DESCRIPTION OF PRINCIPAL MUTUAL LIFE INSURANCE COMPANYS ISSUANCE,
        TRANSFER AND REDEMPTION PROCEDURES FOR POLICIES PURSUANT TO RULE
          6e-3(T)(b)(12)(iii) UNDER THE INVESTMENT COMPANY ACT OF 1940

This   document   sets   forth   the   information   called   for   under   Rule
6e-3(T)(b)(12)(iii)  under the  Investment  Company Act of 1940 (1940 Act).  The
rule provides  exemptions from sections 22(c),  22(d), 22(e) and 27(c)(1) of the
1940 Act,  and Rule  22c-1  thereunder,  for  issuance  (including  face  amount
increase),  transfer and redemption procedures under PrinFlex Variable Life, the
flexible premium variable life insurance policy (Policy) to the extent necessary
to  comply  with  other  provisions  of Rule  6e-3(T),  state  insurance  law or
established administrative procedures of Principal Mutual Life Insurance Company
(the Company).  To qualify for the  exemptions,  procedures  must be reasonable,
fair and not discriminatory to the interests of the affected contractholders and
for all other  holders of  contracts  of the same class or series  funded by the
Separate Account,  and must be disclosed in the registration  statement filed by
the Separate Account.

Principal  Mutual  Life  Insurance  Company  believes  its  procedures  meet the
requirements of Rule 6e-3(T)(b)(12)(iii), as described below.

1. Purchases and Related Transactions 

   Setout below is a summary of the major contract provisions and administrative
   procedures relating to purchase transactions. Because of the insurance nature
   of the  contract,  the  procedures  involved  differ in  certain  significant
   respects from the purchase procedures for mutual funds and contractual plans.

   (a) Application and Contract

   Issue To purchase a Policy, a completed  application,  including any required
   supplements,  must be  submitted  to the Company  through the agent or broker
   selling the Policy.  The Company  generally will not issue policies to insure
   persons over the age 85 for  regularly  underwritten  Policies and age 70 for
   guaranteed  issue,  expanded  non-medical  and batch  underwriting  Policies.
   Applicants must furnish satisfactory evidence of insurability, and acceptance
   is subject to the Companys insurance underwriting  guidelines and suitability
   rules  and  procedures.   The  Company  reserves  the  right  to  reject  any
   application  or related  premium if in the view of the Company,  the Companys
   insurance  underwriting  guidelines and suitability  rules and procedures are
   not  satisfied.  The  minimum  face  amount  for a Policy at issue is $50,000
   ($25,000 for guaranteed issue,  expanded  non-medical and batch  underwriting
   Policies).  The Company  reserves  the right to revise its rules from time to
   time to specify either a higher or lower minimum face amount.

   The "Policy Date" is the date established if the Company  determines to issue
   a Policy.  Policy years and anniversaries  will be determined from the Policy
   Date  regardless  of when a Policy  is  delivered.  Each  Policy  also has an
   Effective  Date.  The  Policy  Date and the  Effective  Date will be the same
   unless (i) a backdated Policy Date is requested,  (ii)the application was not
   accompanied  by a payment in an amount  equal to or greater  than the minimum
   monthly premium, or (iii) additional  premiums or application  amendments are
   required.  In such cases,  the  Effective  Date will be the date on which the
   required  premiums  have been  received at the  Companys  home office and any
   application  amendments  have been  received,  reviewed,  and accepted in the
   Companys home office. The Company does not date Policies on the 29th, 30th or
   31st day of any month of the year. Policies which would otherwise be dated on
   these days except for this rule, will be dated on the 28th of the month.  The
   Policy Date is shown on the Policys data pages.

   Upon specific written request of the applicant in the application and subject
   to the  Companys  approval,  a Policy may be issued with a  backdated  Policy
   Date.  The Policy Date may not be more than three months prior to the date of
   the application or such shorter  backdating  period as required by state law.
   Payment of the Minimum Required Premium is required for the period the Policy
   is backdated.

   If a payment  in at least the  required  minimum  initial  premium  amount is
   submitted  with the  completed  application,  then a  conditional  receipt is
   delivered  to the  applicant  by the  agent or  broker  selling  the  Policy,
   reflecting  receipt  of the  initial  payment  and  any  interim  conditional
   insurance coverage provided by the conditional  receipt. No insurance under a
   Policy will take effect until actual physical delivery to and acceptance of a
   Policy by the applicant.  If the proposed insured dies before actual physical
   delivery to and  acceptance  of a Policy by the  applicant,  there will be no
   coverage  under the Policy and coverage will be  determined  solely under the
   terms of the conditional receipt, if any, given to the applicant.

