - 149 shares
Issued and outstanding - 144 shares	2,880	2,880	2,880
Surplus notes	165,032	184,259	100,000
Paid-in and contributed surplus	435,562	435,562	374,562
Unassigned deficit	(89,330)	(131,369)	(119,441)
Total capital and surplus	514,144	491,332	358,001
Total liabilities and capital and surplus	$ 12,401,980	$8,835,742	$6,671,207

See accompanying notes - statutory basis.

Strategic Investor   			61

Security Life of Denver Insurance Company

Statements of Operations--Statutory Basis
(In Thousands)

	September 30, 2001	Year ended December 31
		2000	1999	1998
	(Unaudited)
Premiums and other revenues:
Life, annuity, and accident and health          premiums	$    1,788,490	$2,959,593	$1,459,361	$1,130,674
Policy proceeds and dividends left on          deposit	15	388	651	515
Net investment income	452,953	474,021	387,685	349,605
Amortization of interest maintenance          reserve	531	670	2,358	3,793
Commissions, expense allowances and     reserve adjustments on reinsurance     ceded	1,501	9,832	11,331	13,255
Considerations and reserve allowances on     modified coinsurance	4,491	2,632	3,670	945
Total premiums and other revenues	2,247,981	3,447,136	1,865,056	1,498,787
Benefits paid or provided:
Death benefits	272,281	316,167	273,368	270,537
Annuity benefits	9,642	11,782	24,573	10,769
Surrender benefits	204,191	258,858	229,434	198,988
Interest on policy or contract funds	104,061	64,719	17,473	13,832
Accident and health benefits	2,902	93	2,235	3,699
Guaranteed investment contract         withdrawals	-	1,072,574	12,186	-
Life contract withdrawals	951,798	-	-	-
Other benefits	995	17,198	13,612	17,750
Increase in life, annuity, and accident and     health reserves	194,623	320,721	491,978	581,110
Increase in liability for guaranteed     investment contracts	-	721,725	335,507	-
Net transfers to separate accounts	129,817	256,538	78,988	65,738
Total benefits paid or provided	1,870,310	3,040,375	1,479,354	1,162,423
Insurance expenses:
Commissions	186,512	242,998	222,005	199,786
General expenses	91,263	130,962	104,808	96,891
Insurance taxes, licenses and fees,          excluding federal income taxes	10,474	23,103	23,861	23,121
Total insurance expenses	288,249	397,063	350,674	319,798
Gain from operations before policyholder     dividends, federal income taxes and net     realized capital gains	89,422	9,698	35,028	16,566

Strategic Investor   			62

Security Life of Denver Insurance Company

Statements of Operations--Statutory Basis (continued)
(In Thousands)

	September 30, 2001	Year ended December 31
		2000	1999	1998
	(Unaudited)
Dividends to policyholders	2,560	2,546	2,594	2,399
Gain from operations before federal income     taxes and net realized capital losses	86,862	7,152	32,434	14,167
Federal income taxes	54,406	(1,339)	8,613	2,371
Gain from operations before net realized     capital losses	32,456	8,491	23,821	11,796
Net realized capital gains (losses) net of     income taxes (2001 - $5,806; 2000 -     $(7,916); 1999 - $(15,108), 1998-     $2,001) and excluding net transfers to the     interest maintenance reserve (2001 -     $8,487; 2000 - $(18,289); 1999 -     $(19,866); 1998 - $8,549)	(10,017)	3,589	(8,194)	(4,834)
Net income	$     22,439	$     12,080	$     15,627	$     6,962

See accompanying notes - statutory basis.

Strategic Investor   			63

Security Life of Denver Insurance Company

Statements of Changes in Capital and Surplus--Statutory Basis
(In Thousands)

	September 30, 2001	Year ended December 31
		2000	1999	1998
	(Unaudited)
Common stock:
Balance at beginning and end of year	$     2,880	$    2,880	$     2,880	$     2,880
Surplus note:
Balance at beginning of year	$ 184,259	$ 100,000	$ 100,000	$   75,000
Increase (decrease) in surplus note	(19,227)	84,259	-	25,000
Balance at end of year	$ 165,032	$ 184,259	$ 100,000	$ 100,000
Paid-in and contributed surplus:
Balance at beginning of year	$ 435,562	$ 374,562	$ 344,562	$ 344,562
Capital contributions	-	61,000	30,000	-
Balance at end of year	$ 435,562	$ 435,562	$ 374,562	$ 344,562
Unassigned deficit:
Balance at beginning of year	$(131,369)	$(119,441)	$(134,540)	$ (86,233)
Net income	22,439	12,080	15,627	6,962
Change in net unrealized capital gains or losses	1,847	12,101	(61)	7,839
Change in net deferred income tax	1,158	-	-	-
Decrease (increase) in nonadmitted assets	1,625	(11,048)	(7,336)	(28,686)
(Increase) decrease in liability for reinsurance in          unauthorized companies	( 915)	(393)	(550)	545
(Increase) decrease in asset valuation reserve	(17,947)	(22,250)	1,726	(6,084)
Increase in reserve valuation basis	-	-	-	(2,994)
Increase in litigation reserve, net of tax	-	-	-	(26,000)
Cession of existing risks, net of tax	-	(2,418)	127	12,591
Prior period adjustments	(8,054)	-	-	(12,480)
Change in accounting policy, net of tax	-	-	5,566	-
Change in accounting principle	41,886	-	-	-
Balance at end of year	$      (89,330)	$(131,369)	$(119,441)	$(134,540)
Total capital and surplus	$     514,144	$ 491,332	$ 358,001	$ 312,902

See accompanying notes - statutory basis.

Strategic Investor   			64

Security Life of Denver Insurance Company

Statements of Cash Flow--Statutory Basis
(In Thousands)

	September 30, 2001	Year ended December 31
		2000	1999	1998
	(Unaudited)
Operations
Premiums, policy proceeds, and other     considerations received, net of reinsurance     paid	$ 4,033,087	$2,910,602	$1,453,924	$1,128,910
Net investment income received	425,249	470,812	379,574	361,645
Commission and expense allowances     received on reinsurance ceded	1,501	9,831	9,246	10,709
Benefits paid	(1,466,686)	(1,691,985)	(558,572)	(494,981)
Net transfers to separate accounts	(139,957)	(225,694)	(101,948)	(96,273)
Insurance expenses paid	(293,043)	(361,130)	(337,254)	(325,688)
Dividends paid to policyholders	(1,186)	(2,417)	(2,562)	(2,317)
Federal income taxes received (paid)	(39,119)	11,961	(28,779)	(17,582)
Other revenues in excess of other (expenses)	189,818	611,646	(9,832)	11,734
Net cash provided by operations	2,709,664	1,733,626	803,797	576,157
Investments
Proceeds from sales, maturities, or     repayments
of investments:
Bonds	2,596,755	2,254,036	2,051,280	4,353,422
Preferred stocks	-	67	1,900	627
Common stocks	5,450	-	-	1,362
Mortgage loans	75,249	79,874	45,272	48,709
Other invested assets	51,802	106,724	310,554	362,419
Miscellaneous proceeds	(15,926)	11,213	-	9,836
Net proceeds from sales, maturities, or     repayments of investments	2,713,330	2,451,914	2,409,006	4,776,375
Cost of investments acquired:
Bonds	4,635,879	3,458,376	2,631,687	4,720,513
Preferred stocks	-	11,031	-	2,060
Common stocks	10,740	10,450	10	341
Mortgage loans	595,269	769,741	262,886	246,511
Real estate	145	3,653	189	98
Other invested assets	46,932	109,244	88,661	387,144
Miscellaneous (receipts) applications	-	23,155	(18,179)	8,516
Total cost of investments acquired	5,288,965	4,385,650	2,965,254	5,365,183
Net increase in policy loans	63,335	49,725	35,890	51,702
Net cash used in investment activities	(2,638,970)	(1,983,461)	(592,138)	(640,510)

Strategic Investor   			65

Security Life of Denver Insurance Company

Statements of Cash Flow--Statutory Basis (continued)
(In Thousands)

	September 30, 2001	Year ended December 31
		2000	1999	1998
	(Unaudited)
Financing and miscellaneous activities
Cash provided:
Capital and surplus paid-in	(19,228)	126,000	20,000	25,000
Borrowed money	100,681	112,792	15,200	-
Other sources	(1,168)	(11,347)	(50,565)	1,390
Net cash provided by (used in) financing and     miscellaneous activities	80,285	227,445	(15,365)	26,390
Net (decrease) increase in cash and short-     term investments	150,979	(22,390)	196,294	(37,963)
Cash and short-term investments:
Beginning of year	203,664	226,054	29,760	67,723
End of year	$354,643	$203,664	$226,054	$ 29,760

See accompanying notes - statutory basis.

Strategic Investor   			66

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis

December 31, 2000

1. Nature of Operations and Basis of Financial Reporting

Security Life of Denver Insurance Company (the Company) is a wholly owned subsidiary of ING America Insurance Holdings, Inc. (ING America). The Company focuses on three markets, the advanced market, reinsurance to other insurers and the investment products market. The life insurance products offered for the advanced market include wealth transfer and estate planning, executive benefits, charitable giving and corporate-owned life insurance. These products include traditional life, interest-sensitive life, universal life, and variable life. Operations are conducted almost entirely on the general agency basis and the Company is presently licensed in all states (approved for reinsurance only in New York), the District of Columbia and the U.S. Virgin Islands. In the reinsurance market, the Company offers financial security to clients through a mix of total risk management and traditional life insurance services. In the investment products market, the Company offers guaranteed investment contracts, funding agreements, and Trust notes to institutional buyers.

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the Division of Insurance of the Department of Regulatory Agencies of the State of Colorado (Colorado Division of Insurance), which practices differ from accounting principles generally accepted in the United States ("GAAP"). The most significant variances from GAAP are as follows:

Investments

Investments in bonds and mandatorily redeemable preferred stocks are reported at amortized cost or market value based on the National Association of Insurance Commissioners ("NAIC") rating; for GAAP, such fixed maturity investments are designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity investments are reported at amortized cost, and the remaining fixed maturity investments are reported at fair value with unrealized capital gains and losses reported in operations for those designated as trading and as a separate component of other comprehensive income in stockholder's equity for those designated as available-for-sale.

Investments in real estate are reported net of related obligations rather than on a gross basis. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset, and investment income and operating expenses include rent for the Company's occupancy of those properties. Changes between depreciated cost and admitted asset investment amounts are credited or charged directly to unassigned surplus rather than income.

Strategic Investor   			67

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Valuation Allowances

The asset valuation reserve (AVR) is determined by an NAIC-prescribed formula and is reported as a liability rather than as a valuation allowance or an appropriation of surplus. The change in AVR is reported directly to unassigned surplus.

Under a formula prescribed by the NAIC, the Company defers the portion of realized gains and losses on sales of fixed-income investments, principally bonds and mortgage loans attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity based on groupings of individual securities sold in five-year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets.

Realized gains and losses on investments are reported in operations net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pretax basis in the period that the asset giving rise to the gain or loss is sold and valuation allowances are provided when there has been a decline in value deemed other than temporary, in which case the provision for such declines is charged to income.

Policy Acquisition Costs

The costs of acquiring and renewing business are expensed when incurred. Under GAAP, acquisition costs related to traditional life insurance, to the extent recoverable from future policy revenues, are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, acquisition costs are amortized generally in proportion to the present value of expected gross margins from surrender charges and investment, mortality, and expense margins.

Benefit and Contract Reserves

Life policy and contract reserves under statutory accounting practices are calculated based upon both the net level premium and Commissioners' Reserve Valuation methods using statutory rates for mortality and interest. GAAP requires that policy reserves for traditional products be based upon the net level premium method utilizing reasonably conservative estimates of mortality, interest, and withdrawals prevailing when the policies were sold. For interest-sensitive products, the GAAP policy reserve is equal to the policy fund balance plus an unearned revenue reserve which reflects the unamortized balance of early year policy loads over renewal year policy loads.

Reinsurance

For business ceded to unauthorized reinsurers, statutory accounting practices require that reinsurance credits permitted by the treaty be recorded as an offsetting liability and charged against unassigned surplus. Such treatment is not required by GAAP. Statutory income recognized on certain reinsurance treaties representing financing arrangements is not recognized on a GAAP basis.

Strategic Investor   			68

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as required under GAAP.

Commissions allowed by reinsurers on business ceded are reported as income when received rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.

Subsidiaries

The accounts and operations of the Company's subsidiaries are not consolidated with the accounts and operations of the Company as required under GAAP.

Nonadmitted Assets

Certain assets designated as "nonadmitted," principally the difference between amortized cost and fair value of less-than-investment-grade bonds, agents' debit balances, furniture and equipment and deferred federal income tax recoverable, are excluded from the accompanying balance sheets and are charged directly to unassigned surplus.

Employee Benefits

For purposes of calculating the Company's postretirement benefit obligation, only vested participants and current retirees are included in the valuation. Under GAAP, active participants not currently vested are also included.

Investment-type Products

Revenues for investment-type products consist of the entire premium received and benefits represent the death benefits paid and the change in policy reserves. Under GAAP, premiums received in excess of policy charges are not recognized as premium revenue; benefits represent the excess of benefits paid over the policy account value and interest credited to the account values.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies.

Surplus Notes

Surplus notes are reported as a component of surplus. Under statutory accounting practices, no interest is recorded on the surplus notes until payment has been approved by the Colorado Division of Insurance. Under GAAP, surplus notes are reported as liabilities and the related interest is reported as a charge to earnings over the term of the note.

Strategic Investor   			69

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Statements of Cash Flows

Cash and short-term investments in the statements of cash flows represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding caption of cash and cash equivalents include cash balances and investments with initial maturities of three months or less.

Reconciliation to GAAP

The effects of the preceding variances from GAAP on the accompanying Statutory-basis financial statements have not been determined, but are presumed to be material.

Other significant accounting practices are as follows:

Investments

Bonds, preferred stocks, common stocks, short-term investments and derivative instruments are stated at values prescribed by the NAIC, as follows:

Bonds not backed by other loans are principally stated at amortized cost using the interest method.

Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method including anticipated prepayments. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities except for higher-risk asset backed securities, which are valued using the prospective method.

Redeemable preferred stocks are reported at cost or amortized cost or the lower of cost, amortized cost, or market value and nonredeemable preferred stocks are reported at market value or the lower of cost or market value as determined by the Securities Valuation Office of the NAIC ("SVO").

Common stocks are reported at market value as determined by the SVO and the related unrealized capital gains/(losses) are reported in unassigned surplus without any adjustment for federal income taxes.

The Company uses interest rate swaps, caps and floors, options and certain other derivatives as part of its overall interest rate risk management strategy for certain life insurance and annuity products. As the Company only uses derivatives for hedging purposes, the Company values all derivative instruments on a consistent basis with the hedged item. Upon termination, gains and losses on those instruments are included in the carrying values of the underlying hedged items and are amortized over the remaining lives of the hedged items as adjustments to investment income or benefits from the hedged items. Any unamortized gains or losses are recognized when the underlying hedged items are sold.

Strategic Investor   			70

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Interest rate swap contracts are used to convert the interest rate characteristics (fixed or variable) of certain investments to match those of the related insurance liabilities that the investments are supporting. The net interest effect of such swap transactions is reported as an adjustment of interest income from the hedged items as incurred.

Interest rate caps and floors are used to limit the effects of changing interest rates on yields of variable rate or short-term assets or liabilities. The initial cost of any such agreement is amortized to net investment income over the life of the agreement. Periodic payments that are receivable as a result of the agreements are accrued as an adjustment of interest income or benefits from the hedged items.

The Company's insurance subsidiaries are reported at their underlying statutory-basis net assets plus the admitted portion of goodwill, and the Company's noninsurance subsidiary is reported at the GAAP-basis of its net assets. The admitted portion of goodwill, which represents the excess of the purchase price over the statutory-basis net assets of the subsidiary at acquisition, is amortized on a straight-line basis over ten years. Dividends from subsidiaries are included in net investment income. The remaining net change in the subsidiaries' equity is included in the change in net unrealized capital gains or losses.

Mortgage loans are reported at unpaid principal balances, less allowance for impairments.

Policy loans are reported at unpaid principal balances.

Land is reported at cost. Real estate occupied by the company is reported at depreciated cost; other real estate is reported at the lower of depreciated cost or fair value. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties.

Dollar roll transactions are accounted for as collateral borrowings, where the amount borrowed is equal to the sales price of the underlying securities.

Short-term investments are reported at cost. Short-term investments include investments with maturities of less than one year at the date of acquisition.

Other invested assets are reported at amortized cost using the effective interest method. Other invested assets primarily consist of residual collateralized mortgage obligations and partnership interests.

Realized capital gains and losses are determined using the specific identification basis. Changes in market values of common stocks are reported as a change in unrealized gains or losses directly in unassigned surplus and, accordingly, have no effect on net income.

Strategic Investor   			71

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Aggregate Reserve for Life Policies and Contracts

Life, annuity, and accident and health reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash value or the amounts required by law. Interest rates range from 2% to 11.25%.

The Company waives the deduction of deferred fractional premiums upon the death of the insured. It is the Company's practice to return a pro rata portion of any premium paid beyond the policy month of death, although it is not contractually required to do so for certain issues.

The methods used in valuation of substandard policies are as follows:

1.	For Life, Endowment and Term policies issued substandard, the standard reserve during the premium-paying period is increased by 50% of the gross annual extra premium. Standard reserves are held on Paid-Up Limited Pay contracts.
2.	For reinsurance accepted:
	a.	with table rating, the reserve established is a multiple of the standard reserve corresponding to the table rating;
	b.	with flat extra premiums, the standard reserve is increased by 50% of the flat extra.

The amount of insurance in force for which the gross premiums are less than the net premiums, according to the standard of valuation required by the State of Colorado, is $61,062,274,000 at December 31, 2000. The amount of reserves for policies on which gross premiums are less than the net premiums is $783,259,000 at December 31, 2000.

The tabular interest has been determined from the basic data for the calculation of policy reserves for all direct ordinary life insurance and for the portion of group life insurance classified as group Section 79. The method of determination of tabular interest of funds not involving life contingencies is as follows: current year reserves, plus payments, less prior year reserves, less funds added.

Reinsurance

Reinsurance premiums, commissions, expense reimbursements, and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Reserves are based on the terms of the reinsurance contracts, and are consistent with the risks assumed. Premiums and benefits ceded to other companies have been reported as a reduction of premium revenue and benefits expense. Amounts applicable to reinsurance ceded for reserves and unpaid claim liabilities have been reported as reductions of these items, and expense allowances received in connection with reinsurance ceded have been reflected in operations.

Strategic Investor   			72

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Real Estate and Electronic Data Processing Equipment

Real estate and electronic data processing equipment are carried at cost less accumulated depreciation. Depreciation for major classes of assets is calculated on a straight-line basis over the estimated useful life.

Participating Insurance

Participating business approximates less than 1% of the Company's ordinary life insurance in force and 1.5% of premium income. The amount of dividends to be paid is determined annually by the Board of Directors. Amounts allocable to participating policyholders are based on published dividend projections or expected dividend scales. Dividends of $2,417,000, $2,562,000 and $2,317,000 were paid in 2000, 1999 and 1998, respectively.

Federal Income Taxes

Deferred federal income taxes have been recognized to reflect prepayment of taxes relating to significant timing differences between income reported for tax and financial statement purposes using assumptions that are both reasonable and conservative. The deferred tax asset has been nonadmitted as a charge against surplus.

Pension Plans

The Company provides noncontributory retirement plans for substantially all employees and certain agents. Pension costs are charged to operations as contributions are made to the plan. The Company also provides a contributory retirement plan for substantially all employees.

Nonadmitted Assets

Nonadmitted assets are summarized as follows:

	December
	2000	1999
	(In thousands)
Deferred federal income tax recoverable	$159,281	$169,893
Agents' debit balances	2,354	2,652
Furniture and equipment	4,308	4,168
Bonds in default	549	4,303
Disallowed Interest Maintenance Reserves	17,436	-
Other	4,910	714
Total nonadmitted assets	$188,838	$181,730

Changes in nonadmitted assets are generally reported directly in surplus as an increase or decrease in nonadmitted assets. Certain changes are reported directly in surplus as a change in unrealized capital gains or losses.

Strategic Investor   			73

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

1. Nature of Operations and Basis of Financial Reporting (continued)

Claims and Claims Adjustment Expenses

Claim expenses represent the estimated ultimate net cost of all reported and unreported claims incurred through December 31. The Company does not discount claim and claim adjustment expense reserves. Such estimates are based on actuarial projections applied to historical claim payment data. Such liabilities are considered to be reasonable and adequate to discharge the Company's obligations for claims incurred but unpaid as of December 31.

Cash Flow Information

Cash and short-term investments include cash on hand, demand deposits and short-term fixed maturity instruments (with a maturity of less than one year at date of acquisition).

The Company borrowed $1,387,826,000 and repaid $1,382,300,000 during 2000, borrowed $2,055,061,000 and repaid $2,039,861,000 during 1999, and borrowed $837,411,000 and repaid $837,411,000 during 1998. These borrowings were on a short-term basis, at an interest rate that approximated current money market rates and exclude borrowings from dollar roll transactions. Interest paid on borrowed money was $1,586,000, $2,180,000 and $4,500,000 during 2000, 1999 and 1998, respectively.

Separate Accounts

Separate accounts held by the Company represent funds held for the benefit of the Company's variable life and annuity policy and contract holders who bear all of the investment risk associated with the policies. All net investment experience, positive or negative, is attributed to the policy and contract holders' account values. The assets and liabilities of these accounts are carried at fair value.

Reserves related to the Company's mortality risk associated with these policies are included in life and annuity reserves. The operations of the separate accounts are not included in the accompanying statements of operations.

2. Permitted Statutory-Basis Accounting Practices

The Company prepares statutory-basis financial statements in accordance with accounting practices prescribed or permitted by the Colorado Division of Insurance. Currently, prescribed statutory accounting practices are interspersed throughout state insurance laws and regulations, NAIC's Accounting Practices and Procedures Manual and a variety of publications of the NAIC. "Permitted" statutory accounting practices encompass all accounting practices that are not prescribed; such practices may differ from state to state, and from company to company within a state, and may change in the future.

The NAIC has revised the Accounting Practices and Procedures Manual in a process referred to as Codification. The revised manual will be effective January 1, 2001. The State of Colorado has adopted the provisions of the revised manual. The revised manual has changed, to some extent, prescribed statutory accounting practices and will result in changes to the accounting practices that the Company uses to prepare its statutory-basis financial statements. The cumulative effect of changes in accounting principles adopted to

Strategic Investor   			74

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

2. Permitted Statutory-Basis Accounting Practices (continued)

conform to the revised Accounting Practices and Procedures Manual, will be reported as an adjustment to surplus as of January 1, 2001. Management believes the effect of these changes will not result in a significant reduction in the Company's statutory-basis capital and surplus as of adoption. (See Note 19).

The Company is required to identify those significant accounting practices that are permitted, and obtain written approval of the significant practices from the Colorado Division of Insurance.

Prescribed statutory reserve methodology does not fully encompass universal life-type products. The NAIC, however, has promulgated a Model Regulation regarding universal life reserves. The Colorado Division of Insurance has not adopted the regulation, but requires that reserves be held which are at least as great as those required by Colorado statutes. The NAIC Universal Life Model Regulation is used by the Company to provide reserves consistent with the principles of this article. Because the reserves satisfy the requirements prescribed by the State of Colorado for the valuation of universal life insurance, the Company is permitted to compute reserves in accordance with this model regulation.

3. Investments

The amortized cost and fair value of bonds and equity securities are as follows:

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In Thousands)
At December 31, 2000:
U.S. Treasury securities and obligations of     U.S. government corporations and     agencies	$     90,840	$    3,049	$     317	$    93,572
States, municipalities, and political         subdivisions	125	2	-	127
Public utilities securities	285,546	3,616	10,684	278,478
Corporate securities	2,269,006	45,861	67,427	2,247,440
Mortgage-backed securities	1,166,237	43,237	23,305	1,186,169
Other asset-backed securities	762,453	18,052	18,770	761,735
Total fixed maturities	4,574,207	113,817	120,503	4,567,521
Preferred stocks	13,524	3	-	13,527
Common stocks	12,853	2,630	-	15,483
Total equity securities	26,377	2,633	-	29,010
Total	$4,600,584	$116,450	$120,503	$4,596,531

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Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

3. Investments (continued)

	Amortized Cost	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In Thousands)
At December 31, 1999:
U.S. Treasury securities and obligations     of U.S. government corporations and     Agencies	$     54,461	$     42	$    5,112	$     49,391
States, municipalities, and political     Subdivisions	751	-	9	742
Public utilities securities	255,807	272	18,221	237,858
Debt securities issued by foreign     Governments	452	-	-	452
Corporate securities	1,338,680	3,801	71,739	1,270,742
Mortgage-backed securities	1,055,856	23,727	56,039	1,023,544
Other asset-backed securities	716,677	7,580	32,221	692,036
Total fixed maturities	3,422,684	35,422	183,341	3,274,765
Preferred stocks	2,560	329	-	2,889
Common stocks	2,404	2,573	-	4,977
Total equity securities	4,964	2,902	-	7,866
Total	$3,427,648	$38,324	$183,341	$3,282,631

	Amortized Cost	Fair Value
December 31, 2000	(In Thousands)
Maturity:
Due in 1 year or less	$             -	$             -
Due after 1 year through 5 years	676,919	682,616
Due after 5 years through 10 years	881,403	862,763
Due after 10 years	1,087,195	1,074,238
Mortgage-backed securities	1,166,237	1,186,169
Other asset-backed securities	762,453	761,735
Total	$4,574,207	$4,567,521

At December 31, 2000, investments in certificates of deposit, bonds, and mortgage loans, with an admitted asset value of $20,777,000, were on deposit with state insurance departments to satisfy regulatory requirements.

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Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

3. Investments (continued)

Reconciliation of bonds from amortized cost to carrying value as of December 31:

	2000	1999
	(In Thousands)
Amortized cost	$4,574,207	$3,422,684
Less nonadmitted bonds	549	4,303
Carrying value	$4,573,658	$3,418,381

The amortized cost and fair value of investments in bonds at December 31, 2000, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Proceeds from sales of investments in bonds and other fixed maturity interest securities were $2,254,036,000, $3,273,528,000 and $4,527,803,000 in 2000, 1999 and 1998, respectively. Gross gains of $31,736,000, $18,928,000 and $38,615,000 and gross losses of $54,352,000, $55,203,000 and $33,297,000 during 2000, 1999 and 1998, respectively, were realized on those sales. A portion of the gains realized in 2000, 1999 and 1998 has been deferred to future periods in the interest maintenance reserve.

Net realized gains (losses), before capital gains tax and interest maintenance reserve transfers and changes in net unrealized gains (losses), are summarized as follows:

	Capital Gains (Losses)			Net Capital Gain (Loss)
	Bonds	Stocks	Other
	(In Thousands)
2000:
Net realized	$(35,399)	$       -	$12,783	$(22,616)
Net unrealized	3,754	8,244	103	12,101
Total	$(31,645)	$8,244	$12,886	$(10,515)
1999:
Net realized	$(44,838)	$ 124	$1,546	$(43,168)
Net unrealized	(4,303)	4,078	174	(51)
Total	$(49,141)	$4,202	$1,720	$(43,219)
1998:
Net realized	$   5,318	$   165	$   233	$   5,716
Net unrealized	-	7,040	799	7,839
Total	$   5,318	$7,205	$1,032	$ 13,555

Strategic Investor   			77

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

3. Investments (continued)

Major categories of net investment income are summarized as follows:

	Year ended December 31
	2000	1999	1998
	(In Thousands)
Income:
Bonds	$316,733	$233,247	$216,972
Mortgage loans	101,617	66,456	51,173
Policy loans	67,909	59,085	56,767
Company-occupied property	2,154	2,313	2,252
Other	4,733	41,800	44,469
Total investment income	493,146	402,901	371,633
Investment expenses	(19,126)	(15,216)	(22,028)
Net investment income	$474,021	$387,685	$349,605

As part of its overall investment strategy, the Company has entered into agreements to purchase securities as follows:

	December 31
	2000	1999	1998
	(In Thousands)
Investment purchase commitments	$98,228	$140,600	$75,575

The Company also entered into dollar roll transactions to increase its return on investments and improve liquidity. Dollar rolls involve a sale of securities and an agreement to repurchase substantially the same securities as those sold. The dollar rolls are accounted for as short term collateralized financings and the repurchase obligation is reported in borrowed money. The repurchase obligation totaled $121,936,000 at December 31, 2000. Such borrowings averaged approximately $122,215,000 during the last three months of 2000 and were collateralized by investment securities with fair values approximately equal to the loan value. The primary risk associated with short-term collateralized borrowings is that the counterparty will be unable to perform under the terms of the contract. The Company's exposure is limited to the excess of the net replacement cost of the securities over the value of the short-term investments (such excess was not material at December 31, 2000). The Company believes the counterparties to the dollar roll agreements are financially responsible and that the counterpary risk is minimal

The Company has an outstanding liability for borrowed money in the amount of $5,926,875 which is due to an affiliate. The principal amount is due January 5, 2001. Interest at 6.75% is required to be paid at maturity.

The maximum and minimum lending rates for long-term mortgage loans during 2000 were 9.10% and 6.85%. Fire insurance is required on all properties covered by mortgage loans and must at least equal the excess of the loan over the maximum loan which would be permitted by law on the land without the buildings.

Strategic Investor   			78

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

3. Investments (continued)

The maximum percentage of any loan to the value of collateral at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages, was 75.7% on commercial properties. As of December 31, 2000, the Company held no mortgages with interest more than one year overdue. Total interest due equals $101,607.

4. Derivative Financial Instruments Held for Purposes Other than Trading

The Company enters into interest rate and currency contracts, including swaps, caps, floors, and options, to reduce and manage risks which include the risk of a change in the value, yield, price, cash flows, exchange rates or quantity of, or a degree of exposure with respect to, assets, liabilities, or future cash flows which the Company has acquired or incurred. Hedge accounting practices are supported by cash flow matching, scenario testing and duration matching.

Interest rate swap agreements generally involve the exchange of fixed and floating interest payments over the life of the agreement without an exchange of the underlying principal amount. Currency swap agreements generally involve the exchange of local and foreign currency payments over the life of the agreements without an exchange of the underlying principal amount. Interest rate cap and interest rate floor agreements owned entitle the Company to receive payments to the extent reference interest rates exceed or fall below strike levels in the contracts based on the notional amounts.

Premiums paid for the purchase of interest rate contracts are included in other invested assets and are being amortized to interest expense over the remaining terms of the contracts or in a manner consistent with the financial instruments being hedged. Amounts paid or received, if any, from such contracts are included in interest expense or income. Accrued amounts payable to or receivable from counterparties are included in other liabilities or other invested assets.

Gains or losses as a result of early terminations of interest rate contracts are amortized to investment income over the remaining term of the items being hedged to the extent the hedge is considered to be effective; otherwise, they are recognized upon termination.

Interest rate contracts that are matched or otherwise designated to be associated with other financial instruments are recorded at fair value if the related financial instruments mature, are sold, or are otherwise terminated or if the interest rate contracts cease to be effective hedges. Changes in the fair value of the derivative are recorded as investment income. The Company manages the potential credit exposure from interest rate contracts through careful evaluation of the counterparties' credit standing, collateral agreements, and master netting agreements.

The Company is exposed to credit loss in the event of nonperformance by counterparties on interest rate contracts; however, the Company does not anticipate nonperformance by any of these counterparties. The amount of such exposure is generally the unrealized gains in such contracts.

Strategic Investor   			79

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

4. Derivative Financial Instruments Held for Purposes Other than Trading (continued)

The table below summarizes the Company's interest rate contracts included in other invested assets at December 31, 2000 and 1999 (in thousands):

	December 31, 2000
	Notional Amount	Carrying Value	Fair Value
Interest rate contracts:
Swaps	$2,478,442	$     95	$(49,375)
Swaps--affiliates	1,645,143	(95)	60,703
Total swaps	4,123,585	-	11,328
Caps owned	53,543	1,224	492
Caps owned--affiliates	20,525	26	-
Total caps owned	74,068	1,250	492
Floors owned	259,637	905	1,975
Total floors owned	259,637	905	1,975
Options owned	97,000	627	342
Total options owned	97,000	627	342
Total derivatives	$4,554,290	$2,782	$ 14,137

Strategic Investor   			80

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

4. Derivative Financial Instruments Held for Purposes Other than Trading (continued)

	December 31, 1999
	Notional Amount	Carrying Value	Fair Value
Interest rate contracts:
Swaps	$1,340,582	$    (125)	$ 19,014
Swaps--affiliates	1,034,535	125	(18,869)
Total swaps	2,375,117	-	145
Caps owned	20,525	(39)	(17)
Caps owned--affiliates	50,525	80	17
Total caps owned	71,050	41	-
Floors owned	90,500	252	172
Total floors owned	90,500	252	172
Options owned	302,000	4,000	7,118
Options owned--affiliates	277,000	(3,210)	(6,198)
Total options owned	579,000	790	920
Forwards owned	152,300	-	37
Forwards owned--affiliates	144,300	-	(32)
Total forwards owned	296,600	-	5
Total derivatives	$3,412,267	$1,083	$  1,242

5. Concentrations of Credit Risk

The Company held less-than-investment-grade corporate bonds with an aggregate book value of $419,904,000 and $317,271,000 with an aggregate market value of $395,837,000 and $305,533,000 at December 31, 2000 and 1999, respectively. Those holdings amounted to 9.2% of the Company's investments in bonds and 4.8% of total admitted assets at December 31, 2000. The holdings of less-than-investment-grade bonds are widely diversified and of satisfactory quality based on the Company's investment policies and credit standards.

The Company held unrated bonds of $723,168,000 and $335,079,000 with an aggregate NAIC market value of $724,545,000 and $332,404,000 at December 31, 2000 and 1999, respectively. The carrying value of these holdings amounted to 16% of the Company's investment in bonds and 8% of the Company's total admitted assets at December 31, 2000.

At December 31, 2000, the Company's commercial mortgages involved a concentration of properties located in Calfornia (14%) and Florida (10%). The remaining commercial mortgages relate to properties located in 37 other states. The portfolio is well diversified, covering many different types of income-producing properties on which the Company has first mortgage liens. The maximum mortgage outstanding on any individual property is $45,000,000.

