As filed with the Securities and Exchange Commission on January 26, 2000

Registration No. 333-89875

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Pre-Effective Amendment No.1 To
FORM S-6

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

TITANIUM UNIVERSAL LIFE VARIABLE ACCOUNT
(Exact name of trust)

UNITED INVESTORS LIFE INSURANCE COMPANY
(Name of depositor)

2001 Third Avenue South
Birmingham, Alabama 35233
(Complete address of depositor's principal executive offices)

(Name and complete address
of agent for service) Copy to:

John H. Livingston, Esq. Frederick R. Bellamy, Esq.
United Investors Life Insurance Company Sutherland Asbill & Brennan LLP
2001 Third Avenue South 1275 Pennsylvania Avenue, N.W.
Birmingham, Alabama 35233 Washington, D.C. 20004-2415

Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration Statement

Securities Being Offered: Flexible Premium Variable Life Insurance Policies

The Registrant hereby amends this Registration Statement on such dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment that 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.

FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICY
issued by
United Investors Life Insurance Company
through
Titanium Universal Life Variable Account

Prospectus
February 15, 2000

Please read this prospectus carefully before investing, and keep it for
future reference. It contains important information about the Titanium Investor
variable life insurance policy.

The SEC maintains an Internet website (http://www.sec.gov) that contains
material incorporated by reference into this prospectus and other information.

Variable life insurance policies involve certain risks, and you may lose
some or all of your investment.

. We do not guarantee how any of the subaccounts will perform.

. The policy is not a deposit or obligation of any bank, and no bank endorses
or guarantees the policy.

. Neither the U.S. Government nor any Federal agency insures your investment in
the policy.

There is no guaranteed cash surrender value for amounts allocated to the
variable subaccounts. If the net cash surrender value (the cash surrender value
reduced by any loan balance) is insufficient to cover the charges due under the
policy, the policy may terminate without value.

Neither the SEC nor any state securities commission has approved or disapproved
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

United Investors Life Insurance Co.
2001 Third Avenue South
Birmingham, Alabama 35233

TITANIUM INVESTOR(SM)
VARIABLE UNIVERSAL LIFE INSURANCE

The policy offers 33 funding choices--one fixed account (paying a
guaranteed minimum fixed rate of interest) and 32 variable subaccounts which
invest in the following mutual fund portfolios:

AIM Variable Insurance Funds, Inc.
. AIM V.I. Capital Appreciation Fund
. AIM V.I. Growth Fund
. AIM V.I. Growth and Income Fund
. AIM V.I. International Equity Fund
. AIM V.I. Value Fund
The Alger American Fund
. Alger American Growth Portfolio
. Alger American Income & Growth Portfolio
. Alger American Leveraged AllCap Portfolio
. Alger American MidCap Growth Portfolio
. Alger American Small Capitalization Portfolio
BT Insurance Funds Trust
. EAFE(R) Equity Index Fund
. Small Cap Index Fund
Dreyfus Funds
. Dreyfus VIF-Capital Appreciation Portfolio
. Dreyfus VIF-Money Market Portfolio
. Dreyfus VIF-Quality Bond Portfolio
. The Dreyfus Socially Responsible Growth Fund, Inc.
Evergreen Funds
. Evergreen VA Equity Index Fund
. Evergreen VA Foundation Fund
. Evergreen VA Global Leaders Fund
. Evergreen VA Small Cap Value Fund
INVESCO Variable Investment Funds, Inc.
. INVESCO VIF- Equity Income Fund
. INVESCO VIF- Technology Fund
. INVESCO VIF- Utilities Fund
MFS(R) Variable Insurance Trust(SM)
. MFS(R) Emerging Growth Series
. MFS(R) Growth with Income Series
. MFS(R) Research Series
. MFS(R) Total Return Series
Strong Variable Insurance Funds, Inc.
. Strong Discovery Fund II
. Strong Mid Cap Growth Fund II
. Strong Opportunity Fund II
Templeton Variable Products Series Fund
. Templeton Asset Allocation Fund
. Templeton International Fund

Table of Contents
================================================================================

Summary................................................................... 1
The Policy.............................................................. 1
Payment of Premiums..................................................... 1
Funding Choices......................................................... 1
Charges and Deductions.................................................. 2
Taxes................................................................... 5
Cash Benefits........................................................... 5
Death Benefit........................................................... 5
Termination............................................................. 6
Other Information....................................................... 6
Inquiries............................................................... 6

Titanium Universal Life Variable Account.................................. 7
The Portfolios.......................................................... 7

Fixed Account............................................................. 11

The Policy................................................................ 11
Applying for a Policy................................................... 11
Conditional Receipt..................................................... 12
"Free Look" Right to Cancel the Policy.................................. 12
Premiums................................................................ 12
Transfers............................................................... 14
Dollar-Cost Averaging................................................... 15
Automatic Asset Rebalancing............................................. 15
Surrender of the Policy................................................. 16
Withdrawals............................................................. 16
Loan Benefits........................................................... 16
Requesting Payments..................................................... 17
Policy Changes.......................................................... 18
Reports to Owners....................................................... 18
Other Policy Provisions................................................. 18
Assignment and Change of Owner.......................................... 19

Death Benefits............................................................ 19
Amount of Death Benefit Payable......................................... 19
Death Benefit Options................................................... 20
Adjustable Term Insurance Rider and Target Face Amount.................. 21
Changing the Death Benefit Option....................................... 22
Changing the Face Amount................................................ 22
Effect of Withdrawals on the Death Benefit.............................. 23
Beneficiary............................................................. 23
Supplemental Benefits................................................... 23

Charges and Deductions.................................................... 24
Premium Expense Charges................................................. 25
Mortality and Expense Risk Charge....................................... 26
Monthly Deduction....................................................... 26
Surrender Charge........................................................ 26
Transaction Charges..................................................... 27

Other Charges.......................................................... 28
Cost of Insurance...................................................... 28
Reduction in Charges for Certain Groups................................ 29

Policy Values............................................................ 29
Policy Value........................................................... 29
Variable Account Value................................................. 29
Fixed Account Value.................................................... 31

Tax Considerations....................................................... 32
Introduction........................................................... 32
Tax Status of the Policy............................................... 32
Tax Treatment of Policy Benefits....................................... 32
Taxation of United Investors........................................... 35
Employment-Related Benefit Plans....................................... 35

Other Information........................................................ 35
United Investors Life Insurance Company................................ 35
Sale of the Policies................................................... 35
Changing the Variable Account.......................................... 36
Voting of Portfolio Shares............................................. 36
Addition, Deletion, or Substitution of Investments..................... 37
Other Information...................................................... 37
Litigation............................................................. 37
Legal Matters.......................................................... 38
Experts................................................................ 38
Financial Statements................................................... 38

Appendix A: Hypothetical Illustrations................................... 39
Appendix B: Directors and Officers of United Investors................... 48
Appendix C: Glossary..................................................... 49
Appendix D: Financial Statements......................................... F-1

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

This prospectus generally describes only the variable portion of the policy,
except where the fixed account is specifically mentioned.