   If the Company rejects an application or a policyowner  chooses to cancel the
   Policy during the free look period,  the Company will refund all amounts paid
   under the  application  or Policy.  For Policies  applied for in the state of
   California  by  policyowners  over the age of 60,  the  Company  will  return
   accumulated value (also known as Policy Value) upon exercise of the free-look
   privilege.  The postmark date on the envelope  containing  the Policy and the
   written request for cancellation shall determine whether such Policy has been
   submitted  within the designated  period.  The refund will ordinarily be made
   within five  business  days after the Company  receives the returned  Policy.
   Consequently, during underwriting and the free look period, the Company bears
   the investment risk with respect to any amounts paid under the Policy (except
   with  respect  to  Policies  applied  for  in  the  state  of  California  by
   policyowners  over  the age of 60).  However,  if the  policyowner  does  not
   exercise the free look  privilege,  the Policy Value will reflect  investment
   performance during the free look period.

   (b) Payment of Premiums

   Premiums  must be paid to the Company at its home  office.  There is no fixed
   schedule of premium payments on a Policy either as to the amount or timing of
   the  payments,  although  a minimum  premium  is  required  during  the first
   twenty-four  Policy months (the Minimum Required  Premium).  Thereafter,  the
   Policy will remain in force as long as the accumulated  value, less any loans
   and unpaid loan  interest,  is sufficient to pay the Monthly  Policy  Charges
   imposed in connection with the Policy.

   A policyowner may determine,  within the specified  limits set forth below, a
   planned periodic premium schedule to fit the policyowners insurance needs and
   financial  abilities.  Planned  Periodic  Premium  schedules  may provide for
   annual,   semiannual,   quarterly  or  monthly  payments.   A  pre-authorized
   withdrawal  allows the company to deduct premiums,  on a monthly basis,  from
   the policyowners checking or other financial institution account. The Company
   will send  premium  reminder  notices in  accordance  with  planned  periodic
   premium schedules to policyowners who are on annual, semi-annual or quarterly
   premium payment  schedules.  Premium payments may also be made by unscheduled
   premium  payment  made to the  Company  at its  home  office,  or by  payroll
   deduction where allowed by law and approved by the Company.

      (i) Initial Premiums

      To apply for a Policy,  a completed  application,  including  any required
      supplements,  must be submitted to the Company through the agent or broker
      selling the Policy. If interim coverage is desired,  a payment in at least
      the required  minimum  initial premium amount must be submitted along with
      the  completed  application  and any  required  supplements.  The required
      minimum initial  premium amount for any Policy  (including a Policy issued
      on an application  submitted without an accompanying  payment) is equal to
      the minimum monthly premium shown on the Policys data pages.

      (ii)  Maximum  Premiums  In no event  can the total of all  premiums  paid
      exceed the current  maximum premium  limitations  required by the Internal
      Revenue Code in order to qualify the Policy as a life insurance  contract.
      The premium limitations are imposed to assure favorable federal income tax
      treatment of the Policy and its death benefit. If at any time a premium is
      paid which would result in total  premiums  exceeding the current  maximum
      premium  limitation,  the Company  will only  accept  that  portion of the
      premium which will make total premiums equal the maximum.  Any part of the
      premium in excess of the maximum will be returned and no further  premiums
      will be accepted until allowed by the current maximum premium  limitations
      required by the Internal Revenue Code.

      (iii) Minimum Premium The current minimum annual planned  periodic premium
      is $360.  The Company  reserves the right to change minimum annual planned
      periodic premium amounts. No premium payment may be less than $30. Premium
      payments less than the minimum amount will be returned to the policyowner.

      (iv) Evidence of  Insurability  If any premium  payment  would  increase a
      Policys  death  benefit by more than it increases  the Policy  Value,  the
      Company  reserves  the right to refund the  premium  payment.  Evidence of
      insurability  under the Companys current  underwriting  guidelines then in
      effect may be required before acceptance of any such premium.

   (c) Allocation of Premiums

   The initial  premium  payment,  less the premium  expense  charge (the charge
   deducted  from  premium  payments  to cover a sales  charge,  state and local
   premium taxes and federal  taxes),  is allocated to the Money Market Division
   of the Separate  Account at the end of the Valuation  Period during which the
   Premium Payment is received.  Any additional  premium payments received prior
   to the Effective  Date and during the first 20 days from the Effective  Date,
   less premium expense  charge,  will be allocated to the Money Market Division
   at the end of the  Valuation  Period during which such premiums are received.
   On the 21st day after the  Effective  Date,  Policy  Value  held in the Money
   Market Division is automatically transferred to the Divisions of the Separate
   Account or to the Fixed Account, or both, in accordance with the policyowners
   direction for allocation of premium payments. 

   For each Division and the Fixed Account,  the allocation  percentages must be
   zero  or a whole  number  not  less  than  ten  nor  greater  than  100.  The
   policyowner  may change the allocation of future  premium  payments among the
   Divisions of the Separate Account and the Fixed Account by written request to
   the Company or by telephone as described  below without payment of any fee or
   penalty.  New allocation  percentages  will be effective as of the end of the
   Valuation Period in which the Company  receives the  policyowners  request in
   proper form.  