Strategic Investor   			81

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

6. Annuity Reserves

At December 31, 2000 and 1999, the Company's annuity reserves, including those held in separate accounts and deposit fund liabilities that are subject to discretionary withdrawal (with adjustment), subject to discretionary withdrawal (without adjustment), and not subject to discretionary withdrawal provisions are summarized as follows:

	December 31, 2000
	Amount	Percent
	(In Thousands)
Subject to discretionary withdrawal (with adjustment):
With market value adjustment	$2,619,437	60.8%
At book value less surrender charge	134,697	3.1
Subtotal	2,754,134	63.9
Subject to discretionary withdrawal (without adjustment)     at book value with minimal or no charge or adjustment	248,208	5.8
Not subject to discretionary withdrawal	1,305,567	30.3
Total annuity reserves and deposit fund liabilities--     Before reinsurance	4,307,909	100.0%
Less reinsurance	2,269,160
Net annuity reserves and deposit fund liabilities	$2,038,749
	December 31, 1999
	Amount	Percent
	(In Thousands)
Subject to discretionary withdrawal (with adjustment):
With market value adjustment	$2,918,405	69.3%
At book value less surrender charge	119,807	2.9
Subtotal	3,038,212	72.2
Subject to discretionary withdrawal (without adjustment)     at book value with minimal or no charge or adjustment	367,014	8.7
Not subject to discretionary withdrawal	803,795	19.1
Total annuity reserves and deposit fund liabilities--     before reinsurance	4,209,021	100.0
Less reinsurance	3,555,109
Net annuity reserves and deposit fund liabilities	$   653,912

Strategic Investor   			82

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

7. Employee Benefit Plans

Pension Plan and Postretirement Benefits

The Company has a qualified noncontributory defined benefit retirement plan covering substantially all employees. In addition, the Company maintains a nonqualified unfunded Supplemental Employees Retirement Plan (SERP).

In addition to providing pension plans, the Company provides certain health care and life insurance benefits for retired employees. Net postretirement benefit cost for the year ended December 31, 2000, 1999 and 1998 was $1,016,000, $1,118,000 and $930,000 respectively, and includes the expected cost of such benefits for newly eligible or vested employees, interest cost, gains and losses arising from differences between actuarial assumptions and actual experiences, and amortization of the transition obligation. At December 31, 2000 and 1999, the unfunded postretirement benefit obligation for retirees and other fully eligible or vested plan participants was $6,245,000 and $5,549,000, respectively. The estimated cost of the benefit obligation for active nonvested employees was $1,906,000.

The funded status for the defined benefit plans and other postretirement benefit plan is as follows (in thousands):

	Qualified Plan	SERP	Post- Retirement
December 31, 2000
Projected benefit obligation	$(39,931)	$(13,135)	$(6,370)
Less plan assets at fair value	47,098	-	-
Plan assets in excess of (less than) projected benefit obligation	$  7,167	$(13,135)	$(6,370)
	Qualified Plan	SERP	Post- Retirement
December 31, 1999
Projected benefit obligation	$(36,352)	$(11,803)	$(6,256)
Less plan assets at fair value	50,495	-	-
Plan assets in excess of (less than) projected benefit obligation	$ 14,143	$(11,803)	$(6,256)

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Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

7. Employee Benefit Plans (continued)

Pension Plan and Postretirement Benefits (continued)

The net periodic pension cost, employer contribution, plan participant contributions, and benefits paid for the defined benefit plans are as follows (in thousands):

	Qualified Plan	SERP	Post- Retirement
December 31, 2000
Net periodic pension (benefit) expense	$ (337)	$2,426	$1,016
Employer contributions	-	375	320
Plan participants' contributions	-	-	120
Benefits paid	1,916	375	440
	Qualified Plan	SERP	Post- Retirement
December 31, 1999
Net periodic pension expense	$    40	$1,971	$1,236
Employer contributions	-	387	467
Plan participants' contributions	-	-	94
Benefits paid	1,238	387	561
	Qualified Plan	SERP	Post- Retirement
December 31, 1998
Net periodic pension expense	$82	$1,109	$893
Employer contributions	-	325	218
Plan participants' contributions	-	-	77
Benefits paid	890	325	296

Assumptions used in determining the accounting for the defined benefit plans as of December 31, 2000 and 1999 were as follows:

	2000	1999
Weighted-average discount rate	7.75%	8.00%
Rate of increase in compensation level	5.00%	5.00%
Expected long-term rate of return on assets	9.25%	9.25%

Strategic Investor   			84

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

7. Employee Benefit Plans (continued)

Plan assets of the defined benefit plans at December 31, 2000 are invested primarily in U.S. government securities, corporate bonds, mutual funds, mortgage loans, money market funds, and common stock. Certain of the Qualified Plan's investments are held in the ING-NA Master Trust, which was established in 1998 for the investment of assets of the Plan and several other ING-NA sponsored retirement plans.

The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) for the medical plan is 8.5% graded to 5.5% over 6 years. The health care cost trend rate assumption has a significant effect on the amounts reported. For example, increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation for the medical plan as of December 31, 2000 by $501,000. Decreasing the assumed health care cost trend rates by one percentage point in each year would decrease the accumulated postretirement benefit obligation for the medical plan as of December 31, 2000 by $(436,000).

The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.75% at December 31, 2000 and 8.00 % at December 31, 1999.

401(k) Plan

Effective January 1, 2000, the Security Life of Denver Insurance Company Savings Incentive Plan was merged into the ING Savings Plan (Savings Plan), a defined contribution plan sponsored by ING America. The Savings Plan is a defined contribution plan, which is available to substantially all home office employees. Participants may make contributions to the plan through salary reductions up to a maximum of $10,500 for 2000, 1999 and 1998. Such contributions are not currently taxable to the participants. The Company matches 100% of the first 3% of participant contributions, plus 50% of contributions which exceed 3% of participants' compensation, subject to a maximum matching percentage of 4-1/2% of the individual's salary. Company matching contributions were $1,552,000, $1,423,000 and $1,343,000 for 2000, 1999 and 1998, respectively.

Plan assets of the Savings Plan at December 31, 2000 are invested in a group deposit administration contract (the Contract) with the Company, various mutual funds maintained by the Principal Financial Group, and loans to participants. The Contract is an employee benefit liability of the Company and had a balance of $28.0 million and $28.7 million at December 31, 2000 and 1999, respectively.

8. Separate Accounts

Separate account assets and liabilities represent funds segregated by the Company for the benefit of certain policy and contract holders who bear the investment risk. Revenues and expenses on the separate account assets and related liabilities equal the benefits paid to the separate account policy and contract holders.

Premiums, deposits, and other considerations received for the years ended December 31, 2000, 1999 and 1998 were $256,712,000, $153,671,000 and $129,527,000, respectively.

Strategic Investor   			85

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

8. Separate Accounts (continued)

A reconciliation of the amounts transferred to and from the separate accounts is presented below:

	2000	1999	1998
	(In Thousands)
Transfers as reported in the summary of operations     of the Separate Accounts Statement:
Transfers to separate accounts	$317,529	$161,205	$136,617
Transfers from separate accounts	61,187	82,218	70,879
Net transfers to separate accounts	256,342	78,987	65,738
Reconciling adjustments:
Miscellaneous transfers	196	1	-
Transfers as reported in the Statement of Operations	$256,538	$ 78,988	$ 65,738

9. Reinsurance

The Company is involved in both ceded and assumed reinsurance with other companies for the purpose of diversifying risk and limiting exposure on larger risks. As of December 31, 2000, the Company's retention limit for acceptance of risk on life insurance policies had been set at various levels up to $3,000,000.

To the extent that the assuming companies become unable to meet their obligations under these treaties, the Company remains contingently liable to its policyholders for the portion reinsured. To minimize its exposure to significant losses from retrocessionaire insolvencies, the Company evaluates the financial condition of the retrocessionaire and monitors concentrations of credit risk.

Assumed premiums amounted to $612,585,000, $520,490,000 and $426,503,000 for the years ended December 31, 2000, 1999 and 1998 respectively.

The Company's ceded reinsurance arrangements reduced certain items in the accompanying financial statements by the following amounts:

	2000	1999	1998
	(In Thousands)
Premiums	$   859,405	$1,701,959	$2,916,141
Benefits paid or provided	247,622	216,778	71,001
Policy and contract liabilities at year end	2,647,258	3,890,702	3,525,241

During 2000, 1999 and 1998, the Company had ceded blocks of insurance under reinsurance treaties to provide funds for financing and other purposes. These reinsurance transactions, generally known as "financial reinsurance," represent financing arrangements. Financial reinsurance has the effect of increasing current statutory surplus while reducing future statutory surplus as the reinsurers recapture amounts.

Strategic Investor   			86

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

10. Federal Income Taxes and Policyholders' Surplus Account

Federal income tax expense consists of the following:

	2000	1999	1998
	(In Thousands)
Operations:
Current	$(1,339)	$ 21,193	$20,910
Deferred	-	(12,580)	(18,539)
Federal income tax expense	$(1,339)	$ 8,613	$2,371

Deferred federal income taxes arise from the recognition of timing differences between income determined for financial statement purposes and income tax purposes (principally differences relating to the recognition of tax-basis deferred acquisition costs, policy and contract liabilities and investment income). The resulting deferred tax asset is nonadmitted and charged against surplus.

The Company files a consolidated federal income tax return with its parent, ING America, and other U.S. affiliates and subsidiaries. The parties that join in the consolidated return have an agreement for the allocation of taxes. The agreement specifies that the separate return payable or the separate return receivable of each member will be the federal income tax payable or receivable that the member would have had for the period had it filed a separate return.

The Policyholders' Surplus Account is an accumulation of certain special deductions for income tax purposes and a portion of the "gain from operations" which were not subject to current taxation under the Life Insurance Company Income Tax Act of 1959. At December 31, 1984, the balance in this account for tax return purposes was approximately $60,490,000. The Tax Reform Act of 1984 provides that no further accumulations will be made in this account. If amounts accumulated in the Policyholders' Surplus Account exceed certain limits, or if distributions to the shareholder exceed amounts in the Shareholder's Surplus Account as determined for income tax purposes, amounts in the Policyholders' Surplus Account would become subject to income tax at rates in effect at that time. Should this occur, the maximum tax, under current tax law, which would be paid is $21,172,000. The Company does not anticipate any such action or foresee any events that would result in such tax.

11. Investment in and Advances to Subsidiaries

The Company has two wholly owned insurance subsidiaries, Midwestern United Life Insurance Company (Midwestern United) and First ING Life Insurance Company of New York (First ING). The Company also has three wholly owned noninsurance subsidiaries, First Secured Mortgage Deposit Corporation, Tailored Investments Notes Trust, and ING America Equities, Inc.

ING America Equities, Inc. is a wholesale broker/dealer whose business activities consist only of the distribution of variable life and annuity contracts. ING America Equities, Inc. does not hold customer funds or securities.

Strategic Investor   			87

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

11. Investment in and Advances to Subsidiaries (continued)

Amounts invested in and advanced to the Company's subsidiaries are summarized as follows:

	December 31
	2000	1999
	(In Thousands)
Common stock (cost--$61,318 in 2000 and 1999)	$85,324	$77,127
(Payable) receivable from subsidiaries	(2,476)	2,060

Summarized financial information for these subsidiaries is as follows:

	2000	1999	1998
	(In Thousands)
Revenues	$  97,086	$  89,507	$  74,536
Income before net realized gains on investments	9,783	7,884	6,123
Net income	9,571	6,301	6,123
Admitted assets	298,260	296,265	308,771
Liabilities	212,936	219,139	234,881

Midwestern United and First ING paid a common stock dividend to the Company of $1,320,000 and $1,970,000 in 1999 and $1,385,000 and $0 in 1998, respectively. No such dividend was paid in 2000.

12. Capital and Surplus

Under Colorado insurance regulations, the Company is required to maintain a minimum total capital and surplus of $1,500,000. Additionally, the amount of dividends which can be paid by the Company to its stockholder without prior approval of the Colorado Division of Insurance is limited to the greater of 10% of statutory surplus or the statutory net gain from operations.

The Company has two surplus notes to a related party for $84,259,000 and $100,000,000 which represent the cumulative cash draws on two $100,000,000 commitments issued by ING America through December 31, 2000, less principal payments.

Strategic Investor   			88

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

12. Capital and Surplus (continued)

These subordinated notes bear interest at a variable rate equal to the prevailing rate for 10-year U.S. Treasury bonds plus 1/4% adjusted annually. The principal and interest is scheduled to be repaid in five annual installments beginning on April 15, 2000 and continuing through April 15, 2004 for the first note and April 2005 and continuing through April 15, 2009, for the second note, respectively. Future minimum payments, assuming a current effective interest rate of 5.11%, are as follows (in thousands):

Year	Total Payments
2001	$  25,842
2002	25,842
2003	25,842
2004	25,842
Subsequent years	143,788
Total	247,156
Less imputed interest	(62,897)
Outstanding principal	$184,259

The repayment of these notes require approval of the Commissioner of Insurance of the State of Colorado and are payable only out of surplus funds of the Company and only at such time as the surplus of the Company, after payment is made, does not fall below the prescribed level. In July 2000, the Company made payments of $15,741,000 and $11,098,000 for principal and interest, respectively, after receiving approval from the Commissioner of Insurance of the State of Colorado.

13. Fair Values of Financial Instruments

In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the financial instrument. Accordingly, the aggregate fair value amounts presented herein do not represent the underlying value of the Company.

Life insurance liabilities that contain mortality risk and all nonfinancial instruments have been excluded from the disclosure requirements. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company's overall management of interest rate risk, such that the Company's exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.

Strategic Investor   			89

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

13. Fair Values of Financial Instruments (continued)

The carrying amounts and fair values of the Company's financial instruments are summarized as follows:

	December 31
	2000		1999
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
	(In Thousands)
Assets:
Bonds	$4,573,658	$4,567,521	$3,418,381	$3,274,765
Preferred stocks	13,524	13,527	2,560	2,889
Unaffiliated common stocks	15,483	15,483	4,977	4,977
Mortgage loans	1,672,169	1,705,801	983,087	943,041
Policy loans	992,911	992,911	943,185	943,185
Residual collateralized
mortgage obligations	30,846	13,141	18,200	16,922
Derivative securities	2,782	14,137	1,083	1,242
Short-term investments	114,848	114,848	179,036	179,036
Cash	88,816	88,816	47,018	47,018
Indebtedness from related parties	69,338	69,338	42,451	42,451
Separate account assets	799,966	799,966	644,975	644,975
Receivable for securities	5,084	5,084	102	102
Liabilities:
Individual and group annuities	203,489	142,743	133,025	132,984
Guaranteed investment contracts	1,578,057	1,575,822	335,507	332,275
Policyholder funds	71,669	71,669	91,920	91,920
Policyholder dividends	11,503	11,503	11,273	11,273
Indebtedness to related parties	8,016	8,016	18,329	18,239
Separate account liabilities	799,966	799,966	644,975	644,975
Payable for securities	3,162	3,162	14,023	14,023

The following methods and assumptions were used by the Company in estimating the fair value disclosures for financial instruments:

Fixed maturities and equity securities: The fair values for bonds, preferred stocks and common stocks, reported herein, are based on quoted market prices, where available. For securities not actively traded, fair values are estimated using values obtained from independent pricing services or, in the case of private placements, collateralized mortgage obligations and other mortgage derivative investments, are estimated by discounting expected future cash flows. The discount rates used vary as a function of factors such as yield, credit quality, and maturity, which fall within a range between 6% and 15% over the total portfolio. Fair values determined on this basis can differ from values published by the NAIC Securities Valuation Office. Market value as determined by the NAIC as of December 31, 2000 and 1999 was $4,675,995,000 and $3,448,196,000, respectively.

Strategic Investor   			90

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

13. Fair Values of Financial Instruments (continued)

Mortgage loans: Estimated market values for commercial real estate loans were generated using a discounted cash flow approach. Loans in good standing are discounted using interest rates determined by U.S. Treasury yields on December 31 and spreads implied by independent published surveys. The same is applied on new loans with similar characteristics. The amortizing features of all loans are incorporated in the valuation. Where data on option features is available, option values are determined using a binomial valuation method, and are incorporated into the mortgage valuation. Restructured loans are valued in the same manner; however, these loans were discounted at a greater spread to reflect increased risk. All residential loans are valued at their outstanding principal balances, which approximate their fair values.

Residual collateralized mortgage obligations: Residual collateralized mortgage obligations are included in the other invested assets balance. Fair values are calculated using discounted cash flows. The discount rates used vary as a function of factors such as yield, credit quality, and maturity, which fall within a range between 6% and 15% over the total portfolio.

Derivative financial instruments: Fair values for on-balance-sheet derivative financial instruments (caps and floors) and off-balance-sheet derivative financial instruments (swaps) are based on broker/dealer valuations or on internal discounted cash flow pricing models taking into account current cash flow assumptions and the counterparties' credit standing.

Guaranteed investment contracts: The fair values of the Company's guaranteed investment contracts are estimated using discounted cash flow calculations, based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued.

Off-balance-sheet instruments: The Company accepted additional deposits on existing synthetic guaranteed investment contracts in the amounts of $0, $70,000,000 and $66,480,000 in 2000, 1999 and 1998, respectively, from trustees of 401(k) plans. Pursuant to the terms of these contracts, the trustees own and retain the assets related to these contracts. Such assets had a value of $406,896,000 and $471,380,000 at December 31, 2000 and 1999, respectively. Under synthetic guaranteed investment contracts, the synthetic issuer may assume interest rate risk on individual plan participant initiated withdrawals from stable value options of 401(k) plans. Approximately 88% of the synthetic guaranteed investment contract book values are on a participating basis and have a credited interest rate reset mechanism which passes such interest rate risk to plan participants.

Other investment-type insurance contracts: The fair values of the Company's deferred annuity contracts are estimated based on the cash surrender values. The carrying values of other policyholder liabilities, including immediate annuities, dividend accumulations, supplementary contracts without life contingencies, and premium deposits, approximate their fair values.

Letters of credit: The Company is the recipient of letters of credit totaling $250,071,000 (see Note 15), which have a market value to the Company of $0, and two lines of credit totaling $340,136,000 which have a market value to the Company of $0.

The carrying value of all other financial instruments approximates their fair value.

Strategic Investor   			91

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

14. Commitments and Contingencies

The Company is a party to pending or threatened lawsuits arising from the normal conduct of its business. Due to the climate in insurance and business litigation, suits against the Company sometimes include substantial additional claims, consequential damages, punitive damages and other similar types of relief. While it is not possible to forecast the outcome of such litigation, it is the opinion of management that the disposition of such lawsuits will not have a materially adverse effect on the Company's financial position or interfere with its operations. The Company has established an accrued liability in the financial statements of $20,449,000 related to certain pending litigation. The Company is vigorously defending its position in these cases.

The Company guarantees the obligations incurred by its wholly owned subsidiary, Midwestern United, with respect to all life insurance policies in force in both 2000, 1999 and 1998. In the event Midwestern United is unable to fulfill its obligations under these policies, the Company would be required to assume the policy obligations. The statutory reserve liabilities for the guaranteed policies totaled $201,306,000 and $209,203,000 as of December 31, 2000 and 1999, respectively.

The Company entered into a Tangible Net Worth Maintenance Agreement, dated June 25, 1998 pursuant to which the Company agreed to cause First ING, a wholly owned subsidiary of the Company, to have a tangible net worth equal to an NAIC-defined risk-based capital ratio of at least 200%, calculated by dividing (total adjusted capital x 100) by (the authorized control level risk based capital x 2). The contingent statutory reserve liability for this guarantee is $189,036.

The Company has agreed to guarantee a revolving line of credit issued to Pen-Cal Administrators, Inc., a California producer group, and represented by the credit agreement dated January 1, 2000 between Bank One and Pen-Cal Administrators, Inc., in the principal amount of $2,500,000.

15. Financing Agreements

The Company has a line of credit of $100,000,000 to provide short-term liquidity which expires July 31, 2001. The amount of funds available under this line is reduced by borrowings of certain affiliates also party to the agreement. Interest on all loans is based on the cost of funds by the lender plus .23%. The Company had outstanding borrowings under this agreement at December 31, 2000 and 1999 of $-0- and $200,000, respectively.

The Company is the beneficiary of letters of credit totaling $250,071,000 that were established in accordance with the terms of reinsurance agreements. The terms of the letters of credit provide for automatic renewal for the following year at December 31, unless otherwise canceled or terminated by either party to the financing. The letters were unused during both 2000 and 1999.

Strategic Investor   			92

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

16. Related Party Transactions

Affiliates

The Company has a $200,136,000 line of credit issued by the Company's parent to provide short-term liquidity. Interest on the loans are indexed to the A1+/P1 commercial paper rates. The average borrowing by the Company in 2000 and 1999 was $17,453,000 and $10,365,000, respectively, with an average borrowing rate of 6.29% and 5.16%, respectively. At December 31, 2000 and 1999, outstanding borrowings were $5,927,000 and $15,000,000, respectively.

The Company provides administrative, investment and other operating services to affiliates. Amounts received for these services were $13,053,000, $2,606,000 and $1,605,000 for 2000, 1999 and 1998, respectively.

The Company also has an Investment Advisory Agreement with an affiliate whereby it receives investment and portfolio management services for a fee. Total fees under the agreement were approximately $9,885,000, $11,373,000 and $10,504,000 for 2000, 1999 and 1998, respectively.

Subsidiaries

The Company provides administrative, investment and other operating services to certain of its subsidiaries pursuant to contractual arrangements. Amounts received for these services were $3,561,000, $4,057,000 and $4,280,000 for 2000, 1999 and 1998, respectively.

17. Guaranty Fund Assessments

Insurance companies are assessed the costs of funding the insolvencies of other insurance companies by the various state guaranty associations, generally based on the amount of premium companies collect in that state.

The Company accrues the cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) and the amount of premiums written in each state. The Company reduces the accrual by credits allowed in some states to reduce future premium taxes by a portion of assessments in that state. The Company has estimated this liability to be $2,305,000 as of December 31, 2000 and 1999 and has recorded a reserve. The Company has also recorded an asset of $5,045,000 and $5,950,000 as of December 31, 2000 and 1999, respectively, for future credits to premium taxes for assessments already paid. Payments received for guaranty fund assessments in 2000 and 1999 were $267,000 and $120,000, respectively.

18. Regulatory Risk-Based Capital

The NAIC prescribes risk-based capital (RBC) requirements for life/health insurance companies. RBC is a series of dynamic surplus-related formulas for monitoring solvency. At December 31, 2000, the Company exceeded all minimum RBC requirements.

Strategic Investor   			93

Security Life of Denver Insurance Company

Notes to Financial Statements - Statutory Basis (continued)

19. Accounting Changes ( Unaudited )

Accounting changes adopted to conform to the provisions of the NAIC Accounting Practices and Procedures manual - Version effective January 1, 2001 are reported as changes in accounting principles. The cumulative effect of changes in accounting principles is reported as an adjustment to unassigned deficit, a component of capital and surplus, in the period of the change in accounting principle. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. As a result of these changes, the Company decreased its unassigned deficit, $41.9 million as of January 1, 2001.

The net decrease in unassigned deficit is comprised of increases to capital and surplus of approximately $51.3 million related to admitting deferred tax assets and $4.7 million related to prepayment penalties on bonds and mortgage loans released from the IMR liability. Partially offsetting these increases to capital and surplus are increases of approximately $12.3 million and $1.3 million related to Supplemental Employee Retirement Liability (SERP) and vacation liability, respectively.

Strategic Investor   			94

Security Life Separate Account L1 of
Security Life of Denver Insurance Company
Financial Statements - Unaudited
As of September 30, 2001

Strategic Investor   			95

Security Life Separate Account L1

Financial Statements - Unaudited

As of September 30, 2001

Contents

Unaudited Financial Statements

Statement of Assets and Liabilities     97
Statement of Operations     108
Statement of Changes in Net Assets     119
Notes to Financial Statements     130

Strategic Investor   			96

Security Life Separate Account L1

Statement of Assets and Liabilities
(Unaudited)
September 30, 2001

	NB
	Limited Maturity Bond	Growth	Partners
Assets
Investments in mutual funds at     market value (Note 4)	$18,301,630	$10,009,825	$24,550,654
Total assets	18,301,630	10,009,825	24,550,654
Liabilities
Due to (from) Security Life of     Denver	(8,224)	(65,701)	(106,901)
Total liabilities	(8,224)	(65,701)	(106,901)
Net assets	$18,309,854	$10,075,526	$24,657,555
Policyholder reserves
Reserves attributable to the     policyholders (Note 2)	$18,309,854	$10,075,526	$24,657,555
Total policyholder reserves	$18,309,854	$10,075,526	$24,657,555
Number of divisional units     outstanding (Note 8):
Class A	1,266,146.581	678,719.272	1,223,913.915
Class B	11,739.142	5,038.762	3,445.477
Value per divisional unit:
Class A	$14.36	$14.79	$20.12
Class B	$10.53	$6.97	$8.30
Number of Shares	1,366,7867	10,737,983	1,902,292

See accompanying notes.

Strategic Investor   			97

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Alger
	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Assets
Investments in mutual funds at
market value (Note 4)	$18,138,243	$31,406,350	$42,934,697	$17,762,534
Total assets	18,138,243	31,406,350	42,934,697	17,762,534
Liabilities
Due to (from) Security Life of Denver	58,749	(70,248)	87,611	(81,638)
Total liabilities	58,749	(70,248)	87,611	(81,638)
Net assets	$18,079,494	$31,476,598	$42,847,086	$17,844,172
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$18,079,494	$31,476,598	$42,847,086	$17,844,172
Total policyholder reserves	$18,079,494	$31,476,598	$42,847,086	$17,844,172
Number of divisional units outstanding     (Note 8):         Class A	1,509,536.384	1,198,930.258	1,986,333.871	602,773.575
Class B	62,310.934	40,121.720	69,337.261	5,114.120
Value per divisional unit:
Class A	$11.73	$25.89	$21.30	$29.53
Class B	$6.00	$10.73	$7.86	$8.29
Number of Shares	1,241,369	2,077,414	1,335,871	647,849

See accompanying notes.

Strategic Investor   			98

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Fidelity
	Asset Manager	Growth	Growth SC	Overseas	Overseas SC	Money Market	Index 500
Assets
Investments in mutual funds at
market value (Note 4)	$18,403,338	$48,559,314	$39,069	$35,140,928	$56,392	$104,269,952	$165,134,818
Total assets	18,403,338	48,559,314	39,069	35,140,928	56,392	104,269,952	165,134,818
Liabilities
Due to (from) Security Life of Denver	116,954	188,725	-	(141,095)	-	270,052	(118,217)
Total liabilities	116,954	188,725	-	(141,095)	-	270,052	(118,217)
Net assets	18,286,384	$48,370,589	$39,069	$35,282,023	$56,392	$103,999,900	$165,253,035
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$18,286,384	$48,370,589	$39,069	$35,282,023	$56,392	$103,999,900	$165,253,035
Total policyholder reserves	$18,286,384	$48,370,589	$39,069	$35,282,023	$56,392	$103,999,900	$165,253,035
Number of divisional units outstanding     (Note 8):             Class A	1,156,791.661	2,250,864.880	-	2,597,785.408	-	7,625,127.938	6,918,271,816
Class B	26,313.332	62,913.082	5,211.697	694,477.886	8,179.664	-	1,111,443.792
Value per divisional unit:         Class A	$15.60	$21.28	$      -	$11.61	$      -	$13.64	$22.61
Class B	$9.12	$7.60	$7.50	$7.37	$6.89	$        -	$7.93
Number of Shares	1,381,501	1,697,925	1,364.97	2,809,870	4,511	104,269,976	1,416,735

See accompanying notes.

Strategic Investor   			99

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	INVESCO
	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Assets
Investments in mutual funds at
market value (Note 4)	$12,144,819	$25,681,577	$9,214,844	$7,467,107	$10,460,141
Total assets	12,144,819	25,681,577	9,214,844	7,467,107	10,460,141
Liabilities
Due to (from) Security Life of Denver	(13,157)	55,392	(72,271)	(4,960)	(145,016)
Total liabilities	(13,157)	55,392	(72,271)	(4,960)	(145,016)
Net assets	$12,157,976	$25,626,185	$9,287,115	$7,472,067	$10,605,157
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$12,157,976	$25,626,185	$9,287,115	$7,472,067	$10,605,157
Total policyholder reserves	$12,157,976	$25,626,185	$9,287,115	$7,472,067	$10,605,157
Number of divisional units outstanding     (Note 8):         Class A	784,615.582	1,120,571.435	705,483.302	497,812.071	864,531.358
Class B	9,292.612	72,952.755	29,772.229	4,758.584	20,749.332
Value per divisional unit:         Class A	$15.39	$22.29	$12.85	$14.94	$12.05
Class B	$9.31	$8.92	$7.56	$6.84	$8.84
Number of Shares	996,292	1,500,790	1,098,432	539,357	859,733

See accompanying notes.

Strategic Investor   			100

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Van Eck
	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Assets
Investments in mutual funds
at market value (Note 4)	$1,807,820	$1,231,030	$3,467,592	$2,187,361
Total assets	1,807,820	1,231,030	3,467,592	2,187,361
Liabilities
Due to (from) Security Life of Denver	10	(4)	2,381	-
Total liabilities	10	(4)	2,381	-
Net assets	$1,807,810	$1,231,034	$3,465,211	$2,187,361
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$1,807,810	$1,231,034	$3,465,211	$2,187,361
Total policyholder reserves	$1,807,810	$1,231,034	$3,465,211	$2,187,361
Number of divisional units outstanding     (Note 8):         Class A	203,521.465	123,234.447	535,825.114	217,366.861
Class B	13.677	255.806	36,852.978	1,575.885
Value per divisional unit:         Class A	$8.88	$9.97	$6.03	$9.98
Class B	$8.19	$9.86	$6.38	$11.05
Number of Shares	182,475	126,247	541,673	210,490

See accompanying notes.

Strategic Investor   			101

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	AIM
	Capital Appreciation	Government Securities
Assets
Investments in mutual funds at market value (Note 4)	$10,908,024	$69,368,797
Total assets	10,908,024	69,368,797
Liabilities
Due to (from) Security Life of Denver	(19,484)	(6,315)
Total liabilities	(19,484)	(6,315)
Net assets	$10,927,508	$69,375,112
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$10,927,508	$69,375,112
Total policyholder reserves	$10,927,508	$69,375,112
Number of divisional units outstanding (Note 8):     Class A	971,640.477	1,786,935.309
Class B	232,658.986	4,049,142.811
Value per divisional unit:     Class A	$9.37	$11.96
Class B	$7.86	$11.85
Number of Shares	545,671	5,834,261

See accompanying notes.

Strategic Investor   			102

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	GCG
	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return	Fully Managed
Assets
Investments in mutual funds     at market value (Note 4)	$3,226	$5,172	$  -	$1,144,133	$4,137,301	$110,991	$1,539	$29,482	$2,253,669
Total assets	3,226	5,172	-	1,144,133	4,137,301	110,991	1,539	29,482	2,253,669
Liabilities
Due to (from) Security Life     of Denver	-	-	-	-	-	-	-	-	-
Total liabilities	-	-	-	-	-	-	-	-	-
Net assets	$3,226	$5,172	$  -	$1,144,133	$4,137,301	$110,991	$1,539	$29,482	$2,253,669
Policyholder reserves
Reserves attributable to the     policyholders (Note 2)	$3,226	$5,172	$  -	$1,144,133	$4,137,301	$110,991	$1,539	$29,482	$2,253,669
Total policyholder reserves	$3,226	$5,172	$  -	$1,144,133	$4,137,301	$110,991	$1,539	$29,482	$2,253,669
Number of divisional units     outstanding (Note 8):         Class A	-	-	-	-	-	12,588.249	-	-	219,306.572
Class B	325.075	686.746	-	96,914.830	373,052.660	1,149.040	197.916	2,688.403	3,993.953
Value per divisional unit:         Class A	$  -	$  -	$  -	$  -	$  -	$7.85	$  -	$  -	$10.09
Class B	$9.92	$7.53	$  -	$11.81	$11.10	$10.57	$7.77	$10.97	$10.13
Number of Shares	296	413	-	100,272	4,137,301	9,683	106	1,834	129,878

See accompanying notes.

Strategic Investor   			103

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Janus
	Growth	Aggressive Growth	Worldwide Growth	International Growth
Assets
Investments in mutual funds at market     value (Note 4)	$2,155,887	$1,515,206	$1,908,586	$4,139,907
Total assets	2,155,887	1,515,206	1,908,586	4,139,907
Liabilities
Due to (from) Security Life of Denver	-	-	-	-
Total liabilities	-	-	-	-
Net assets	$2,155,887	$1,515,206	$1,908,586	$4,139,907
Policyholder reserves
Reserves attributable to the policyholders     (Note 2)	$2,155,887	$1,515,206	$1,908,586	$4,139,907
Total policyholder reserves	$2,155,887	$1,515,206	$1,908,586	$4,139,907
Number of divisional units     outstanding (Note 8):         Class A	374,228.179	386,703.945	302,692.294	686,018.038
Class B	22,582.056	28,184.319	21,263.352	28,976.041
Value per divisional unit:         Class A	$5.43	$3.65	$5.89	$5.79
Class B	$5.47	$3.68	$5.94	$5.83
Number of Shares	124,301	78,678	76,347	202,889

See accompanying notes.

Strategic Investor   			104

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	M
	International Equity	Enhanced US Equity	Capital Appreciation	Core Growth
Assets
Investments in mutual funds at market     value (Note 4)	$1,099,802	$666,240	$890,363	$146,464
Total assets	1,099,802	666,240	890,363	146,464
Liabilities
Due to (from) Security Life of Denver	-	-	-	-
Total liabilities	-	-	-	-
Net assets	$1,099,802	$666,240	$890,363	$146,464
Policyholder reserves
Reserves attributable to the policyholders     (Note 2)	$1,099,802	$666,240	$890,363	$146,464
Total policyholder reserves	$1,099,802	$666,240	$890,363	$146,464
Number of divisional units     outstanding (Note 8):         Class A	125,031.764	74,088.595	105,033.545	17,267.848
Class B	231.817	34.188	543.718	106.670
Value per divisional unit:         Class A	$8.78	$8.99	$8.43	$8.43
Class B	$8.81	$9.01	$8.46	$8.47
Number of Shares	91,516	52,050	65,685	12,323

See accompanying notes.

Strategic Investor   			105

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Pilgrim
	Growth Opportunities	MagnaCap	MidCap Opportunities	SmallCap Opportunities
Assets
Investments in mutual funds at market     value (Note 4)	$8,492	$76,342	$75,286	$109,219
Total assets	8,492	76,342	75,286	109,219
Liabilities
Due to (from) Security Life of Denver	-	-	-	-
Total liabilities	-	-	-	-
Net assets	$8,492	$76,342	$75,286	$109,219
Policyholder reserves
Reserves attributable to the policyholders     (Note 2)	$8,492	$76,342	$75,286	$109,219
Total policyholder reserves	$8,492	$76,342	$75,286	$109,219
Number of divisional units outstanding (Note 8):         Class A	1,138.989	7,618.144	9,945.500	12,810.621
Class B	-	864.888	26.044	367.643
Value per divisional unit:         Class A	$7.46	$9.00	$7.55	$8.29
Class B	$      -	$8.98	$7.45	$8.30
Number of Shares	1,798	9,241	15,271	6,775

See accompanying notes.