Buying this policy might not be a good way of replacing your existing insurance
or adding more insurance if you already own a flexible premium variable life
insurance policy.

Certain terms and phrases used in this prospectus are explained in Appendix C
(the Glossary).

iii

Summary
================================================================================

This is a summary of some of the more important points that you should know
and consider before purchasing the Titanium Investor variable life insurance
policy.

The Policy

The Titanium Investor variable life insurance policy is an individual
flexible premium variable life insurance policy issued by United Investors Life
Insurance Company. Among other things, the policy:

(a) provides insurance protection on the life of the insured until the policy's
maturity date.

(b) allows you to vary the amount and timing of the premiums you pay and to
change the amount of the death benefit payable under the policy.

(c) provides the opportunity for cash value build-up on a tax-deferred basis,
depending on investment performance of the underlying mutual fund
portfolios. However, there is no guaranteed policy value and you bear the
risk of poor investment performance. (d) permits you to borrow against the
policy value, to make withdrawals, or to surrender the policy completely.
Loans and withdrawals will affect the policy value and may affect the death
benefit and termination of the policy. Loans, withdrawals and surrenders
may be taxable and subject to a 10% tax penalty before age 59-1/2.

In addition to providing life insurance, the policy provides a means of
investing for your retirement or other long-term purposes. Tax deferral allows
the entire amount you have invested (net of charges) to remain in the policy
where it can continue to produce an investment return. Therefore, your money
could grow faster than in a comparable taxable investment where current income
taxes would be due each year.

You may divide your Titanium Investor policy value among the fixed account
and 32 variable subaccounts which invest in specified portfolios of underlying
mutual funds. We guarantee the principal and a minimum interest rate you will
receive from the fixed account. However, the value of what you allocate to the
variable subaccounts is not guaranteed. Instead, your investment in the variable
subaccounts will go up or down with the performance of the particular mutual
fund portfolios you select (and the deduction of charges). You will lose money
on policy value allocated to the variable subaccounts if performance is not
sufficiently positive to cover the charges under the policy.

Payment of Premiums

Although you select a premium payment plan, you are not required to follow
it. (The minimum initial premium and planned premium depend on age, sex, and
risk class of the insured, on the face amount of the policy, and on any
supplemental benefit riders to the policy.) Within limits, you can vary the
frequency and amount of premium payments and can skip planned premiums. However,
extra premiums may be required to prevent policy termination under certain
circumstances.

Funding Choices

We deduct premium expense charges from each premium payment, and then we
allocate the net premium among the variable subaccounts and the fixed account
according to your written instructions.

You may allocate each premium (and your existing policy value) among
variable subaccounts which invest in the following 32 mutual fund portfolios:

AIM Variable Insurance Funds, Inc.

. AIM V.I. Capital Appreciation Fund
. AIM V.I. Growth Fund
. AIM V.I. Growth and Income Fund
. AIM V.I. International Equity Fund
. AIM V.I. Value Fund
The Alger American Fund
. Alger American Growth Portfolio
. Alger American Income & Growth Portfolio
. Alger American Leveraged AllCap Portfolio
. Alger American MidCap Growth Portfolio
. Alger American Small Capitalization
BT Insurance Funds Trust
. EAFE(R) Equity Index Fund
. Small Cap Index Fund
Dreyfus Funds
. Dreyfus VIF-Capital Appreciation Portfolio

. Dreyfus VIF-Money Market Portfolio
. Dreyfus VIF-Quality Bond Portfolio
. The Dreyfus Socially Responsible Growth Fund, Inc.
Evergreen Funds
. Evergreen VA Equity Index Fund
. Evergreen VA Foundation Fund
. Evergreen VA Global Leaders Fund
. Evergreen VA Small Cap Value Fund
INVESCO Variable Investment Funds, Inc.
. INVESCO VIF- Equity Income Fund
. INVESCO VIF- Technology Fund
. INVESCO VIF- Utilities Fund
MFS(R) Variable Insurance Trust(SM)
. MFS(R) Emerging Growth Series
. MFS(R) Growth with Income Series
. MFS(R) Research Series
. MFS(R) Total Return Series
Strong Variable Insurance Funds, Inc.
. Strong Discovery Fund II
. Strong Mid Cap Growth Fund II
. Strong Opportunity Fund II
Templeton Variable Products Series Fund
. Templeton Asset Allocation Fund - Class 2
. Templeton International Fund - Class 2

You may also allocate each premium (and your existing policy value) to the
fixed account. We guarantee your fixed account allocation will earn at least
3.5% interest per year.

Charges and Deductions

We deduct a 2.5% premium expense charge from each premium payment for state
and local taxes and a 1.5% premium expense charge for the estimated cost of the
federal income tax treatment of deferred acquisition costs. In addition, we
deduct a 4% sales charge from each premium payment, until premiums paid equal 10
target premiums (or the premiums paid allocated to an increase in the policy's
base face amount equal 10 target premiums for the increase). The target premium
is specified in your policy's data page, and discussed in the "Premium Expense
Charge" section of this prospectus. A new target premium is calculated if you
increase the policy's base face amount.

We also make certain periodic deductions from your policy value. Each
month, we deduct a "monthly deduction" from your policy value, which is the sum
of the following:

(a) the cost of insurance charge;

(b) the initial policy charge ($20 per month for the first 12 months);

(d) any supplemental benefit or rider charges.

Each day, we deduct a charge from the assets in the variable subaccounts
for certain mortality and expense risks we bear under the policy. This charge is
at an effective annual rate of 0.75% of those assets during the first ten policy
years, .50% during the second ten policy years, and 0.25% thereafter. We
guarantee not to increase this mortality and expense risk charge above these
annual rates.

We deduct a surrender charge from the policy value upon a full surrender
before the 14th policy anniversary (or the 14th anniversary of any increase in
the policy's base face amount). The surrender charge consists of two charges:
the administrative surrender charge and the sales surrender charge.

The administrative surrender charge is $4 per $1,000 of base face amount
for the first 9 policy years (or for the 9 years following an increase in the
policy's base face amount), and then decreases annually to zero at the 14/th/
policy anniversary.

The sales surrender charge for the first 2 policy years (or for the 2 years
following an increase in the policy's base face amount) is:

. 26% of premium paid up to one target premium, plus
. 6% of premium paid above one target up to two target premiums, plus
. 5% of premium paid above two target premiums.

The sales surrender charge for policy years 3 through 9 (or for years 3
through 9 following an increase in the policy's base face amount) is:

. 46% of premium paid up to one target premium, plus
. 44% of premium paid above one target up to two target premiums.