   (d) Monthly Policy Charge

   There is a Monthly  Policy  Charge from the Policy Value in the  Divisions of
   the  Separate  Account and the Fixed  Account  equal to the cost of insurance
   plus the cost of  additional  benefits  provided  by rider  plus the  monthly
   administration charge and mortality and expense risks charge in effect on the
   Monthly Date (the day of the month which is the same as the day of the Policy
   Date).  The cost of insurance  charge is calculated  on each  Monthly.  It is
   based on the sex (where  allowed by law),  issue age,  duration  since issue,
   smoking status and risk  classification of the insured.  Current monthly cost
   of  insurance   rates  will  be  determined  by  the  Company  based  on  its
   expectations as to future mortality  experience.  Cost of insurance rates are
   guaranteed  not to exceed the  maximum  charge  based on the 1980  Smoker and
   Nonsmoker   Commissioners   Standard  Ordinary  Mortality  Tables,  age  last
   birthday.  Unisex rates will also be  available  for use in  connection  with
   employment-related  insurance and benefit  plans.  The cost of insurance rate
   for a face amount  increase is based on the insureds gender (where allowed by
   law), age at time of increase,  duration since  increase,  smoking status and
   risk classification of the insured at the time of the increase. 

   (e) Change in Face Amount

   A  policyowner  may make a written  request to increase  the face amount of a
   Policy  at any  time,  so long as the  Policy  is not in a grace  period  and
   premiums are not being waived under a rider. A policyowner may make a written
   request to decrease the face amount at any time on or after the second Policy
   anniversary  so long as the Policy is not in a grace  period and premiums are
   not being waived under a rider.  Any written  request for  adjustment of face
   amount is subject to these  additional  conditions.  

      (i) Any  request  for an  increase in face amount must be applied for by a
      supplemental  application  and an  adjustment  application,  signed by the
      policyowner  and  the  insured,  and  shall  be  subject  to  evidence  of
      insurability satisfactory to the Company under its underwriting guidelines
      then in effect. The minimum increase in face amount is $50,000. The age of
      the insured must be 85 or less at the time of the request.  

      (ii) A request  for a decrease  in face  amount  must be applied for by an
      adjustment application, signed by the policyowner and the insured, and may
      not reduce the face amount of the Policy below $50,000. 

      (iii) Any  increase in face amount  will be in a risk  classification  the
      Company  determines.  

      (iv) Any adjustment  approved by the Company will become  effective on the
      monthly date that coincides with or next follows the Companys  approval of
      the  request.  

   If a payment in an amount  equal to or greater than the  conditional  receipt
   premium  deposit  is  submitted  with  the  adjustment  application,  then  a
   conditional  receipt is given to the  policyowner  reflecting  receipt of the
   payment and  outlining  any  interim  coverage  provided  by the  conditional
   receipt.  The  payment  submitted  with the  adjustment  application  will be
   considered  a premium  payment  for the Policy and will be  allocated  to the
   Divisions  of the  Separate  Account  or to the Fixed  Account,  or both,  in
   accordance  with the  policyholders  existing  directions  for  allocation of
   premium  payments.  

   Any  increase in face amount will carry its own free look period and exchange
   right,  which will apply only to the increase in face amount,  not the entire
   Policy.  If a face amount  increase is canceled  pursuant to the above right,
   the Company  will  restore to the Policy Value an amount equal to all Monthly
   Policy Charges  attributable to the increase in face amount  (including rider
   costs arising from the increase). The amount restored will be allocated among
   the Divisions of the Separate Account or the Fixed Account, or both, as if it
   were a Net Premium.  This  restoration will be made within five business days
   after the Company  receives the request for  cancellation  on the appropriate
   form. In addition,  the surrender charge will be adjusted,  if necessary,  so
   that it will be as  though no  increase  in face  amount  had  occurred.  

   The  exchange  right may be  exercised  during  the  first 24  policy  months
   following  issuance of Policy data pages reflecting an increased face amount,
   but not while the Policy is in a grace  period.  On the date of  exchange,  a
   portion of the Policy Value  attributable to the increase will be transferred
   to the fixed benefit policy.  The portion of the Policy Value attributable to
   the  increase  in face amount is  determined  by use of the ratio of the face
   amount of the increase over the face amount of the Policy,  determined at the
   adjustment date for the face amount increase. Premium payments made under the
   Policy after  exercise of this  exchange  right will be credited  only to the
   Policy. 

   A new policy will be issued upon  exercise of the  exchange  right which will
   require  payment of its own  premiums.  A portion of any policy loan and loan
   interest may be required to be repaid prior to the exchange or transferred to
   the new Policy.

   (f) Reinstatement

   If the Policy  lapses,  the  policyowner  may reinstate the Policy subject to
   certain conditions.