Strategic Investor   			106

Security Life Separate Account L1

Statement of Assets and Liabilities (continued)
(Unaudited)
September 30, 2001

	Putnam
	New Opportunities	Voyager	Growth and Income	Small Cap Value
Assets
Investments in mutual funds at market     value (Note 4)	$175,596	$38,193	$716,653	$895,460
Total assets	175,596	38,193	716,653	895,460
Liabilities
Due to (from) Security Life of Denver	-	-	-	-
Total liabilities	-	-	-	-
Net assets	$175,596	$38,193	$716,653	$895,460
Policyholder reserves
Reserves attributable to the policyholders     (Note 2)	$175,596	$38,193	$716,653	$895,460
Total policyholder reserves	$175,596	$38,193	$716,653	$895,460
Number of divisional units outstanding (Note 8):         Class A	20,496.413	4,416.369	77,415.535	89,076.344
Class B	1,686.535	23.864	157.737	1,954.892
Value per divisional unit:         Class A	$7.91	$8.60	$9.24	$9.84
Class B	$7.94	$8.63	$9.27	$9.84
Number of Shares	12,845	1,482	32,596	70,356

See accompanying notes.

Strategic Investor   			107

Security Life Separate Account L1

Statement of Operations
(Unaudited)
Nine months ended September 30, 2001

	NB
	Limited Maturity Bond	Growth	Partners
Investment Income
Dividends from mutual funds	$953,448	$6,951,959	$1,186,558
Less valuation period deductions
(Note 2)	92,409	81,874	161,085
Net investment income (loss)	861,039	6,870,085	1,025,473
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
Investments	(143,790)	(8,528,144)	(1,054,314)
Net unrealized gains (losses) on
Investments	495,407	(6,570,124)	(4,918,083)
Net realized and unrealized gains
(losses) on investments	351,617	(15,098,268)	(5,972,397)
Net increase (decrease) in net assets
resulting from operations	$1,212,656	$(8,228,183)	$(4,946,924)

See accompanying notes.

Strategic Investor   			108

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	Alger
	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Investment Income
Dividends from mutual funds	$11,078	$16,595,646	$6,375,756	$844,791
Less valuation period deductions     (Note 2)	122,654	198,151	280,040	130,145
Net investment income (loss)	(111,576)	16,397,495	6,095,716	714,646
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(3,211,611)	(10,113,537)	(574,752)	(10,400,578)
Net unrealized gains (losses) on
investments	(7,316,939)	(14,244,865)	(18,464,604)	2,152,849
Net realized and unrealized gains
(losses) on investments	(10,528,550)	(24,358,402)	(19,039,356)	(8,247,729)
Net increase (decrease) in net assets
resulting from operations	$(10,640,126)	$(7,960,907)	$(12,943,640)	$(7,533,083)

See accompanying notes.

Strategic Investor   			109

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	Fidelity
	Asset Manager	Growth	Growth SC	Overseas	Overseas SC	Money Market	Index 500
Investment income
Dividends from mutual funds	$903,965	$4,536,923	$     -	$5,340,174	$     -	$2,511,589	$1,936,486
Less valuation period deductions
(Note 2)	104,838	351,213	-	216,162	-	421,406	974,190
Net investment income (loss)	799,127	4,185,710	-	5,124,012	-	2,090,183	962,296
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(1,333,723)	(8,394,238)	(8,299)	(7,918,094)	(64)	-	2,005,052
Net unrealized gains (losses) on
investments	(1,786,550)	(17,260,429)	(6,406)	(11,186,604)	(15,770)	-	(46,372,634)
Net realized and unrealized gains
(losses) on investments	(3,120,273)	(25,654,667)	(14,705)	(19,104,698)	(15,834)	-	(44,367,582)
Net increase (decrease) in net assets
resulting from operations	$(2,321,146)	$(21,468,957)	$(14,705)	$(13,980,686)	$(15,834)	$2,090,183	$(43,405,286)

See accompanying notes.

Strategic Investor   			110

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	INVESCO
	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Investment Income
Dividends from mutual funds	$      -	$      -	$      -	$      -	$      -
Less valuation period deductions
(Note 2)	66,544	140,586	58,859	47,837	68,303
Net investment income (loss)	(66,544)	(140,586)	(58,859)	(47,837)	(68,303)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(468,777)	143,442	(472,065)	(100,255)	(1,478,280)
Net unrealized gains (losses) on
investments	(547,842)	(5,021,480)	(1,317,590)	(3,455,761)	(3,256,600)
Net realized and unrealized gains
(losses) on investments	(1,016,619)	(4,878,038)	(1,789,655)	(3,556,016)	(4,734,880)
Net increase (decrease) in net assets
resulting from operations	$(1,083,163)	$(5,018,624)	$(1,848,514)	$(3,603,853)	$(4,803,183)

See accompanying notes.

Strategic Investor   			111

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	Van Eck
	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Investment Income
Dividends from mutual funds	$25,272	$44,322	$      -	$38,335
Less valuation period deductions
(Note 2)	13,526	5,895	22,837	10,015
Net investment income (loss)	11,746	38,427	(22,837)	28,320
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	135,326	(26,384)	(990,221)	58,819
Net unrealized gains (losses) on
investments	(532,795)	(28,601)	(6,036)	(92,801)
Net realized and unrealized gains
(losses) on investments	(397,469)	(54,985)	(996,257)	(33,982)
Net increase (decrease) in net assets
resulting from operations	$(385,723)	$(16,558)	$(1,019,094)	$(5,662)

See accompanying notes.

Strategic Investor   			112

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	AIM
	Capital Appreciation	Government Securities
Investment Income
Dividends from mutual funds	$      -	$      -
Less valuation period deductions
(Note 2)	56,237	96,489
Net investment income (loss)	(56,237)	(96,489)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
Investments	(2,469,266)	188,570
Net unrealized gains (losses) on
Investments	(4,603,030)	3,416,228
Net realized and unrealized gains
(losses) on investments	(7,072,296)	3,604,798
Net increase (decrease) in net assets
resulting from operations	$(7,128,533)	$3,508,309

See accompanying notes.

Strategic Investor   			113

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	GCG
	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return	Fully Managed
Investment income
Dividends from mutual funds	$     -	$     -	$     -	$     -	$155,365	$     -	$     -	$     -	$     -
Less valuation period deductions     (Note 2)	-	-	-	-	-	121	-	-	2,623
Net investment income (loss)	-	-	-	-	155,365	(121)	-	-	(2,623)
Realized and unrealized gains (losses) on investments
Net realized gains (losses) on     investments	4	(473)	-	(2,533)	-	(5,748)	(270)	(376)	(1,507)
Net unrealized gains (losses) on     investments	(248)	(815)	-	86,154	-	(31,208)	(356)	(1,106)	(76,768)
Net realized and unrealized gains     (losses) on investments	(244)	(1,288)	-	83,621	-	(36,956)	(626)	(1,482)	(78,275)
Net increase (decrease) in net assets     resulting from operations	$(244)	$(1,288)	$     -	$83,621	$155,365	$(37,077)	$(626)	$(1,482)	$(80,898)

See accompanying notes.

Strategic Investor   			114

Security Life Separate Account L1

Statement of Operations (continued)

(Unaudited)

Nine months ended September 30, 2001

	Janus
	Growth	Aggressive Growth	Worldwide Growth	International Growth
Investment Income
Dividends from mutual funds	$4,387	$     -	$4,480	$22,708
Less valuation period deductions
(Note 2)	8,354	5,763	7,792	16,351
Net investment income (loss)	(3,967)	(5,763)	(3,312)	6,357
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(66,138)	(52,832)	(188,602)	(45,901)
Net unrealized gains (losses) on
investments	(770,447)	(620,228)	(490,331)	(1,192,508)
Net realized and unrealized gains
(losses) on investments	(836,585)	(673,060)	(678,933)	(1,238,409)
Net increase (decrease) in net assets
resulting from operations	$(840,552)	$(678,823)	$(682,245)	$(1,232,052)

See accompanying notes.

Strategic Investor   			115

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	M
	International Equity	Enhanced US Equity	Capital Appreciation	Core Growth
Investment Income
Dividends from mutual funds	$68	$     -	$172	$4
Less valuation period deductions
(Note 2)	656	484	523	118
Net investment income (loss)	(588)	(484)	(351)	(114)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(2,402)	(1,096)	(3,447)	(110)
Net unrealized gains (losses) on
investments	(97,793)	(47,816)	(149,084)	(14,305)
Net realized and unrealized gains
(losses) on investments	(100,195)	(48,912)	(152,531)	(14,415)
Net increase (decrease) in net assets
resulting from operations	$(100,783)	$(49,396)	$(152,882)	$(14,529)

See accompanying notes.

Strategic Investor   			116

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	Pilgrim
	Growth Opportunities	MagnaCap	MidCap Opportunities	SmallCap Opportunities
Investment Income
Dividends from mutual funds	$     -	$     -	$     -	$241
Less valuation period deductions
(Note 2)	9	88	98	101
Net investment income (loss)	(9)	(88)	(98)	140
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(135)	(833)	(4,931)	(684)
Net unrealized gains (losses) on
investments	(1,677)	(6,117)	(14,824)	(20,337)
Net realized and unrealized gains
(losses) on investments	(1,812)	(6,950)	(19,755)	(21,021)
Net increase (decrease) in net assets
resulting from operations	$(1,821)	$(7,038)	$(19,853)	$(20,881)

See accompanying notes.

Strategic Investor   			117

Security Life Separate Account L1

Statement of Operations (continued)
(Unaudited)
Nine months ended September 30, 2001

	Putnam
	New Opportunities	Voyager	Growth and Income	Small Cap Value
Investment Income
Dividends from mutual funds	$     -	$     -	$     -	$     -
Less valuation period deductions
(Note 2)	36	35	579	1,028
Net investment income (loss)	(36)	(35)	(579)	(1,028)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(1,711)	(292)	(488)	2,286
Net unrealized gains (losses) on
investments	(2,405)	(3,672)	(40,786)	(86,221)
Net realized and unrealized gains
(losses) on investments	(4,116)	(3,964)	(41,274)	(83,935)
Net increase (decrease) in net assets
resulting from operations	$(4,152)	$(3,999)	$(41,853)	$(84,963)

See accompanying notes.

Strategic Investor   			118

Security Life Separate Account L1

Statement of Changes in Net Assets
(Unaudited)
Nine months ended September 30, 2001

	NB
	Limited Maturity Bond	Growth	Partners
Increase (decrease) in net assets
Operations
Net investment income (loss)	$861,039	$6,870,085	$1,025,473
Net realized gains (losses) on
investments	(143,790)	(8,528,144)	(1,054,314)
Net unrealized gains (losses) on
investments	495,407	(6,570,124)	(4,918,083)
Increase (decrease) in net assets from
operations	1,212,656	(8,228,183)	(4,946,924)
Changes from principal
transactions
Net premiums	1,873,806	2,923,785	3,589,106
Cost of insurance and
administrative charges	(466,860)	(548,934)	(1,176,952)
Benefit payments	-	-	-
Surrenders	(467,521)	(202,352)	(1,062,230)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	1,667,688	(3,810,780)	679,750
Other	(4,066)	(2,916)	19,026
Increase (decrease) from principal
transactions	2,603,047	(1,641,197)	2,048,700
Total increase (decrease) in net assets	3,815,703	(9,869,380)	(2,898,224)
Net assets at beginning of year	14,494,151	19,944,906	27,555,779
Net assets at end of year	$18,309,854	$10,075,526	$24,657,555

See accompanying notes.

Strategic Investor   			119

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Alger
	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(111,576)	$16,397,495	$6,095,716	$714,646
Net realized gains (losses) on
investments	(3,211,611)	(10,113,537)	(574,752)	(10,400,578)
Net unrealized gains (losses) on
investments	(7,316,939)	(14,244,865)	(18,464,604)	2,152,849
Increase (decrease) in net assets from
operations	(10,640,126)	(7,960,907)	(12,943,640)	(7,533,083)
Changes from principal
transactions
Net premiums	4,553,211	7,796,119	9,023,477	5,069,199
Cost of insurance and
administrative charges	(981,734)	(1,465,438)	(2,106,987)	(1,311,526)
Benefit payments	-	-	-	-
Surrenders	(595,965)	(1,197,795)	(1,117,742)	(777,555)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(402,843)	1,111,738	(58,483)	(2,120,485)
Other	(22,179)	(100,870)	(67,971)	140,014
Increase (decrease) from principal
transactions	2,550,490	6,143,754	5,672,294	999,647
Total increase (decrease) in net assets	(8,089,636)	(1,817,153)	(7,271,346)	(6,533,436)
Net assets at beginning of year	26,169,130	33,293,751	50,118,432	24,377,608
Net assets at end of year	$18,079,494	$31,476,598	$42,847,086	$17,844,172

See accompanying notes.

Strategic Investor   			120

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Fidelity
	Asset Manager	Growth	Growth SC	Overseas	Overseas SC	Money Market	Index 500
Increase (decrease) in net assets
Operations
Net investment income (loss)	$799,127	$4,185,710	$     -	$5,124,012	$     -	$2,090,183	$962,296
Net realized gains (losses) on
investments	(1,333,723)	(8,394,238)	(8,299)	(7,918,094)	(64)	1,798,913	2,005,052
Net unrealized gains (losses) on
investments	(1,786,550)	(17,260,429)	(6,406)	(11,186,604)	(15,770)	(1,798,913)	(46,372,634)
Increase (decrease) in net assets from
operations	(2,321,146)	(21,468,957)	(14,705)	(13,980,686)	(15,834)	2,090,183	(43,405,286)
Changes from principal
transactions
Net premiums	3,679,706	10,807,387	62,782	7,272,439	66,462	88,102,103	35,902,623
Cost of insurance and
administrative charges	(835,313)	(2,441,729)	(1,532)	(1,506,200)	(1,319)	(3,455,771)	(7,689,386)
Benefit payments	-	-	-	-	-	(579,967)	-
Surrenders	(372,658)	(2,041,763)	-	(1,448,283)	-	(3,072,457)	(4,304,294)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	2,403,551	(4,975,532)	(7,345)	1,750,726	6,130	(41,128,003)	3,791,793
Other	(22,374)	(15,020)	(131)	(127,850)	953	29,000	17,144
Increase (decrease) from principal
transactions	4,852,912	1,333,343	53,774	5,940,832	72,226	39,894,905	27,717,880
Total increase (decrease) in net assets	2,531,766	(20,135,614)	39,069	(8,039,854)	56,392	41,985,088	(15,687,406)
Net assets at beginning of year	15,754,618	68,506,203	-	43,321,877	-	62,014,812	180,940,441
Net assets at end of year	$18,286,384	$48,370,589	$39,069	$35,282,023	$56,392	$103,999,900	$165,253,035

See accompanying notes.

Strategic Investor   			121

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	INVESCO
	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(66,544)	$(140,586)	$(58,859)	$(47,837)	$(68,303)
Net realized gains (losses) on
investments	(468,777)	143,442	(472,065)	(100,255)	(1,478,280)
Net unrealized gains (losses) on
investments	(547,842)	(5,021,480)	(1,317,590)	(3,455,761)	(3,256,600)
Increase (decrease) in net assets from
operations	(1,083,163)	(5,018,624)	(1,848,514)	(3,603,853)	(4,803,183)
Changes from principal
transactions
Net premiums	1,645,834	3,594,047	1,794,573	2,226,839	2,568,865
Cost of insurance and
administrative charges	(698,137)	(1,244,698)	(480,469)	(411,603)	(493,547)
Benefit payments	-	-	-	-	-
Surrenders	(577,591)	(359,353)	(208,715)	(99,927)	(452,315)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	1,172,479	7,159,477	(469,867)	1,501,839	1,953,248
Other	3,923	(40,760)	3,755	46,840	(16,014)
Increase (decrease) from principal
transactions	1,546,508	9,108,713	639,277	3,263,988	3,560,237
Total increase (decrease) in net assets	463,345	4,090,089	(1,209,237)	(339,865)	(1,242,946)
Net assets at beginning of year	11,694,631	21,536,096	10,496,352	7,811,932	11,848,103
Net assets at end of year	$12,157,976	$25,626,185	$9,287,115	$7,472,067	$10,605,157

See accompanying notes.

Strategic Investor   			122

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Van Eck
	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Increase (decrease) in net assets
Operations
Net investment income (loss)	$11,746	$38,427	$(22,837)	$28,320
Net realized gains (losses) on
investments	135,326	(26,384)	(990,221)	58,819
Net unrealized gains (losses) on
investments	(532,795)	(28,601)	(6,036)	(92,801)
Increase (decrease) in net assets from
operations	(385,723)	(16,558)	(1,019,094)	(5,662)
Changes from principal
transactions	226,207	299,916	952,897	468,455
Net premiums
Cost of insurance and
administrative charges	(104,223)	(69,357)	(189,443)	(72,864)
Benefit payments	-	-	-	-
Surrenders	(290,575)	(9,234)	(80,627)	(288)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	49,675	93,709	(764,206)	485,639
Other	(902)	1,131	3,684	(227)
Increase (decrease) from principal
transactions	(119,818)	316,165	(77,695)	880,715
Total increase (decrease) in net assets	(505,541)	299,607	(1,096,789)	875,053
Net assets at beginning of year	2,313,351	931,427	4,562,000	1,312,308
Net assets at end of year	$1,807,810	$1,231,034	$3,465,211	$2,187,361

See accompanying notes.

Strategic Investor   			123

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	AIM
	Capital Appreciation	Government Securities
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(56,237)	$(96,489)
Net realized gains (losses) on
investments	(2,469,266)	188,570
Net unrealized gains (losses) on
investments	(4,603,030)	3,416,228
Increase (decrease) in net assets from
operations	(7,128,533)	3,508,309
Changes from principal
transactions
Net premiums	3,519,507	2,241,128
Cost of insurance and
administrative charges	(708,763)	(1,873,858)
Benefit payments	-	-
Surrenders	(287,754)	(219,941)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(37,907,694)	48,560,641
Other	2,402,069	394,935
Increase (decrease) from principal
transactions	(32,982,635)	49,102,905
Total increase (decrease) in net assets	(40,111,168)	52,611,214
Net assets at beginning of year	51,038,676	16,763,898
Net assets at end of year	$10,927,508	$69,375,112

See accompanying notes.

Strategic Investor   			124

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	GCG
	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return	Fully Managed
Increase (decrease) in net assets
Operations
Net investment income (loss)	$     -	$     -	$     -	$     -	$155,365	$(121)	$     -	$     -	$(2,623)
Net realized gains (losses) on
investments	4	(473)	-	(2,533)	-	(5,748)	(270)	(376)	(1,507)
Net unrealized gains (losses) on
investments	(248)	(815)	-	86,154	-	(31,208)	(356)	(1,106)	(76,768)
Increase (decrease) in net assets from
operations	(244)	(1,288)	-	83,621	155,365	(37,077)	(626)	(1,482)	(80,898)
Changes from principal
transactions
Net premiums	4,020	5,529	-	125,575	11,154,856	32,152	4,019	25,913	132,198
Cost of insurance and
administrative charges	(262)	(218)	-	(25,656)	(192,824)	(2,517)	(237)	(992)	(10,015)
Benefit payments	-	-	-	-	-	-	-	-	-
Surrenders	-	-	-	(28,821)	(64,165)	-	-	-	-
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(287)	(361)	-	112,849	(8,917,271)	116,110	(1,617)	(4,384)	2,212,603
Other	(1)	277	-	(233)	9,838	2,323	-	(106)	(219)
Increase (decrease) from principal
transactions	3,470	5,227	-	183,714	1,990,434	148,068	2,165	20,431	2,334,567
Total increase (decrease) in net assets	3,226	3,939	-	267,335	2,145,799	110,991	1,539	18,949	2,253,669
Net assets at beginning of year	-	1,233	-	876,798	1,991,502	-	-	10,533	-
Net assets at end of year	$3,226	$5,172	$     -	$1,144,133	$4,137,301	$110,991	$1,539	$29,482	$2,253,669

See accompanying notes.

Strategic Investor   			125

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Janus
	Growth	Aggressive Growth	Worldwide Growth	International Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(3,967)	$(5,763)	$(3,312)	$6,357
Net realized gains (losses) on investments	(66,138)	(52,832)	(188,602)	(45,901)
Net unrealized gains (losses) on investments	(770,447)	(620,228)	(490,331)	(1,192,508)
Increase (decrease) in net assets from     operations	(840,552)	(678,823)	(682,245)	(1,232,052)
Changes from principal transactions
Net premiums	843,683	656,670	770,445	997,292
Cost of insurance and administrative     expenses	(68,517)	(59,897)	(73,929)	(87,762)
Benefit payments	-	-	-	-
Surrenders	(2,404)	(5,593)	(55,040)	(1,942)
Net transfers among divisions (including the     loan division and guaranteed interest     division in the general account)	1,979,388	1,073,793	1,630,824	4,043,370
Other	648	4,473	(889)	385
Increase (decrease) from principal transactions	2,752,798	1,669,446	2,271,411	4,951,343
Total increase (decrease) in net assets	1,912,246	990,623	1,589,166	3,719,291
Net assets at beginning of year	243,641	524,583	319,420	420,616
Net assets at end of year	$2,155,887	$1,515,206	$1,908,586	$4,139,907

See accompanying notes.

Strategic Investor   			126

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	M
	International Equity	Enhanced US Equity	Capital Appreciation	Core Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(588)	$(484)	$(351)	$(114)
Net realized gains (losses) on investments	(2,402)	(1,096)	(3,447)	(110)
Net unrealized gains (losses) on investments	(97,793)	(47,816)	(149,084)	(14,305)
Increase (decrease) in net assets from operations	(100,783)	(49,396)	(152,882)	(14,529)
Changes from principal transactions
Net premiums	27,786	37,540	22,739	8,845
Cost of insurance and administrative expenses	(5,028)	(2,196)	(4,405)	(648)
Benefit payments	-	-	-	-
Surrenders	(423)	-	(420)	-
Net transfers among divisions (including the     loan division and guaranteed interest division     in the general account)	1,178,592	680,257	1,026,098	152,791
Other	(342)	35	(767)	5
Increase (decrease) from principal transactions	1,200,585	715,636	1,043,245	160,993
Total increase (decrease) in net assets	1,099,802	666,240	890,363	146,464
Net assets at beginning of year	-	-	-	-
Net assets at end of year	$1,099,802	$666,240	$890,363	$146,464

See accompanying notes.

Strategic Investor   			127

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Pilgrim
	Growth Opportunities	MagnaCap	MidCap Opportunities	SmallCap Opportunities
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(9)	$(88)	$(98)	$140
Net realized gains (losses) on investments	(135)	(833)	(4,931)	(684)
Net unrealized gains (losses) on investments	(1,677)	(6,117)	(14,824)	(20,337)
Increase (decrease) in net assets from operations	(1,821)	(7,038)	(19,853)	(20,881)
Changes from principal transactions
Net premiums	1,989	22,346	1,547	49,789
Cost of insurance and administrative expenses	(153)	(1,616)	(671)	(2,102)
Benefit payments	-	-	-	-
Surrenders	-	-	-	(181)
Net transfers among divisions (including the     loan division and guaranteed interest division     in the general account)	8,413	62,752	92,340	82,640
Other	64	(102)	1,923	(46)
Increase (decrease) from principal transactions	10,313	83,380	95,139	130,100
Total increase (decrease) in net assets	8,492	76,342	75,286	109,219
Net assets at beginning of year	-	-	-	-
Net assets at end of year	$8,492	$76,342	$75,286	$109,219

See accompanying notes.

Strategic Investor   			128

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)
(Unaudited)
Nine months ended September 30, 2001

	Putnam
	New Opportunities	Voyager	Growth and Income	Small Cap Value
Increase (decrease) in net assets
Operations
Net investment income (loss)	$(36)	$(35)	$(579)	$(1,028)
Net realized gains (losses) on investments	(1,711)	(292)	(488)	2,286
Net unrealized gains (losses) on investments	(2,405)	(3,672)	(40,786)	(86,221)
Increase (decrease) in net assets from operations	(4,152)	(3,999)	(41,853)	(84,963)
Changes from principal transactions
Net premiums	27,153	12,573	167,986	167,132
Cost of insurance and administrative expenses	(696)	(1,145)	(6,504)	(10,083)
Benefit payments	-	-	-	-
Surrenders	-	-	-	(10,133)
Net transfers among divisions (including the loan     division and guaranteed interest division in the      general account)	153,503	30,741	596,974	832,214
Other	(212)	23	50	1,293
Increase (decrease) from principal transactions	179,748	42,192	758,506	980,423
Total increase (decrease) in net assets	175,596	38,193	716,653	895,460
Net assets at beginning of year	-	-	-	-
Net assets at end of year	$175,596	$38,193	$716,653	$895,460

See accompanying notes.

Strategic Investor   			129

Security Life Separate Account L1

Notes to Financial Statements
(Unaudited)
September 30, 2001

1. Organization

Security Life Separate Account L1 (the "Separate Account") was established by resolution of the Board of Directors of Security Life of Denver Insurance Company (the "Company") on November 3, 1993. The Separate Account is organized as a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940.

The Separate Account supports the operations of the FirstLine Variable Universal Life, FirstLine II Variable Universal Life, Strategic Advantage Variable Universal Life, Strategic Advantage II Variable Universal Life, Variable Survivorship Universal Life, Corporate Benefits Variable Universal Life, Strategic Benefits Variable Universal Life, Asset Portfolio Manager Variable Universal Life, and Estate Designer policies ("Variable Universal Life Policies") offered by the Company. Corporate Benefits Variable Universal Life and Strategic Benefits Variable Universal Life became effective in 2000 and are defined as Class B policies due to their mortality and expense charge structure. Asset Portfolio Manager Variable Universal Life became effective in 2001 and is also defined as a Class B policy. All other Variable Universal Life Policies are defined as Class A policies. The Separate Account may be used to support other variable life policies as the Company offers them. The assets of the Separate Account are the property of the Company. However, the portion of the Separate Account's assets attributable to the policies will not be used to satisfy liabilities arising out of any other operations of the Company.

As of September 30, 2001, the Separate Account offered 50 investment divisions (collectively "Funds") available to the policyholders, 37 of which invest in an independently managed mutual fund portfolio and thirteen of which invest in a mutual fund portfolio managed by an affiliate, either Direct Services, Inc. or ING Pilgrim Investments, LLC. The Funds are as follows:

Portfolio Managers/Portfolios (Funds)

Neuberger Berman Management Incorporated (NB)
     Neuberger Berman Limited Maturity Bond Portfolio
     Neuberger Berman Growth Portfolio
     Neuberger Berman Partners Portfolio

Fred Alger Management, Inc. (Alger)
     Alger American Small Capitalization Portfolio
     Alger American MidCap Growth Portfolio
     Alger American Growth Portfolio
     Alger American Leveraged AllCap Portfolio

Fidelity Management & Research Company (Fidelity)
     Fidelity Investments VIP II Asset Manager Portfolio
     Fidelity Investments VIP Growth Portfolio
     Fidelity Investments VIP Growth Service Class Portfolio
     Fidelity Investments VIP Overseas Portfolio
     Fidelity Investments VIP Overseas Service Class Portfolio
     Fidelity Investments VIP Money Market Portfolio
     Fidelity Investments VIP II Index 500 Portfolio

Strategic Investor   			130

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

INVESCO Funds Group, Inc. (INVESCO)
     INVESCO VIF Total Return Portfolio
     INVESCO VIF Equity Income Portfolio
     INVESCO VIF High Yield Portfolio
     INVESCO VIF Utilities Portfolio
     INVESCO VIF Small Company Growth Portfolio

Van Eck Associates Corporation (Van Eck)
     Van Eck Worldwide Hard Assets Portfolio
     Van Eck Worldwide Bond Portfolio
     Van Eck Worldwide Emerging Markets Portfolio
     Van Eck Worldwide Real Estate Portfolio

AIM Advisors, Inc. (AIM)
     AIM VI - Capital Appreciation Portfolio
     AIM VI - Government Securities Portfolio

Directed Services, Inc. ("GCG")
     GCG Trust - Equity Income Portfolio
     GCG Trust - Growth Portfolio
     GCG Trust - Hard Assets Portfolio
     GCG Trust - Limited Maturity Bond Portfolio
     GCG Trust - Liquid Asset Portfolio
     GCG Trust - MidCap Growth Portfolio
     GCG Trust - Research Portfolio
     GCG Trust - Total Return Portfolio
     GCG Trust - Fully Managed Portfolio

Janus Aspen Series Funds ("Janus")
     Growth Portfolio
     Aggressive Growth Portfolio
     Worldwide Growth Portfolio
     International Growth Portfolio

M Fund, Inc. ("M")
     Brandes International Equity Fund
     Clifton Enhanced U.S. Equity Fund
     Frontier Capital Appreciation Fund
     Turner Core Growth Fund

Strategic Investor   			131

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

ING Pilgrim Investments, LLC ("Pilgrim")
     VP Growth Opportunities Portfolio
     VP MagnaCap Portfolio
     VP MidCap Opportunities Portfolio
     VP SmallCap Opportunities Portfolio

Putnam Investment Management, LLC ("Putnam")
     Putnam VT New Opportunities Fund - Class 1B Shares
     Putnam VT Voyager Fund - Class 1B Shares
     Putnam VT Growth and Income Fund - Class 1B Shares
     Putnam VT Small Cap Value Fund - Class 1B Shares

Effective May 1, 2001 fifteen new divisions became available to the policyholders for investment in the following funds:

Fidelity Management & Research Company (Fidelity)
     Fidelity Investments VIP Growth Service Class Portfolio
     Fidelity Investments VIP Overseas Service Class Portfolio

Directed Services, Inc. ("GCG")
     GCG Trust - Fully Managed Portfolio

M Fund, Inc. ("M")
     Brandes International Equity Fund
     Clifton Enhanced U.S. Equity Fund
     Frontier Capital Appreciation Fund
     Turner Core Growth Fund

ING Pilgrim Investments, LLC ("Pilgrim")
     VP Growth Opportunities Portfolio
     VP MagnaCap Portfolio
     VP MidCap Opportunities Portfolio
     VP SmallCap Opportunities Portfolio

Putnam Investment Management, LLC ("Putnam")
     Putnam VT New Opportunities Fund - Class 1B Shares
     Putnam VT Voyager Fund - Class 1B Shares
     Putnam VT Growth and Income Fund - Class 1B Shares
     Putnam VT Small Cap Value Fund - Class 1B Shares

Strategic Investor   			132

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

The Variable Universal Life Policies allow the policyholders to specify the allocation of their net premium to the various Funds. They can also transfer their account values among the Funds. The Variable Universal Life Policies also provide the policyholders the option to allocate their net premiums, or to transfer their account values, to a Guaranteed Interest Division ("GID") in the Company's general account. The GID guarantees a rate of interest to the policyholder, and it is not variable in nature. Therefore, it is not included in these Separate Account statements.

2. Summary of Significant Accounting Policies

The accompanying financial statements of the Separate Account have been prepared on the basis of accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The significant accounting principles followed by the Separate Account and the methods of applying those principles are presented below or in the footnotes that follow:

Investment Valuation

The investments in shares of the Funds are valued at the closing net asset value (market value) per share as determined by the Funds on the day of measurement.

Investment Transactions and Related Investment Income

The investments in shares of the Funds are accounted for on the date the order to buy or sell is confirmed. Dividend income and distributions of capital gains are recorded on the ex-dividend date. Realized gains and losses from sales transactions are reported using the first-in, first-out ("FIFO") method of accounting for cost. The difference between cost and current market value of investments owned on the day of measurement is recorded as unrealized gain or loss on investment.

Valuation Period Deductions

For FirstLine, FirstLine II, Strategic Advantage, Strategic Advantage II, Variable Survivorship and Estate Designer policies (Class A Policies), charges are made directly against the assets of the Separate Account divisions and are reflected daily in the computation of the unit values of the divisions.

A daily deduction, at an annual rate of .75% of the daily asset value of the Separate Account divisions, is charged to the Separate Account for mortality and expense risks assumed by the Company. Total mortality and expense charges for the nine months ended September 30, 2001 were $3,766,054

Strategic Investor   			133

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

For the Corporate Benefits, Strategic Benefits and Asset Portfolio Manager policies (Class B Policies), mortality and expense charges result in the redemption of units rather than a deduction in the daily computation of unit values

For Corporate Benefits policies, a monthly deduction, at an annual rate of .20% of the account value, is charged. For Strategic Benefits policies, a monthly deduction, at an annual rate of .85%, .60% and .05% of the account value, is charged during policy years 1 through 10, 11 through 20, and 21 and later, respectively. For Asset Portfolio Manager, a monthly deduction, at an annual rate of .90% and .45% of the account value, is charged during policy years 1 through 10 and 11 through 20, respectively. There is no mortality and expense charge after year 20 for Asset Portfolio Manager policies. Total mortality and expense charges for these policies for the nine months ended September 30, 2001 were $117,234 and are included in the Statement of Changes in Net Assets as cost of insurance and administrative charges.

Policyholder Reserves

Policyholder reserves are recorded in the Separate Account at the aggregate account values of the policyholders invested in the Separate Account divisions. To the extent that benefits to be paid to the policyholders exceed their account values, the Company will contribute additional funds to the benefit proceeds.

3. Related Party Transactions

During the nine months ended September 30, 2001, management fees were paid indirectly to Direct Services, Inc., an affiliate of the Company, in its capacity as investment manager to GCG Trust. The Fund's advisory agreement provided for a fee at an annual rate of .94% of the average net assets of the Equity Income, Hard Assets and Fully Managed Portfolios, .99% of the average net assets of the Growth Portfolio, .54% of the average net assets of the Limited Maturity Bond and Liquid Assets Portfolios, and .88% of the average net assets of the MidCap, Research and Total Return Portfolios. In addition, management fees were paid to ING Pilgrim Investments, LLC, an affiliate of the Company, in its capacity as investment advisor to Pilgrim Variable Products Trust. The Fund's advisory agreement provides for a fee at an annual rate of .75% of the average net assets of the fund for all available Pilgrim funds.

4. Investments

Fund shares are purchased at net asset value with net premiums (premium payments, less sales and tax loads charged by the Company) and divisional transfers from other divisions. Fund shares are redeemed for the payment of benefits, for surrenders, for transfers to other divisions, and for charges by the Company for certain cost of insurance and administrative charges. The cost of insurance and administrative charges for the nine months ended September 30, 2001 was $30,894,716. Dividends made by the Funds are reinvested in the Funds.