The sales surrender charge then decreases annually to zero at the 14/th/
policy anniversary.

In addition, investment management fees, operating expenses, and in some
cases 12b-1 fees are deducted from each portfolio of the underlying mutual
funds. See the table below for a summary of these portfolio expenses for the
last year.

Portfolio Annual Expenses/1/
(% of net assets of the portfolio)

- -----------------------------------------------------------------------------------------------------------------
Management 12b - 1 Other/2 3/ Total/2/ Portfolio
Fee/2/ Fees Expenses Expenses
(after any (after any (after waiver or
Portfolio waiver) reimbursement) reimbursement)
- -----------------------------------------------------------------------------------------------------------------

AIM Variable Insurance Funds, Inc.
. AIM V.I. Capital Appreciation Fund 0.62% None 0.05% 0.67%
. AIM V.I. Growth Fund 0.64% None 0.08% 0.72%
. AIM V.I. Growth and Income Fund 0.61% None 0.04% 0.65%
. AIM V.I. International Equity Fund 0.75% None 0.16% 0.91%
. AIM V.I. Value Fund 0.61% None 0.05% 0.66%
- -----------------------------------------------------------------------------------------------------------------
The Alger American Fund
. Alger American Growth Portfolio 0.75% None 0.04% 0.79%
. Alger American Income & Growth Portfolio 0.625% None 0.075% 0.70%
. Alger American Leveraged AllCap Portfolio 0.85% None 0.11% 0.96%
. Alger American MidCap Growth Portfolio 0.80% None 0.04% 0.84%
. Alger American Small Capitalization Portfolio 0.85% None 0.04% 0.89%
- -----------------------------------------------------------------------------------------------------------------
BT Insurance Funds Trust
. EAFE(R) Equity Index Fund 0.45% None 0.15% 0.65%
. Small Cap Index Fund 0.35% None 0.10% 0.45%
- -----------------------------------------------------------------------------------------------------------------
Dreyfus Funds
. Dreyfus VIF - Capital Appreciation Portfolio 0.75% None 0.06% 0.81%
. Dreyfus VIF - Money Market Portfolio 0.50% None 0.06% 0.56%
. Dreyfus VIF - Quality Bond Portfolio 0.65% None 0.08% 0.73%
. The Dreyfus Socially Responsible Growth Fund 0.75% None 0.05% 0.80%
- -----------------------------------------------------------------------------------------------------------------
Evergreen Funds
. Evergreen VA Equity Index Fund 0.00% None 0.30% 0.30%
. Evergreen VA Foundation Fund 0.83% None 0.17% 1.00%
. Evergreen VA Global Leaders Fund 0.39% None 0.61% 1.00%
. Evergreen VA Small Cap Value Fund 0.00% None 1.00% 1.00%
- -----------------------------------------------------------------------------------------------------------------
INVESCO Variable Investment Funds, Inc.
. INVESCO VIF - Equity Income Fund 0.75% None 0.18% 0.93%
. INVESCO VIF - Technology Fund 0.75% None 0.65% 1.40%
. INVESCO VIF - Utilities Fund 0.60% None 0.48% 1.08%
- -----------------------------------------------------------------------------------------------------------------

MFS(R) Variable Insurance Trust(SM)
. MFS(R) Emerging Growth Series 0.75% None 0.10% 0.85%
. MFS(R) Growth with Income Series 0.75% None 0.13% 0.88%
. MFS(R) Research Series 0.75% None 0.11% 0.86%
. MFS(R) Total Return Series 0.75% None 0.16% 0.91%
- -----------------------------------------------------------------------------------------------------------------
Strong Variable Insurance Funds, Inc.
. Strong Discovery Fund II 1.00% None 0.18% 1.18%
. Strong Mid Cap Growth Fund II 1.00% None 0.20% 1.20%
. Strong Opportunity Fund II 1.00% None 0.16% 1.16%
- -----------------------------------------------------------------------------------------------------------------
Templeton Variable Products Series Fund/3/
. Templeton Asset Allocation Fund - Class 2 0.60% 0.25% 0.18% 1.03%
. Templeton International Fund - Class 2 0.69% 0.25% 0.17% 1.11%
- -----------------------------------------------------------------------------------------------------------------

/1/These expenses are deducted directly from the assets of the underlying mutual
fund portfolios and therefore reduce their net asset value. The investment
adviser of each underlying mutual fund supplied the above information, and we
have not independently verified it. The expenses shown are those incurred for
the year ended December 31, 1998 except that the Evergreen VA Equity Index Fund
commenced operations on September 30, 1999, so the figures for this portfolio
are estimates for its first year of operations. Current or future expenses may
be greater or less than those shown. See the underlying mutual funds' prospectus
for more complete information.

/2/With respect to certain Portfolios, the Portfolio's investment adviser is
waiving part or all of its Management Fee and reimbursing part or all of the
Other Expenses. Absent the waivers or reimbursements, the 1998 expenses of these
Portfolios would have been as indicated below:

Total Portfolio
Other/3/ Annual
Management 12b - 1 Expenses Expenses
Portfolio Fee (before any Fees (before any (before waiver or
Waiver) reimbursement) reimbursement)

Evergreen VA Equity Index Fund 0.40% None 0.46% 0.86%
Evergreen VA Global Leaders Fund 0.95% None 0.61% 1.56%
Evergreen VA Small Cap Value Fund 0.95% None 2.52% 3.47%
INVESCO VIF - Equity Income Fund 0.75% None 0.42% 1.17%
INVESCO VIF - Technology Fund 0.75% None 5.85% 6.60%
INVESCO VIF - Utilities Fund 0.60% None 1.24% 1.84%
Strong Mid Cap Growth Fund II 1.00% None 0.55% 1.55%

/3/Class 2 of the Templeton Variable Products Series Fund has a distribution
plan or "Rule 12-b-1 plan" that is described in the Fund's prospectus.

We also deduct a portion of the surrender charge if you reduce the base
face amount of the policy, or if a withdrawal causes the base face amount to be
reduced. See the "Surrender Charge" section of this prospectus.

There is also a $25 transaction charge for transactions in excess of the
following limits:

. each withdrawal after the 1/st/ in a policy year (the charge is limited to
2% of the withdrawal);
. each transfer between subaccounts and/or the fixed account after the 12/th/
in a policy year;
. each requested policy illustration after the 1/st/ in a policy year.

Taxes

We intend for the policy to satisfy the definition of life insurance under
the Internal Revenue Code. Therefore, the death benefit generally should be
excludable from the gross income of its recipient.Similarly, you should not be
deemed to be in constructive receipt of the policy value, and therefore should
not be taxed on increases in the policy value until you take out a loan or
withdrawal, surrender the policy, or we pay the maturity benefit. Under certain
circumstances, a policy could be treated as a modified endowment contract. See
"Tax Considerations" for a discussion of when distributions, such as
withdrawals, surrenders and loans, from policy value could be subject to Federal
income tax and penalty tax.