   An application for  reinstatement  may be made any time within three years of
   lapse.  (In some  states,  the Company is required by law to provide a longer
   period of time within which a Policy may be reinstated.)  Satisfactory  proof
   of  insurability  based  upon the  Companys  current  insurance  underwriting
   guidelines is required. Payment of a reinstatement premium is also required.

   The  reinstatement  premium  must be at least  the  greater  of ((1) plus (2)
   divided by (3)) or ((4) minus (5)) where:

   1. Is the amount by which the  Surrender  Charge  exceeds the Policy Value on
      the  Monthly  Date on or  immediately  preceding  the  start of the  Grace
      Period;

   2. Is three Monthly Policy Charges;

   3. Is one minus the maximum Premium Expense Charge;

   4. Is the Minimum  Required  Premium due on the second Monthly Date following
      the beginning of the Grace Period; and

   5. Is the sum of the premiums paid since the Policy Date.

   If a loan was  outstanding  at the time of lapse,  the Company  will  require
   repayment or  reinstatement  of the loan and any unpaid loan interest  before
   permitting reinstatement of the Policy. Loan interest will not be charged for
   the period of lapse. Reinstatement will be effective on the next Monthly Date
   following the Companys approval of the reinstatement application.

   The Policy Date of the Policy will remain the  original  policy date and will
   not be  changed  at  reinstatement,  although  surrender  charges  for  total
   surrender following reinstatement will resume at the rate charged at the time
   of the Policys termination, as adjusted for the payment of past due premiums,
   if any.

   (g) Repayment of Loan and Loan Interest

   A policy  loan may be repaid in whole or in part at any time while the Policy
   is in force. The minimum loan repayment amount is $30 or the outstanding loan
   amount,  if less. Loan repayments will be applied  effective the date payment
   is received  in the Home  Office.  If the  policyowner  does not  designate a
   payment as a premium  payment,  or if the  Company  cannot  identify  it as a
   premium payment,  the Company will apply payments received as loan repayments
   if a loan  is  outstanding.  When a loan  repayment  is  made,  Policy  Value
   securing the policy loan in the loan account equal to the loan repayment will
   be  allocated  among the  Divisions  of the  Separate  Account  and the Fixed
   Account  in  the  proportion   currently  designated  by  a  policyowner  for
   allocation of premium payments.  Unless the Company is instructed  otherwise,
   the balance of a payment not needed to repay a loan, less the Premium Expense
   Charge,  will be applied to the  Divisions  of the  Separate  Account and the
   Fixed  Account  according  to the  premium  allocation  then in  effect.  

   (h) Misstatements of Age or Sex

   If the age or sex of the insured has been  misstated in an  application,  the
   death benefit under the Policy will be the Policy Value plus the amount which
   would be purchased by the most recent mortality charge at the correct age and
   sex.

2. Redemptions and Related  Transactions Set out below is a summary of the major
   contract  provisions  and  administrative  procedures  relating to redemption
   transactions. Because of the insurance nature of the contract, the procedures
   involved  differ in certain  significant  respects from procedures for mutual
   funds and contractual  plans.  

   (a)  Total  Surrender  and  Partial  Surrenders  

   So long as the Policy is in effect,  a policyowner may elect to surrender the
   Policy and  receive its net  surrender  value  determined  as of the date the
   Company receives the policyowners  written request.  

   A policyowner may, after the second Policy Year and so long as a Policy is in
   effect, request a partial surrender from the net surrender value, but no more
   than two times per policy year. The minimum amount of a partial  surrender is
   $500 and the  maximum  amount  that may be  surrendered  in a Policy  Year by
   partial  surrender  is 75% of the net  surrender  value as of the date of the
   first partial  surrender.  There is a transaction charge of the lesser of $25
   or two  percent of the  amount  surrendered  for each  partial  surrender.  A
   partial  surrender  will be processed  effective the date written  request is
   received in the home office of the  Company.  

   The Policy Value is reduced by the amount of the partial  surrender  plus the
   amount of the transaction  charge. If the option 1 death benefit is in effect
   at the time of a partial  surrender,  then the  Policys  face  amount also is
   reduced by the amount of the partial  surrender and the  transaction  charge.
   The minimum amount of a partial  surrender is $500.  Proceeds will ordinarily
   be paid  within  five  business  days from the date of  receipt  of a written
   request at the Companys home office.  

   A  policyowner  may  designate  the  amount of the  partial  surrender  to be
   withdrawn from each of the Divisions and the Fixed Account. If no designation
   is made, the amount of the partial surrender and the transaction  charge will
   be withdrawn in the same  proportion as allocation  instruction in effect for
   the Monthly Policy Charge.

   During the first ten years of a Policy,  a surrender  charge will be assessed
   in  connection  with total  surrender  of a Policy.  In  addition,  each face
   increase carries it own set of ten-year surrender charges,  causing any total
   surrender  made  after  an  adjustment  date  to be  subject  to a  composite
   surrender  charge.   Surrender  charges  following  a  Policys  reinstatement
   commence  at the rate in effect  at the time of the  Policys  termination.  A
   policyowner will never be assessed the surrender charge if total surrender or
   termination of the Policy does not occur within the first ten Policy years or
   ten years following an adjustment date.