Strategic Investor   			134

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

4. Investments (continued)

For the nine months ended September 30, 2001 the cost of purchases (plus reinvested dividends) and sales of investments are as follows:

Fund	Beginning of Year	Purchases	Sales	End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond	$14,317,177	$9,833,157	$(6,515,553)	$17,634,781
Growth	23,675,702	11,654,195	(15,008,036)	20,321,861
Partners	26,760,069	23,327,672	(21,312,796)	28,774,945
Fred Alger Management, Inc.:
American Small Capitalization	29,017,464	7,200,099	(7,970,932)	28,246,631
American MidCap Growth	32,585,413	47,695,306	(35,334,268)	44,946,451
American Growth	57,519,366	17,361,380	(6,055,876)	68,824,870
American Leveraged AllCap	30,403,675	30,525,084	(39,280,783)	21,647,976
Fidelity Management & Research Co.:
Asset Manager	16,794,005	12,581,884	(8,145,836)	21,230,053
Growth	76,947,214	25,701,078	(28,420,205)	74,228,087
Growth SC	-	-	-	-
Overseas	47,778,416	36,291,549	(33,079,359)	50,990,606
Overseas SC	-	-	-	-
Money Market	62,301,092	134,998,767	(93,029,907)	104,269,952
Index 500	171,986,004	46,080,738	(15,471,172)	202,595,570
INVESCO Funds Group, Inc.:
Total Return	13,758,395	3,323,740	(2,356,356)	14,725,779
Equity Income	20,783,337	12,004,405	(2,835,000)	29,952,742
High Yield	11,975,324	3,851,647	(3,800,870)	12,026,101
Utilities	7,691,761	4,628,178	(1,517,562)	10,802,377
Small Company Growth	14,096,290	6,001,772	(4,003,922)	16,094,140
Van Eck Associates Corporation:
Worldwide Hard Assets	2,041,764	1,220,311	(1,193,058)	2,069,017
Worldwide Bond	913,802	642,334	(314,200)	1,241,936
Worldwide Emerging Markets	6,215,858	2,124,071	(3,214,716)	5,125,213
Worldwide Real Estate	1,192,797	1,591,292	(623,412)	2,160,677
AIM Advisors, Inc.:
Capital Appreciation	51,815,173	9,320,530	(44,829,713)	16,305,990
Government Securities	16,599,323	53,962,296	(4,773,896)	65,787,723

Strategic Investor   			135

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

4. Investments (continued)

Fund	Beginning of Year	Purchases	Sales	End of Year
Directed Services, Inc. (GCG):
Equity Income	-	3,991	(517)	3,474
Growth	1,401	7,709	(2,954)	6,156
Hard Assets	-	-	-	-
Limited Maturity Bond	922,084	311,237	(130,056)	1,103,265
Liquid Asset	1,991,502	14,647,461	(12,501,662)	4,137,301
MidCap Growth	-	158,554	(16,356)	142,198
Research	-	3,991	(2,095)	1,896
Total Return	11,083	28,275	(8,220)	31,138
Fully Managed	-	2,377,472	(47,035)	2,330,437
Janus Aspen Series Funds:
Growth	258,748	2,995,398	(312,693)	2,941,453
Aggressive Growth	575,061	1,753,178	(142,309)	2,185,930
Worldwide Growth	336,173	2,942,885	(863,379)	2,415,679
International Growth	437,129	5,208,140	(296,326)	5,348,943
M Fund, Inc.:
Brandes	-	1,240,840	(43,244)	1,197,596
Clifton	-	724,772	(10,716)	714,056
Frontier	-	1,082,801	(43,354)	1,039,447
Turner	-	161,512	(743)	160,769
ING Pilgrim Investments, LLC:
Growth Opportunities	-	13,010	(2,841)	10,169
MagnaCap	-	91,882	(9,395)	82,487
Mid-Cap Opportunities	-	106,497	(16,387)	90,110
Small Cap Opportunities	-	133,734	(4,178)	129,556
Putnam Investment Management, LLC:
New Opportunity	-	188,345	(10,344)	178,001
Voyager	-	44,823	(2,957)	41,866
Growth and Income	-	765,548	(8,109)	757,439
Small Cap Value	-	1,057,284	(75,602)	981,682

Aggregate proceeds from sales of investments for the year ended September 30, 2001 were $339,904,411.

Strategic Investor   			136

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

5. Other Policy Deductions

The Variable Universal Life Policies provide for certain deductions for sales and tax loads from premium payments received from the policyholders and for surrender charges and taxes from amounts paid to policyholders. Such deductions are taken before the purchase of divisional units or after the redemption of divisional units of the Separate Account. Such deductions are not included in the Separate Account financial statements.

6. Policy Loans

The Variable Universal Life Policies allow the policyholders to borrow against their policies by using them as collateral for a loan. At the time of borrowing against the policies, an amount equal to the loan amount is transferred from the Separate Account divisions to a Loan Division in the Company's General Account to secure the loan. As payments are made on the policy loan, amounts are transferred back from the Loan Division to the Separate Account divisions. Interest is credited to the balance in the Loan Division at a fixed rate. The Loan Division is not variable in nature and is not included in these Separate Account statements.

7. Federal Income Taxes

The Separate Account is not taxed separately because the operations of the Separate Account are part of the total operations of the Company. The Company is taxed as a life insurance company under the Internal Revenue Code. The Separate Account is not taxed as a "Regulated Investment Company" under subchapter "M" of the Internal Revenue Code.

Strategic Investor   			137

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

8. Summary of Changes in Units

The following schedule summarizes the changes in divisional units for the nine months ended September 30, 2001:

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond:
Class A	1,085,190.344	633,981.266	(453,025.029)	1,266,146.581
Class B	-	11,870.651	(131.509)	11,739.142
Growth:
Class A	755,032.816	211,630.138	(297,943.682)	678,719.272
Class B	-	5,187.887	(149.125)	5,038.762
Partners:
Class A	1,131,357.503	954,332.012	(861,775.600)	1,223,913.915
Class B	727.044	3,644.189	(925.756)	3,445.477
Fred Alger Management, Inc.:
American Small Capitalization:
Class A	1,351,105.091	494,615.223	(336,183.930)	1,509,536.384
Class B	55,669.122	13,745.027	(7,103.215)	62,310.934
American MidCap Growth:
Class A	1,022,948.192	992,259.366	(816,277.300)	1,198,930.258
Class B	4,581.526	42,048.850	(6,508.656)	40,121.720
American Growth:
Class A	1,795,058.476	402,366.412	(211,091.017)	1,986,333.871
Class B	11,503.557	64,282.741	(6,449.037)	69,337.261
American Leveraged AllCap:
Class A	602,197.766	819,661.610	(819,085.801)	602,773.575
Class B	-	5,213.278	(99.158)	5,114.120
Fidelity Management & Research Co.:
Asset Manager:
Class A	878,584.296	673,615.192	(395,407.827)	1,156,791.661
Class B	-	27,300.458	(987.126)	26,313.332
Growth:
Class A	2,222,867.138	780,227.088	(752,229.346)	2,250,864.880
Class B	40,727.108	28,191.232	(6,005.258)	62,913.082
Growth SC:
Class A	-	-	-	-
Class B	-	10,635.510	(5,423.813)	5,211.697
Overseas:
Class A	2,586,286.303	1,374,102.231	(1,362,603.126)	2,597,785.408
Class B	83,750.568	1,138,500.038	(527,772.720)	694,477.886
Overseas SC:
Class A	-	-	-	-
Class B	-	8,253.934	(74.270)	8,179.664
Money Market:
Class A	4,689,569.461	9,818,823.896	(6,883,266.419)	7,625,126.938
Class B	-	-	-	-
Index 500:
Class A	6,025,479.633	1,389,040.776	(496,248.593)	6,918,271.816
Class B	704,951.502	850,688.233	(444,195.943)	1,111,443.792

Strategic Investor   			138

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

8. Summary of Changes in Units (continued)

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
INVESCO Funds Group, Inc.:
Total Return:
Class A	698,007.347	198,981.329	(112,373.094)	784,615.582
Class B	-	9,860.724	(568.112)	9,292.612
Equity Income:
Class A	782,880.410	452,568.963	(114,877.938)	1,120,571.435
Class B	23,197.396	53,355.532	(3,600.173)	72,952.755
High Yield:
Class A	680,080.798	235,922.007	(210519.503)	705,483.302
Class B	2,293.135	29,970.920	(2,491.826)	29,772.229
Utilities:
Class A	341,947.485	229,222.309	(73,357.723)	497,812.071
Class B	-	6,855.602	(2,097.018)	4,758.584
Small Company Growth:
Class A	658,499.168	378,941.248	(172,909.058)	864,531.358
Class B	2,459.473	20,102.781	(1,812.922)	20,749.332
Van Eck Associates Corporation:
Worldwide Hard Assets:
Class A	214,971.664	112,334.417	(123,784.616)	203,521.465
Class B	-	2,087.328	(2,073.651)	13.677
Worldwide Bond:
Class A	91,236.724	60,797.233	(28,799.510)	123,234.447
Class B	42.100	272.010	(58.304)	255.806
Worldwide Emerging Markets:
Class A	543,314.421	268,211.374	(275,700.681)	535,825.114
Class B	36,043.266	5,491.307	(4,681.595)	36,852.978
Worldwide Real Estate:
Class A	131,207.896	155,468.629	(69,309.664)	217,366.861
Class B	395.373	1,255.009	(74.497)	1,575.885
AIM Advisors, Inc.:
Capital Appreciation:
Class A	647,483.811	455,916.587	(131,759.921)	971,640.477
Class B	3,435,424.363	374,457.966	(3,577,223.343)	232,658.986
Government Securities:
Class A	1,022,213.843	909,066.908	(144,345.442)	1,786,935.309
Class B	469,535.280	3,863,575.759	(283,968.228)	4,049,142.811

Strategic Investor   			139

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

8. Summary of Changes in Units (continued)

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Directed Services, Inc. (GCG):
Equity Income:
Class A	-	-	-	-
Class B	-	373.031	(47.956)	325.075
Growth:
Class A	-	-	-	-
Class B	103.679	814.912	(231.845)	686.746
Hard Assets:
Class A	-	-	-	-
Class B	-	-	-	-
Limited Maturity Bond:
Class A	-	-	-	-
Class B	80,478.798	27,750.347	(11,314.315)	96,914.830
Liquid Asset:
Class A	-	-	-	-
Class B	183,932.621	1,320,267.028	(1,131,146.989)	373,052.660
MidCap Growth:
Class A	-	13,786.105	(1,197.856)	12,588.249
Class B	-	1,269.186	(120.146)	1,149.040
Research:
Class A	-	-	-	-
Class B	-	399.308	(201.392)	197.916
Total Return:
Class A	-	-	-	-
Class B	908.365	2,449.192	(669.154)	2,688.403
Fully Managed:
Class A	-	223,008.727	(3,702.155)	219,306.572
Class B	-	4,607.591	(613.638)	3,993.953
Janus Aspen Series Funds:
Growth:
Class A	29,430.276	378,803.998	(34,006.095)	374,228.179
Class B	-	23,700.310	(1,118.254)	22,582.056
Aggressive Growth:
Class A	53,752.789	345,618.839	(12,667.683)	386,703.945
Class B	22,786.649	11,209.173	(5,811.503)	28,184.319
Worldwide Growth:
Class A	19,710.545	380,733.407	(97,751.658)	302,692.294
Class B	17,011.166	6,125.993	(1,873.807)	21,263.352
International Growth:
Class A	42,106.076	671,293.298	(27,381.336)	686,018.038
Class B	6,269.387	27,479.028	(4,772.374)	28,976.041
M Fund, Inc.:
Brandes:
Class A	-	129,279.832	(4,248.068)	125,031.764
Class B	-	234.984	(3.167)	231.817
Clifton:
Class A	-	75,096.341	(1,007.746)	74,088.595
Class B	-	41.210	(7.022)	34.188
Frontier:
Class A	-	109,053.187	(4,019.642)	105,033.545
Class B	-	553.939	(10.221)	543.718
Turner:
Class A	-	17,312.395	(44.547)	17,267.848
Class B	-	119.092	(12.422)	106.670

Strategic Investor   			140

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

8. Summary of Changes in Units (continued)

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
ING Pilgrim Investments, LLC:
Growth Opportunities:
Class A	-	1,429.571	(290.582)	1.138.989
Class B	-	-	-	-
MagnaCap:
Class A	-	8,476.145	(858.001)	7,618.144
Class B	-	890.161	(25.273)	864.888
Mid-Cap Opportunities:
Class A	-	11,454.437	(1,508.937)	9,945.500
Class B	-	26.044	-	26.044
Small Cap Opportunities:
Class A	-	13,141.785	(331.164)	12,810.621
Class B	-	369.609	(1.966)	367.643
Putnam Investment Management, LLC:
New Opportunities:
Class A	-	21,527.240	(1,030.827)	20,496.413
Class B	-	1,699.870	(13.335)	1,686.535
Voyager:
Class A	-	4,684.642	(268.273)	4,416.369
Class B	-	25.078	(1.214)	23.864
Growth and Income:
Class A	-	78,154.086	(738.551)	77,415.535
Class B	-	158.978	(1.241)	157.737
Small Cap Value:
Class A	-	95,839.897	(6,763.553)	89,076.344
Class B	-	2,247.174	(292.282)	1,954.892

Strategic Investor   			141

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios

The following schedule summarizes expense ratios, excluding expenses of underlying funds and total return for the nine-month period ended September 30, 2001 and the years ended December 31, 2000, 1999, 1998, and 1997.

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Neuberger Berman Management Inc.:
Limited Maturity Bond - Class A
September 30, 2001	1,266,146.581	$14.36	$18,186	.30%	7.49%
December 31, 2000	1,085,190.344	13.36	14,494	.29	6.03
December 31, 1999	889,159.604	12.60	11,201	.28	.72
December 31, 1998	1,245,559.121	12.51	15,578	*	3.65
December 31, 1997	552,985.394	12.97	6,675	*	5.97
Neuberger Berman Management Inc.:
Limited Maturity Bond - Class B
September 30, 2001	11,739.142	$10.53	$124	1.55%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Neuberger Berman Management Inc.:
Growth - Class A
September 30, 2001	678,719.272	$14.79	$10,040	.51%	(44.02)%
December 31, 2000	755,032.816	26.42	19,945	.39	(12.26)
December 31, 1999	434,338.368	30.11	13,076	.41	49.28
December 31, 1998	447,486.376	20.17	9,026	*	14.60
December 31, 1997	316,146.084	17.60	5,564	*	28.09
Neuberger Berman Management Inc.:
Growth - Class B
September 30, 2001	5,038.762	$6.97	$35	2.61%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Neuberger Berman Management Inc.:
Government Income - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	75,811.559	11.79	894	*	8.76
Neuberger Berman Management Inc.:
Partners - Class A
September 30, 2001	1,223,913.915	$20.12	$24,629	.37%	(17.37)%
December 31, 2000	1,131,357.503	24.35	27,548	.55	.33
December 31, 1999	1,212,133.448	24.27	29,420	.51	6.54
December 31, 1998	986,298.018	22.78	22,463	*	3.45
December 31, 1997	626,285.721	22.02	13,792	*	30.30

Strategic Investor   			142

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Neuberger Berman Management Inc.:
Partners - Class B
September 30, 2001	3,445.477	$8.30	$29	5.51%	(16.75)%
December 31, 2000	727.044	9.97	7	8.66	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fred Alger Management, Inc:
American Small Capitalization - Class A
September 30, 2001	1,509,536.384	$11.73	$17,705	0.49%	(38.17)%
December 31, 2000	1,351,105.091	18.97	25,632	0.57	(27.90)
December 31, 1999	1,055,757.484	26.31	27,780	.053	42.29
December 31, 1998	838,692.418	18.49	15,503	*	14.70
December 31, 1997	648,733.740	16.12	11,275	*	10.56
Fred Alger Management, Inc:
American Small Capitalization - Class B
September 30, 2001	62,310.934	$6.00	$374	0.50%	(37.82)%
December 31, 2000	55,669.122	9.65	537	1.26	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fred Alger Management, Inc:
American MidCap Growth - Class A
September 30, 2001	1,198,930.258	$25.89	$31,046	0.61%	(20.31)%
December 31, 2000	1,022,948.192	32.49	33,232	0.61	8.41
December 31, 1999	576,738.314	29.97	17,287	0.71	30.82
December 31, 1998	402,532.472	22.91	9,220	*	29.36
December 31, 1997	288,809.482	17.71	5,115	*	14.11
Fred Alger Management, Inc:
American MidCap Growth - Class B
September 30, 2001	40,121.720	$10.73	$430	3.34%	(20.10)%
December 31, 2000	4,581.526	13.43	62	14.13	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fred Alger Management, Inc:
American Growth - Class A
September 30, 2001	1,986,333.871	$21.30	$42,302	0.51%	(23.57)%
December 31, 2000	1,795,058.476	27.87	50,001	0.54	(15.31)
December 31, 1999	1,257.371.637	32.89	41,383	0.54	32.70
December 31, 1998	923,696.066	24.80	22,904	*	47.01
December 31, 1997	569,990.309	16.87	9,616	*	24.78

Strategic Investor   			143

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Fred Alger Management, Inc:
American Growth - Class B
September 30, 2001	69,337.261	$7.86	$545	1.77%	(22.64)%
December 31, 2000	11,503.557	10.16	117	8.26	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fred Alger Management, Inc:
American Leveraged AllCap - Class A
September 30, 2001	602,773.575	$29.53	$17,802	0.81%	(27.05)%
December 31, 2000	602,197.766	40.48	24,377	0.74	(25.35)
December 31, 1999	425,281.099	54.23	23,064	0.63	76.70
December 31, 1998	221,642.446	30.69	6,801	*	56.66
December 31, 1997	148,542.639	19.59	2,910	*	18.80
Fred Alger Management, Inc:
American Leveraged AllCap - Class B
September 30, 2001	5,114.120	$8.29	$42	4.87%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
�� December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Asset Manager - Class A
September 30, 2001	1,156,791.661	$15.60	$18,046	0.50%	(12.99)%
December 31, 2000	878,584.296	17.93	15,755	0.55	(4.63)
December 31, 1999	722,717.906	18.80	13,590	0.50	10.26
December 31, 1998	600,255.213	17.05	10,237	*	14.12
December 31, 1997	410,906.106	14.94	6,137	*	19.81
Fidelity Management & Research Co.:
Asset Manager - Class B
September 30, 2001	26,313.332	$9.12	$240	1.92%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Growth - Class A
September 30, 2001	2,250,864.880	$21.28	$47,892	0.51%	(30.50)%
December 31, 2000	2,222,867.138	30.62	68,065	0.68	(11.76)
December 31, 1999	1,676,236.646	34.70	58,158	0.49	36.40
December 31, 1998	1,293,480.338	25.44	32,900	*	38.49
December 31, 1997	983,842.388	18.37	18,075	*	22.55

Strategic Investor   			144

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Fidelity Management & Research Co.:
Growth - Class B
September 30, 2001	62,913.082	$7.60	$478	1.95%	(28.89)%
December 31, 2000	40,727.108	10.84	441	4.93	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Growth SC - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Growth SC - Class B
September 30, 2001	5,211.697	$7.50	$56	5.03%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Overseas - Class A
September 30, 2001	2,597,785.408	$11.61	$30,163	.48%	(29.25)%
December 31, 2000	2,586,286.303	16.41	42,453	.45	(19.48)
December 31, 1999	1,716,617.627	20.38	34,984	.44	41.53
December 31, 1998	1,429,659.907	14.40	20,582	*	11.98
December 31, 1997	950,328.899	12.86	12,226	*	10.67
Fidelity Management & Research Co.:
Overseas - Class B
September 30, 2001	694,477.886	$7.37	$5,119	2.53%	(29.00)%
December 31, 2000	83,750.568	10.38	869	1.40	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Overseas SC- Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			145

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Fidelity Management & Research Co.:
Overseas SC- Class B
September 30, 2001	8,179.664	$6.89	$56	1.58%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Money Market - Class A
September 30, 2001	7,625,127.938	$13.64	$104,000	.72%	3.18%
December 31, 2000	4,689,569.461	13.22	62,105	1.35	5.00
December 31, 1999	2,763,648.297	12.59	34,797	.99	4.39
December 31, 1998	1,526,404.399	12.06	18,412	*	4.69
December 31, 1997	1,303,059.881	11.52	15,013	*	4.63
Fidelity Management & Research Co.:
Money Market - Class B
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Fidelity Management & Research Co.:
Index 500 - Class A
September 30, 2001	6,918,271,816	$22.61	$156,436	.50%	(21.63)%
December 31, 2000	6,025,479.633	28.85	173,842	.53	(9.96)
December 31, 1999	4,772,484.597	32.04	152,916	1.08	19.60
December 31, 1998	3,215,990.519	26.79	86,154	*	27.39
December 31, 1997	1,863,056.104	21.03	39,185	*	31.68
Fidelity Management & Research Co.:
Index 500 - Class B
September 30, 2001	1,111,443.792	$7.93	$8,817	1.72%	(21.25)%
December 31, 2000	704,951.502	10.07	7,098	.99	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
INVESCO Funds Group, Inc:
Total Return - Class A
September 30, 2001	784,615.582	$15.39	$12,071	82%	(8.12)%
December 31, 2000	698,007.347	16.75	11,695	.96	(2.90)
December 31, 1999	602,187.614	17.25	10,387	1.02	(4.11)
December 31, 1998	450,557.216	17.99	8,105	*	8.77
December 31, 1997	184,042.238	16.54	3,045	*	21.98

Strategic Investor   			146

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
INVESCO Funds Group, Inc:
Total Return - Class B
September 30, 2001	9,292.612	$9.31	$87	1.00%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
INVESCO Funds Group, Inc:
Equity Income - Class A
September 30, 2001	1,120,561.435	$22.29	$24,975	.67%	(18.02)%
December 31, 2000	782,880.410	27.19	21,286	.81	4.10
December 31, 1999	621,047.937	26.12	16,221	.85	13.96
December 31, 1998	473,616.752	22.92	10,853	*	14.49
December 31, 1997	297,553.033	20.02	5,958	*	27.19
INVESCO Funds Group, Inc:
Equity Income - Class B
September 30, 2001	72,952.755	$8.92	$651	.89%	(17.33)%
December 31, 2000	23,197.396	10.79	250	1.88	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
INVESCO Funds Group, Inc:
High Yield - Class A
September 30, 2001	705,483.302	$12.85	$9,062	.52%	(16.56)%
December 31, 2000	680,080.798	15.40	10,476	.54	(12.25)
December 31, 1999	536,863.946	17.55	9,421	.57	8.40
December 31, 1998	486,858.648	16.19	7,883	*	0.68
December 31, 1997	333,501.857	16.08	5,364	*	16.44
INVESCO Funds Group, Inc:
High Yield - Class B
September 30, 2001	29,772.229	$7.56	$225	1.39%	(16.43)%
December 31, 2000	2,293.135	9.07	21	12.83	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
INVESCO Funds Group, Inc:
Utilities - Class A
September 30, 2001	497,812.071	$14.94	$7,440	.76%	(34.62)%
December 31, 2000	341,947.485	22.85	7,812	.72	4.53
December 31, 1999	189,409.984	21.86	4,141	.72	18.23
December 31, 1998	110,379.616	18.49	2,041	*	24.51
December 31, 1997	78,118.685	14.85	1,160	*	22.52

Strategic Investor   			147

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
INVESCO Funds Group, Inc:
Utilities - Class B
September 30, 2001	4,758.584	$6.84	$33	2.21%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
INVESCO Funds Group, Inc:
Small Company Growth - Class A
September 30, 2001	864,531.358	$12.05	$10,422	.72%	(32.91)%
December 31, 2000	658,499.168	17.96	11,825	.83	(14.60)
December 31, 1999	212,503.210	21.03	4,469	.98	89.63
December 31, 1998	67,506.441	11.09	749	*	-
December 31, 1997	-	-	-	*	-
INVESCO Funds Group, Inc:
Small Company Growth - Class B
September 30, 2001	20,749.332	$8.84	$183	2.26%	(33.13)%
December 31, 2000	2,459.473	13.22	33	9.94	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Van Eck Associates Corporation:
Worldwide Hard Assets - Class A
September 30, 2001	203,521.465	$8.88	$1,808	.37%	(17.47)%
December 31, 2000	214,971.664	10.76	2,313	.36	10.59
December 31, 1999	236,972.429	9.73	2,306	.47	20.12
December 31, 1998	132,513.824	8.10	1,074	*	(31.47)
December 31, 1997	77,046.773	11.82	911	*	(2.48)
Van Eck Associates Corporation:
Worldwide Hard Assets - Class B
September 30, 2001	13.677	$8.19	-	.64%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Van Eck Associates Corporation:
Worldwide Bond - Class A
September 30, 2001	123,234.447	$9.97	$1,229	.72%	(2.25)%
December 31, 2000	91,236.724	10.20	931	.80	1.09
December 31, 1999	33,114.078	10.09	334	1.00	(8.52)
December 31, 1998	18,656.317	11.03	206	*	-
December 31, 1997	-	-	-	*	-

Strategic Investor   			148

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Van Eck Associates Corporation:
Worldwide Bond - Class B
September 30, 2001	255.806	$9.86	$3	15.08%	(1.60)%
December 31, 2000	42.100	10.02	422	56.52	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Van Eck Associates Corporation:
Worldwide Emerging Markets - Class A
September 30, 2001	535,825.114	$6.03	$3,230	.71%	(23.18)%
December 31, 2000	543,314.421	7.85	4,264	.64	(42.32)
December 31, 1999	228,819.195	13.61	3,114	.46	98.69
December 31, 1998	67,354.295	6.85	461		-
December 31, 1997	-	-	-		-
Van Eck Associates Corporation:
Worldwide Emerging Markets - Class B
September 30, 2001	36,852.978	$6.38	$235	.50%	(22.85)%
December 31, 2000	36,043.266	8.27	298	1.28	-
December 31, 1999	-	-	-		-
December 31, 1998	-	-	-		-
December 31, 1997	-	-	-		-
Van Eck Associates Corporation:
Worldwide Real Estate - Class A
September 30, 2001	217,366.861	$9.98	$2,170	.62%	.10%
December 31, 2000	131,207.896	9.97	1,308	.63	17.85
December 31, 1999	64,967.173	8.46	550	.96	(2.76)
December 31, 1998	8,765.232	8.70	76		-
December 31, 1997	-	-			-
Van Eck Associates Corporation:
Worldwide Real Estate - Class B
September 30, 2001	1,575.885	$11.05	$17	6.01%	.73%
December 31, 2000	395.373	10.97	4	11.51	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
AIM Advisors, Inc.:
Capital Appreciation- Class A
September 30, 2001	971,640.477	$9.37	$9,099	1.10%	(34.01)%
December 31, 2000	647,483.811	14.52	9,404	1.20	(13.36)
December 31, 1999	323,846.032	16.39	5,309	1.32	43.52
December 31, 1998	105,457.867	11.42	1,204		-
December 31, 1997	-	-	-		-

Strategic Investor   			149

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
AIM Advisors, Inc.:
Capital Appreciation- Class B
September 30, 2001	232,658.986	$7.86	$1,828	.71%	(35.15)%
December 31, 2000	3,435,424.363	12.12	41,634	.38	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
AIM Advisors, Inc.:
Government Securities - Class A
September 30, 2001	1,786,935.309	$11.96	$21,380	.30%	5.93%
December 31, 2000	1,022,213.843	11.29	11,540	.32	5.29
December 31, 1999	715,905.149	10.33	7,394	.39	(2.09)
December 31, 1998	246,150.062	10.55	2,596		-
December 31, 1997	-	-	-		-
AIM Advisors, Inc.:
Government Securities - Class B
September 30, 2001	4,049,142.811	$11.85	$47,995	1.47%	6.47%
December 31, 2000	469,535.280	11.13	5,224	.53	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Equity Income - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Equity Income - Class B
September 30, 2001	325.075	$9.92	$3	3.13%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Growth - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			150

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Directed Services, Inc. (GCG):
Growth - Class B
September 30, 2001	687.746	$7.53	$5	1.91%	(36.67)%
December 31, 2000	103.679	11.89	1	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Hard Assets - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Hard Assets - Class B
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Limited Maturity Bond - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Limited Maturity Bond - Class B
September 30, 2001	96,914.830	$11.81	$1,144	.31%	8.45%
December 31, 2000	80,478.798	10.89	877	.72	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Liquid Assets - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			151

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Directed Services, Inc. (GCG):
Liquid Assets - Class B
September 30, 2001	373,052.660	$11.10	$4,137	.82%	2.49%
December 31, 2000	183,932.621	10.83	1,992	.37	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
MidCap Growth - Class A
September 30, 2001	12,588.249	$7.85	$99	.93%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
MidCap Growth - Class B
September 30, 2001	1,149.040	$10.57	$12	3.15%
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Research - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Research - Class B
September 30, 2001	197.916	$7.77	$1	3.38%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Total Return - Class A
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			152

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Directed Services, Inc. (GCG):
Total Return - Class B
September 30, 2001	2,688.403	$10.97	$3	2.56%	(5.43)%
December 31, 2000	908.365	11.60	11	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Fully Managed- Class A
September 30, 2001	219,306.572	$10.09	$2,213	.21%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Directed Services, Inc. (GCG):
Fully Managed- Class B
September 30, 2001	3,993.953	$10.13	$40	2.36%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
Growth - Class A
September 30, 2001	374,228.179	$5.43	$2,032	1.19%	(32.42)%
December 31, 2000	29,430.276	8.28	244	0.24	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
Growth - Class B
September 30, 2001	22,582.056	$5.47	$123	4.04%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
Aggressive Growth - Class A
September 30, 2001	386,073.945	$3.65	$1,411	1.34%	(46.72)%
December 31, 2000	53,752.789	6.85	368	0.16	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			153

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Janus Aspen Series Funds:
Aggressive Growth - Class B
September 30, 2001	28,184.319	$3.68	$104	0.76%	(46.36)%
December 31, 2000	22.786.649	6.86	156	0.19	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
Worldwide Growth - Class A
September 30, 2001	302,692.294	$5.89	$1,782	1.17%	(32.22)%
December 31, 2000	19,710.545	8.69	171	0.24	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
Worldwide Growth - Class B
September 30, 2001	21,263.352	$5.94	$126	0.77%	(31.80)%
December 31, 2000	17,011.166	8.71	148	0.20	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
International Growth - Class A
September 30, 2001	686,018.038	$5.79	$3,971	0.47%	(33.37)%
December 31, 2000	42,106.076	8.69	366	0.24	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Janus Aspen Series Funds:
International Growth - Class B
September 30, 2001	28,976.041	$5.83	$169	2.80%	(33.07)%
December 31, 2000	6,269.387	8.71	55	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
International Equity - Class A
September 30, 2001	125,031.764	$8.78	$1,098	.21%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			154

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
M Fund, Inc.:
International Equity - Class B
September 30, 2001	231.817	$8.81	$2	12.05%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
Enhanced US Equity- Class A
September 30, 2001	74,088.595	$8.99	$665	.14%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
Enhanced US Equity- Class B
September 30, 2001	34.188	$9.01	-	34.61%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
Capital Appreciation - Class A
September 30, 2001	105,033.545	$8.43	$886	.20%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
Capital Appreciation - Class B
September 30, 2001	523.718	$8.46	$4	13.74%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
M Fund, Inc.:
Core Growth - Class A
September 30, 2001	17,267.848	$8.43	$146	.32%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			155

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
M Fund, Inc.:
Core Growth - Class B
September 30, 2001	106.670	$8.47	-	20.53%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
Growth Opportunities - Class A
September 30, 2001	1,138.989	$7.46	$8,492	2.86%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
Growth Opportunities - Class B
September 30, 2001	-	-	-	-	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
MagnaCap - Class A
September 30, 2001	7,618.144	$9.00	$69	1.57%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
MagnaCap - Class B
September 30, 2001	864.888	8.98	$8	9.16%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
Mid-Cap Opportunities - Class A
September 30, 2001	9,945.500	$7.55	$75	.41%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			156

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
ING Pilgrim Investment, LLC:
Mid-Cap Opportunities - Class B
September 30, 2001	26.044	$7.45	-	51.50%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
Small Cap Opportunities - Class A
September 30, 2001	12,810.621	$8.29	$106	1.23%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
ING Pilgrim Investment, LLC:
Small Cap Opportunities - Class B
September 30, 2001	367.643	$8.30	$3	28.22%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
New Opportunities - Class A
September 30, 2001	20,496.413	$7.91	$162	1.52%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
New Opportunities - Class B
September 30, 2001	1,686.535	$7.94	$13	2.88%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
Voyager - Class A
September 30, 2001	4,416.369	$8.60	$38	2.50%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

Strategic Investor   			157

Security Life Separate Account L1
(Unaudited)
Notes to Financial Statements (continued)

9. Summary of Expense and Investment Ratios (continued)

Division	Units	Net Assets		Expenses as a % of Average Net Assets	Total Return
		Unit Value	(000s)
Putnam Investment Management, LLC:
Voyager - Class A
September 30, 2001	23.864	$8.63	-	15.79%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
Growth and Income - Class A
September 30, 2001	77,415.535	$9.24	$715	.54%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
Growth and Income - Class B
September 30, 2001	157.737	$9.27	$1	27.46%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
Small Cap Value - Class A
September 30, 2001	89,076.344	$9.84	$876	.55%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-
Putnam Investment Management, LLC:
Small Cap Value - Class B
September 30, 2001	1,954.892	$9.84	$19	3.32%	-
December 31, 2000	-	-	-	-	-
December 31, 1999	-	-	-	-	-
December 31, 1998	-	-	-	-	-
December 31, 1997	-	-	-	-	-

*Ratio not provided for years ended December 31, 1998 and 1997.</R>

Strategic Investor   			158

Security Life Separate Account L1 of
Security Life of Denver Insurance Company
Financial Statements
Years ended December 31, 2000, 1999 and 1998

Strategic Investor   			159

Security Life Separate Account L1

Financial Statements

Years ended December 31, 2000, 1999 and 1998

Contents

Report of Independent Auditors	161
Audited Financial Statements
Statement of Net Assets	162
Statement of Operations	171
Statement of Changes in Net Assets	194
Notes to Financial Statements	217

Strategic Investor   			160

Report of Independent Auditors

Policyholders
Security Life Separate Account L1 of
     Security Life of Denver Insurance Company

We have audited the accompanying statement of net assets of Security Life Separate Account L1 of Security Life of Denver Insurance Company, comprising, respectively, the Neuberger Berman Advisers Management Trust (comprising the Limited Maturity Bond, Growth and Partners Divisions) ("NB"), the Alger American Fund (comprising the American Small Capitalization, American MidCap Growth, American Growth and American Leveraged AllCap Divisions) ("Alger"), the Fidelity Variable Insurance Products Fund and Variable Insurance Products Fund II (comprising the Asset Manager, Growth, Overseas, Money Market and Index 500 Divisions) ("Fidelity"), the INVESCO Variable Investment Funds, Inc. (comprising the Total Return, Equity Income, High Yield, Utilities and Small Company Growth Divisions) ("INVESCO"), the Van Eck Worldwide Trust (comprising the Worldwide Hard Assets, Worldwide Bond, Worldwide Emerging Markets and Worldwide Real Estate Divisions) ("Van Eck"), AIM Advisors, Inc. (comprising the Capital Appreciation and Government Securities Divisions) ("AIM"), the Directed Services, Inc. (comprising the Equity Income, Growth, Hard Asset, Limited Maturity Bond, Liquid Asset, MidCap, Research and Total Return Divisions) ("GCG"), and Janus Aspen Series Funds (comprising the Aggressive Growth, Growth, International Growth and Worldwide Growth Divisions) ("Janus"), as of December 31, 2000, and the related statements of operations and changes in net assets for each of the three years in the period then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2000, by correspondence with the transfer agents. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Security Life Separate Account L1 at December 31, 2000, and the results of its operations and changes in its net assets for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States.