Cash Benefits

Your policy value is the sum of the amounts allocated to the variable
subaccounts (variable account value) and the amount allocated to the fixed
account (fixed account value). The cash surrender value (the policy value less
any applicable surrender charge) may be substantially less than the premiums
paid.

Policy Loans. You may take loans in aggregate amounts of up to 90% of the
policy's cash surrender value. Policy loans reduce the amount available for
allocations and transfers.

Full Surrender. You may surrender the policy at any time for its net cash
surrender value. The net cash surrender value is the cash surrender value less
any loan balance.

Withdrawal. You generally may make a withdrawal from the net cash surrender
value at any time during the insured's life, provided that the policy has
sufficient net cash surrender value remaining.

Death Benefit

You must select one of two death benefit options under the policy:

(a) Option A: the greater of the policy's base face amount or a multiple of
its policy value; or

(b) Option B: the greater of (i) the policy's base face amount plus its policy
value or (ii) a multiple of its policy value.

The total death benefit equals the base death benefit above, plus any amounts
provided by the adjustable term insurance rider and any other riders payable on
the death of the insured.

Subject to certain limits, you may change the policy's face amount and
death benefit.

The policy's no-lapse guarantee feature will keep the policy in force
during the first three policy years even if there is insufficient cash surrender
value to pay the cost of insurance and other periodic charges. The no-lapse
guarantee remains effective during the first three policy years so long as
cumulative premiums paid on the policy, less gross withdrawals and any
outstanding loan balance, equals or exceeds the cumulative no-lapse monthly
premiums for the number of months the policy has been in force.

An optional death benefit guarantee rider is available, which allows you to
choose one of two guarantee periods at the time of application:

. to the later of the insured's age 65 or 10 years, or
. for the lifetime of the insured, or to the maturity date.

Each guarantee period requires the payment of higher premiums, and the guarantee
does not apply to any rider benefits. As long as the guarantee is in force, we
will deduct a monthly charge for the rider from your policy value. This optional
benefit rider is not available in all states.

Termination

There is no minimum guaranteed policy value. The policy value may decrease
if the investment performance of the variable subaccounts (to which policy value
is allocated) is not sufficiently positive to cover the charges deducted under
the policy.

If the net cash surrender value (based on the policy value) becomes
insufficient to cover the monthly deduction when due, and the no-lapse guarantee
or an optional death benefit guarantee is not in effect, the policy will
terminate without value after a grace period, even if all planned premiums have
been paid in full and on schedule. Additional premium payments will be necessary
during the grace period to keep the policy in force if this occurs.

Other Information

Free Look: For a limited time after the policy's effective date, you may
cancel the policy and receive a full refund of all premiums paid.

Supplemental Benefits: Your policy may have one or more supplemental
benefits which are attached to the policy by rider. Each is subject to its own
requirements as to eligibility and additional cost. In addition to the optional
death benefit guarantee rider previously described, other benefits currently
available under the policy are:

. accelerated death benefit rider;
. accidental death benefit rider;
. additional insured term insurance rider;
. adjustable term insurance rider;
. change of person insured rider;
. children's term insurance rider;
. disability waiver of monthly deductions rider;
. disability waiver of specified premium rider; and
. option to purchase additional insurance rider.

Other supplemental benefits may also be available, and all benefits may not
be available in all states.

Transfers: Within certain limits, you may transfer all or part of your
policy value among the variable subaccounts and the fixed account.

Dollar-Cost Averaging: You may have automatic transfers of a predetermined
amount made from the fixed account or the money market variable subaccount to
other variable subaccounts. Certain minimums and other restrictions apply.

Automatic Asset Rebalancing: You may have automatic transfers occur at
selected intervals that will reallocate your policy value according to your
premium allocation percentage for new premiums. Certain minimums and other
restrictions apply.

Illustrations: Sample projections of hypothetical death benefits and
policy values are in Appendix A to this prospectus. These projections may help
you:

(a) understand (i) the long-term effects of different levels of investment
performance and (ii) the charges and deductions under the policy; and

(b) compare the policy to other life insurance policies.

The projections also show the value of the annual premiums accumulated with
interest and demonstrate that the cash surrender value may be low (compared to
the premiums plus accumulated interest) if the policy is surrendered in the
early policy years. Therefore, the policy should not be purchased as a short-
term investment.

Financial Information: Our financial statements are in Appendix D to this
prospectus.

Inquiries

If you have questions about your policy or need to make changes, contact
your financial representative who sold you the policy, or contact us at:

United Investors Life Insurance Company
Administrative Office
2001 Third Avenue South (35233)
P.O. Box 10287
Birmingham, Alabama 35202-0287
Telephone: (800)340-3787

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

The policy is not available in all states. This prospectus does not offer
the policies in any jurisdiction where they cannot be lawfully sold. You should
rely only on the information contained in this prospectus or that we have
referred you to. We have not authorized anyone to provide you with information
that is different.

NOTE: Because this is a summary, it does not contain all the information
that may be important to you. You should read this entire prospectus and the
underlying mutual funds' prospectuses carefully before investing.

Titanium Universal Life Variable Account
================================================================================

The variable subaccounts are divisions of the Titanium Universal Life
Variable Account (the "Variable Account"). We established the Variable Account
as a segregated asset account on September 15, 1999. The Variable Account will
receive and invest the premiums allocated to the variable subaccounts. Our
Variable Account is currently divided into 32 subaccounts. Each subaccount
invests exclusively in shares of a single mutual fund portfolio. Income, gains
and losses arising from the assets of each subaccount are credited to or charged
against that subaccount without regard to income, gains or losses from any other
subaccount of the Variable Account or arising out of any other business we may
conduct.

The assets in the Variable Account are our property. However, the assets
allocated to the variable subaccounts under the policy are not chargeable with
liabilities arising out of any other business that we may conduct.

The Variable Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). It meets the
definition of a "separate account" under the Federal securities law. However,
the SEC does not supervise the management or investment practices or policies of
the Variable Account or us.

The Portfolios

Each subaccount of the Variable Account invests exclusively in shares of a
particular mutual fund portfolio. The assets of each portfolio are separate from
the assets of the other portfolios. Thus, each portfolio operates separately,
and the income, gains, or losses of one portfolio have no effect on the
investment performance of any other portfolio.

The investment objectives and policies of each mutual fund portfolio are
summarized below. There is no assurance that any of the portfolios will achieve
their stated objectives. More detailed information, including a description of
risks, is in the prospectuses of the portfolios which accompany this prospectus.