   (b) Benefit Claims

   As long as the Policy remains in force,  the Company will,  upon proof of the
   insureds death and receipt of all additional claim requirements, and pursuant
   to the terms of the Policy,  pay the death proceeds to the named  beneficiary
   in accordance  with the designated  death benefit  option.  The amount of the
   death benefit  payable will be determined as of the date of death,  or on the
   next following  valuation date if the date of death is not a valuation  date.
   Benefit  claims will  ordinarily  be paid within five business days after all
   necessary claim requirements are received.

   Unless a settlement option is elected by the policyowner  during the insureds
   lifetime or by the  beneficiary  following the insureds  death,  the proceeds
   will be paid in one lump sum. The Company will pay interest  from the date of
   the  insureds  death to the date of  payment or  application  under a benefit
   option at a rate  determined  by the Company,  but not less than  required by
   state law. The Company offers  beneficiaries  and policyowners a wide variety
   of settlement options.

   The Policy  provides two death  benefit  options:  Option 1 and Option 2. The
   policyowner  designates  the death benefit option in the  application.  Under
   Option 1 the death benefit is the greater of the Policys  current face amount
   or the  Policy  Value  on the  date of  death  multiplied  by the  applicable
   percentage as determined by the then effective tax corridor  percentage table
   as shown in the Policy.  The Option 2 death  benefit is the  Policys  current
   face amount plus its Policy Value on the date of death, but not less than the
   Policy Value on that date multiplied by the applicable  percentage  described
   above.

   The death proceeds, determined as of the date of the insureds death, are: The
   death benefit  described  above,  plus the proceeds from any benefit rider on
   the insureds life, less any unpaid loan principal and loan interest under the
   Policy,  and less any overdue  Monthly  Policy  Charges if the  insured  died
   during a grace period.

   The amount of the benefit  payable at  maturity is the Policy  Value less any
   policy loans and non paid loan  interest on the maturity  date.  This benefit
   will only be paid if the insured is living on the policy  maturity  date. The
   Policy will mature on the policy anniversary  following the birthday on which
   the insured reaches age 95. 

   (c) Policy Loans

   As long as the  Policy  remains  in force and the  Policy  has net  surrender
   value,  a  policyowner  may borrow money from the Company using the Policy as
   the only  security for the loan.  The maximum  amount that may be borrowed is
   90% of the net surrender value of the Policy as of the date a loan request is
   processed at the Companys home office. The minimum loan amount is $500.

   Proceeds of policy loans  ordinarily  will be disbursed  within five business
   days from the date of written request for a loan at the Companys home office.

   When a policy  loan is taken,  a portion  of the  Policy  Value  equal to the
   amount of the loan will be transferred to the Loan Account from the Divisions
   and the Fixed Account in the proportions  requested by the  policyowner.  The
   Loan  Account  is that  part of the  Policy  Value  that  reflects  the value
   transferred to the General Account from the Fixed Account,  Separate Account,
   or both as  collateral  for a Policy  Loan. A Policys Loan Account is part of
   the Companys  General  Account.  If no request for  allocation  of the loaned
   amount is made by the policyowner, the loan amount will be withdrawn from the
   Divisions and the Fixed Account in the same proportion as the allocation used
   for the most recent Monthly Policy Charge.

   Any loan interest that is due and unpaid will also be transferred in the same
   manner as  described  above for  policy  loans.  During  the first ten Policy
   Years, the Loan Account will earn interest at an annual rate six percent, and
   thereafter  at an  effective  annual  rate of 7.75  percent.  On each  Policy
   Anniversary,  if there has been a loan repayment,  this credited  interest is
   transferred  from the Loan Account to the  Divisions of the Separate  Account
   and the Fixed Account in the proportion currently designated by a policyowner
   for the allocation of premium  payments.  

   The Company will charge interest on any unpaid policy loan.  Interest accrues
   daily at an effective annual interest rate of eight percent.  Interest is due
   and payable at the end of each Policy Year. Any interest not paid when due is
   added to the loan  principal and bears interest at the rate of eight percent.
   Adding unpaid interest to the loan principal will cause additional amounts to
   be withdrawn  from the  Divisions and the Fixed Account in the same manner as
   described  above for loans. 

   If on any Monthly Date the net surrender  value is not  sufficient to pay the
   Monthly  Policy  Charge,  the 61-day  grace period  provision  may apply (see
   Section 2(d) below, Policy Termination and Grace Period). Unpaid policy loans
   and loan interest  reduce the net surrender value and may cause it to be less
   than the Monthly Policy Charge on a Monthly Date.