April 3, 2001

Strategic Investor   			161

Security Life Separate Account L1

Statement of Net Assets

December 31, 2000

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM	Total GCG	Total Janus
Assets
Investments in mutual funds at market value (Note 3)	$711,116,580	$61,876,992	$133,977,481	$370,730,205	$63,237,456	$9,121,476	$67,784,644	$2,880,066	$1,508,260
Total assets	711,116,580	61,876,992	133,977,481	370,730,205	63,237,456	9,121,476	67,784,644	2,880,066	1,508,260
Liabilities
Due to (from) Security Life of Denver	(72,228)	(117,844)	18,560	192,254	(149,658)	2,390	(17,930)	-	-
Total liabilities	(72,228)	(117,844)	18,560	192,254	(149,658)	2,390	(17,930)	-	-
Net assets	$711,188,808	$61,994,836	$133,958,921	$370,537,951	$63,387,114	$9,119,086	$67,802,574	$2,880,066	$1,508,260
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$711,188,808	$61,994,836	$133,958,921	$370,537,951	$63,387,114	$9,119,086	$67,802,574	$2,880,066	$1,508,260
Total policyholder reserves	$711,188,808	$61,994,836	$133,958,921	$370,537,951	$63,387,114	$9,119,086	$67,802,574	$2,880,066	$1,508,260

See accompanying notes.

Strategic Investor   			162

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	NB
	Total NB	Limited Maturity Bond	Growth	Partners
Assets
Investments in mutual funds at market value (Note 3)	$61,876,992	$14,488,939	$19,934,193	$27,453,860
Total assets	61,876,992	14,488,939	19,934,193	27,453,860
Liabilities
Due to (from) Security Life of Denver	(117,844)	(5,212)	(10,713)	(101,919)
Total liabilities	(117,844)	(5,212)	(10,713)	(101,919)
Net assets	$61,994,836	$14,494,151	$19,944,906	$27,555,779
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$61,994,836	$14,494,151	$19,944,906	$27,555,779
Total policyholder reserves	$61,994,836	$14,494,151	$19,944,906	$27,555,779
Number of divisional units outstanding (Note 7):
Class A		1,085,190.344	755,032.816	1,131,357.503
Class B		-	-	727.044
Value per divisional unit:
Class A		$13.36	$26.42	$24.35
Class B		$ -	$ -	$ 9.97

See accompanying notes.

Strategic Investor   			163

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Assets
Investments in mutual funds at market value (Note 3)	$133,977,481	$26,226,670	$33,290,178	$50,094,730	$24,365,903
Total assets	133,977,481	26,226,670	33,290,178	50,094,730	24,365,903
Liabilities
Due to (from) Security Life of Denver	18,560	57,540	(3,573)	(23,702)	(11,705)
Total liabilities	18,560	57,540	(3,573)	(23,702)	(11,705)
Net assets	$133,958,921	$26,169,130	$33,293,751	$50,118,432	$24,377,608
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$133,958,921	$26,169,130	$33,293,751	$50,118,432	$24,377,608
Total policyholder reserves	$133,958,921	$26,169,130	$33,293,751	$50,118,432	$24,377,608
Number of divisional units outstanding (Note 7):
Class A		1,351,105.091	1,022,948.192	1,795,058.476	602,197.766
Class B		55,669.122	4,581.526	11,503.557	-
Value per divisional unit:
Class A		$18.97	$32.49	$27.87	$40.48
Class B		$ 9.65	$13.43	$10.16	$ -

See accompanying notes.

Strategic Investor   			164

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Assets
Investments in mutual funds at
market value (Note 3)	$370,730,205	$15,754,225	$68,586,160	$43,188,471	$62,301,092	$180,900,257
Total assets	370,730,205	15,754,225	68,586,160	43,188,471	62,301,092	180,900,257
Liabilities
Due to (from) Security Life of Denver	192,254	(393)	79,957	(133,406)	286,280	(40,184)
Total liabilities	192,254	(393)	79,957	(133,406)	286,280	(40,184)
Net assets	$370,537,951	$15,754,618	$68,506,203	$43,321,877	$62,014,812	$180,940,441
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$370,537,951	$15,754,618	$68,506,203	$43,321,877	$62,014,812	$180,940,441
Total policyholder reserves	$370,537,951	$15,754,618	$68,506,203	$43,321,877	$62,014,812	$180,940,441
Number of divisional units outstanding (Note 7):
Class A		878,584.296	2,222,867.138	2,586,286.303	4,689,569.461	6,025,479.633
Class B		-	40,727.108	83,750.568	-	704,951.502
Value per divisional unit:      Class A		$17.93	$30.62	$16.41	$13.22	$28.85
Class B		$ -	$10.84	$10.38	$ -	$10.07

See accompanying notes.

Strategic Investor   			165

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Assets
Investments in mutual funds at
market value (Note 3)	$63,237,456	$11,689,940	$21,534,053	$10,481,915	$7,812,397	$11,719,151
Total assets	63,237,456	11,689,940	21,534,053	10,481,915	7,812,397	11,719,151
Liabilities
Due to (from) Security Life of Denver	(149,658)	(4,691)	(2,043)	(14,437)	465	(128,952)
Total liabilities	(149,658)	(4,691)	(2,043)	(14,437)	465	(128,952)
Net assets	$63,387,114	$11,694,631	$21,536,096	$10,496,352	$7,811,932	$11,848,103
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$63,387,114	$11,694,631	$21,536,096	$10,496,352	$7,811,932	$11,848,103
Total policyholder reserves	$63,387,114	$11,694,631	$21,536,096	$10,496,352	$7,811,932	$11,848,103
Number of divisional units outstanding (Note 7):
Class A		698,007.347	782,880.410	680,080.798	341,947.485	658,499.168
Class B		-	23,197.396	2,293.135	-	2,459.473
Value per divisional unit:      Class A		$16.75	$27.19	$15.40	$22.85	$17.96
Class B		$-	$10.79	$ 9.07	$ -	$13.22

See accompanying notes.

Strategic Investor   			166

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	Van Eck
	Total Van Eck	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Assets
Investments in mutual funds
at market value (Note 3)	$9,121,476	$2,313,362	$931,424	$4,564,382	$1,312,308
Total assets	9,121,476	2,313,362	931,424	4,564,382	1,312,308
Liabilities
Due to (from) Security Life of Denver	2,390	11	(3)	2,382	-
Total liabilities	2,390	11	(3)	2,382	-
Net assets	$9,119,086	$2,313,351	$931,427	$4,562,000	$1,312,308
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$9,119,086	$2,313,351	$931,427	$4,562,000	$1,312,308
Total policyholder reserves	$9,119,086	$2,313,351	$931,427	$4,562,000	$1,312,308
Number of divisional units outstanding (Note 7):      Class A		214,971.664	91,236.724	543,314.421	131,207.896
Class B		-	42.100	36,043.266	395.373
Value per divisional unit:      Class A		$10.76	$10.20	$7.85	$ 9.97
Class B		$ -	$10.02	$8.27	$10.97

See accompanying notes.

Strategic Investor   			167

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	AIM
	Total AIM	Capital Appreciation	Government Securities
Assets
Investments in mutual funds at
market value (Note 3)	$67,784,644	$51,020,236	$16,764,408
Total assets	67,784,644	51,020,236	16,764,408
Liabilities
Due to (from) Security Life of Denver	(17,930)	(18,440)	510
Total liabilities	(17,930)	(18,440)	510
Net assets	$67,802,574	$51,038,676	$16,763,898
Policyholder reserves
Reserves attributable to the
policyholders (Note 2)	$67,802,574	$51,038,676	$16,763,898
Total policyholder reserves	$67,802,574	$51,038,676	$16,763,898
Number of divisional units outstanding (Note 7):      Class A		647,483.811	1,022,213.843
Class B		3,435,424.363	469,535.280
Value per divisional unit:      Class A		$14.52	$11.29
Class B		$12.12	$11.13

See accompanying notes.

Strategic Investor   			168

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	GCG
	Total GCG	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return
Assets
Investments in mutual funds at market value (Note 3)	$2,880,066	$ -	$1,233	$ -	$876,798	$1,991,502	$ -	$ -	$10,533
Total assets	2,880,066	-	1,233	-	876,798	1,991,502	-	-	10,533
Liabilities
Due to (from) Security Life of Denver	-	-	-	-	-	-	-	-	-
Total liabilities	-	-	-	-	-	-	-	-	-
Net assets	$2,880,066	$ -	$1,233	$ -	$876,798	$1,991,502	$ -	$ -	$10,533
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$2,880,066	$ -	$1,233	$ -	$876,798	$1,991,502	$ -	$ -	$10,533
Total policyholder reserves	$2,880,066	$ -	$1,233	$ -	$876,798	$1,991,502	$ -	$ -	$10,533
Number of divisional units outstanding (Note 7):      Class A		-	-	-	-	-	-	-	-
Class B		-	103.679	-	80,478.798	183,932.621	-	-	908.365
Value per divisional unit:      Class A		-	-	-	-	-	-	-	-
Class B		-	$11.89	-	$10.89	$10.83	-	-	$11.60

See accompanying notes.

Strategic Investor   			169

Security Life Separate Account L1

Statement of Net Assets (continued)

December 31, 2000

	Janus
	Total Janus	Growth	Aggressive Growth	Worldwide Growth	International Growth
Assets
Investments in mutual funds at market value (Note 3)	$1,508,260	$243,641	$524,583	$319,420	$420,616
Total assets	1,508,260	243,641	524,583	319,420	420,616
Liabilities
Due to (from) Security Life of Denver	-	-	-	-	-
Total liabilities	-	-	-	-	-
Net assets	$1,508,260	$243,641	$524,583	$319,420	$420,616
Policyholder reserves
Reserves attributable to the policyholders (Note 2)	$1,508,260	$243,641	$524,583	$319,420	$420,616
Total policyholder reserves	$1,508,260	$243,641	$524,583	$319,420	$420,616
Number of divisional units outstanding (Note 7):      Class A		29,430.276	53,752.789	19,710.545	42,106.076
Class B		-	22,786.649	17,011.166	6,269.387
Value per divisional unit:      Class A		$8.28	$6.85	$8.69	$8.69
Class B		$ -	$6.86	$8.71	$8.71

See accompanying notes.

Strategic Investor   			170

Security Life Separate Account L1

Statement of Operations

Year ended December 31, 2000

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM	Total GCG	Total Janus
Investment income
Dividends from mutual funds	$ 50,577,183	$ 7,022,071	$ 21,585,044	$ 16,687,757	$ 3,487,264	$ 59,217	$ 818,477	$916,460	$ 893
Less valuation period deductions
(Note 2)	4,508,171	450,958	982,444	2,480,381	404,934	59,822	128,874	-	758
Net investment income (loss)	46,069,012	6,571,113	20,602,600	14,207,376	3,082,330	(605)	689,603	916,460	135
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	5,695,914	(1,808,706)	(5,036,278)	10,515,603	1,339,426	220,229	475,369	-	(9,729)
Net unrealized gains (losses) on
investments	(118,856,269)	(7,325,351)	(40,865,515)	(58,774,602)	(7,701,130)	(2,223,947)	(1,820,869)	(46,004)	(98,851)
Net realized and unrealized gains
(losses) on investments	(113,160,355)	(9,134,057)	(45,901,793)	(48,258,999)	(6,361,704)	(2,003,718)	(1,345,500)	(46,004)	(108,580)
Net increase (decrease) in net assets
resulting from operations	$ (67,091,343)	$(2,562,944)	$(25,299,193)	$(34,051,623)	$(3,279,374)	$(2,004,323)	$ (655,897)	$870,456	$(108,445)

See accompanying notes.

Strategic Investor   			171

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	NB
	Total NB	Limited Maturity Bond	Growth	Partners
Investment income
Dividends from mutual funds	$ 7,022,071	$775,107	$ 1,356,082	$4,890,882
Less valuation period deductions
(Note 2)	450,958	92,250	138,445	220,263
Net investment income (loss)	6,571,113	682,857	1,217,637	4,670,619
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(1,808,706)	(281,540)	3,777,374	(5,304,540)
Net unrealized gains (losses) on
investments	(7,325,351)	351,484	(7,971,190)	294,355
Net realized and unrealized gains
(losses) on investments	(9,134,057)	69,944	(4,193,816)	(5,010,185)
Net increase (decrease) in net assets
resulting from operations	$(2,562,944)	$752,801	$(2,976,179)	$ (339,566)

See accompanying notes.

Strategic Investor   			172

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Investment income
Dividends from mutual funds	$21,585,044	$9,941,662	$2,936,254	$6,249,935	$2,457,193
Less valuation period deductions
(Note 2)	982,444	222,078	194,721	366,802	198,843
Net investment income (loss)	20,602,600	9,719,584	2,741,533	5,883,133	2,258,350
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(5,036,278)	(9,976,931)	1,057,836	1,775,571	2,107,246
Net unrealized gains (losses) on
investments	(40,865,515)	(9,435,613)	(2,672,195)	(16,304,212)	(12,453,495)
Net realized and unrealized gains
(losses) on investments	(45,901,793)	(19,412,544)	(1,614,359)	(14,528,641)	(10,346,249)
Net increase (decrease) in net assets
resulting from operations	$(25,299,193)	$(9,692,960)	$1,127,174	$(8,645,508)	$(8,087,899)

See accompanying notes.

Strategic Investor   			173

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Investment income
Dividends from mutual funds	$ 16,687,757	$1,469,444	$ 6,670,347	$ 3,516,677	$2,798,325	$ 2,232,964
Less valuation period deductions
(Note 2)	2,480,381	105,478	489,501	301,304	340,745	1,243,353
Net investment income (loss)	14,207,376	1,363,966	6,180,846	3,215,373	2,457,580	989,611
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	10,515,603	8,816	2,581,814	1,800,478	-	6,124,495
Net unrealized gains (losses) on
investments	(58,774,602)	(2,092,103)	(17,925,268)	(13,999,080)	-	(24,758,151)
Net realized and unrealized gains
(losses) on investments	(48,258,999)	(2,083,287)	(15,343,454)	(12,198,602)	-	(18,633,656)
Net increase (decrease) in net assets
resulting from operations	$(34,051,623)	$ (719,321)	$(9,162,608)	$(8,983,229)	$2,457,580	$(17,644,045)

See accompanying notes.

Strategic Investor   			174

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Investment income
Dividends from mutual funds	$ 3,487,264	$1,540,605	$1,186,862	$ 97,398	$324,011	$ 338,388
Less valuation period deductions
(Note 2)	404,934	80,022	139,132	78,969	43,912	62,899
Net investment income (loss)	3,082,330	1,460,583	1,047,730	18,429	280,099	275,489
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	1,339,426	(314,414)	593,634	(390,743)	256,021	1,194,928
Net unrealized gains (losses) on
investments	(7,701,130)	(1,435,710)	(904,246)	(1,002,431)	(372,493)	(3,986,250)
Net realized and unrealized gains
(losses) on investments	(6,361,704)	(1,750,124)	(310,612)	(1,393,174)	(116,472)	(2,791,322)
Net increase (decrease) in net assets
resulting from operations	$(3,279,374)	$ (289,541)	$ 737,118	$(1,374,745)	$163,627	$(2,515,833)

See accompanying notes.

Strategic Investor   			175

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	Van Eck
	Total Van Eck	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Investment income
Dividends from mutual funds	$ 59,217	$ 25,149	$20,595	$ -	$ 13,473
Less valuation period deductions
(Note 2)	59,822	17,641	5,005	31,191	5,985
Net investment income (loss)	(605)	7,508	15,590	(31,191)	7,488
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	220,229	140,202	(14,783)	87,666	7,144
Net unrealized gains (losses) on
investments	(2,223,947)	123,530	23,588	(2,508,578)	137,513
Net realized and unrealized gains
(losses) on investments	(2,003,718)	263,732	8,805	(2,420,912)	144,657
Net increase (decrease) in net assets
resulting from operations	$(2,004,323)	$271,240	$24,395	$(2,452,103)	$152,145

See accompanying notes.

Strategic Investor   			176

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	AIM
	Total AIM	Capital Appreciation	Government Securities
Investment income
Dividends from mutual funds	$ 818,477	$ 266,665	$551,812
Less valuation period deductions
(Note 2)	128,874	58,290	70,584
Net investment income (loss)	689,603	208,375	481,228
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
Investments	475,369	418,127	57,242
Net unrealized gains (losses) on
Investments	(1,820,869)	(2,171,530)	350,661
Net realized and unrealized gains
(losses) on investments	(1,345,500)	(1,753,403)	407,903
Net increase (decrease) in net assets
resulting from operations	$ (655,897)	$(1,545,028)	$889,131

See accompanying notes.

Strategic Investor   			177

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	GCG
	Total GCG	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return
Investment income
Dividends from mutual funds	$916,460	$ -	$ 90	$ -	$54,281	$861,303	$ -	$ -	$786
Less valuation period deductions (Note 2)	-	-	-	-	-	-	-	-	-
Net investment income (loss)	916,460	-	90	-	54,281	861,303	-	-	786
Realized and unrealized gains (losses) on investments
Net realized gains (losses) on investments	-	-	-	-	-	-	-	-	-
Net unrealized gains (losses) on investments	(46,004)	-	(168)	-	(45,286)	-	-	-	(550)
Net realized and unrealized gains (losses) on investments	(46,004)	-	(168)	-	(45,286)	-	-	-	(550)
Net increase (decrease) in net assets resulting from operations	$870,456	$ -	$ (78)	$ -	$ 8,995	$861,303	$ -	$ -	$236

See accompanying notes.

Strategic Investor   			178

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 2000

	Janus
	Total Janus	Growth	Aggressive Growth	Worldwide Growth	International Growth
Investment income
Dividends from mutual funds	$ 893	$ -	$ -	$ 83	$ 810
Less valuation period deductions
(Note 2)	758	180	218	147	213
Net investment income (loss)	135	(180)	(218)	(64)	597
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	(9,729)	(1,546)	(86)	(7,584)	(513)
Net unrealized gains (losses) on
investments	(98,851)	(15,107)	(50,478)	(16,753)	(16,513)
Net realized and unrealized gains
(losses) on investments	(108,580)	(16,653)	(50,564)	(24,337)	(17,026)
Net increase (decrease) in net assets
resulting from operations	$(108,445)	$(16,833)	$(50,782)	$(24,401)	$(16,429)

See accompanying notes.

Strategic Investor   			179

Security Life Separate Account L1

Statement of Operations

Year ended December 31, 1999

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM
Investment income
Dividends from mutual funds	$18,884,169	$2,123,919	$ 7,325,481	$ 7,908,482	$1,183,695	$ 30,826	$ 311,766
Less valuation period deductions
(Note 2)	2,908,885	371,218	557,411	1,629,301	272,130	27,814	51,011
Net investment income (loss)	15,975,284	1,752,701	6,768,070	6,279,181	911,565	3,012	260,755
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	18,191,446	557,950	5,023,269	11,358,812	1,094,239	73,144	84,032
Net unrealized gains (losses) on
investments	55,998,041	3,797,732	17,500,945	30,152,442	2,135,798	1,374,192	1,036,932
Net realized and unrealized gains
(losses) on investments	74,189,487	4,355,682	22,524,214	41,511,254	3,230,037	1,447,336	1,120,964
Net increase (decrease) in net assets
resulting from operations	$90,164,771	$6,108,383	$29,292,284	$47,790,435	$4,141,602	$1,450,348	$1,381,719

See accompanying notes.

Strategic Investor   			180

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	NB
	Total NB	Limited Maturity Bond	Growth	Partners
Investment income
Dividends from mutual funds	$2,123,919	$911,596	$ 453,085	$ 759,238
Less valuation period deductions
(Note 2)	371,218	108,699	70,308	192,211
Net investment income (loss)	1,752,701	802,897	382,777	567,027
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	557,950	(293,615)	318,964	532,601
Net unrealized gains (losses) on
investments	3,797,732	(423,477)	3,714,218	506,991
Net realized and unrealized gains
(losses) on investments	4,355,682	(717,092)	4,033,182	1,039,592
Net increase (decrease) in net assets
resulting from operations	$6,108,383	$ 85,805	$4,415,959	$1,606,619

See accompanying notes.

Strategic Investor   			181

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Investment income
Dividends from mutual funds	$ 7,325,481	$2,200,048	$1,636,538	$2,764,203	$ 724,692
Less valuation period deductions
(Note 2)	557,411	141,734	88,955	233,373	93,349
Net investment income (loss)	6,768,070	2,058,314	1,547,583	2,530,830	631,343
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	5,023,269	94,825	322,974	2,007,625	2,597,845
Net unrealized gains (losses) on
investments	17,500,945	5,993,398	2,015,333	4,584,649	4,907,565
Net realized and unrealized gains
(losses) on investments	22,524,214	6,088,223	2,338,307	6,592,274	7,505,410
Net increase (decrease) in net assets
resulting from operations	$29,292,284	$8,146,537	$3,885,890	$9,123,104	$8,136,753

See accompanying notes.

Strategic Investor   			182

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Investment income
Dividends from mutual funds	$ 7,908,482	$ 798,528	$ 3,508,501	$ 820,014	$1,277,704	$ 1,503,735
Less valuation period deductions
(Note 2)	1,629,301	83,646	308,868	188,207	188,211	860,369
Net investment income (loss)	6,279,181	714,882	3,199,633	631,807	1,089,493	643,366
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	11,358,812	122,474	7,459,882	553,230	-	3,223,226
Net unrealized gains (losses) on
investments	30,152,442	316,538	3,509,953	8,740,414	-	17,585,537
Net realized and unrealized gains
(losses) on investments	41,511,254	439,012	10,969,835	9,293,644	-	20,808,763
Net increase (decrease) in net assets
resulting from operations	$47,790,435	$1,153,894	$14,169,468	$9,925,451	$1,089,493	$21,452,129

See accompanying notes.

Strategic Investor   			183

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Investment income
Dividends from mutual funds	$1,183,695	$ 276,071	$ 252,055	$618,531	$ 37,038	$ -
Less valuation period deductions
(Note 2)	272,130	71,255	97,430	65,338	23,769	14,338
Net investment income (loss)	911,565	204,816	154,625	553,193	13,269	(14,338)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	1,094,239	286,623	506,767	(241,611)	304,911	237,549
Net unrealized gains (losses) on
investments	2,135,798	(923,083)	965,264	379,005	179,598	1,535,014
Net realized and unrealized gains
(losses) on investments	3,230,037	(636,460)	1,472,031	137,394	484,509	1,772,563
Net increase (decrease) in net assets
resulting from operations	$4,141,602	$(431,644)	$1,626,656	$690,587	$497,778	$1,758,225

See accompanying notes.

Strategic Investor   			184

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	Van Eck
	Total Van Eck	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Investment income
Dividends from mutual funds	$ 30,826	$ 16,585	$ 12,446	$ -	$ 1,795
Less valuation period deductions
(Note 2)	27,814	12,646	2,550	10,886	1,732
Net investment income (loss)	3,012	3,939	9,896	(10,886)	63
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	73,144	(313,009)	(25,853)	410,384	1,622
Net unrealized gains (losses) on
investments	1,374,192	592,123	(9,920)	809,962	(17,973)
Net realized and unrealized gains
(losses) on investments	1,447,336	279,114	(35,773)	1,220,346	(16,351)
Net increase (decrease) in net assets
resulting from operations	$1,450,348	$283,053	$(25,877)	$1,209,460	$(16,288)

See accompanying notes.

Strategic Investor   			185

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1999

	AIM
	Total AIM	Capital Appreciation	Government Securities
Investment income
Dividends from mutual funds	$ 311,766	$ 113,467	$198,299
Less valuation period deductions
(Note 2)	51,011	19,289	31,722
Net investment income (loss)	260,755	94,178	166,577
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	84,032	92,256	(8,224)
Net unrealized gains (losses) on
investments	1,036,932	1,257,369	(220,437)
Net realized and unrealized gains
(losses) on investments	1,120,964	1,349,625	(228,661)
Net increase (decrease) in net assets
resulting from operations	$1,381,719	$1,443,803	$ (62,084)

See accompanying notes.

Strategic Investor   			186

Security Life Separate Account L1

Statement of Operations

Year ended December 31, 1998

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM
Investment income
Dividends from mutual funds	$17,747,833	$4,273,690	$ 4,617,072	$ 6,943,854	$1,625,860	$ 189,620	$ 97,737
Less valuation period deductions
(Note 2)	1,740,661	291,487	290,412	971,160	162,321	11,393	13,888
Net investment income (loss)	16,007,172	3,982,203	4,326,660	5,972,694	1,463,539	178,227	83,849
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	8,536,274	347,823	1,685,294	6,403,348	355,780	(260,570)	4,599
Net unrealized gains (losses) on
investments	18,766,977	(2,323,636)	5,825,800	15,230,082	248,681	(368,037)	154,087
Net realized and unrealized gains
(losses) on investments	27,303,251	(1,975,813)	7,511,094	21,633,430	604,461	(628,607)	158,686
Net increase (decrease) in net
assets resulting from operations	$43,310,423	$2,006,390	$11,837,754	$27,606,124	$2,068,000	$(450,380)	$242,535

See accompanying notes.

Strategic Investor   			187

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	NB
	Total NB	Limited Maturity Bond	Growth	Government Income	Partners
Investment income
Dividends from mutual funds	$4,273,690	$409,268	$1,579,109	$136,565	$2,148,748
Less valuation period deductions
(Note 2)	291,487	87,183	52,660	3,213	148,431
Net investment income (loss)	3,982,203	322,085	1,526,449	133,352	2,000,317
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	347,823	10,003	(264,148)	(53,894)	655,862
Net unrealized gains (losses) on
investments	(2,323,636)	59,369	(81,576)	(60,954)	(2,240,475)
Net realized and unrealized gains
(losses) on investments	(1,975,813)	69,372	(345,724)	(114,848)	(1,584,613)
Net increase (decrease) in net
assets resulting from operations	$2,006,390	$391,457	$1,180,725	$ 18,504	$ 415,704

See accompanying notes.

Strategic Investor   			188

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Investment income
Dividends from mutual funds	$ 4,617,072	$1,681,373	$ 593,045	$2,196,712	$ 145,942
Less valuation period deductions
(Note 2)	290,412	95,588	53,316	113,376	28,132
Net investment income (loss)	4,326,660	1,585,785	539,729	2,083,336	117,810
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	1,685,294	186,963	316,932	915,872	265,527
Net unrealized gains (losses) on
investments	5,825,800	166,990	1,022,340	3,099,428	1,537,042
Net realized and unrealized gains
(losses) on investments	7,511,094	353,953	1,339,272	4,015,300	1,802,569
Net increase (decrease) in net
assets resulting from operations	$11,837,754	$1,939,738	$1,879,001	$6,098,636	$1,920,379

See accompanying notes.

Strategic Investor   			189

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Investment income
Dividends from mutual funds	$ 6,943,854	$ 808,986	$2,663,618	$1,015,626	$830,137	$ 1,625,487
Less valuation period deductions
(Note 2)	971,160	63,669	183,002	129,504	116,932	478,053
Net investment income (loss)	5,972,694	745,317	2,480,616	886,122	713,205	1,147,434
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	6,403,348	20,247	1,534,000	298,379	-	4,550,722
Net unrealized gains (losses) on
investments	15,230,082	315,702	4,444,805	707,398	-	9,762,177
Net realized and unrealized gains
(losses) on investments	21,633,430	335,949	5,978,805	1,005,777	-	14,312,899
Net increase (decrease) in net
assets resulting from operations	$27,606,124	$1,081,266	$8,459,421	$1,891,899	$713,205	$15,460,333

See accompanying notes.

Strategic Investor   			190

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Investment income
Dividends from mutual funds	$1,625,860	$312,534	$ 514,174	$769,805	$ 29,058	$ 289
Less valuation period deductions
(Note 2)	162,321	40,898	60,678	49,140	10,730	875
Net investment income (loss)	1,463,539	271,636	453,496	720,665	18,328	(586)
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	355,780	136,473	342,342	(151,382)	35,245	(6,898)
Net unrealized gains (losses) on
investments	248,681	73,689	359,519	(541,125)	282,500	74,098
Net realized and unrealized gains
(losses) on investments	604,461	210,162	701,861	(692,507)	317,745	67,200
Net increase (decrease) in net
assets resulting from operations	$2,068,000	$481,798	$1,155,357	$ 28,158	$336,073	$66,614

See accompanying notes.

Strategic Investor   			191

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	Van Eck
	Total Van Eck	Worldwide Balanced	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Investment income
Dividends from mutual funds	$ 189,620	$45,674	$ 143,946	$ -	$ -	$ -
Less valuation period deductions      (Note 2)	11,393	1,050	8,170	212	1,736	225
Net investment income (loss)	178,227	44,624	135,776	(212)	(1,736)	(225)
Realized and unrealized gains (losses) on investments
Net realized gains (losses) on investments	(260,570)	4,682	(162,110)	130	(101,436)	(1,836)
Net unrealized gains (losses) on investments	(368,037)	(23,403)	(395,698)	3,953	47,140	(29)
Net realized and unrealized gains (losses) on investments	(628,607)	(18,721)	(557,808)	4,083	(54,296)	(1,865)
Net increase (decrease) in net assets resulting from operations	$(450,380)	$25,903	$(422,032)	$3,871	$ (56,032)	$(2,090)

See accompanying notes.

Strategic Investor   			192

Security Life Separate Account L1

Statement of Operations (continued)

Year ended December 31, 1998

	AIM
	Total AIM	Capital Appreciation	Government Securities
Investment income
Dividends from mutual funds	$ 97,737	$ 27,109	$ 70,628
Less valuation period deductions
(Note 2)	13,888	3,056	10,832
Net investment income (loss)	83,849	24,053	59,796
Realized and unrealized gains
(losses) on investments
Net realized gains (losses) on
investments	4,599	(3,315)	7,914
Net unrealized gains (losses) on
investments	154,087	119,225	34,862
Net realized and unrealized gains
(losses) on investments	158,686	115,910	42,776
Net increase (decrease) in net
assets resulting from operations	$242,535	$139,963	$102,572

See accompanying notes.

Strategic Investor   			193

Security Life Separate Account L1

Statement of Changes in Net Assets

Year ended December 31, 2000

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM	Total GCG	Total Janus
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 46,069,012	$ 6,571,113	$ 20,602,600	$ 14,207,376	$ 3,082,330	$ (605)	$ 689,603	$ 916,460	$ 135
Net realized gains (losses) on
investments	5,695,914	(1,808,706)	(5,036,278)	10,515,603	1,339,426	220,229	475,369	-	(9,729)
Net unrealized gains (losses) on
investments	(118,856,269)	(7,325,351)	(40,865,515)	(58,774,602)	(7,701,130)	(2,223,947)	(1,820,869)	(46,004)	(98,851)
Increase (decrease) in net assets from
operations	(67,091,343)	(2,562,944)	(25,299,193)	(34,051,623)	(3,279,374)	(2,004,323)	(655,897)	870,456	(108,445)
Changes from principal
transactions
Net premiums	317,402,712	12,252,726	37,515,640	184,341,968	18,591,825	3,290,844	6,971,977	53,982,127	455,605
Cost of insurance and
administrative charges	(30,552,382)	(2,409,367)	(6,276,189)	(16,796,166)	(3,114,778)	(384,336)	(861,571)	(702,322)	(7,653)
Benefit payments	(1,594,522)	(19,938)	(28,371)	(1,534,182)	(12,031)	-	-	-	-
Surrenders	(21,566,997)	(3,720,641)	(4,011,887)	(11,413,075)	(1,965,457)	(86,249)	(369,688)	-	-
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(7,189,963)	4,582,877	21,813,159	(44,990,539)	8,412,713	2,032,846	51,053,800	(51,255,284)	1,160,465
Other	478,335	175,141	731,362	535,825	115,805	(33,873)	(1,039,302)	(14,911)	8,288
Increase (decrease) from principal
transactions	256,977,183	10,860,798	49,743,714	110,143,831	22,028,077	4,819,232	55,755,216	2,009,610	1,616,705
Total increase (decrease) in net assets	189,885,840	8,297,854	24,444,521	76,092,208	18,748,703	2,814,909	55,099,319	2,880,066	1,508,260
Net assets at beginning of year	521,302,968	53,696,982	109,514,400	294,445,743	44,638,411	6,304,177	12,703,255	-	-
Net assets at end of year	$711,188,808	$61,994,836	$133,958,921	$370,537,951	$63,387,114	$9,119,086	$67,802,574	$ 2,880,066	$1,508,260

See accompanying notes.

Strategic Investor   			194

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	NB
	Total NB	Limited Maturity Bond	Growth	Partners
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 6,571,113	$ 682,857	$ 1,217,637	$ 4,670,619
Net realized gains (losses) on
investments	(1,808,706)	(281,540)	3,777,374	(5,304,540)
Net unrealized gains (losses) on
investments	(7,325,351)	351,484	(7,971,190)	294,355
Increase (decrease) in net assets from
operations	(2,562,944)	752,801	(2,976,179)	(339,566)
Changes from principal
transactions
Net premiums	12,252,726	3,373,191	3,809,287	5,070,248
Cost of insurance and
administrative charges	(2,409,367)	(422,495)	(645,717)	(1,341,155)
Benefit payments	(19,938)	-	-	(19,938)
Surrenders	(3,720,641)	(485,003)	(434,853)	(2,800,785)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	4,582,877	72,092	7,083,628	(2,572,843)
Other	175,141	2,737	32,586	139,818
Increase (decrease) from principal
transactions	10,860,798	2,540,522	9,844,931	(1,524,655)
Total increase (decrease) in net assets	8,297,854	3,293,323	6,868,752	(1,864,221)
Net assets at beginning of year	53,696,982	11,200,828	13,076,154	29,420,000
Net assets at end of year	$61,994,836	$14,494,151	$19,944,906	$27,555,779

See accompanying notes.