The following 32 mutual fund portfolios are currently offered to policy
owners through the subaccounts of the Variable Account:

Investment Objective and Certain Policies

- --------------------------------------------------------------------------------
Portfolio Investment Objective and Certain Policies
- --------------------------------------------------------------------------------
AIM V.I. Capital Seeks growth of capital through investment in common
Appreciation Fund stocks, with emphasis on small and medium sized growth
companies. Focus is on companies believed to be likely to
benefit from new or innovative products, services or
processes as well as those that have experienced above-
average, long-term growth in earnings.
- --------------------------------------------------------------------------------
AIM V.I. Seeks growth of capital primarily by investing in
Growth Fund seasoned and better capitalized companies considered to
have strong earnings momentum.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Portfolio Investment Objective and Certain Policies
- --------------------------------------------------------------------------------
AIM V.I. Growth and Seeks growth of capital with a secondary objective of
Income Fund current income. Focus is on securities of established
companies that have long-term, above-average growth
earnings and dividends, and growth companies that have
potential for above-average growth in earnings and
dividends.
- --------------------------------------------------------------------------------
AIM V.I Seeks long-term growth of capital by investing in a
International diversified portfolio of international equity securities
Equity Fund whose issuers are considered to have strong earnings
momentum. The Fund primarily invests in companies outside
of the United States, emphasizing investment in companies
in the developed countries of Western Europe and the
Pacific Basin.
- --------------------------------------------------------------------------------
AIM V.I. Seeks long-term growth of capital by investing primarily
Value Fund in equity securities judged by the fund's investment
advisor to be undervalued relative to the investment
advisor's appraisal of the current or projected earnings
of the companies issuing the securities, or relative to
current market values of assets owned by the companies
issuing the securities or relative to the equity market
generally. Income is a secondary objective.
- --------------------------------------------------------------------------------
Alger American Seeks long-term capital appreciation. It focuses on
Growth Portfolio growing companies that generally have broad product lines,
markets, financial resources and depth of management.
Under normal circumstances, the portfolio invests
primarily in the equity securities of large companies. The
portfolio considers a large company to have a market
capitalization of $1 billion or greater.
- --------------------------------------------------------------------------------
Alger American Primarily seeks to provide a high level of dividend
Income and income; its secondary goal is to provide capital
Growth Portfolio appreciation. The portfolio invests in dividend paying
equity securities, such as common or preferred stocks,
preferably those which the Manager believes also offer
opportunities for capital appreciation.
- --------------------------------------------------------------------------------
Alger American Seeks long-term capital appreciation. Under normal
Leveraged AllCap portfolio invests in the equity securities of companies
Portfolio of any size which demonstrate promising growth potential.
The portfolio can leverage, that is, borrow money, up to
one-third of its total assets to buy additional
securities. By borrowing money, the portfolio has the
potential to increase its returns if the increase in the
value of the securities purchased exceeds the cost of
borrowing, including interest paid on the money borrowed.
- --------------------------------------------------------------------------------
Alger American Seeks long-term capital appreciation. It focuses on
MidCap Growth mid-size companies with promising growth potential. Under
Portfolio normal circumstances, the portfolio invests primarily in
the equity securities of companies having a market
capitalization within the range of companies in the S&P(R)
MidCap 400 Index.
- --------------------------------------------------------------------------------
Alger American Seeks long-term capital appreciation. It focuses on
Small small, fast-growing companies that offer innovative
Capitalization products, services or technologies to a rapidly expanding
Portfolio marketplace. Under normal circumstances, the portfolio
invests primarily in the equity securities of small
capitalization companies. A small capitalization company
is one that has a market capitalization within the range
of the Russell 2000(R) Growth Index or the S&P(R) SmallCap
600 Index.
- --------------------------------------------------------------------------------
BT Insurance Seeks to match as closely as possible, and before
Funds Trust expenses, the risk and return characteristics of the
EAFE(R) Equity Morgan Stanley Capital International (MSCI) EAFE Index,
Index Fund which emphasizes stocks of companies in major markets in
Europe, Australia and the Far East. The Fund may also use
stock index futures and options.
- --------------------------------------------------------------------------------
BT Insurance Seeks to match as closely as possible, and before
Funds Trust Small expenses, the risk and return characteristics of the
Cap Index Fund Russell 2000 Small Stock Index which emphasizes stocks of
small United States companies. The Fund may also use
stock index futures and options.
- --------------------------------------------------------------------------------
Dreyfus VIF-Capital Seeks long-term capital growth consistent with the
Appreciation preservation of capital; current income is a secondary
Portfolio focusing on 'blue chip' companies with total market values
of more than $5 billion at the time of purchase.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Portfolio Investment Objective and Certain Policies
- --------------------------------------------------------------------------------
Dreyfus VIF-Money Seeks as high a level of current income as is consistent
Market Portfolio with the preservation of capital and the maintenance of
liquidity. The portfolio invests in a diversified
portfolio of high-quality, short-term debt securities.
- --------------------------------------------------------------------------------
Dreyfus VIF-Quality Seeks to maximize current income as is consistent with
Bond Portfolio the preservation of capital and the maintenance of
liquidity. The portfolio invests at least 80% of net
assets in fixed-income securities, including mortgage-
related securities, collateralized mortgage obligations
and asset-backed securities, that, when purchased, are
rated A or better, and in securities issued or guaranteed
by the U.S. government or its agencies or
instrumentalities.
- --------------------------------------------------------------------------------
Dreyfus Socially Seeks to provide capital growth, with current income as
Responsible a secondary goal. To pursue these goals, the fund
Growth Fund, Inc. invests primarily in the common stock of companies that,
in the opinion of the fund's management, meet traditional
investment standards and conduct their business in a
manner that contributes to the enhancement of the quality
of life in America.
- --------------------------------------------------------------------------------
Evergreen VA Seeks investment results that achieve price and yield
Equity Index Fund performance similar to the Standard and Poor's 500
Composite Stock Price Index (S&P 500 Index). The fund's
investment advisor uses a passive management approach and
purchases all or a representative sample of the stocks
comprising the S&P 500 Index which is an un-managed index
of 500 common stocks chosen to reflect the industries of
the U.S. economy and is often considered a proxy for the
stock market in general.
- --------------------------------------------------------------------------------
Evergreen VA Seeks, in order of priority, reasonable income,
Foundation Fund conservation of capital and capital appreciation. The fund
invests principally in a combination of common stocks,
securities convertible into or exchangeable for common
stocks and fixed income securities.
- --------------------------------------------------------------------------------
Evergreen VA Seeks to provide investors with long-term capital growth.
Global Leaders The fund normally invests at least 65% of its assets in
Fund a diversified portfolio of U.S. and non-U.S. equity
securities of companies located in the world's major
industrialized countries.
- --------------------------------------------------------------------------------
Evergreen VA Seeks current income and capital growth in the value of
Small Cap Value its shares. The fund invests primarily in common stocks
Fund and convertible preferred stocks of small companies (less
than $1 billion in market capitalization). The fund seeks
to limit the investment risk of small company investing by
seeking stocks that produce regular income and trade below
what the manager considers their intrinsic value. The fund
looks specifically for various growth triggers that will
bring the stock's price into line with its actual or
potential value, such as new products, new management,
changes in regulation and/or restructuring potential.
- --------------------------------------------------------------------------------
INVESCO VIF- Primary goal is high current income. Capital growth is a
Equity Income secondary objective in the selection of portfolio
Fund securities. The fund normally invests at least 65% of its
assets in dividend-paying common and preferred stocks.
Although it focuses on the stocks of larger companies with
a strong record of paying dividends, the Fund's assets may
be invested in equity securities that do not pay regular
dividends.
- --------------------------------------------------------------------------------
INVESCO VIF- Seeks capital appreciation and invests in strong growth
Technology Fund companies engaged in various technology-related
industries. Although the funds can invest in debt
securities, it primarily invests in equity securities that
are believed will rise in price faster than other
investments, as well as other investments whose value is
based upon the values of equity securities. The fund tends
to be more volatile than other mutual funds, and the value
of its portfolio investments tend to go up and down more
rapidly. As a result, the value of a fund share may rise
or fall rapidly.
- --------------------------------------------------------------------------------
INVESCO VIF- Seeks capital growth and income through investments in
Utilities Fund companies that produce, generate, transmit or distribute
natural gas or electricity, and in companies that provide
telecommunication services including local, long distance
and wireless. Stock selections are based on the merits of
the individual companies, but weighting within the various
industry segments are monitored to prevent extreme tilts
in the fund. The fund tends to be more volatile than other
mutual funds, and the value of its portfolio investments
tend to go up and down more rapidly. As a result, the
value of a fund share may rise or fall rapidly.
- --------------------------------------------------------------------------------
MFS(R) Emerging Seeks to provide long-term growth of capital. The series
Growth Series normally invests at least 65% of its total assets in
common stocks and related securities, such as preferred
stocks, convertible securities and depositary receipts for
those securities, of emerging growth companies.
- --------------------------------------------------------------------------------