   Upon  repayment,  the Policy Value securing the repaid portion of the loan in
   the Loan Account will be transferred to the Divisions of the Separate Account
   and the Fixed Account,  applying the same percentages currently in effect for
   the allocation of premium payments. Any unpaid policy loans and loan interest
   are subtracted  from life insurance  proceeds  payable at the insureds death,
   from Policy  Value upon total  surrender,  and from Policy  Value  payable at
   maturity.  The claim of the Company for  repayment of policy loans and unpaid
   loan interest has priority over the claims of any assignee,  any  beneficiary
   or any other person.

   (d) Policy Termination and Grace Period

   Failure to make a planned periodic premium payment will not necessarily cause
   the Policy to terminate.  A notice of impending  policy  termination  will be
   sent if:

   1. Twenty-four  months after the Policy Date or later, or at any time after a
      policy loan is taken,  the net surrender value on any Monthly Date is less
      than the Monthly  Policy  Charge  and,  if the Policy has a death  benefit
      guarantee rider, the death benefit guarantee premium requirem has not been
      satisfied.

   2. During the 24 months  following  the Policy Date,  the sum of the premiums
      paid is less than the Minimum Required Premium on a Monthly Date.

   The  Minimum  Required  Premium  on a Monthly  Date is equal to (1) times (2)
   where:  

   1. Is the minimum monthly premium shown on the data page; and

   2. Is the number of completed months since the Policy Date.

   The grace period begins when the Company mails to the policyowner a notice of
   impending policy  termination.  Th will be sent to the policyowners last post
   office  address  known  to the  Company.  It will  show the  minimum  payment
   required  to keep the  Policy  in  force.  It will also show the 61 day grace
   period during which such payment will be accepted.

   If the grace period begins  because the sum of the premiums paid is less than
   the minimum required premium, the minimum payment is (1) minus (2) where:

   1. Is the Minimum  Required  Premium due on the second Monthly Date following
      the beginning o the grace period; and

   2. Is the sum of the premiums paid since the Policy Date.

   If the grace  period  ends before the Company  receives  the minimum  payment
   described  above, the Company will pay to the policyowner any remaining value
   in the Policy which would be the excess of (1) over (2) where:

   1. Is the net surrender value on the Monthly Date on or immediately preceding
      the start of the grace period; and

   2. Is the two Monthly Policy Charges applicable during the grace period.

   If the grace period begins  because the Net Surrender  Value is less than the
   current  Monthly Policy Charge,  the minimum payment is equal to (1) plus (2)
   divided by (3) where:

   1. Is the amount by which the  Surrender  Charge  exceeds the Policy Value on
      the  Monthly  Date on or  immediately  preceding  the  start of the  grace
      period;

   2. Is three Monthly Policy Charges; and

   3. Is 1 minus the maximum Premium Expense Charge.

   If the grace period ends before we receive this minimum payment,  the Company
   will keep any remaining value in the policy.

   The Policy  will  continue  in force  through  the grace  period,  but if the
   required  payment is not  received  by the  Company  during the 61-day  grace
   period,  the Policy will  terminate as of the Monthly Date on or  immediately
   preceding the start of the grace period. If the insured dies during the grace
   period,  the death  benefit  payable  under the Policy will be reduced by the
   amount of all Monthly Policy Charges due and unpaid at the insureds death, as
   well as the amount of any unpaid policy loans and loan interest.

   (e) Suicide

   The  Policy  does not cover the risk of  suicide  within  two years  from the
   Policy  Date or two years from the date of any  increase  in face amount with
   respect to such increase, whether the insured is sane or insane. In the event
   of suicide  within two years of the Policy  Date,  the only  liability of the
   Company will be a refund of premiums paid, without interest,  less any policy
   loans, any partial  surrenders,  and any surrender  charges.  In the event of
   suicide within two years of an increase in face amount, the only liability of
   the  Company in respect to such  increase  in face amount will be a refund of
   the cost of insurance charges for such increase.

   (f) Postponement of Payment

   Payment  of any  amount  upon total or partial  surrender,  policy  loan,  or
   benefits  payable at death or maturity  and the right to transfer to and from
   an  Investment  Account  may be  postponed  whenever:  

      (i) The New York Stock Exchange is closed other than customary weekend and
      holiday closings,  or trading on the New York Stock Exchange is restricted
      as determined by the Securities and Exchange Commission.

      (ii) The Securities and Exchange Commission by order permits  postponement
      for the protection of policyowners.

      (iii) An emergency  exists,  as determined by the  Securities and Exchange
      Commission,  as a result of which disposal of securities is not reasonably
      practicable or it is not reasonably  practicable to determine the value of
      the Separate  Account  assets.

3. Transfers
 
   Thepolicyowner  may  transfer  amounts  among the  Divisions  of the Separate
   Account and the Fixed Account on either an unscheduled or a scheduled basis.