Strategic Investor   			195

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 20,602,600	$ 9,719,584	$ 2,741,533	$ 5,883,133	$ 2,258,350
Net realized gains (losses) on
investments	(5,036,278)	(9,976,931)	1,057,836	1,775,571	2,107,246
Net unrealized gains (losses) on
investments	(40,865,515)	(9,435,613)	(2,672,195)	(16,304,212)	(12,453,495)
Increase (decrease) in net assets from
operations	(25,299,193)	(9,692,960)	1,127,174	(8,645,508)	(8,087,899)
Changes from principal
transactions
Net premiums	37,515,640	6,777,077	8,256,914	14,199,181	8,282,468
Cost of insurance and
administrative charges	(6,276,189)	(1,361,117)	(1,182,610)	(2,244,564)	(1,487,898)
Benefit payments	(28,371)	(8,499)	-	-	(19,872)
Surrenders	(4,011,887)	(1,213,521)	(527,415)	(1,866,225)	(404,726)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	21,813,159	3,623,099	8,242,898	7,157,011	2,790,151
Other	731,362	265,296	89,303	135,039	241,724
Increase (decrease) from principal
transactions	49,743,714	8,082,335	14,879,090	17,380,442	9,401,847
Total increase (decrease) in net assets	24,444,521	(1,610,625)	16,006,264	8,734,934	1,313,948
Net assets at beginning of year	109,514,400	27,779,755	17,287,487	41,383,498	23,063,660
Net assets at end of year	$133,958,921	$26,169,130	$33,293,751	$50,118,432	$24,377,608

See accompanying notes.

Strategic Investor   			196

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 14,207,376	$ 1,363,966	$ 6,180,846	$ 3,215,373	$ 2,457,580	$ 989,611
Net realized gains (losses) on
investments	10,515,603	8,816	2,581,814	1,800,478	-	6,124,495
Net unrealized gains (losses) on
investments	(58,774,602)	(2,092,103)	(17,925,268)	(13,999,080)	-	(24,758,151)
Increase (decrease) in net assets from
operations	(34,051,623)	(719,321)	(9,162,608)	(8,983,229)	2,457,580	(17,644,045)
Changes from principal
transactions
Net premiums	184,341,968	4,246,313	16,858,828	10,774,262	102,634,205	49,828,360
Cost of insurance and
administrative charges	(16,796,166)	(729,175)	(2,871,811)	(1,545,175)	(3,421,123)	(8,228,882)
Benefit payments	(1,534,182)	-	(8,585)	-	(1,512,600)	(12,997)
Surrenders	(11,413,075)	(523,096)	(1,526,139)	(1,310,651)	(1,580,652)	(6,472,537)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(44,990,539)	(110,602)	6,705,250	9,264,961	(71,323,681)	10,473,533
Other	535,825	41	353,438	137,428	(36,325)	81,243
Increase (decrease) from principal
transactions	110,143,831	2,883,481	19,510,981	17,320,825	24,759,824	45,668,720
Total increase (decrease) in net assets	76,092,208	2,164,160	10,348,373	8,337,596	27,217,404	28,024,675
Net assets at beginning of year	294,445,743	13,590,458	58,157,830	34,984,281	34,797,408	152,915,766
Net assets at end of year	$370,537,951	$15,754,618	$68,506,203	$43,321,877	$ 62,014,812	$180,940,441

See accompanying notes.

Strategic Investor   			197

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 3,082,330	$ 1,460,583	$ 1,047,730	$ 18,429	$ 280,099	$ 275,489
Net realized gains (losses) on
investments	1,339,426	(314,414)	593,634	(390,743)	256,021	1,194,928
Net unrealized gains (losses) on
investments	(7,701,130)	(1,435,710)	(904,246)	(1,002,431)	(372,493)	(3,986,250)
Increase (decrease) in net assets from
operations	(3,279,374)	(289,541)	737,118	(1,374,745)	163,627	(2,515,833)
Changes from principal
transactions
Net premiums	18,591,825	4,101,918	5,744,367	2,639,161	2,052,375	4,054,004
Cost of insurance and
administrative charges	(3,114,778)	(753,096)	(1,128,125)	(507,500)	(326,968)	(399,089)
Benefit payments	(12,031)	-	(12,031)	-	-	-
Surrenders	(1,965,457)	(882,070)	(593,452)	(303,992)	(148,234)	(37,709)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	8,412,713	(858,136)	588,741	584,364	1,906,098	6,191,646
Other	115,805	(11,094)	(21,075)	38,387	23,719	85,868
Increase (decrease) from principal
transactions	22,028,077	1,597,522	4,578,425	2,450,420	3,506,990	9,894,720
Total increase (decrease) in net assets	18,748,703	1,307,981	5,315,543	1,075,675	3,670,617	7,378,887
Net assets at beginning of year	44,638,411	10,386,650	16,220,553	9,420,677	4,141,315	4,469,216
Net assets at end of year	$63,387,114	$11,694,631	$21,536,096	$10,496,352	$7,811,932	$11,848,103

See accompanying notes.

Strategic Investor   			198

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	Van Eck
	Total Van Eck	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ (605)	$ 7,508	$ 15,590	$ (31,191)	$ 7,488
Net realized gains (losses) on
investments	220,229	140,202	(14,783)	87,666	7,144
Net unrealized gains (losses) on
investments	(2,223,947)	123,530	23,588	(2,508,578)	137,513
Increase (decrease) in net assets from
operations	(2,004,323)	271,240	24,395	(2,452,103)	152,145
Changes from principal
transactions
Net premiums	3,290,844	358,451	329,600	2,190,959	411,834
Cost of insurance and
administrative charges	(384,336)	(106,083)	(44,145)	(190,748)	(43,360)
Benefit payments	-	-	-	-	-
Surrenders	(86,249)	(36,625)	(12,576)	(35,659)	(1,389)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	2,032,846	(475,702)	298,840	1,965,172	244,536
Other	(33,873)	(4,008)	1,110	(29,680)	(1,295)
Increase (decrease) from principal
transactions	4,819,232	(263,967)	572,829	3,900,044	610,326
Total increase (decrease) in net assets	2,814,909	7,273	597,224	1,447,941	762,471
Net assets at beginning of year	6,304,177	2,306,078	334,203	3,114,059	549,837
Net assets at end of year	$9,119,086	$2,313,351	$931,427	$4,562,000	$1,312,308

See accompanying notes.

Strategic Investor   			199

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	AIM
	Total AIM	Capital Appreciation	Government Securities
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 689,603	$ 208,375	$ 481,228
Net realized gains (losses) on
investments	475,369	418,127	57,242
Net unrealized gains (losses) on
investments	(1,820,869)	(2,171,530)	350,661
Increase (decrease) in net assets from
operations	(655,897)	(1,545,028)	889,131
Changes from principal
transactions
Net premiums	6,971,977	4,809,190	2,162,787
Cost of insurance and
administrative charges	(861,571)	(550,172)	(311,399)
Benefit payments	-	-	-
Surrenders	(369,688)	(120,337)	(249,351)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	51,053,800	44,182,854	6,870,946
Other	(1,039,302)	(1,046,753)	7,451
Increase (decrease) from principal
transactions	55,755,216	47,274,782	8,480,434
Total increase (decrease) in net assets	55,099,319	45,729,754	9,369,565
Net assets at beginning of year	12,703,255	5,308,922	7,394,333
Net assets at end of year	$67,802,574	$51,038,676	$16,763,898

See accompanying notes.

Strategic Investor   			200

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	GCG
	Total GCG	Equity Income	Growth	Hard Assets	Limited Maturity Bond	Liquid Asset	MidCap Growth	Research	Total Return
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 916,460	$ -	$ 90	$ -	$ 54,281	$ 861,303	$ -	$ -	$ 786
Net realized gains (losses) on
investments	-	-	-	-	-	-	-	-	-
Net unrealized gains (losses) on
investments	(46,004)	-	(168)	-	(45,286)	-	-	-	(550)
Increase (decrease) in net assets from
operations	870,456	-	(78)	-	8,995	861,303	-	-	236
Changes from principal
transactions
Net premiums	53,982,127	-	-	-	868,271	53,113,856	-	-	-
Cost of insurance and
administrative charges	(702,322)	-	-	-	(3,837)	(698,485)	-	-	-
Benefit payments	-
Surrenders	-	-	-	-	-	-	-	-	-
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(51,255,284)	-	1,311	-	3,369	(51,270,261)	-	-	10,297
Other	(14,911)	-	-	-	-	(14,911)	-	-	-
Increase (decrease) from principal
transactions	2,009,610	-	1,311	-	867,803	1,130,199	-	-	10,297
Total increase (decrease) in net assets	2,880,066	-	1,233	-	876,798	1,991,502	-	-	10,533
Net assets at beginning of year	-	-	-	-	-	-	-	-	-
Net assets at end of year	$ 2,880,066	$ -	$1,233	$ -	$876,798	$ 1,991,502	$ -	$ -	$10,533

See accompanying notes.

Strategic Investor   			201

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 2000

	Janus
	Total Janus	Growth	Aggressive Growth	Worldwide Growth	International Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 135	$ (180)	$ (218)	$ (64)	$ 597
Net realized gains (losses) on investments	(9,729)	(1,546)	(86)	(7,584)	(513)
Net unrealized gains (losses) on investments	(98,851)	(15,107)	(50,478)	(16,753)	(16,513)
Increase (decrease) in net assets from operations	(108,445)	(16,833)	(50,782)	(24,401)	(16,429)
Changes from principal transactions
Net premiums	455,605	44,231	197,569	202,866	10,939
Cost of insurance and administrative expenses	(7,653)	(1,752)	(2,059)	(1,621)	(2,221)
Benefit payments	-	-	-	-	-
Surrenders	-	-	-	-	-
Net transfers among divisions (including the loan       division and guaranteed interest division in the general account)	1,160,465	216,576	370,746	142,784	430,359
Other	8,288	1,419	9,109	(208)	(2,032)
Increase (decrease) from principal transactions	1,616,705	260,474	575,365	343,821	437,045
Total increase (decrease) in net assets	1,508,260	243,641	524,583	319,420	420,616
Net assets at beginning of year	-	-	-	-	-
Net assets at end of year	$1,508,260	$243,641	$524,583	$319,420	$420,616

See accompanying notes.

Strategic Investor   			202

Security Life Separate Account L1

Statement of Changes in Net Assets

Year ended December 31, 1999

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 15,975,284	$ 1,752,701	$ 6,768,070	$ 6,279,181	$ 911,565	$ 3,012	$ 260,755
Net realized gains (losses) on
investments	18,191,446	557,950	5,023,269	11,358,812	1,094,239	73,144	84,032
Net unrealized gains (losses) on
investments	55,998,041	3,797,732	17,500,945	30,152,442	2,135,798	1,374,192	1,036,932
Increase (decrease) in net assets from
operations	90,164,771	6,108,383	29,292,284	47,790,435	4,141,602	1,450,348	1,381,719
Changes from principal
transactions
Net premiums	162,042,407	9,691,552	19,246,531	115,810,413	12,770,723	1,311,620	3,211,568
Cost of insurance and
administrative charges	(20,649,015)	(2,172,531)	(3,837,369)	(11,622,709)	(2,460,819)	(173,456)	(382,131)
Benefit payments	(542,037)	-	-	(542,037)	-	-	-
Surrenders	(15,066,657)	(1,529,928)	(3,447,763)	(7,887,081)	(1,567,128)	(33,331)	(601,426)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	91,435	(5,513,893)	13,797,533	(17,535,989)	2,140,348	1,919,235	5,284,201
Other	231,958	45,648	34,663	146,782	(17,068)	12,762	9,171
Increase (decrease) from principal
transactions	126,108,091	520,848	25,793,595	78,369,379	10,866,056	3,036,830	7,521,383
Total increase (decrease) in net assets	216,272,862	6,629,231	55,085,879	126,159,814	15,007,658	4,487,178	8,903,102
Net assets at beginning of year	305,030,106	47,067,751	54,428,521	168,285,929	29,630,753	1,816,999	3,800,153
Net assets at end of year	$521,302,968	$53,696,982	$109,514,400	$294,445,743	$44,638,411	$6,304,177	$12,703,255

See accompanying notes.

Strategic Investor   			203

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	NB
	Total NB	Limited Maturity Bond	Growth	Partners
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 1,752,701	$ 802,897	$ 382,777	$ 567,027
Net realized gains (losses) on
investments	557,950	(293,615)	318,964	532,601
Net unrealized gains (losses) on
investments	3,797,732	(423,477)	3,714,218	506,991
Increase (decrease) in net assets from
operations	6,108,383	85,805	4,415,959	1,606,619
Changes from principal
transactions
Net premiums	9,691,552	2,691,658	1,968,259	5,031,635
Cost of insurance and
administrative charges	(2,172,531)	(532,487)	(382,030)	(1,258,014)
Benefit payments	-	-	-	-
Surrenders	(1,529,928)	(1,033,731)	(175,255)	(320,942)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(5,513,893)	(5,610,959)	(1,798,195)	1,895,261
Other	45,648	22,193	21,256	2,199
Increase (decrease) from principal
transactions	520,848	(4,463,326)	(365,965)	5,350,139
Total increase (decrease) in net assets	6,629,231	(4,377,521)	4,049,994	6,956,758
Net assets at beginning of year	47,067,751	15,578,349	9,026,160	22,463,242
Net assets at end of year	$53,696,982	$11,200,828	$13,076,154	$29,420,000

See accompanying notes.

Strategic Investor   			204

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 6,768,070	$ 2,058,314	$ 1,547,583	$ 2,530,830	$ 631,343
Net realized gains (losses) on
investments	5,023,269	94,825	322,974	2,007,625	2,597,845
Net unrealized gains (losses) on
investments	17,500,945	5,993,398	2,015,333	4,584,649	4,907,565
Increase (decrease) in net assets from
operations	29,292,284	8,146,537	3,885,890	9,123,104	8,136,753
Changes from principal
transactions
Net premiums	19,246,531	4,618,903	3,508,936	7,654,291	3,464,401
Cost of insurance and
administrative charges	(3,837,369)	(957,053)	(661,896)	(1,597,077)	(621,343)
Benefit payments	-	-	-	-	-
Surrenders	(3,447,763)	(986,740)	(286,174)	(1,594,894)	(579,955)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	13,797,533	1,461,610	1,637,697	4,904,801	5,793,425
Other	34,663	(6,873)	(17,173)	(10,341)	69,050
Increase (decrease) from principal
transactions	25,793,595	4,129,847	4,181,390	9,356,780	8,125,578
Total increase (decrease) in net assets	55,085,879	12,276,384	8,067,280	18,479,884	16,262,331
Net assets at beginning of year	54,428,521	15,503,371	9,220,207	22,903,614	6,801,329
Net assets at end of year	$109,514,400	$27,779,755	$17,287,487	$41,383,498	$23,063,660

See accompanying notes.

Strategic Investor   			205

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 6,279,181	$ 714,882	$ 3,199,633	$ 631,807	$ 1,089,493	$ 643,366
Net realized gains (losses) on
investments	11,358,812	122,474	7,459,882	553,230	-	3,223,226
Net unrealized gains (losses) on
investments	30,152,442	316,538	3,509,953	8,740,414	-	17,585,537
Increase (decrease) in net assets from
operations	47,790,435	1,153,894	14,169,468	9,925,451	1,089,493	21,452,129
Changes from principal
transactions
Net premiums	115,810,413	3,791,052	9,969,268	5,963,624	62,143,060	33,943,409
Cost of insurance and
administrative charges	(11,622,709)	(604,489)	(1,912,531)	(1,071,163)	(2,273,369)	(5,761,157)
Benefit payments	(542,037)	-	-	-	(542,037)	-
Surrenders	(7,887,081)	(641,428)	(1,308,922)	(1,227,419)	(1,281,819)	(3,427,493)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(17,535,989)	(349,280)	4,285,808	788,107	(42,741,942)	20,481,318
Other	146,782	3,430	54,597	23,794	(8,230)	73,191
Increase (decrease) from principal
transactions	78,369,379	2,199,285	11,088,220	4,476,943	15,295,663	45,309,268
Total increase (decrease) in net assets	126,159,814	3,353,179	25,257,688	14,402,394	16,385,156	66,761,397
Net assets at beginning of year	168,285,929	10,237,279	32,900,142	20,581,887	18,412,252	86,154,369
Net assets at end of year	$294,445,743	$13,590,458	$58,157,830	$34,984,281	$34,797,408	$152,915,766

See accompanying notes.

Strategic Investor   			206

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 911,565	$ 204,816	$ 154,625	$ 553,193	$ 13,269	$ (14,338)
Net realized gains (losses) on
investments	1,094,239	286,623	506,767	(241,611)	304,911	237,549
Net unrealized gains (losses) on
investments	2,135,798	(923,083)	965,264	379,005	179,598	1,535,014
Increase (decrease) in net assets from
operations	4,141,602	(431,644)	1,626,656	690,587	497,778	1,758,225
Changes from principal
transactions
Net premiums	12,770,723	4,580,034	4,374,844	1,987,501	1,127,118	701,226
Cost of insurance and
administrative charges	(2,460,819)	(764,047)	(922,117)	(471,532)	(198,877)	(104,246)
Benefit payments	-	-	-	-	-	-
Surrenders	(1,567,128)	(239,246)	(333,959)	(155,182)	(820,016)	(18,725)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	2,140,348	(854,496)	643,961	(518,177)	1,491,088	1,377,972
Other	(17,068)	(9,279)	(21,837)	4,698	3,264	6,086
Increase (decrease) from principal
transactions	10,866,056	2,712,966	3,740,892	847,308	1,602,577	1,962,313
Total increase (decrease) in net assets	15,007,658	2,281,322	5,367,548	1,537,895	2,100,355	3,720,538
Net assets at beginning of year	29,630,753	8,105,328	10,853,005	7,882,782	2,040,960	748,678
Net assets at end of year	$44,638,411	$10,386,650	$16,220,553	$9,420,677	$4,141,315	$4,469,216

See accompanying notes.

Strategic Investor   			207

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	Van Eck
	Total Van Eck	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 3,012	$ 3,939	$ 9,896	$ (10,886)	$ 63
Net realized gains (losses) on
investments	73,144	(313,009)	(25,853)	410,384	1,622
Net unrealized gains (losses) on
investments	1,374,192	592,123	(9,920)	809,962	(17,973)
Increase (decrease) in net assets from
operations	1,450,348	283,053	(25,877)	1,209,460	(16,288)
Changes from principal
transactions
Net premiums	1,311,620	441,045	253,322	416,537	200,716
Cost of insurance and
administrative charges	(173,456)	(86,064)	(17,509)	(56,532)	(13,351)
Benefit payments	-	-	-	-	-
Surrenders	(33,331)	(23,325)	-	(5,545)	(4,461)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	1,919,235	602,367	(80,721)	1,091,100	306,489
Other	12,762	15,247	(819)	(2,117)	451
Increase (decrease) from principal
transactions	3,036,830	949,270	154,273	1,443,443	489,844
Total increase (decrease) in net assets	4,487,178	1,232,323	128,396	2,652,903	473,556
Net assets at beginning of year	1,816,999	1,073,755	205,807	461,156	76,281
Net assets at end of year	$6,304,177	$2,306,078	$334,203	$3,114,059	$549,837

See accompanying notes.

Strategic Investor   			208

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1999

	AIM
	Total AIM	Capital Appreciation	Government Securities
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 260,755	$ 94,178	$ 166,577
Net realized gains (losses) on
Investments	84,032	92,256	(8,224)
Net unrealized gains (losses) on
Investments	1,036,932	1,257,369	(220,437)
Increase (decrease) in net assets from
operations	1,381,719	1,443,803	(62,084)
Changes from principal
transactions
Net premiums	3,211,568	1,497,094	1,714,474
Cost of insurance and
administrative charges	(382,131)	(216,619)	(165,512)
Benefit payments	-	-	-
Surrenders	(601,426)	(18,584)	(582,842)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	5,284,201	1,391,719	3,892,482
Other	9,171	7,073	2,098
Increase (decrease) from principal
transactions	7,521,383	2,660,683	4,860,700
Total increase (decrease) in net assets	8,903,102	4,104,486	4,798,616
Net assets at beginning of year	3,800,153	1,204,436	2,595,717
Net assets at end of year	$12,703,255	$5,308,922	$7,394,333

See accompanying notes.

Strategic Investor   			209

Security Life Separate Account L1

Statement of Changes in Net Assets

Year ended December 31, 1998

	Total All Divisions	Total NB	Total Alger	Total Fidelity	Total INVESCO	Total Van Eck	Total AIM
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 16,007,172	$ 3,982,203	$ 4,326,660	$ 5,972,694	$ 1,463,539	$ 178,227	$ 83,849
Net realized gains (losses) on
investments	8,536,274	347,823	1,685,294	6,403,348	355,780	(260,570)	4,599
Net unrealized gains (losses) on
investments	18,766,977	(2,323,636)	5,825,800	15,230,082	248,681	(368,037)	154,087
Increase (decrease) in net assets
from operations	43,310,423	2,006,390	11,837,754	27,606,124	2,068,000	(450,380)	242,535
Changes from principal
transactions
Net premiums	128,820,440	12,563,792	13,089,164	92,335,231	8,092,294	875,501	1,864,458
Cost of insurance and
administrative charges	(14,458,798)	(2,063,802)	(2,525,683)	(8,200,381)	(1,481,570)	(108,634)	(78,728)
Benefit payments	(306,862)	(11,220)	(26,492)	(259,989)	(9,161)	-	-
Surrenders	(10,842,736)	(725,767)	(859,454)	(8,654,377)	(586,533)	(15,198)	(1,407)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(3,936,799)	8,461,193	4,831,250	(25,231,056)	6,011,967	216,552	1,773,295
Other	(41,582)	(87,331)	(18,626)	54,208	9,107	1,060	-
Increase (decrease) from principal
transactions	99,233,663	18,136,865	14,490,159	50,043,636	12,036,104	969,281	3,557,618
Total increase (decrease) in net assets	142,544,086	20,143,255	26,327,913	77,649,760	14,104,104	518,901	3,800,153
Net assets at beginning of year	162,486,020	26,924,496	28,100,608	90,636,169	15,526,649	1,298,098	-
Net assets at end of year	$305,030,106	$47,067,751	$54,428,521	$168,285,929	$29,630,753	$1,816,999	$3,800,153

See accompanying notes.

Strategic Investor   			210

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	NB
	Total NB	Limited Maturity Bond	Growth	Government Income	Partners
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 3,982,203	$ 322,085	$1,526,449	$133,352	$ 2,000,317
Net realized gains (losses) on
investments	347,823	10,003	(264,148)	(53,894)	655,862
Net unrealized gains (losses) on
investments	(2,323,636)	59,369	(81,576)	(60,954)	(2,240,475)
Increase (decrease) in net assets
from operations	2,006,390	391,457	1,180,725	18,504	415,704
Changes from principal
transactions
Net premiums	12,563,792	3,839,599	2,578,265	31,593	6,114,335
Cost of insurance and
administrative charges	(2,063,802)	(492,782)	(393,894)	(14,839)	(1,162,287)
Benefit payments	(11,220)	-	-	-	(11,220)
Surrenders	(725,767)	(15,922)	(419,497)	(3,243)	(287,105)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	8,461,193	5,212,588	513,663	(894,126)	3,629,068
Other	(87,331)	(31,757)	3,226	(31,566)	(27,234)
Increase (decrease) from principal
transactions	18,136,865	8,511,726	2,281,763	(912,181)	8,255,557
Total increase (decrease) in net assets	20,143,255	8,903,183	3,462,488	(893,677)	8,671,261
Net assets at beginning of year	26,924,496	6,675,166	5,563,672	893,677	13,791,981
Net assets at end of year	$47,067,751	$15,578,349	$9,026,160	$ -	$22,463,242

See accompanying notes.

Strategic Investor   			211

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	Alger
	Total Alger	American Small Capitalization	American MidCap Growth	American Growth	American Leveraged AllCap
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 4,326,660	$ 1,585,785	$ 539,729	$ 2,083,336	$ 117,810
Net realized gains (losses) on
investments	1,685,294	186,963	316,932	915,872	265,527
Net unrealized gains (losses) on
investments	5,825,800	166,990	1,022,340	3,099,428	1,537,042
Increase (decrease) in net assets
from operations	11,837,754	1,939,738	1,879,001	6,098,636	1,920,379
Changes from principal
transactions
Net premiums	13,089,164	4,154,774	2,573,424	5,298,963	1,062,003
Cost of insurance and
administrative charges	(2,525,683)	(803,988)	(473,224)	(989,260)	(259,211)
Benefit payments	(26,492)	(14,248)	(12,244)	-	-
Surrenders	(859,454)	(196,345)	(376,263)	(216,867)	(69,979)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	4,831,250	(35,168)	528,261	3,094,366	1,243,791
Other	(18,626)	(504)	(14,286)	1,597	(5,433)
Increase (decrease) from principal
transactions	14,490,159	3,104,521	2,225,668	7,188,799	1,971,171
Total increase (decrease) in net assets	26,327,913	5,044,259	4,104,669	13,287,435	3,891,550
Net assets at beginning of year	28,100,608	10,459,112	5,115,538	9,616,179	2,909,779
Net assets at end of year	$54,428,521	$15,503,371	$9,220,207	$22,903,614	$6,801,329

See accompanying notes.

Strategic Investor   			212

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	Fidelity
	Total Fidelity	Asset Manager	Growth	Overseas	Money Market	Index 500
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 5,972,694	$ 745,317	$ 2,480,616	$ 886,122	$ 713,205	$ 1,147,434
Net realized gains (losses) on
investments	6,403,348	20,247	1,534,000	298,379	-	4,550,722
Net unrealized gains (losses) on
investments	15,230,082	315,702	4,444,805	707,398	-	9,762,177
Increase (decrease) in net assets
from operations	27,606,124	1,081,266	8,459,421	1,891,899	713,205	15,460,333
Changes from principal
transactions
Net premiums	92,335,231	2,713,832	8,443,426	5,709,711	55,421,815	20,046,447
Cost of insurance and
administrative charges	(8,200,381)	(490,838)	(1,358,671)	(939,010)	(1,769,895)	(3,641,967)
Benefit payments	(259,989)	-	(8,890)	(8,379)	(240,733)	(1,987)
Surrenders	(8,654,377)	(652,157)	(2,494,098)	(438,536)	(2,335,262)	(2,734,324)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	(25,231,056)	1,440,884	1,798,160	2,169,798	(48,429,964)	17,790,066
Other	54,208	7,219	(14,128)	(29,375)	39,827	50,665
Increase (decrease) from principal
transactions	50,043,636	3,018,940	6,365,799	6,464,209	2,685,788	31,508,900
Total increase (decrease) in net assets	77,649,760	4,100,206	14,825,220	8,356,108	3,398,993	46,969,233
Net assets at beginning of year	90,636,169	6,137,073	18,074,922	12,225,779	15,013,259	39,185,136
Net assets at end of year	$168,285,929	$10,237,279	$32,900,142	$20,581,887	$18,412,252	$86,154,369

See accompanying notes.

Strategic Investor   			213

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	INVESCO
	Total INVESCO	Total Return	Equity Income	High Yield	Utilities	Small Company Growth
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 1,463,539	$ 271,636	$ 453,496	$ 720,665	$ 18,328	$ (586)
Net realized gains (losses) on
investments	355,780	136,473	342,342	(151,382)	35,245	(6,898)
Net unrealized gains (losses) on
investments	248,681	73,689	359,519	(541,125)	282,500	74,098
Increase (decrease) in net assets
from operations	2,068,000	481,798	1,155,357	28,158	336,073	66,614
Changes from principal
transactions
Net premiums	8,092,294	2,104,849	3,170,236	2,297,048	435,105	85,056
Cost of insurance and
administrative charges	(1,481,570)	(425,176)	(567,563)	(389,895)	(87,692)	(11,244)
Benefit payments	(9,161)	-	(9,161)	-	-	-
Surrenders	(586,533)	(56,509)	(192,220)	(329,292)	(8,210)	(302)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	6,011,967	2,955,200	1,315,595	931,519	201,017	608,636
Other	9,107	556	22,617	(18,840)	4,856	(82)
Increase (decrease) from principal
transactions	12,036,104	4,578,920	3,739,504	2,490,540	545,076	682,064
Total increase (decrease) in net assets	14,104,104	5,060,718	4,894,861	2,518,698	881,149	748,678
Net assets at beginning of year	15,526,649	3,044,610	5,958,144	5,364,084	1,159,811	-
Net assets at end of year	$29,630,753	$8,105,328	$10,853,005	$7,882,782	$2,040,960	$748,678

See accompanying notes.

Strategic Investor   			214

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	Van Eck
	Total Van Eck	Worldwide Balanced	Worldwide Hard Assets	Worldwide Bond	Worldwide Emerging Markets	Worldwide Real Estate
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 178,227	$ 44,624	$ 135,776	$ (212)	$ (1,736)	$ (225)
Net realized gains (losses) on
investments	(260,570)	4,682	(162,110)	130	(101,436)	(1,836)
Net unrealized gains (losses) on
investments	(368,037)	(23,403)	(395,698)	3,953	47,140	(29)
Increase (decrease) in net assets
from operations	(450,380)	25,903	(422,032)	3,871	(56,032)	(2,090)
Changes from principal
transactions
Net premiums	875,501	(1,347)	571,430	129,336	137,102	38,980
Cost of insurance and
administrative charges	(108,634)	(9,423)	(86,867)	(1,544)	(7,777)	(3,023)
Benefit payments	-	-	-	-	-	-
Surrenders	(15,198)	(3,105)	(11,871)	-	-	(222)
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	216,552	(399,466)	111,286	74,151	387,960	42,621
Other	1,060	90	1,059	(7)	(97)	15
Increase (decrease) from principal
transactions	969,281	(413,251)	585,037	201,936	517,188	78,371
Total increase (decrease) in net assets	518,901	(387,348)	163,005	205,807	461,156	76,281
Net assets at beginning of year	1,298,098	387,348	910,750	-	-	-
Net assets at end of year	$1,816,999	$ -	$1,073,755	$205,807	$461,156	$76,281

See accompanying notes.

Strategic Investor   			215

Security Life Separate Account L1

Statement of Changes in Net Assets (continued)

Year ended December 31, 1998

	AIM
	Total AIM	Capital Appreciation	Government Securities
Increase (decrease) in net assets
Operations
Net investment income (loss)	$ 83,849	$ 24,053	$ 59,796
Net realized gains (losses) on
investments	4,599	(3,315)	7,914
Net unrealized gains (losses) on
investments	154,087	119,225	34,862
Increase (decrease) in net assets
from operations	242,535	139,963	102,572
Changes from principal
transactions
Net premiums	1,864,458	329,635	1,534,823
Cost of insurance and
administrative charges	(78,728)	(28,940)	(49,788)
Benefit payments	-	-	-
Surrenders	(1,407)	(1,407)	-
Net transfers among divisions
(including the loan division and
guaranteed interest division in
the general account)	1,773,295	765,185	1,008,110
Other	-	-	-
Increase (decrease) from principal
transactions	3,557,618	1,064,473	2,493,145
Total increase (decrease) in net assets	3,800,153	1,204,436	2,595,717
Net assets at beginning of year	-	-	-
Net assets at end of year	$3,800,153	$1,204,436	$2,595,717

See accompanying notes.

Strategic Investor   			216

Security Life Separate Account L1

Notes to Financial Statements

December 31, 2000

1. Organization

Security Life Separate Account L1 (the "Separate Account") was established by resolution of the Board of Directors of Security Life of Denver Insurance Company (the "Company") on November 3, 1993. The Separate Account is organized as a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940.

The Separate Account supports the operations of the FirstLine Variable Universal Life, FirstLine II Variable Universal Life, Strategic Advantage Variable Universal Life, Strategic Advantage II Variable Universal Life, Variable Survivorship Universal Life, Corporate Benefits Variable Universal Life, Strategic Benefits Variable Universal Life, and Estate Designer policies ("Variable Universal Life Policies") offered by the Company. Corporate Benefits Variable Universal Life and Strategic Benefits Variable Universal Life became effective in 2000 and are defined as Class B policies due to their mortality and expense charge structure. All other Variable Universal Life Policies are defined as Class A policies. The Separate Account may be used to support other variable life policies as they are offered by the Company. The assets of the Separate Account are the property of the Company. However, the portion of the Separate Account's assets attributable to the policies will not be used to satisfy liabilities arising out of any other operations of the Company.

As of December 31, 2000, the Separate Account offered 35 investment divisions available to the policyholders, 27 of which invest in an independently managed mutual fund portfolio and eight of which invest in a mutual fund portfolio managed by an affiliate, Direct Services, Inc. (collectively, "Funds"). The Funds are as follows:

Portfolio Managers/Portfolios (Funds)

Neuberger Berman Management Incorporated (NB)
	Neuberger Berman Limited Maturity Bond Portfolio
	Neuberger Berman Growth Portfolio
	Neuberger Berman Partners Portfolio
Fred Alger Management, Inc. (Alger)
	Alger American Small Capitalization Portfolio
	Alger American MidCap Growth Portfolio
	Alger American Growth Portfolio
	Alger American Leveraged AllCap Portfolio

Strategic Investor   			217

Security Life Separate Account L1

Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

Fidelity Management & Research Company (Fidelity)
	Fidelity Investments VIP II Asset Manager Portfolio
	Fidelity Investments VIP Growth Portfolio
	Fidelity Investments VIP Overseas Portfolio
	Fidelity Investments VIP Money Market Portfolio
	Fidelity Investments VIP II Index 500 Portfolio
INVESCO Funds Group, Inc. (INVESCO)
	INVESCO VIF Total Return Portfolio
	INVESCO VIF Equity Income Portfolio
	INVESCO VIF High Yield Portfolio
	INVESCO VIF Utilities Portfolio
	INVESCO VIF Small Company Growth Portfolio
Van Eck Associates Corporation (Van Eck)
	Van Eck Worldwide Hard Assets Portfolio
	Van Eck Worldwide Bond Portfolio
	Van Eck Worldwide Emerging Markets Portfolio
	Van Eck Worldwide Real Estate Portfolio
AIM Advisors, Inc. (AIM)
	AIM VI - Capital Appreciation Portfolio
	AIM VI - Government Securities Portfolio
Directed Services, Inc. ("GCG")
	The GCG Trust - Equity Income Portfolio
	The GCG Trust - Growth Portfolio
	The GCG Trust - Hard Assets Portfolio
	The GCG Trust - Limited Maturity Bond Portfolio
	The GCG Trust - Liquid Asset Portfolio
	The GCG Trust - MidCap Growth Portfolio
	The GCG Trust - Research Portfolio
	The GCG Trust - Total Return Portfolio
Janus Aspen Series Funds ("Janus")
	Aggressive Growth
	Growth
	International Growth
	Worldwide Growth

Strategic Investor   			218

Security Life Separate Account L1

Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

Effective February 19, 1998, six new divisions became available to the policyholders for investment in the following funds:

Van Eck Associates Corporation (Van Eck)
	Van Eck Worldwide Bond Portfolio
	Van Eck Worldwide Emerging Markets Portfolio
	Van Eck Worldwide Real Estate Portfolio
AIM Advisors, Inc. (AIM)
	AIM VI - Capital Appreciation Portfolio
	AIM VI - Government Securities Portfolio
INVESCO Funds Group, Inc. (INVESCO)
	INVESCO VIF Small Company Growth Portfolio

Effective May 1, 2000, eight new divisions became available to the policyholders for investment in the following funds:

Directed Services, Inc. ("GCG")
	GCG Trust - Equity Income Portfolio
	GCG Trust - Growth Portfolio
	GCG Trust - Hard Assets Portfolio
	GCG Trust - Limited Maturity Bond Portfolio
	GCG Trust - Liquid Asset Portfolio
	GCG Trust - MidCap Growth Portfolio
	GCG Trust - Research Portfolio
	GCG Trust - Total Return Portfolio

Effective October 13, 2000, four new divisions became available to the policyholders for investment in the following funds:

Janus Aspen Series Funds ("Janus")
	Aggressive Growth
	Growth
	International Growth
	Worldwide Growth

Strategic Investor   			219

Security Life Separate Account L1

Notes to Financial Statements (continued)

1. Organization (continued)

Portfolio Managers/Portfolios (Funds) (continued)

The Variable Universal Life Policies allow the policyholders to specify the allocation of their net premium to the various Funds. They can also transfer their account values among the Funds. The Variable Universal Life Policies also provide the policyholders the option to allocate their net premiums, or to transfer their account values, to a Guaranteed Interest Division ("GID") in the Company's general account. The GID guarantees a rate of interest to the policyholder, and it is not variable in nature. Therefore, it is not included in these Separate Account statements.