Each mutual fund portfolio is designed to provide an investment vehicle for
variable annuity and variable life insurance contracts issued by various
insurance companies. For more information about the risks associated with the
use of the same funding vehicle for both variable annuity and variable life
insurance contracts of various insurance companies, see the prospectuses of the
portfolios which accompany this prospectus.

These mutual fund portfolios are not available for purchase directly by the
general public, and are not the same as other mutual fund portfolios with very
similar or nearly identical names that are sold directly to the public. However,
the investment objectives and policies of certain portfolios available under the
policy are very similar to the investment objectives and policies of other
portfolios that are or may be managed by the same investment adviser or manager.
Nevertheless, the investment performance and results of the portfolios available
under the policy may be lower, or higher, than the investment results of such
other (publicly available) portfolios. There can be no assurance, and no
representation is made, that the investment results of any of the portfolios
available under

________________________________

* On February 8, 2000 a shareholders meeting will be held to approve a
proposal to merge the funds of Templeton Variable Products Series Fund into
the similar corresponding funds of Franklin Templeton Variable Insurance
Products Trust (Reorganization). If approved, the Reorganization will be
completed by May 1, 2000.

the policy will be comparable to the investment results of any other mutual fund
portfolio, even if the other portfolio has the same investment adviser or
manager and the same investment objectives and policies, and a very similar
name.

We may receive payments or revenues from some or all of the mutual fund
portfolios or their investment advisers. The amount we receive may depend on how
much of our policy value is invested in the applicable portfolios.

Fixed Account
================================================================================

The funding choice guaranteeing your principal and a minimum fixed rate of
interest is called the "fixed account." It is not registered under the
Securities Act of 1933, and it is not registered as an investment company under
the Investment Company Act of 1940. Accordingly, neither the fixed account nor
any interests therein are subject to the provisions or restrictions of these
Federal securities laws, and the disclosure regarding the fixed account has not
been reviewed by the staff of the SEC.

The fixed account is part of our general account assets. It is not a
separate account. Amounts allocated to the fixed account are credited with
interest at rates determined in our sole discretion, but in no event will
interest credited on these amounts be less than an effective annual rate of
3.5%. The current interest rate is the guaranteed minimum interest rate plus any
excess interest rate. The current interest rate is determined periodically. The
current interest rate will be guaranteed for at least a one-year period. You
assume the risk that interest credited may not exceed the guaranteed minimum
rate of 3.5% per year. We may credit interest at a rate in excess of 3.5% per
year, but any excess interest credited will be determined in our sole
discretion. The policy owner assumes the risk that interest credited to the
fixed account may not exceed 3.5% per year. The fixed account may not be
available in all states.

Our general account assets are used to support our insurance and annuity
obligations other than those funded by separate accounts. Subject to applicable
law, we have sole discretion over the investment of the assets of the fixed
account.

As the policy owner, you determine the allocation of policy value to the
fixed account. There are significant limits on your right to transfer policy
value into and out of the fixed account. (See "Transfers.")

The Policy
================================================================================

Applying for a Policy

To purchase a policy, you must complete an application, submit it to our
administrative office (at the address listed in the "Inquiries" section of this
prospectus), and pay an initial premium which varies by age, sex and risk class.
(See "Premiums" below.) The initial premium must be paid prior to the policy's
effective date. (We will only accept a premium that complies with our
underwriting rules.) Coverage becomes effective as of the policy's effective
date. If the proposed insured dies before the policy's effective date, our sole
obligation will be to return the premium paid plus any interest earned on it
(unless a conditional receipt is in effect).

Generally, we will issue a policy covering an insured up to attained age 75
(on the policy's effective date) if evidence of insurability satisfies our
underwriting rules. Evidence of insurability may include, among other things, a
medical examination of the insured. We may, in our sole discretion, issue a
policy covering an insured over age 75. We reserve the right not to accept an
application for any lawful reason.

Conditional Receipt

You may be given a 'conditional receipt' when you apply for a policy, if
you pay an initial premium (or a 'conditional deposit') equal to at least one
no-lapse monthly premium. However, even if you are given a conditional receipt,
no life insurance will take effect earlier than the policy delivery date unless
all of the conditions of the conditional receipt are met. These conditions are
specified in the conditional receipt. If these conditions are not met, then we
have no liability except to return the initial premium.

The maximum amount of insurance available under a conditional receipt is
$500,000. Until we approve the application and issue the policy (on its
effective date), your premium is not invested (in either the variable or the
fixed account) and you have no policy value.

The terms of the conditional receipt may depend on requirements of your
state, and it may have a different name.

"Free Look" Right to Cancel the Policy

During the "free look" period, you may cancel your policy and receive a
refund of all premiums paid. The "free look" period expires the later of:

(a) 20 days after you receive your policy; or

(b) 45 days after you sign the application for the policy.