   (a) Transfers From Divisions of the Separate Account

   Unscheduled  Transfers.  Transfers of amounts from one Division to another or
   to the  Fixed  Account  can be made by the  policyowner.  A  transfer  from a
   Division to the Fixed  Account  may not be made if a transfer  from the Fixed
   Account to a Division has been made within the six-month  period prior to the
   date of the requested  transfer or if  immediately  after the transfer to the
   Fixed Account the  policyowners  Fixed Account Value exceeds $1 million.  The
   amount to be transferred  may be stated as a dollar amount or as a percentage
   of the value of the  Division  from  which the  transfer  is to be made.  The
   amount transferred from each Division must equal or exceed the lesser of $100
   or  100% of the  policyowners  interest  in the  Division.  Transfers  may be
   completed by sending a Written Request to the Company at its home office,  or
   by telephone as described below. (See Service Available by Telephone.)

   All or part of the values in one or more  Divisions may be transferred at one
   time.  Transfers  from a  Division  will  be  executed  and  values  will  be
   determined in  connection  with the transfers at the next computed Unit value
   after the Company receives the transfer request. There is currently no charge
   for the transfer but the Company reserves the right to impose charges (not to
   exceed $25 per  transfer)  on  unscheduled  transfers  after the twelfth such
   transfer  during a Policy Year. For this purpose,  all transfers  between and
   among Divisions and the Fixed Account will be treated as one transfer, if all
   the transfer  requests are made at the same time as part of one request.  The
   Company also reserves the right to reject transfer instructions provided by a
   person providing them for multiple contracts.

   Scheduled  Transfers The  policyowner  may elect to have automatic  transfers
   completed on a periodic basis from any Division.  Scheduled  transfers may be
   initiated from a Division only if the value of the Investment  Account equals
   or exceeds $2,500 when scheduled transfers begin. A policyowner may establish
   scheduled  transfers by sending a Written  Request to the Company at its home
   office or by  telephone.  (See  Service  Available by  Telephone.)  Scheduled
   transfers  will be completed on a monthly,  quarterly,  semiannual  or annual
   basis  beginning on the Monthly Date following the date the Company  receives
   the request. The amount of the transfers (minimum of $100) will be the dollar
   amount  or  percentage  of the value of the  Division  as of the later of the
   Policy  Date or most  recent  Anniversary  Date  prior  to  establishing  the
   scheduled  transfers,  as specified by the policyowner.  Scheduled  transfers
   will  continue  until  the  Policy  Value in the  Division  from  which  such
   transfers are made is exhausted or until the policyowner notifies the Company
   to discontinue  such transfers.  The Company  reserves the right to limit the
   number of Divisions from which transfers will be made simultaneously,  but in
   no event will such limitation be less than two Divisions.

   (b) Transfer From The Fixed Account

   Transfers from the Fixed Account have special limitations which are described
   below. A policyowner may not make both an unscheduled  transfer and scheduled
   transfers from the Fixed Account during the same Policy Year.

   Unscheduled Transfers. An unscheduled transfer in an amount not to exceed 25%
   of the policyowners Fixed Account value as of the later of the Policy Date or
   the last  Anniversary,  may be made each Policy Year during the 30-day period
   following the Policy Date or Anniversary.  A transfer request must be made by
   the  policyowner  within such 30-day period.  The minimum  transfer amount is
   $100 (or, if less, the entire amount of the Fixed Account value).

   Scheduled  Transfers.  The policyowner may elect to have automatic  transfers
   completed on a monthly basis from the Fixed Account to one or more Investment
   Accounts.  Scheduled  transfers are available  from the Fixed Account only if
   the  policyowners  Fixed Account  value equals or exceeds  $2,500 at the time
   scheduled  transfers  begin.  (The Company  reserves the right to change that
   amount  but it will  never  exceed  $10,000.)  A  policyowner  may  establish
   scheduled  transfers by sending a Written  Request to the Company at its home
   office or by  telephone.  (See  Service  Available by  Telephone.)  Scheduled
   transfers will be completed on a monthly basis  beginning on the Monthly Date
   following the date the Company receives the request. Once each Policy Year, a
   policyowner having automatic transfers completed may, upon Written Request or
   by telephone (See Service  Available by Telephone),  change the dollar amount
   of scheduled monthly transfers  (subject to the $50 minimum),  the percentage
   of the Fixed Account  transferred  each month (subject to the $50 minimum and
   2% of Fixed  Account  value  maximum),  and/or the date as of which the Fixed
   Account value figure for calculating the dollar amount of scheduled transfers
   expressed as a percentage of Fixed Account value is  determined.  The updated
   Fixed Account  value figure is the Fixed Account value as of the  immediately
   preceding  Policy  Anniversary,  or, if the policyowner so elects,  the Fixed
   Account  value as of the date the Company  receives  the  request.  Scheduled
   monthly transfers will continue until the Fixed Account value is exhausted or
   until the  policyowner  notifies  the Company to  discontinue  the  scheduled
   transfers.  If the policyowner  discontinues the scheduled  transfers,  these
   transfers  may not begin  again  until six months  after the date of the last
   scheduled transfer.