2. Summary of Significant Accounting Policies

The accompanying financial statements of the Separate Account have been prepared on the basis of accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The significant accounting principles followed by the Separate Account and the methods of applying those principles are presented below or in the footnotes which follow:

Investment Valuation

The investments in shares of the Funds are valued at the closing net asset value (market value) per share as determined by the Funds on the day of measurement.

Investment Transactions and Related Investment Income

The investments in shares of the Funds are accounted for on the date the order to buy or sell is confirmed. Dividend income and distributions of capital gains are recorded on the ex-dividend date. Realized gains and losses from sales transactions are reported using the first-in, first-out ("FIFO") method of accounting for cost. The difference between cost and current market value of investments owned on the day of measurement is recorded as unrealized gain or loss on investment.

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Notes to Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Valuation Period Deductions

For FirstLine, FirstLine II, Strategic Advantage, Strategic Advantage II, Variable Survivorship and Estate Designer policies (Class A Policies), charges are made directly against the assets of the Separate Account divisions and are reflected daily in the computation of the unit values of the divisions.

A daily deduction, at an annual rate of .75% of the daily asset value of the Separate Account divisions, is charged to the Separate Account for mortality and expense risks assumed by the Company. Total mortality and expense charges for the years ended December 31, 2000, 1999 and 1998 were $4,508,171, $2,908,885, and $1,740,661, respectively.

For the Corporate Benefits and Strategic Benefits policies (Class B Policies), mortality and expense charges result in the redemption of units rather than a deduction in the daily computation of unit values.

For Corporate Benefits policies, a monthly deduction, at an annual rate of .20% of the account value, is charged. For Strategic Benefits policies, a monthly deduction, at an annual rate of .85%, .60% and .05% of the account value, is charged during policy years 1 through 10, 11 through 20, and 21 and later, respectively. Total mortality and expense charges for these policies for the year ended December 31, 2000 were $42,000 and are included in the Statement of Changes in Net Assets as cost of insurance and administrative charges.

Policyholder Reserves

Policyholder reserves are recorded in the Separate Account at the aggregate account values of the policyholders invested in the Separate Account divisions. To the extent that benefits to be paid to the policyholders exceed their account values, the Company will contribute additional funds to the benefit proceeds.

3. Investments

Fund shares are purchased at net asset value with net premiums (premium payments, less sales and tax loads charged by the Company) and divisional transfers from other divisions. Fund shares are redeemed for the payment of benefits, for surrenders, for transfers to other divisions, and for charges by the Company for certain cost of insurance and administrative charges. The cost of insurance and administrative charges for the years ended December 31, 2000, 1999 and 1998 were $30,552,382, $20,649,015, and $14,458,798, respectively. Dividends made by the Funds are reinvested in the Funds.

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Notes to Financial Statements (continued)

3. Investments (continued)

The following is a summary of Fund shares owned as of December 31, 2000:

Fund	Number of Shares	Net Asset Value	Value of Shares at Market	Cost of Shares
Neuberger Berman Management Inc.:
Limited Maturity Bond	1,098,479.067	$13.19	$ 14,488,939	$ 14,317,177
Growth	650,381.500	$30.65	19,934,193	23,675,702
Partners	1,697,826.869	$16.17	27,453,860	26,760,069
Fred Alger Management, Inc.:
American Small Capitalization	1,116,503.632	$23.49	26,226,670	29,017,464
American MidCap Growth	1,087,203.730	$30.62	33,290,178	32,585,413
American Growth	1,059,757.353	$47.27	50,094,730	57,519,366
American Leveraged AllCap	627,987.182	$38.80	24,365,903	30,403,675
Fidelity Management & Research Co.:
Asset Manager	984,639.059	$16.00	15,754,225	16,794,005
Growth	1,571,275.140	$43.65	68,586,160	76,947,214
Overseas	2,160,503.810	$19.99	43,188,471	47,778,416
Money Market	62,301,092.280	$1.00	62,301,092	62,301,092
Index 500	1,209,792.397	$149.53	180,900,257	171,986,004
INVESCO Funds Group, Inc.:
Total Return	884,931.109	$13.21	11,689,940	13,758,395
Equity Income	1,039,790.088	$20.71	21,534,053	20,783,337
High Yield	1,040,905.170	$10.07	10,481,915	11,975,324
Utilities	370,959.040	$21.06	7,812,397	7,691,761
Small Company Growth	648,541.835	$18.07	11,719,151	14,096,290
Van Eck Associates Corporation:
Worldwide Hard Assets	191,662.125	$12.07	2,313,362	2,041,764
Worldwide Bond	89,819.082	$10.37	931,424	913,802
Worldwide Emerging Markets	550,588.884	$8.29	4,564,382	6,215,858
Worldwide Real Estate	123,569.451	$10.62	1,312,308	1,192,797
AIM Advisors, Inc.:
Capital Appreciation	1,654,352.662	$30.84	51,020,236	51,815,173
Government Securities	1,502,187.120	$11.16	16,764,408	16,599,323
Directed Services, Inc. (GCG):
Equity Income	-	-	-	-
Growth	62.340	$19.78	1,233	1,401
Hard Assets	-	-	-	-
Limited Maturity Bond	83,266.629	$10.53	876,798	922,084
Liquid Asset	1,991,502.030	$1.00	1,991,502	1,991,502
MidCap Growth	-	-	-	-
Research	-	-	-	-
Total Return	619.589	$17.00	10,533	11,083
Janus Funds:
Growth	9,242.830	$26.36	243,641	258,748
Aggressive Growth	14,583.894	$35.97	524,583	575,061
Worldwide Growth	8,686.977	$36.77	319,420	336,173
International Growth	13,727.681	$30.64	420,616	437,129
Total			$711,116,580	$741,702,602

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Notes to Financial Statements (continued)

3. Investments (continued)

For the year ended December 31, 2000, the cost of purchases (plus reinvested dividends) and sales of investments are as follows:

Fund	Beginning of Year	Purchases	Sales	End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond	$ 11,380,242	$ 7,233,774	$ (4,296,839)	$ 14,317,177
Growth	8,836,640	20,151,116	(5,312,054)	23,675,702
Partners	28,931,311	47,152,244	(49,323,486)	26,760,069
Fred Alger Management, Inc.:
American Small Capitalization	21,103,331	74,629,293	(66,715,160)	29,017,464
American MidCap Growth	13,903,676	21,597,617	(2,915,880)	32,585,413
American Growth	32,482,027	31,091,492	(6,054,153)	57,519,366
American Leveraged AllCap	16,645,127	19,821,075	(6,062,527)	30,403,675
Fidelity Management & Research Co.:
Asset Manager	12,533,037	7,123,256	(2,862,288)	16,794,005
Growth	48,588,495	109,439,111	(81,080,392)	76,947,214
Overseas	25,474,948	31,328,225	(9,024,757)	47,778,416
Money Market	34,799,038	248,428,475	(220,926,421)	62,301,092
Index 500	119,231,939	63,143,704	(10,389,639)	171,986,004
INVESCO Funds Group, Inc.:
Total Return	11,019,270	5,757,584	(3,018,459)	13,758,395
Equity Income	14,534,380	8,908,214	(2,659,257)	20,783,337
High Yield	9,910,525	4,917,230	(2,852,431)	11,975,324
Utilities	3,647,584	4,689,595	(645,418)	7,691,761
Small Company Growth	2,793,624	13,241,957	(1,939,291)	14,096,290
Van Eck Associates Corporation:
Worldwide Hard Assets	2,157,787	548,401	(664,424)	2,041,764
Worldwide Bond	341,712	782,955	(210,865)	913,802
Worldwide Emerging Markets	2,209,985	4,730,706	(724,833)	6,215,858
Worldwide Real Estate	567,839	963,776	(338,818)	1,192,797
AIM Advisors, Inc.:
Capital Appreciation	3,932,316	48,423,913	(541,056)	51,815,173
Government Securities	7,579,908	13,067,857	(4,048,442)	16,599,323
Directed Services, Inc. (GCG):
Equity Income
Growth	-	1,401	-	1,401
Hard Assets	-	-	-	-
Limited Maturity Bond	-	922,084	-	922,084
Liquid Asset	-	54,297,849	(52,306,347)	1,991,502
MidCap Growth	-	-	-	-
Research	-	-	-	-
Total Return	-	11,083	-	11,083
Janus Funds:
Growth	-	335,602	(76,854)	258,748
Aggressive Growth	-	575,493	(432)	575,061
Worldwide Growth	-	463,855	(127,682)	336,173
International Growth	-	446,417	(9,288)	437,129
Total	$432,604,741	$844,225,354	$(535,127,493)	$741,702,602

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Security Life Separate Account L1

Notes to Financial Statements (continued)

3. Investments (continued)

Aggregate proceeds from sales of investments for the year ended December 31, 2000 were $540,823,407.

4. Other Policy Deductions

The Variable Universal Life Policies provide for certain deductions for sales and tax loads from premium payments received from the policyholders and for surrender charges and taxes from amounts paid to policyholders. Such deductions are taken before the purchase of divisional units or after the redemption of divisional units of the Separate Account. Such deductions are not included in the Separate Account financial statements.

5. Policy Loans

The Variable Universal Life Policies allow the policyholders to borrow against their policies by using them as collateral for a loan. At the time of borrowing against the policies, an amount equal to the loan amount is transferred from the Separate Account divisions to a Loan Division in the Company's General Account to secure the loan. As payments are made on the policy loan, amounts are transferred back from the Loan Division to the Separate Account divisions. Interest is credited to the balance in the Loan Division at a fixed rate. The Loan Division is not variable in nature and is not included in these Separate Account statements.

6. Federal Income Taxes

The Separate Account is not taxed separately because the operations of the Separate Account are part of the total operations of the Company. The Company is taxed as a life insurance company under the Internal Revenue Code. The Separate Account is not taxed as a "Regulated Investment Company" under subchapter "M" of the Internal Revenue Code.

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Security Life Separate Account L1

Notes to Financial Statements (continued)

7. Summary of Changes in Units

The following schedule summarizes the changes in divisional units for the year ended December 31, 2000:

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond:
Class A	889,159.604	504,777.566	(308,746.826)	1,085,190.344
Class B	-	-	-	-
Growth:
Class A	434,338.368	585,182.288	(264,487.840)	755,032.816
Class B	-	-	-	-
Partners:
Class A	1,212,133.448	1,779,259.060	(1,860,035.005)	1,131,357.503
Class B	-	776.829	(49.785)	727.044
Fred Alger Management, Inc.:
American Small Capitalization:
Class A	1,055,757.484	2,800,960.511	(2,505,612.904)	1,351,105.091
Class B	-	55,711.543	(42.421)	55,669.122
American MidCap Growth:
Class A	576,738.314	560,214.726	(114,004.848)	1,022,948.192
Class B	-	4,663.845	(82.319)	4,581.526
American Growth:
Class A	1,257,371.637	778,072.130	(240,385.291)	1,795,058.476
Class B	-	11,643.541	(139.984)	11,503.557
American Leveraged AllCap:
Class A	425,281.099	336,729.473	(159,812.806)	602,197.766
Class B	-	-	-	-
Fidelity Management & Research Co.:
Asset Manager:
Class A	722,717.906	310,205.974	(154,339.584)	878,584.296
Class B	-	-	-	-
Growth:
Class A	1,676,236.646	2,952,178.456	(2,405,547.964)	2,222,867.138
Class B	-	40,990.125	(263.017)	40,727.108
Overseas:
Class A	1,716,617.627	1,467,555.053	(597,886.377)	2,586,286.303
Class B	-	83,821.190	(70.622)	83,750.568
Money Market:
Class A	2,763,648.297	18,979,254.070	(17,053,332.906)	4,689,569.461
Class B	-	-	-	-
Index 500:
Class A	4,772,484.597	1,767,429.327	(514,434.291)	6,025,479.633
Class B	-	714,452.306	(9,500.804)	704,951.502

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Security Life Separate Account L1

Notes to Financial Statements (continued)

7. Summary of Changes in Units (continued)

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
INVESCO Funds Group, Inc.:
Total Return:
Class A	602,187.614	257,125.735	(161,306.002)	698,007.347
Class B	-	-	-	-
Equity Income:
Class A	621,047.937	283,695.785	(121,863.312)	782,880.410
Class B	-	23,229.266	(31.870)	23,197.396
High Yield:
Class A	536,863.946	285,666.502	(142,449.650)	680,080.798
Class B	-	2,314.001	(20.866)	2,293.135
Utilities:
Class A	189,409.984	190,914.332	(38,376.831)	341,947.485
Class B	-	-	-	-
Small Company Growth:
Class A	212,503.210	609,134.460	(163,138.502)	658,499.168
Class B	-	2,483.692	(24.219)	2,459.473
Van Eck Associates Corporation:
Worldwide Hard Assets:
Class A	236,972.429	53,067.697	(75,068.462)	214,971.664
Class B	-	-	-	-
Worldwide Bond:
Class A	33,114.078	77,355.439	(19,232.793)	91,236.724
Class B	-	51.386	(9.286)	42.100
Worldwide Emerging Markets:
Class A	228,819.195	390,868.355	(76,373.129)	543,314.421
Class B	-	36,097.306	(54.040)	36,043.266
Worldwide Real Estate:
Class A	64,967.173	103,195.970	(36,955.247)	131,207.896
Class B	-	439.384	(44.011)	395.373
AIM Advisors, Inc.:
Capital Appreciation:
Class A	323,846.032	377,520.848	(53,883.069)	647,483.811
Class B	-	3,435,588.521	(164.158)	3,435,424.363
Government Securities:
Class A	715,905.149	682,457.548	(376,148.854)	1,022,213.843
Class B	-	469,546.296	(11.016)	469,535.280

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Security Life Separate Account L1

Notes to Financial Statements (continued)

7. Summary of Changes in Units (continued)

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Directed Services, Inc. (GCG):
Equity Income:
Class A	-	-	-	-
Class B	-	-	-	-
Growth:
Class A	-	-	-	-
Class B	-	103.679	-	103.679
Hard Assets:
Class A	-	-	-	-
Class B	-	-	-	-
Limited Maturity Bond:
Class A	-	-	-	-
Class B	-	80,478.798	-	80,478.798
Liquid Asset:
Class A	-	-	-	-
Class B	-	5,018,488.796	(4,834,556.175)	183,932.621
MidCap Growth:
Class A	-	-	-	-
Class B	-	-	-	-
Research:
Class A	-	-	-	-
Class B	-	-	-	-
Total Return:
Class A	-	-	-	-
Class B	-	908.365	-	908.365
Janus Aspen Series Funds:
Growth:
Class A	-	37,656.545	(8,226.269)	29,430.276
Class B	-	-	-	-
Aggressive Growth:
Class A	-	53,792.856	(40.067)	53,752.789
Class B	-	22,786.649	-	22,786.649
Worldwide Growth:
Class A	-	33,160.748	(13,450.203)	19,710.545
Class B	-	17,011.166	-	17,011.166
International Growth:
Class A	-	43,058.359	(952.283)	42,106.076
Class B	-	6,269.387	-	6,269.387

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Security Life Separate Account L1

Notes to Financial Statements (continued)

7. Summary of Changes in Units (continued)

The following schedule summarizes the changes in divisional units for the year ended December 31, 1999:

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond	1,245,559.121	421,349.898	(777,749.415)	889,159.604
Growth	447,486.376	233,319.969	(246,467.977)	434,338.368
Partners	986,298.018	385,667.451	(159,832.021)	1,212,133.448
Fred Alger Management, Inc.:
American Small Capitalization	838,692.418	603,898.891	(386,833.825)	1,055,757.484
American MidCap Growth	402,532.472	225,361.191	(51,155.349)	576,738.314
American Growth	923,696.066	585,374.403	(251,698.832)	1,257,371.637
American Leveraged AllCap	221,642.446	410,084.371	(206,445.718)	425,281.099
Fidelity Management & Research Co.:
Asset Manager	600,255.213	393,745.577	(271,282.884)	722,717.906
Growth	1,293,480.338	2,233,512.279	(1,850,755.971)	1,676,236.646
Overseas	1,429,659.907	963,512.218	(676,554.498)	1,716,617.627
Money Market	1,526,404.399	9,068,762.545	(7,831,518.647)	2,763,648.297
Index 500	3,215,990.519	1,840,375.191	(283,881.113)	4,772,484.597
INVESCO Funds Group, Inc.:
Total Return	450,557.216	300,554.107	(148,923.709)	602,187.614
Equity Income	473,616.752	252,971.948	(105,540.763)	621,047.937
High Yield	486,858.648	226,071.484	(176,066.186)	536,863.946
Utilities	110,379.616	140,069.045	(61,038.677)	189,409.984
Small Company Growth	67,506.441	210,114.805	(65,118.036)	212,503.210
Van Eck Associates Corporation:
Worldwide Hard Assets	132,513.824	246,466.322	(142,007.717)	236,972.429
Worldwide Bond	18,656.317	43,237.412	(28,779.651)	33,114.078
Worldwide Emerging Markets	67,354.295	582,654.548	(421,189.648)	228,819.195
Worldwide Real Estate	8,765.232	67,514.147	(11,312.206)	64,967.173
AIM Advisors, Inc.:
Capital Appreciation	105,457.867	263,795.629	(45,407.464)	323,846.032
Government Securities	246,150.062	723,064.769	(253,309.682)	715,905.149

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Security Life Separate Account L1

Notes to Financial Statements (continued)

7. Summary of Changes in Units (continued)

The following schedule summarizes the changes in divisional units for the year ended December 31, 1998:

Division	Outstanding at Beginning of Year	Increase for Payments Received	(Decrease) for Withdrawals and Other Deductions	Outstanding at End of Year
Neuberger Berman Management Inc.:
Limited Maturity Bond	552,985.394	801,233.327	(108,659.600)	1,245,559.121
Growth	316,146.084	250,854.619	(119,514.327)	447,486.376
Government Income	75,811.559	58.537	(75,870.096)	-
Partners	626,285.721	455,096.290	(95,083.993)	986,298.018
Fred Alger Management, Inc.:
American Small Capitalization	648,733.740	333,770.247	(143,811.569)	838,692.418
American MidCap Growth	288,809.482	167,037.228	(53,314.238)	402,532.472
American Growth	569,990.309	442,313.190	(88,607.433)	923,696.066
American Leveraged AllCap	148,542.639	102,168.282	(29,068.475)	221,642.446
Fidelity Management & Research Co.:
Asset Manager	410,906.106	270,972.780	(81,623.673)	600,255.213
Growth	983,842.388	614,542.294	(304,904.344)	1,293,480.338
Overseas	950,328.899	861,220.218	(381,889.210)	1,429,659.907
Money Market	1,303,059.881	5,059,561.984	(4,836,217.466)	1,526,404.399
Index 500	1,863,056.104	1,617,935.444	(265,001.029)	3,215,990.519
INVESCO Funds Group, Inc.:
Total Return	184,042.238	307,178.543	(40,663.565)	450,557.216
Equity Income	297,553.033	216,644.366	(40,580.647)	473,616.752
High Yield	333,501.857	283,205.205	(129,848.414)	486,858.648
Utilities	78,118.685	41,701.114	(9,440.183)	110,379.616
Small Company Growth	-	71,535.065	(4,028.624)	67,506.441
Van Eck Associates Corporation:
Worldwide Balanced	32,139.282	190.627	(32,329.909)	-
Worldwide Hard Assets	77,046.773	68,491.375	(13,024.324)	132,513.824
Worldwide Bond	-	18,882.425	(226.108)	18,656.317
Worldwide Emerging Markets	-	105,064.405	(37,710.110)	67,354.295
Worldwide Real Estate	-	9,848.072	(1,082.840)	8,765.232
AIM Advisors, Inc.:
Capital Appreciation	-	108,895.839	(3,437.972)	105,457.867
Government Securities	-	261,432.015	(15,281.953)	246,150.062

Strategic Investor   			229

Security Life Separate Account L1

Notes to Financial Statements (continued)

8. Net Assets

Net assets at December 31, 2000 consisted of the following:

Division	Principal Transactions	Accumulated Investment Income (Loss)	Accumulated Net Realized Gains (Losses) on Investments	Net Unrealized Gains (Losses) on Investments	Net Assets
Neuberger Berman Management Inc.:
Limited Maturity Bond	$ 12,875,450	$ 2,040,309	$ (593,370)	$ 171,762	$ 14,494,151
Growth	16,507,147	3,350,605	3,828,663	(3,741,509)	19,944,906
Partners	22,990,354	7,470,143	(3,598,509)	693,791	27,555,779
Fred Alger Management, Inc.:
American Small Capitalization	24,994,589	13,518,183	(9,552,848)	(2,790,794)	26,169,130
American MidCap Growth	25,790,401	4,859,141	1,939,444	704,765	33,293,751
American Growth	42,065,399	10,516,454	4,961,215	(7,424,636)	50,118,432
American Leveraged AllCap	22,124,855	2,992,031	5,298,494	(6,037,772)	24,377,608
Fidelity Management & Research Co.:
Asset Manager	13,593,835	3,007,490	193,073	(1,039,780)	15,754,618
Growth	52,479,909	12,125,623	12,261,725	(8,361,054)	68,506,203
Overseas	39,756,895	5,133,376	3,021,551	(4,589,945)	43,321,877
Money Market	56,817,693	5,197,119	-	-	62,014,812
Index 500	154,623,275	3,154,401	14,248,512	8,914,253	180,940,441
INVESCO Funds Group, Inc.:
Total Return	11,552,212	2,025,307	185,567	(2,068,455)	11,694,631
Equity Income	17,049,701	2,143,899	1,591,780	750,716	21,536,096
High Yield	10,481,018	1,938,615	(429,872)	(1,493,409)	10,496,352
Utilities	6,663,951	338,852	688,493	120,636	7,811,932
Small Company Growth	12,539,097	260,565	1,425,580	(2,377,139)	11,848,103
Van Eck Associates Corporation:
Worldwide Hard Assets	2,194,793	156,270	(309,310)	271,598	2,313,351
Worldwide Bond	929,038	25,274	(40,507)	17,622	931,427
Worldwide Emerging Markets	5,860,675	(43,813)	396,614	(1,651,476)	4,562,000
Worldwide Real Estate	1,178,540	7,326	6,931	119,511	1,312,308
AIM Advisors, Inc.:
Capital Appreciation	50,999,939	326,605	507,069	(794,937)	51,038,676
Government Securities	15,834,280	707,601	56,932	165,085	16,763,898

Strategic Investor   			230

Security Life Separate Account L1

Notes to Financial Statements (continued)

8. Net Assets (continued)

Division	Principal Transactions	Accumulated Investment Income (Loss)	Accumulated Net Realized Gains (Losses) on Investments	Net Unrealized Gains (Losses) on Investments	Net Assets
Directed Services, Inc. (GCG):
Equity Income	$ -	$ -	$ -	$ -	$ -
Growth	1,311	90	-	(168)	1,233
Hard Assets	-	-	-	-	-
Limited Maturity Bond	867,803	54,281	-	(45,286)	876,798
Liquid Asset	1,130,199	861,303	-	-	1,991,502
MidCap Growth	-	-	-	-	-
Research	-	-	-	-	-
Total Return	10,297	786	-	(550)	10,533
Janus Aspen Series Funds:
Growth	260,474	(180)	(1,546)	(15,107)	243,641
Aggressive Growth	575,365	(218)	(86)	(50,478)	524,583
Worldwide Growth	343,821	(64)	(7,584)	(16,753)	319,420
International Growth	437,045	597	(513)	(16,513)	420,616
Total	$623,529,361	$82,167,971	$36,077,498	$(30,586,022)	$711,188,808

Strategic Investor   			231

APPENDIX A

Factors for the
Cash Value Accumulation Test
For a Life Insurance Policy

Attained Age	Male	Female	Unisex	Attained Age	Male	Female	Unisex	Attained Age	Male	Female	Unisex
0	11.727	14.234	12.149
1	11.785	14.209	12.194	34	4.188	4.902	4.314	67	1.617	1.815	1.657
2	11.458	13.815	11.857	35	4.052	4.742	4.173	68	1.583	1.769	1.620
3	11.128	13.417	11.515	36	3.920	4.586	4.037	69	1.550	1.724	1.585
4	10.803	13.023	11.178	37	3.793	4.437	3.906	70	1.518	1.681	1.552
5	10.481	12.635	10.845	38	3.670	4.293	3.780	71	1.488	1.639	1.520
6	10.161	12.253	10.514	39	3.553	4.154	3.658	72	1.459	1.599	1.489
7	9.844	11.875	10.187	40	3.439	4.021	3.541	73	1.432	1.560	1.460
8	9.530	11.505	9.863	41	3.330	3.894	3.429	74	1.406	1.524	1.433
9	9.221	11.141	9.545	42	3.226	3.771	3.322	75	1.382	1.490	1.407
10	8.918	10.784	9.233	43	3.125	3.654	3.218	76	1.359	1.457	1.383
11	8.623	10.436	8.928	44	3.028	3.541	3.119	77	1.338	1.427	1.360
12	8.338	10.098	8.634	45	2.936	3.432	3.023	78	1.318	1.398	1.338
13	8.066	9.771	8.353	46	2.846	3.328	2.931	79	1.299	1.371	1.318
14	7.808	9.455	8.085	47	2.761	3.227	2.843	80	1.281	1.345	1.298
15	7.564	9.150	7.831	48	2.678	3.129	2.758	81	1.264	1.321	1.280
16	7.335	8.857	7.592	49	2.599	3.035	2.676	82	1.248	1.298	1.262
17	7.118	8.575	7.364	50	2.522	2.945	2.597	83	1.233	1.277	1.245
18	6.911	8.302	7.148	51	2.449	2.858	2.522	84	1.218	1.257	1.230
19	6.713	8.038	6.939	52	2.378	2.774	2.449	85	1.205	1.238	1.215
20	6.521	7.782	6.737	53	2.311	2.693	2.379	86	1.193	1.221	1.202
21	6.334	7.534	6.540	54	2.246	2.615	2.312	87	1.181	1.205	1.189
22	6.150	7.293	6.347	55	2.184	2.540	2.248	88	1.171	1.190	1.177
23	5.969	7.059	6.158	56	2.125	2.468	2.187	89	1.160	1.176	1.166
24	5.791	6.831	5.971	57	2.068	2.398	2.128	90	1.151	1.163	1.155
25	5.615	6.611	5.788	58	2.014	2.330	2.071	91	1.141	1.150	1.144
26	5.441	6.396	5.608	59	1.962	2.265	2.017	92	1.131	1.137	1.133
27	5.271	6.188	5.431	60	1.912	2.201	1.965	93	1.120	1.125	1.122
28	5.104	5.986	5.258	61	1.864	2.139	1.915	94	1.109	1.112	1.110
29	4.940	5.791	5.089	62	1.818	2.079	1.867	95	1.097	1.098	1.097
30	4.781	5.601	4.925	63	1.774	2.022	1.821	96	1.083	1.084	1.084
31	4.626	5.418	4.765	64	1.732	1.967	1.777	97	1.069	1.069	1.069
32	4.476	5.241	4.610	65	1.692	1.914	1.735	98	1.054	1.054	1.054
33	4.330	5.069	4.459	66	1.654	1.863	1.695	99	1.040	1.040	1.040
								100	1.000	1.000	1.000

Strategic Investor   			232

APPENDIX A - Enhanced

Factors for the
Cash Value Accumulation Test
For a Life Insurance Policy

Attained Age	Male	Female	Unisex	Attained Age	Male	Female	Unisex	Attained Age	Male	Female	Unisex
0	11.727	14.234	12.149
1	11.785	14.209	12.194	34	4.188	4.902	4.314	67	1.617	1.815	1.657
2	11.458	13.815	11.857	35	4.052	4.742	4.173	68	1.583	1.769	1.620
3	11.128	13.417	11.515	36	3.920	4.586	4.037	69	1.550	1.724	1.585
4	10.803	13.023	11.178	37	3.793	4.437	3.906	70	1.518	1.681	1.552
5	10.481	12.635	10.845	38	3.670	4.293	3.780	71	1.503	1.655	1.535
6	10.161	12.253	10.514	39	3.553	4.154	3.658	72	1.488	1.631	1.519
7	9.844	11.875	10.187	40	3.439	4.021	3.541	73	1.475	1.607	1.504
8	9.530	11.505	9.863	41	3.330	3.894	3.429	74	1.462	1.585	1.490
9	9.221	11.141	9.545	42	3.226	3.771	3.322	75	1.451	1.565	1.477
10	8.918	10.784	9.233	43	3.125	3.654	3.218	76	1.441	1.544	1.466
11	8.623	10.436	8.928	44	3.028	3.541	3.119	77	1.432	1.527	1.455
12	8.338	10.098	8.634	45	2.936	3.432	3.023	78	1.423	1.510	1.445
13	8.066	9.771	8.353	46	2.846	3.328	2.931	79	1.416	1.494	1.437
14	7.808	9.455	8.085	47	2.761	3.227	2.843	80	1.409	1.480	1.428
15	7.564	9.150	7.831	48	2.678	3.129	2.758	81	1.378	1.440	1.395
16	7.335	8.857	7.592	49	2.599	3.035	2.676	82	1.348	1.402	1.363
17	7.118	8.575	7.364	50	2.522	2.945	2.597	83	1.319	1.366	1.332
18	6.911	8.302	7.148	51	2.449	2.858	2.522	84	1.291	1.332	1.304
19	6.713	8.038	6.939	52	2.378	2.774	2.449	85	1.265	1.300	1.276
20	6.521	7.782	6.737	53	2.311	2.693	2.379	86	1.241	1.270	1.250
21	6.334	7.534	6.540	54	2.246	2.615	2.312	87	1.216	1.241	1.225
22	6.150	7.293	6.347	55	2.184	2.540	2.248	88	1.194	1.214	1.201
23	5.969	7.059	6.158	56	2.125	2.468	2.187	89	1.172	1.188	1.178
24	5.791	6.831	5.971	57	2.068	2.398	2.128	90	1.151	1.163	1.155
25	5.615	6.611	5.788	58	2.014	2.330	2.071	91	1.141	1.150	1.144
26	5.441	6.396	5.608	59	1.962	2.265	2.017	92	1.131	1.137	1.133
27	5.271	6.188	5.431	60	1.912	2.201	1.965	93	1.120	1.125	1.122
28	5.104	5.986	5.258	61	1.864	2.139	1.915	94	1.109	1.112	1.110
29	4.940	5.791	5.089	62	1.818	2.079	1.867	95	1.097	1.098	1.097
30	4.781	5.601	4.925	63	1.774	2.022	1.821	96	1.083	1.084	1.084
31	4.626	5.418	4.765	64	1.732	1.967	1.777	97	1.069	1.069	1.069
32	4.476	5.241	4.610	65	1.692	1.914	1.735	98	1.054	1.054	1.054
33	4.330	5.069	4.459	66	1.654	1.863	1.695	99	1.040	1.040	1.040
								100	1.000	1.000	1.000

Strategic Investor   			233

APPENDIX B

<R>Definition of Life Insurance
Guideline Premium Test/Cash Value Corridor Test
Death Benefit Factors</R>

Attained Age	Factor	Attained Age	Factor	Attained Age	Factor	Attained Age	Factor
0	2.50	25	2.50	50	1.85	75	1.05
1	2.50	26	2.50	51	1.78	76	1.05
2	2.50	27	2.50	52	1.71	77	1.05
3	2.50	28	2.50	53	1.64	78	1.05
4	2.50	29	2.50	54	1.57	79	1.05
5	2.50	30	2.50	55	1.50	80	1.05
6	2.50	31	2.50	56	1.46	81	1.05
7	2.50	32	2.50	57	1.42	82	1.05
8	2.50	33	2.50	58	1.38	83	1.05
9	2.50	34	2.50	59	1.34	84	1.05
10	2.50	35	2.50	60	1.30	85	1.05
11	2.50	36	2.50	61	1.28	86	1.05
12	2.50	37	2.50	62	1.26	87	1.05
13	2.50	38	2.50	63	1.24	88	1.05
14	2.50	39	2.50	64	1.22	89	1.05
15	2.50	40	2.50	65	1.20	90	1.05
16	2.50	41	2.43	66	1.19	91	1.04
17	2.50	42	2.36	67	1.18	92	1.03
18	2.50	43	2.29	68	1.17	93	1.02
19	2.50	44	2.22	69	1.16	94	1.01
20	2.50	45	2.15	70	1.15	95	1.00
21	2.50	46	2.09	71	1.13	96	1.00
22	2.50	47	2.03	72	1.11	97	1.00
23	2.50	48	1.97	73	1.09	98	1.00
24	2.50	49	1.91	74	1.07	99	1.00
						100	1.00

THE POLICY'S BASE DEATH BENEFIT AT ANY TIME WILL BE AT LEAST EQUAL TO THE ACCOUNT VALUE TIMES THE APPROPRIATE FACTOR FROM THIS TABLE.