Some states may require a longer period or a different refund amount. In
order to cancel the policy, you must return it by mail or other delivery before
the end of the "free look" period to our administrative office or to the agent
who sold it to you.

Premiums

The premium amounts sufficient to fund a policy depend on a number of
factors, such as:

(a) the age, sex and risk class of the proposed insured;

(b) the face amount of the policy;

(d) the investment performance of the portfolios you choose.

The initial premium must be at least equal to the no-lapse monthly premium.
After the initial premium is paid, additional premiums may be paid at any time.
We currently require that any additional premiums be at least $25.00 (or the no-
lapse monthly premium, if less). We will give you 90 days' advance written
notice if we change this minimum.

Total premiums paid in a policy year may not exceed guideline premium
limitations for life insurance set forth in the Internal Revenue Code. We
reserve the right to reject any premium that would result in the policy being
disqualified as life insurance under the Code and will refund any rejected
premium. (See "Tax Considerations.")

Planned Premiums. When you apply for a policy, you select a quarterly,
semi-annual or annual premium payment plan. You may also arrange for premiums to
be paid monthly, quarterly, semi-annually or annually via automatic deduction
from your checking account or other payment methods approved by us. You are not
required to pay premiums in accordance with this premium plan; rather, you can
pay more or less than planned premiums (subject to the minimum noted above), or
skip a planned premium entirely. You can change the amount of planned

premiums and payment arrangements, or switch payment frequencies, whenever you
want by providing satisfactory written instructions to our administrative
office. Such changes will be effective upon our receipt of the instructions. If
you increase the policy's face amount, then a change in the amount of planned
premiums may be advisable, depending on the policy value at that time and the
amount of the increase requested. (See "Changing the Face Amount.")

Premiums to Prevent Termination. If you do not pay planned premiums or if
the investment performance of the policy's variable subaccounts is not
sufficient, your policy may terminate without value. Policy termination depends
on (i) whether the net cash surrender value is sufficient to cover the monthly
deduction when due and (ii) whether the no-lapse guarantee or an optional death
benefit guarantee is in effect.

If the no-lapse guarantee or an optional death benefit guarantee is not in
effect on a monthly processing date and either

(a) the net cash surrender value is less than the monthly deduction, or

(b) the loan balance exceeds the cash surrender value,

the policy will terminate without value unless additional premiums are paid.
(See "Monthly Deduction" and "No-Lapse Guarantee.") This can occur even if you
--------------------------
have paid all planned premiums in full and on time.
- --------------------------------------------------

You will have a 61-day grace period to pay a premium sufficient to cover
the monthly deduction. We will send notice of the amount required to be paid
during the grace period to your last known address (and to any assignee of
record). The grace period will begin when the notice is sent, and your policy
will remain in effect during the grace period. (See "Amount of Death Benefit
Payable" and "Effect of Policy Loan.") The payment required (called the "grace
period premium") will not exceed:

(a) the amount by which the loan balance exceeds the cash surrender value;
plus

(b) any accrued and unpaid monthly deductions as of the date of the
notice; plus

If the grace period premium has not been paid before the end of the 61-day
grace period, your policy will terminate. It will have no value, and no benefits
will be payable. (See "Other Policy Provisions" for a discussion of your
reinstatement rights.) If the insured should die during the grace period before
the grace period premium is paid, the death benefit will still be payable to the
beneficiary, although the amount paid will reflect a reduction for any monthly
deductions due on or before the date of the insured's death and for any loan
balance.

No-Lapse Guarantee. During the first three policy years, the policy will
continue in force so long as total premiums paid, less gross withdrawals and any
loan balance, are at least equal to the cumulative amount of no-lapse monthly
premiums for the number of policy months the policy has been in force. If this
requirement is met, the policy will remain in force regardless of the
sufficiency of net cash surrender value to cover monthly deductions. If the no-
lapse monthly premium changes after the policy's effective date, the total
premium amount required will be based on each no-lapse monthly premium amount
and the number of months for which each applies.

The Cash Surrender Value at the third policy anniversary may be zero or
less. If so, then payment of additional premiums will be required to prevent the
policy from lapsing.

Optional Death Benefit Guarantee. An optional death benefit guarantee rider
is also available, that will extend the period during which the base face amount
will remain in effect even if your net cash surrender value is insufficient to
pay monthly deductions. The guarantee does not apply to any rider benefits,
including the adjustable term insurance rider, and these additional benefits may
lapse even though the base face amount remains in force. One of two guarantee
periods may be chosen when you apply for the policy:

(a) to the later of the insured's age 65 or 10 policy years, or

(b) for the lifetime of the insured, or to the maturity date.

Each guarantee requires the payment of premiums each month higher than the
no-lapse monthly premium. We include the higher required premium in your policy
for whichever guarantee period you choose, and will send revised policy pages if
the required premium changes due to a change in your benefits. At the end of the
first three years, and each monthly processing date thereafter, the guarantee
will not stay in effect unless total premiums paid, less gross withdrawals and
any loan balance, equals or exceeds the cumulative amount of required monthly
premiums for the number of policy months the policy has been in force. If the
death benefit guarantee rider terminates due to insufficient premium payments,
it may not be restored or reinstated by payment of additional premiums.

As long the death benefit guarantee rider is in force, we will deduct an
additional monthly charge for the guarantee from your policy value. This charge
is currently $0.005 per $1,000 of base face amount each month, and is guaranteed
not to exceed $0.01 per $1,000 of base face amount each month. This optional
benefit can only be added when we issue your policy, and is not available in all
states.

Crediting Premiums to the Policy. On the policy's effective date, the
initial net premium will be credited to the policy. Any additional premium
received will be credited to the policy on the date we receive it, or the next
business day thereafter.

Net Premium Allocations. When you apply for a policy, you specify the
percentage (from 0% to 100%) of net premium payments to be allocated to each
variable subaccount and to the fixed account. You can change the allocation
percentages at any time by sending satisfactory written or telephone
instructions (if we have your written authorization for telephone requests on
file) to our administrative office. The change will apply to all premiums
received after we receive your instructions, unless you instruct otherwise. Net
premium payment allocations must be in percentages totaling 100%, and each
allocation percentage must be a whole number.

Transfers

At any time after the end of the "free look" period, you may transfer all
or part of your variable account value to one or more of the other variable
subaccounts or to the fixed account. There is a $25 charge for each transfer
after twelve in a policy year. You may transfer amounts from the fixed account
to one or more variable subaccounts only once each policy year. We also reserve
the right to limit the maximum amount you can transfer out of the fixed account
to the greater of:

(a) 25% of the prior policy anniversary's unloaned fixed account value; or

(b) the amount of the prior policy year's transfer.

The minimum amount that may be transferred out of a variable subaccount or
the fixed account is $100 or, if less, the policy value in the variable
subaccount or in the fixed account. The amount remaining must be at least $100,
or we will transfer the total value.