4. Service Available by Telephone

   Unless  telephone  transaction  services  are  declined  on the  supplemental
   application for a Policy, or at any subsequent time the policyowner  notifies
   the  Company in writing to remove  telephone  transaction  services,  certain
   transactions,  including  transfers  permitted  by the Policy,  Policy  loans
   (Policy  loan  proceeds  will be mailed only to the  policyowners  address of
   record),  changes in the allocation of future premium payments and changes in
   allocation of the Monthly  Policy  Charge,  may be made pursuant to telephone
   instructions.  The  telephone  transactions  may be exercised by  telephoning
   1-800-852-4450.  Telephone transfer requests must be received by the close of
   the New York Stock Exchange on a day when the Company is open for business to
   be  effective  that day.  Requests  made after that time or on a day when the
   Company is not open for business  will be effective  the next  Business  Day.
   Although  neither the Separate Account nor the Company is responsible for the
   authenticity  of  telephone  transaction  requests,  the right is reserved to
   refuse to accept telephone  requests when the opinion of the Company it seems
   prudent to do so. The policyowner bears the risk of loss caused by fraudulent
   telephone  instructions the Company  reasonably  believes to be genuine.  The
   Company will employ  reasonable  procedures to assure telephone  instructions
   are  genuine  and if such  procedures  are not  followed,  the Company may be
   liable  for losses  due to  unauthorized  or  fraudulent  transactions.  Such
   procedures include recording all telephone instructions,  requesting personal
   identification  information  such  as the  callers  name,  daytime  telephone
   number,  social  security  number  and/or  birthday  and  sending  a  written
   confirmation  of the  transaction  to the  policyowners  address  of  record.
   Policyowners may obtain additional  information and assistance by telephoning
   the toll free number. The Company may modify or terminate  telephone transfer
   procedures at any time.

5. Right  to  Exchange  Policy  and  Adjustment  Computation  Required  by  Rule
   6e-3(T)(b)(13)(v)(B)

   Once during the first 24 policy months  following the Effective  Date (except
   at any time a Policy is in the grace period) the policyowner may exchange the
   Policy for any other form of fixed benefit  individual life insurance  policy
   (other than term insurance)  currently made available by the Company for this
   purpose on the insureds life. Such request must be postmarked or delivered to
   the home office of the Company  before the  expiration of 24 months after the
   Effective Date.

   The new policy  will  provide  for either the same death  benefit or the same
   amount at risk as the Policy did at the time of conversion,  at the option of
   the  policyowner.  Premiums  for the new  policy  will be  based  on the same
   gender,   issue  age,   duration   since  issue,   smoking  status  and  risk
   classification  of the insured under the Policy.  An equitable  adjustment in
   the new  policys  payments  and cash or  accumulated  values  will be made to
   reflect  variances,  if any, in the payments and accumulated values under the
   Policy and the new conversion policy. Minimum benefits of the new Policy will
   be fixed  and  guaranteed  and the new  Policy  will not  participate  in the
   experience  of the Separate  Account.  Policy values will be determined as of
   the date  written  request for  exchange is  received  at the  Companys  home
   office.  Evidence of  insurability  will not be  required.  No charge will be
   imposed on transfers  resulting from the exercise of this exchange privilege;
   however,  any unpaid  policy loans and loan  interest must be repaid prior to
   the exchange or transferred to the new conversion  Policy.  The exchange will
   be effective  upon proper  receipt by the Company of the written  request and
   return of the  Policy.  The new  conversion  Policy will have the same Policy
   date as the  Policy.  The  exchange  will be  subject to any  applicable  tax
   consequences related to such an exchange.

   Thepolicyowner  may also  exchange the Policy for a  fixed-benefit,  flexible
   premium  policy in the event the  Company  eliminates  or  combines  existing
   Divisions,  or transfers  assets in one Division to another.  The policyowner
   may exercise this right until the later of 60 days after the  effective  date
   of such change or the date the policyowner receives notice of this right. The
   death  benefit  will  be the  death  benefit  of the  Policy  on the  date of
   exchange.

6. Statement of Value

   Each  year a  statement  will be  sent to the  policyowner  which  shows  the
   following:

   1. the current death benefit;

   2. the current Policy Value and surrender value;

   3. all premiums paid since the last statement;

   4. all charges since the last statement;

   5. any Policy loans and loan interest;

   6. any partial surrenders since the last statement;

   7. the number of units and unit value; and

   8. the total value of each of the policyowners investment accounts;

   9. any investment gain or loss since the last statement;
 
   10. the designated beneficiary or beneficiaries;

   11. all riders included with the Policy; and

   12. a detailed summary of activity which occurred during the Policy Year.

The  Company  will  also  send  the  policyowner  the  reports  required  by the
Investment Company Act of 1940.