Strategic Investor   			234

APPENDIX B - Enhanced

<R>Definition of Life Insurance
Guideline Premium Test/Cash Value Corridor Test
Death Benefit Factors</R>

Attained Age	Factor	Attained Age	Factor	Attained Age	Factor	Attained Age	Factor
0	2.50	25	2.50	50	1.85	75	1.10
1	2.50	26	2.50	51	1.78	76	1.11
2	2.50	27	2.50	52	1.71	77	1.12
3	2.50	28	2.50	53	1.64	78	1.13
4	2.50	29	2.50	54	1.57	79	1.14
5	2.50	30	2.50	55	1.50	80	1.16
6	2.50	31	2.50	56	1.46	81	1.14
7	2.50	32	2.50	57	1.42	82	1.13
8	2.50	33	2.50	58	1.38	83	1.12
9	2.50	34	2.50	59	1.34	84	1.11
10	2.50	35	2.50	60	1.30	85	1.10
11	2.50	36	2.50	61	1.28	86	1.09
12	2.50	37	2.50	62	1.26	87	1.08
13	2.50	38	2.50	63	1.24	88	1.07
14	2.50	39	2.50	64	1.22	89	1.06
15	2.50	40	2.50	65	1.20	90	1.05
16	2.50	41	2.43	66	1.19	91	1.04
17	2.50	42	2.36	67	1.18	92	1.03
18	2.50	43	2.29	68	1.17	93	1.02
19	2.50	44	2.22	69	1.16	94	1.01
20	2.50	45	2.15	70	1.15	95	1.00
21	2.50	46	2.09	71	1.14	96	1.00
22	2.50	47	2.03	72	1.13	97	1.00
23	2.50	48	1.97	73	1.12	98	1.00
24	2.50	49	1.91	74	1.11	99	1.00
						100	1.00

THE POLICY'S BASE DEATH BENEFIT AT ANY TIME WILL BE AT LEAST EQUAL TO THE ACCOUNT VALUE TIMES THE APPROPRIATE FACTOR FROM THIS TABLE.

Strategic Investor   			235

APPENDIX C

Performance Information

POLICY PERFORMANCE

The following hypothetical illustrations demonstrate how the actual investment experience of each variable investment option of the separate account affects the cash surrender value, account value and death benefit of a policy. These hypothetical illustrations are based on the actual historical return of each investment portfolio as if a policy had been issued on the date indicated. Each investment portfolio's annual total return is based on the total return calculated for each fiscal year. These annual total return figures reflect the investment portfolio's net management fees after any voluntary waiver and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions, which if reflected, would result in lower total return figures than those shown.

The illustrations are based on the payment of a $3,750 annual premium, received at the beginning of each year, for a hypothetical policy with a $300,000 stated death benefit, the cash value accumulation test, death benefit option 1, issued to a preferred, tobacco non-user male, age 45. In each case, it is assumed that all premium is allocated to the variable investment option investing in the investment portfolio illustrated for the period shown. The benefits are calculated for a specific date. The amount and timing of premium payments and the use of other policy features, such as policy loans, would affect individual policy benefits.

The amounts shown for the cash surrender values, account values and death benefits take into account the charges from premium, current cost of insurance and monthly deductions, and each investment portfolio's charges and expenses. See Charges and Deductions, page 45.

Strategic Investor   			236

HYPOTHETICAL ILLUSTRATIONS
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
AIM V.I. Capital Appreciation Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	2.50%	3,119	2,707	300,000
12/31/95	35.69%	7,704	7,141	300,000
12/31/96	17.58%	11,595	11,183	300,000
12/31/97	13.51%	15,369	15,369	300,000
12/31/98	19.30%	21,057	21,057	300,000
12/31/99	44.61%	33,862	33,862	300,000
12/31/00	-10.91%	32,006	32,006	300,000
AIM V.I. Government Securities Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	-3.73%	2,940	2,527	300,000
12/31/95	15.56%	6,388	5,826	300,000
12/31/96	2.29%	8,753	8,340	300,000
12/31/97	8.16%	11,569	11,569	300,000
12/31/98	7.73%	14,902	14,902	300,000
12/31/99	-1.32%	16,932	16,932	300,000
12/31/00	10.12%	21,097	21,097	300,000
Alger American Growth Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	40.39%	4,216	3,803	300,000
12/31/92	12.38%	7,644	7,081	300,000
12/31/93	22.47%	12,004	11,591	300,000
12/31/94	1.45%	14,109	14,109	300,000
12/31/95	36.37%	22,423	22,423	300,000
12/31/96	13.35%	27,992	27,992	300,000
12/31/97	25.75%	38,002	38,002	300,000
12/31/98	48.07%	59,529	59,529	300,000
12/31/99	33.74%	82,326	82,326	300,000
12/31/00	-14.78%	71,568	71,568	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			237

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Alger American Leveraged AllCap Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/96	12.04%	3,394	2,982	300,000
12/31/97	19.68%	7,148	6,586	300,000
12/31/98	57.83%	14,695	14,282	300,000
12/31/99	78.06%	29,834	29,834	300,000
12/31/00	-24.83%	23,941	23,941	300,000
Alger American MidCap Growth Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	-1.54%	3,003	2,590	300,000
12/31/95	44.45%	8,021	7,458	300,000
12/31/96	11.90%	11,389	10,976	300,000
12/31/97	15.01%	15,341	15,341	300,000
12/31/98	30.30%	23,003	23,003	300,000
12/31/99	31.85%	33,389	33,389	300,000
12/31/00	9.18%	38,804	38,804	300,000
Alger American Small Capitalization Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	57.54%	4,715	4,303	300,000
12/31/92	3.55%	7,576	7,013	300,000
12/31/93	13.28%	11,028	10,615	300,000
12/31/94	-4.38%	12,349	12,349	300,000
12/31/95	44.31%	21,229	21,229	300,000
12/31/96	4.18%	24,456	24,456	300,000
12/31/97	11.39%	29,689	29,689	300,000
12/31/98	15.53%	36,773	36,773	300,000
12/31/99	43.42%	55,811	55,811	300,000
12/31/00	-27.20%	41,829	41,829	300,000
Fidelity VIP Growth Portfolio (Service Class)
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/98	39.38%	4,187	3,774	300,000
12/31/99	37.29%	9,248	8,686	300,000
12/31/00	-11.05%	10,146	9,734	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			238

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Fidelity VIP Overseas Portfolio (Service Class)
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/98	12.69%	3,413	3,001	300,000
12/31/99	42.44%	8,493	7,930	300,000
12/31/00	-19.18%	8,617	8,205	300,000
Fidelity VIP II Asset Manager Portfolio (Service Class)
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/98	14.82%	3,475	3,062	300,000
12/31/99	11.01%	6,736	6,173	300,000
12/31/00	-4.06%	8,543	8,131	300,000
Fidelity VIP II Index 500 Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/93	9.74%	3,328	2,916	300,000
12/31/94	1.04%	6,006	5,443	300,000
12/31/95	37.19%	11,212	10,799	300,000
12/31/96	22.71%	16,179	16,179	300,000
12/31/97	32.82%	24,563	24,563	300,000
12/31/98	28.31%	34,474	34,474	300,000
12/31/99	20.52%	44,182	44,182	300,000
12/31/00	-9.30%	41,865	41,865	300,000
The GCG Trust Fully Managed Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	28.93%	3,883	3,471	300,000
12/31/92	6.23%	6,887	6,325	300,000
12/31/93	7.59%	9,739	9,326	300,000
12/31/94	-7.27%	10,776	10,776	300,000
12/31/95	20.80%	15,808	15,808	300,000
12/31/96	16.36%	21,085	21,085	300,000
12/31/97	15.27%	26,869	26,869	300,000
12/31/98	5.89%	30,691	30,691	300,000
12/31/99	6.92%	34,997	34,997	300,000
12/31/00	21.97%	45,129	45,129	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			239

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
The GCG Trust Liquid Asset Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	5.66%	3,210	2,798	300,000
12/31/92	3.13%	6,004	5,441	300,000
12/31/93	2.64%	8,390	7,978	300,000
12/31/94	3.89%	10,724	10,724	300,000
12/31/95	5.51%	13,699	13,699	300,000
12/31/96	5.01%	16,786	16,786	300,000
12/31/97	5.07%	19,957	19,957	300,000
12/31/98	5.13%	23,231	23,231	300,000
12/31/99	4.74%	26,489	26,489	300,000
12/31/00	6.05%	30,175	30,175	300,000
The GCG Trust Mid-Cap Growth Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/99	79.05%	5,343	4,930	300,000
12/31/00	8.18%	8,579	8,016	300,000
INVESCO VIF-Equity Income Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	29.25%	3,893	3,480	300,000
12/31/96	22.28%	7,904	7,341	300,000
12/31/97	28.17%	12,894	12,481	300,000
12/31/98	15.30%	17,107	17,107	300,000
12/31/99	14.84%	22,239	22,239	300,000
12/31/00	4.87%	25,675	25,675	300,000
INVESCO VIF-High Yield Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	19.76%	3,618	3,205	300,000
12/31/96	16.59%	7,228	6,666	300,000
12/31/97	17.33%	11,016	10,603	300,000
12/31/98	1.42%	13,108	13,108	300,000
12/31/99	9.20%	16,782	16,782	300,000
12/31/00	-11.68%	16,768	16,768	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			240

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
INVESCO VIF-Small Company Growth Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/98	16.38%	3,520	3,107	300,000
12/31/99	91.06%	11,531	10,968	300,000
12/31/00	-14.98%	11,630	11,217	300,000
INVESCO VIF-Total Return Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	22.79%	3,705	3,293	300,000
12/31/96	12.18%	7,061	6,499	300,000
12/31/97	22.91%	11,335	10,923	300,000
12/31/98	9.56%	14,538	14,538	300,000
12/31/99	-3.40%	16,173	16,173	300,000
12/31/00	-2.17%	18,021	18,021	300,000
INVESCO VIF-Utilities Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	9.08%	3,309	2,896	300,000
12/31/96	12.76%	6,653	6,090	300,000
12/31/97	23.41%	10,880	10,467	300,000
12/31/98	25.48%	16,138	16,138	300,000
12/31/99	19.13%	21,938	21,938	300,000
12/31/00	5.28%	25,462	25,462	300,000
Janus Aspen Aggressive Growth Portfolio Service Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	16.19%	3,514	3,102	300,000
12/31/95	27.28%	7,740	7,177	300,000
12/31/96	7.33%	10,624	10,212	300,000
12/31/97	12.29%	14,116	14,116	300,000
12/31/98	33.33%	21,923	21,923	300,000
12/31/99	1.22%	24,450	24,450	300,000
12/31/00	-31.78%	18,025	18,025	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			241

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Janus Aspen Growth Portfolio Service Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	2.58%	3,122	2,709	300,000
12/31/95	29.92%	7,388	6,826	300,000
12/31/96	17.73%	11,241	10,828	300,000
12/31/97	21.84%	16,096	16,096	300,000
12/31/98	34.71%	24,808	24,808	300,000
12/31/99	42.50%	38,683	38,683	300,000
12/31/00	-14.75%	34,702	34,702	300,000
Janus Aspen International Growth Portfolio Service Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	23.15%	3,716	3,303	300,000
12/31/96	34.07%	8,409	7,847	300,000
12/31/97	17.22%	12,382	11,969	300,000
12/31/98	16.14%	16,643	16,643	300,000
12/31/99	78.93%	34,081	34,081	300,000
12/31/00	-16.14%	30,342	30,342	300,000
Janus Aspen Worldwide Growth Portfolio Service Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/94	1.47%	3,090	2,677	300,000
12/31/95	27.25%	7,201	6,638	300,000
12/31/96	28.21%	12,001	11,589	300,000
12/31/97	20.90%	16,883	16,883	300,000
12/31/98	27.13%	24,383	24,383	300,000
12/31/99	62.98%	43,618	43,618	300,000
12/31/00	-15.99%	38,319	38,319	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			242

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Neuberger Berman Growth Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	29.73%	3,906	3,494	300,000
12/31/92	9.54%	7,120	6,557	300,000
12/31/93	6.79%	9,913	9,501	300,000
12/31/94	-4.99%	11,215	11,215	300,000
12/31/95	31.73%	17,852	17,852	300,000
12/31/96	9.14%	21,972	21,972	300,000
12/31/97	29.01%	31,266	31,266	300,000
12/31/98	15.53%	38,587	38,587	300,000
12/31/99	50.40%	61,272	61,272	300,000
12/31/00	-11.66%	55,671	55,671	300,000
Neuberger Berman Limited Maturity Bond Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	11.34%	3,374	2,962	300,000
12/31/92	5.18%	6,290	5,727	300,000
12/31/93	6.63%	9,018	8,606	300,000
12/31/94	-0.15%	10,916	10,916	300,000
12/31/95	10.94%	14,637	14,637	300,000
12/31/96	4.31%	17,645	17,645	300,000
12/31/97	6.74%	21,194	21,194	300,000
12/31/98	4.39%	24,350	24,350	300,000
12/31/99	1.48%	26,781	26,781	300,000
12/31/00	6.78%	30,696	30,696	300,000
Neuberger Berman Partners Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	36.47%	4,102	3,690	300,000
12/31/96	29.57%	8,632	8,069	300,000
12/31/97	31.25%	14,153	13,741	300,000
12/31/98	4.21%	16,730	16,730	300,000
12/31/99	7.37%	20,363	20,363	300,000
12/31/00	0.70%	22,759	22,759	300,000
Pilgrim Growth Opportunities Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
	This fund is too new for experience to be shown

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			243

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Pilgrim MagnaCap Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
	This fund is too new for experience to be shown
Pilgrim MidCap Opportunities Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
	This fund is too new for experience to be shown
Pilgrim SmallCap Opportunities Portfolio
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/95	21.39%	3,665	3,252	300,000
12/31/96	13.61%	7,103	6,540	300,000
12/31/97	15.81%	10,729	10,316	300,000
12/31/98	17.30%	14,885	14,885	300,000
12/31/99	141.03%	41,878	41,878	300,000
12/31/00	1.09%	44,501	44,501	300,000
Putnam VT Growth and Income Fund - Class IB Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/99	1.46%	3,089	2,677	300,000
12/31/00	7.92%	6,142	5,579	300,000
Putnam VT New Opportunities Fund - Class IB Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/99	69.10%	5,052	4,640	300,000
12/31/00	-26.20%	5,723	5,160	300,000
Putnam VT Small Cap Value Fund - Class IB Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/00	24.44%	3,753	3,341	300,000
Putnam VT Voyager Fund - Class IB Shares
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/99	58.01%	4,729	4,316	300,000
12/31/00	-16.54%	6,168	5,605	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			244

HYPOTHETICAL ILLUSTRATIONS (continued)
Tobacco Non-user Male Age 45			Cash Value Accumulation Test
Preferred Risk Class			Death Benefit Option 1
Stated Death Benefit $300,000			Annual Premium $3,750
Van Eck Worldwide Bond Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	18.39%	3,578	3,166	300,000
12/31/92	-5.25%	5,883	5,320	300,000
12/31/93	7.79%	8,680	8,267	300,000
12/31/94	-1.32%	10,452	10,452	300,000
12/31/95	17.30%	14,959	14,959	300,000
12/31/96	2.53%	17,665	17,665	300,000
12/31/97	2.38%	20,332	20,332	300,000
12/31/98	12.75%	25,369	25,369	300,000
12/31/99	-7.82%	25,218	25,218	300,000
12/31/00	1.88%	27,677	27,677	300,000
Van Eck Worldwide Emerging Markets Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/96	26.82%	3,822	3,410	300,000
12/31/97	-11.61%	5,720	5,157	300,000
12/31/98	-34.15%	5,220	4,808	300,000
12/31/99	100.28%	14,742	14,742	300,000
12/31/00	-41.87%	9,707	9,707	300,000
Van Eck Worldwide Hard Assets Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/91	-2.93%	2,963	2,550	300,000
12/31/92	-4.09%	5,365	4,803	300,000
12/31/93	64.83%	12,426	12,014	300,000
12/31/94	-4.78%	13,620	13,620	300,000
12/31/95	10.99%	17,630	17,630	300,000
12/31/96	18.04%	23,536	23,536	300,000
12/31/97	-1.67%	25,257	25,257	300,000
12/31/98	-30.93%	18,764	18,764	300,000
12/31/99	21.00%	25,295	25,295	300,000
12/31/00	11.41%	30,402	30,402	300,000
Van Eck Worldwide Real Estate Fund
Year Ended:	Annual Total Return*	Cash Surrender Value	Account Value	Death Benefit
12/31/98	-11.35%	2,721	2,309	300,000
12/31/99	-2.01%	5,241	4,678	300,000
12/31/00	18.71%	8,799	8,387	300,000

The assumptions underlying these values are described in Performance Information, page 236.

* These annual total return figures reflect the investment portfolio's management fees and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions which, if reflected, would result in lower total return figures than those shown.

Strategic Investor   			245

PART II

UNDERTAKING TO FILE REPORTS

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

UNDERTAKING REGARDING INDEMNIFICATION

Security Life of Denver's (the "corporation") Certificate of Incorporation and bylaws provide that the corporation shall have every power and duty of indemnification of directors, officers, employees and agents, without limitation, provided by the laws of the state of Colorado. Under Colorado law, the corporation has the power to indemnify such persons against expense, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit or proceeding, if such person acted in good faith and in a manner which that person reasonably believed to be in or not opposed to the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. In the case of actions by or in the right of the corporation, such indemnification cannot be made where such person is adjudged liable to the corporation, except pursuant to a court order. The corporation is required to indemnify directors, officers, employees and agents against expenses actually and reasonably incurred in connection with actions where such persons have been successful on the merits or otherwise in defense of such actions.

Consistent with applicable law, the corporation's bylaws provide as follows:

Section 1. Non-Derivative Actions. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary of the corporation or is or was serving at the request of the corporation (whether or not as a representative of the corporation) as a director, officer, employee, (for example, acting in a fiduciary capacity for welfare benefit plans including but not limited to Employees' Retirement Plan, Savings Incentive Plan, Group Medical Plan, Prescription Drug Program, Group Term Life Insurance, Group Dental Plan, Travel Accident Plan or Deferred Compensation Plan, et al.), or fiduciary of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorney fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to in the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not of Itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in the best interests of the corporation and, with respect to any original criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

Section 2. Derivative Actions. The corporation shall indemnify any person who was or is a party or is a party to or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary of the corporation or is or was serving at the request of the corporation (whether or not as a representative of the corporation) as a director, officer, employee, (for example, acting in a fiduciary capacity for welfare benefit plans including but not limited to Employees' Retirement Plan, Savings Incentive Plan, Group Medical Plan, Prescription Drug Program, Group Term Life Insurance, Group Dental Plan, Travel Accident Plan or Deferred Compensation Plan, et al.), or fiduciary of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorney fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed, to be in the best interests or the corporation; but no indemnification shall be made in respect of any claim, issue, or matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability, but in view or all circumstances of the case, such person is fairly and reasonably entitled to indemnification for such expenses which such court deems proper.

Section 3. Expenses. To the extent that a director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary of the corporation shall be successful on the merits in defense of any action, suit, or proceeding referred to in Section 1 or Section 2 of this Article VIII or in defense of any claim, issue, or matter therein, he shall be indemnified by the corporation against expenses (including attorney fees) actually and reasonably incurred by him in connection therewith.

Section 4. Authorization. Any indemnification under Section 1 or Section 2 of this Article VIII (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2. Such determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or, if such a quorum is not obtainable or even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the Stockholder.

Section 5. Advance Payment of Expenses. Expenses (including attorney fees) incurred in defending a civil or criminal action, suit, or proceeding may be paid by the corporation in advance of the final disposition of such action, suit, or proceeding as authorized in Section 4 Of this Article VIII upon receipt of an undertaking by or on behalf of the director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary to repay such amount unless it is ultimately determined that he is entitled to be indemnified by the corporation as authorized in this Article VIII.

Section 6. Non-Exclusivity and Continuance. The indemnification provided by this Article VIII shall not be deemed exclusive of any other rights to which any person indemnified may be entitled under the Articles of Incorporation, any agreement, insurance policy, vote of the Stockholder or disinterested directors, or otherwise, and any procedure provided for by any of the foregoing, both as to action in his official capacity and as to action in another capacity while holding such office. Any indemnity otherwise payable under this Article VIII on account of any specific loss or expense shall be reduced by the amount of any insurance proceeds paid or payable to the person to be indemnified on account of the same loss or expense if such insurance is provided by the corporation or any of its affiliates. The indemnification provided by this Article VIII shall continue as to a person who has ceased to be a director, member of a committee appointed by the Board of Directors, officer, salaried employee, or fiduciary with regard to acts or omissions of such person occurring or alleged to have occurred while the person was so engaged, and shall inure to the benefit of heirs, executors, and administrators of such a person.

Section 7. Application of this Article. The provisions of this Article VIII shall apply to all actions, suits or proceedings described in Section 1 or Section 2 arising or alleged to arise out of any acts or omissions on the part of any person referred to in Section 1 or Section 2 occurring or alleged to occur prior to the adoption of this Article VIII or at any time while it remains in force.

Section 8. Exclusions. No indemnification is provided under this Article VIII for unsalaried persons under contract with the corporation in sales-capacities such as General Agents, Agents and Brokers. Except as expressly provided in this Article VIII, no indemnity is provided for persons performing services to the corporation as independent contractors.

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.

UNDERTAKING REQUIRED BY SECTION 26(e)(2)(A) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED

Security Life of Denver Insurance Company represents that the fees and charges deducted under the Policy, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred and the risks assumed by the Company.

Contents of Registration Statement

This Registration Statement comprises the following papers and documents:
	The facing sheet.
	Cross-Reference table.
	The prospectus.
	The undertaking to file reports.
	The undertaking regarding indemnification.
	The undertaking required by Section 26(e)(2)(A) of the Investment Company Act of 1940, as amended.
	The signatures.
	Written consents of the following persons:
		J. Neil McMurdie (See Exhibit 2.).
		James L. Livingston, Jr. (See Exhibit 6.A).
		Ernst & Young LLP (See Exhibit 7.A).
	The following exhibits:

1.A	(1)	Resolution of the Executive Committee of the Board of Directors of Security Life of Denver Insurance Company ("Security Life of Denver") authorizing the establishment of the Registrant.3
	(2)	Not Applicable.
	(3)	(a)	Security Life of Denver Distribution Agreement.3
			(i)	Amendment to Security Life of Denver Insurance Company Distribution Agreement.5
			(ii)	Amendment to Security Life of Denver Insurance Company Distribution Agreement.4
			(iii)	Amendment to Security Life of Denver Insurance Company Distribution Agreement.10
			(iv)	Amendment to Security Life of Denver Insurance Company Distribution Agreement.11
		(b)	Specimen Broker/Dealer Supervisory and Selling Agreement for Variable Contracts with Compensation Schedules. 2
			(i)	Compensation Schedule.
		(c)	Commission Schedule for Policies.
		(d)	Specimen Master Sales and Supervisory Agreement with Compensation Schedule.8
	(4)	Not Applicable.
	(5)	(a)	Specimen Variable Universal Life Insurance Policy (Form No. 2513 (VUL)-1/02).13
		(b)	Adjustable Term Insurance Rider (Form No. R2023-1/02).13
		(c)	Waiver of Cost of Insurance Rider (Form No. R-1505).4
		(d)	Waiver of Specified Premium Total Disability Rider (Form No. R-1506).4
	(6)	(a)	Security Life of Denver's Restated Articles of Incorporation.3
		(b-g)Amendments to Articles of Incorporation through June 12, 1987.3
		(h)	Security Life of Denver's By-Laws.3
			(i)	Bylaws of Security Life of Denver Insurance Company (Restated with Amendments through September 30, 1997).1
	(7)	Not Applicable.
	(8)	(a)	Addendum to Sales Agreement.3
			(i)	Participation Agreement by and among AIM Variable Insurance Funds, Inc., Life Insurance Company, on Behalf of Itself and its Separate Accounts and Name of Underwriter of Variable Contracts and Policies. 2
			(ii)	Sales Agreement by and among The Alger American Fund, Fred Alger Management, Inc., and Security Life of Denver Insurance Company. 3
			(iii)	Sales Agreement by and among Neuberger & Berman Advisers Management Trust, Neuberger & Berman Management Incorporated, and Security Life of Denver Insurance Company. 3
			(iv)	Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(v)	Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(vi)	Participation Agreement among INVESCO Variable Investment Funds, Inc., INVESCO Funds Group, Inc., and Security Life of Denver Insurance Company. 3
			(vii)	Participation Agreement between Van Eck Investment Trust and the Trust's investment adviser, Van Eck Associates Corporation, and Security Life of Denver Insurance Company. 3
			(viii)	Participation Agreement among Security Life of Denver Insurance Company, The GCG Trust and Directed Services, Inc.10
			(ix)	Participation Agreement among M Fund, Inc., M Financial Advisers, Inc. and Security Life of Denver Insurance Company.11
			(x)	Form of Participation Agreement among Security Life of Denver Insurance Company and Southland Life Insurance Company, Pilgrim Variable Products Trust and ING Pilgrim Investments, LLC. 11
			(xi)	Participation Agreement among Security Life of Denver Insurance Company and Southland Life Insurance Company, Putnam Variable Trust and Putnam Retail Management, Inc.13
		(b)	(i)	First Amendment to Fund Participation Agreement between Security Life of Denver, Van Eck Investment Trust and Van Eck Associates Corporation. 2
			(ii)	Second Amendment to Participation Agreement between Security Life of Denver, Van Eck Worldwide Insurance Trust and Van Eck Associates Corporation. 2
			(iii)	Assignment and Modification Agreement between Neuberger & Berman Advisers Management Trust, Neuberger & Berman Management Incorporated, Neuberger & Berman Advisers Management Trust, Advisers Managers Trust and Security Life of Denver Insurance Company. 2
			(iv)	First Amendment to Participation Agreement by and among The Alger American Fund, Fred Alger Management, Inc., Security Life of Denver Insurance Company. 3
			(v)	First Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(vi)	Second Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(vii)	First Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(viii)	Second Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company. 3
			(ix)	First Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc. 3
			(x)	Third Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.4
			(xi)	Third Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.4
			(xii)	Fourth Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.1
			(xiii)	Fourth Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.1
			(xiv)	Amendment No. 2 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.1
			(xv)	Fourth Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc.3
			(xvi)	Amendment No. 3 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.3
			(xvii)	Fifth Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.3
			(xviii)	Fifth Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.3
			(xix)	Amendment No. 4 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.7
			(xx)	Sixth Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.7
			(xxi)	Sixth Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.7
			(xxii)	Fifth Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc.7
			(xxiii)	Seventh Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.6
			(xxiv)	Seventh Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.9
			(xxv)	Eighth Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.9
			(xxvi)	Addendum to Fund Participation Agreement among Security Life of Denver Insurance Company, Neuberger Berman Advisers Management Trust, Advisers Managers Trust and Neuberger Berman Management Inc.9
			(xxvii)	Fund Participation Agreement between Janus Aspen Series and Security Life of Denver Insurance Company.9
			(xxviii)	Amendment to Janus Aspen Series Fund Participation Agreement.10
			(xxix)	Amendment No. 5 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.10
			(xxx)	Amendment to Participation Agreement among Security Life of Denver Insurance Company, The GCG Trust and Directed Services, Inc.10
			(xxxi)	Sixth Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc.10
			(xxxii)	Eighth Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.11
			(xxxiii)	Ninth Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.11
			(xxxiv)	Amendment to Participation Agreement among M Fund, Inc., M Financial Advisers, Inc. and Security Life of Denver Insurance Company.11
			(xxxv)	Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.13
			(xxxvi)	Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.13
			(xxxvii)	Form of Amendment to Participation Agreement among Security Life of Denver Insurance Company, The GCG Trust and Directed Services, Inc.11
			(xxxviii)	Amendment to Participation Agreement among M Fund, Inc., M Financial Advisers, Inc. and Security Life of Denver Insurance Company.11
			(xxxix)	Amendment No. 6 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.
			(xxxx)	Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.
			(xxxxi)	Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.
			(xxxxii)	Seventh Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc.
			(xxxxiii)	Amendment to Janus Aspen Series Fund Participation Agreement.
			(xxxxiv)	Amendment to Participation Agreement among Security Life of Denver Insurance Company, Pilgrim Variable Products Trust and ING Pilgrim Securities, Inc.
		(c)	(i)	Service Agreement between Fred Alger Management, Inc. and Security Life of Denver Insurance Company.3
			(ii)	Expense Allocation Agreement between A I M Advisors, Inc., A I M Distributors, Inc. and Security Life of Denver.4 a. Amendment No. 1 to Expense Allocation Agreement between A I M Advisors, Inc., A I M Distributors, Inc. and Security Life of Denver.
			(iii)	Service Agreement between INVESCO Funds Group, Inc. and Security Life of Denver Insurance Company.4
			(iv)	Service Agreement between Neuberger & Berman Management Incorporated and Security Life of Denver Insurance Company.4
			(v)	Service Agreement between Fidelity Investments Institutional Operations Company, Inc. and Security Life of Denver Insurance Company.4
			(vi)	Side Letter between Van Eck Worldwide Insurance Trust and Security Life of Denver.4
			(vii)	Distribution and Shareholder Services Agreement between Janus Distributors, Inc. and Security Life of Denver Insurance Company.9
			(viii)	Administrative and Shareholder Service Agreement between Directed Services, Inc. and Security Life of Denver Insurance Company.11
			(ix)	Administrative and Shareholder Service Agreement between ING Pilgrim Investments, LLC and Security Life of Denver Insurance Company.
			(x)	Letter of Agreement between Security Life of Denver and Janus Capital Corporation
		(d)	Administrative Services Agreement between Security Life of Denver and Financial Administrative Services Corporation. 3
		(e)	Amendment to Administrative Services Agreement between Security Life of Denver and Financial Administrative Services Corporation. 3
	(9)	Not Applicable.
	(10)	Specimen Application for Life Insurance Fixed and Variable Products (Form No. 110945).13
		(a)	Investment Feature Selection Form (Form No. V-166-00 Rev. 5/1/01). 7
	(11)	Issuance, Transfer and Redemption Procedures Memorandum.
2.	Opinion and Consent of J. Neil McMurdie as to securities being registered.13
3.	Not Applicable.
4.	Not Applicable.
5.	Not Applicable.
6.A	Opinion and Consent of James L. Livingston, Jr.13
7.A	Consent of Ernst & Young, LLP.
8.	Not Applicable.
10.	Powers of Attorney.13
11.	Issuance, Transfer and Redemption Memorandum13

_______________

1	Incorporated herein by reference to Post-Effective Amendment No. 3 to the form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on October 29, 1997 (File No. 33-88148).
2	Incorporated herein by reference to Post-Effective Amendment No. 4 to the form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on February 18, 1998 (File No. 33-88148).
3	Incorporated herein by reference to Post-Effective Amendment No. 5 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 17, 1998 (File No. 33-88148).
4	Incorporated herein by reference to Post-Effective Amendment No. 10 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 23, 1999 (File No. 33-74190).
5	Incorporated herein by reference to Post-Effective Amendment No. 7 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 29, 1999 (File No. 33-74190).
6	Incorporated herein by reference to the Post-Effective Amendment No. 12 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 25, 2000 (File No. 33-74190).
7	Incorporated herein by reference to the Post-Effective Amendment No. 1 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on February 29, 2000 (File No. 333-72753).
8	Incorporated herein by reference to the Post-Effective Amendment No. 8 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 29, 1999 (File No. 33-88148).
9	Incorporated herein by reference to the Post-Effective Amendment No. 13 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on October 13, 2000 (File No. 33-74190).
10	Incorporated herein by reference to the Pre-Effective Amendment No. 1 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on January 30, 2001 (File No. 333-50278).
11	Incorporated herein by reference to the Post-Effective Amendment No. 14 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 19, 2001 (File No. 33-74190).
12	Incorporated herein by reference to the Post-Effective Amendment No. 1 to the Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on April 19, 2001 (File No. 333-50278).
13	Incorporated herein by reference to the Initial Form S-6 Registration Statement of Security Life of Denver Insurance Company and its Security Life Separate Account L1, filed with the Securities and Exchange Commission on November 15, 2001 (File No. 333-73464).

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Security Life of Denver Insurance Company and the Registrant, Security Life Separate Account L1, have duly caused this Registration Statement to be signed on their behalf by the undersigned, hereunto duly authorized, and their seal to be hereunto fixed and attested, all in the City and County of Denver and the State of Colorado on the 18th day of December, 2001.

                                                  SECURITY LIFE OF DENVER INSURANCE COMPANY
                                                  (Depositor)

                                                  BY: /s/ James L. Livingston, Jr.
                                                       James L. Livingston, Jr.
                                                       Executive Vice President

(Seal)

ATTEST:

/s/ Rita J. Kummer
Rita J. Kummer

                                                  SECURITY LIFE SEPARATE ACCOUNT L1
                                                  (Registrant)

                                                  BY: /s/ James L. Livingston, Jr.
                                                       James L. Livingston, Jr.
                                                       Executive Vice President

(Seal)

ATTEST:

/s/ Rita J. Kummer
Rita J. Kummer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities with Security Life of Denver Insurance Company and on the date indicated.

PRINCIPAL EXECUTIVE OFFICERS:

/s/ James L. Livingston, Jr.
James L. Livingston, Jr.
Executive Vice President

/s/ Douglas W. Campbell
Douglas W. Campbell
Senior Vice President

CHIEF FINANCIAL OFFICER:

/s/ Wayne R. Huneke*
Wayne R. Huneke
Chief Financial Officer and Director

DIRECTORS:

/s/ Robert C. Salipante*
Robert C. Salipante

/s/ P. Randall Lowery*
P. Randall Lowery

BY: /s/ J. Neil McMurdie
       J. Neil McMurdie
      Attorney-in-Fact
      December 18, 2001

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
1.A(3)(b)(i)	Compensation Schedule.
1.A(3)(c)	Commission Schedule for Policies.
1.A(8)(b)(xxxix)	Amendment No. 6 to Participation Agreement among AIM Variable Insurance Funds, Inc., Security Life of Denver Insurance Company and ING America Equities, Inc.
1.A(8)(b)(xxxx)	Amendment to Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.
1.A(8)(b)(xxxxi)	Amendment to Participation Agreement among Variable Insurance Products Fund II, Fidelity Distributors Corporation and Security Life of Denver Insurance Company.
1.A(8)(b)(xxxxii)	Seventh Amendment to Participation Agreement among Security Life of Denver Insurance Company, INVESCO Variable Investment Funds, Inc. and INVESCO Funds Group, Inc.
1.A(8)(b)(xxxxiii)	Amendment to Janus Aspen Series Fund Participation Agreement.
1.A(8)(b)(xxxxiv)	Amendment to Participation Agreement among Security Life of Denver Insurance Company, Pilgrim Variable Products Trust and ING Pilgrim Securities, Inc.
1.A(8)(c)(ii)a.	Amendment No. 1 to Expense Allocation Agreement between A I M Advisors, Inc., A I M Distributors, Inc. and Security Life of Denver.
1.A(8)(c)(ix)	Administrative and Shareholder Service Agreement between ING Pilgrim Investments, LLC and Security Life of Denver Insurance Company.
1.A(8)(c)(x)	Letter of Agreement between Security Life of Denver and Janus Capital Corporation
7.A	Consent of Ernst & Young, LLP.
11.	Issuance, Transfer and Redemption Memorandum