Transfer requests may be made by satisfactory written or telephone request
(if we have your written authorization for telephone requests on file). A
transfer will take effect on the date we receive the request at our
administrative office if it is received by 4:00 p.m. Eastern time; otherwise it
will take effect on the following business day. We may, however, defer transfers
under the same conditions that we may delay paying proceeds. (See "Requesting
Payments.") We reserve the right to modify, restrict, suspend or eliminate the
transfer privileges, including telephone transfer privileges, at any time, for
any reason.

We have the authority to honor any telephone transfer request believed to
be authentic. We employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. For example, you may be required to use a
personal identification number to initiate a telephone transfer. We will not be
liable for the consequences of a fraudulent telephone transfer request we
believe to be authentic. As a result, you bear the risk of loss arising from
such a fraudulent request if you give us authorization for telephone transfers.

Dollar-Cost Averaging

The dollar-cost averaging program permits you to systematically transfer an
amount from the fixed account or the money market variable subaccount to the
other variable subaccounts on a periodic basis prior to the policy's maturity
date. The amount transferred may be (1) a specified dollar amount from each
account, or (2) a percentage of the value in each account, or (3) an amount
determined from a beginning date to an ending date you select, by reducing the
value in each account to zero over the specified period. Dollar-cost averaging
may occur on the same day of the month either monthly, quarterly, semi-annually,
or annually. (If that day of the month does not fall on a business day, then
transfers will be made on the next following business day.) Transfers will be
made at the unit values determined on the date of each transfer.

The minimum automatic transfer of a specified dollar amount is $100. If the
transfer is to be made to more than one variable subaccount, a minimum of $25
must be transferred to each variable subaccount selected.

The dollar-cost averaging method of investment is designed to reduce the
risk of making purchases only when the price of units is high, but you should
carefully consider your financial ability to continue the program over a long
enough period of time to purchase units when their value is low as well as when
it is high. Dollar-cost averaging does not assure a profit or protect against a
loss.

You may elect to participate in the dollar-cost averaging program at any
time by sending a written request to our administrative office. Once elected,
dollar-cost averaging remains in effect from the date we receive your request
until the value of the fixed account or money market variable subaccount you are
transferring from is depleted, or until you cancel your participation in the
program by written request or by telephone. There is no additional charge for
dollar-cost averaging. A transfer under this program is not counted as a
transfer for purposes of the 12 free transfers discussed above. We reserve the
right to modify or discontinue offering the dollar-cost averaging program at any
time and for any reason. Another method of dollar-cost averaging is for you to
allocate monthly premiums directly to the variable subaccounts you desire.

Automatic Asset Rebalancing

Automatic asset rebalancing allows you to set up transfers to occur at
selected intervals that will reallocate your policy value according to your
current premium allocation percentages. After the transfers, the ratio of the
value in each investment option to the value for all the investment options
included in automatic rebalancing will equal the percentages chosen by you for
each investment option. You may change your allocation percentages for
automatic rebalancing at any time. Automatic rebalancing may occur on the same
day of the month either quarterly, semi-annually, or annually. If you select
the fixed account or the money market variable subaccount in the dollar-cost
averaging program, you may not include that option in your automatic asset
rebalancing program.

Automatic asset rebalancing provides you with a method for maintaining a
consistent approach to investing your policy value over time, and simplifies
asset allocation among those investments that you and your advisor have
determined represent the appropriate mix at any particular time. You should
consider, however, that transfers will be made from investments which have
outperformed other investment options since the last reallocation of your policy
value to less successful investment options. Automatic rebalancing does not
assure a higher or lower investment return over short or long term horizons.

You may elect to participate in the automatic rebalancing program at any
time by sending a written request to our administrative office. Once elected,
automatic rebalancing remains in effect from the date we receive your request
until you cancel your participation in the program by written request or by
telephone. There is no additional

charge for automatic rebalancing. A transfer under this program is not counted
as a transfer for purposes of the 12 free transfers discussed above. We reserve
the right to modify or discontinue offering automatic rebalancing at any time
and for any reason.

Surrender of the Policy

You may surrender your policy at any time for its net cash surrender value.
(See "Requesting Payments.") The net cash surrender value is the policy value
minus any surrender charge and minus any loan balance. A surrender charge may
apply. (See "Surrender Charge.") Your policy will terminate and cease to be in
force when it is surrendered. It cannot later be reinstated if it has been
surrendered for its net cash surrender value. Surrendering the policy may have
tax consequences. (See "Tax Considerations.")

Withdrawals

You may make withdrawals under your policy at any time during the insured's
life and before the policy has terminated. (See "Requesting Payments.") Requests
for withdrawals must be made in writing. The minimum withdrawal amount is $500.
The amount remaining after a withdrawal must be at least $500.

For each withdrawal after the first in a policy year, there is a
transaction charge equal to the lesser of $25 or 2% of the withdrawal amount. If
death benefit option A is in effect, a withdrawal may reduce the base face
amount of your policy. (See "Effect of Withdrawals on the Death Benefit.") A
portion of the surrender charge will be deducted based on the amount of the
decrease in base face amount caused by the withdrawal. (See "Surrender Charge.")
The amount of the withdrawal plus any applicable surrender charge and
transaction charge is called the gross withdrawal.

When you request a withdrawal, you should tell us what funding choices the
policy value should be deducted from. If you provide no directions, the gross
withdrawal will be deducted from your policy value in the variable subaccounts
and the fixed account on a pro rata basis. Withdrawals may have tax
consequences. (See "Tax Considerations.")

Loan Benefits

You may borrow up to 90% of your cash surrender value at any time by
submitting a written request to our administrative office. (This percentage may
vary in some states.) The cash surrender value is the policy value less any
applicable surrender charge. Outstanding loans, including accrued interest,
reduce the amount available for new loans. The minimum loan amount is $100. Your
policy may terminate if the loan balance becomes greater than the cash surrender
value. (See "Premiums to Prevent Termination.") Policy loans may have income tax
consequences. (See "Tax Considerations.")

When a loan is made, an amount equal to the requested loan and any loan
interest must remain in the fixed account or be transferred from variable
subaccounts to the fixed account. The amount to be transferred will be deducted
from each variable subaccount in the same proportion that the value of each
variable subaccount bears to your variable account value unless you specify one
or more variable subaccounts from which the loan is to be made.

Interest. We will charge interest daily on any outstanding loan at an
effective annual rate of 4.75%. Interest is due and payable at the end of each
policy year while a loan is outstanding. Interest paid on a policy loan
generally is not tax-deductible. If, on any policy anniversary, interest accrued
since the last policy anniversary has not been paid, the amount of the interest
is added to the loan and becomes part of the outstanding loan balance. Interest
will be deducted from the variable subaccounts in the same proportion that the
value of each variable subaccount bears to your variable account value. On each
monthly processing date, the loaned amount will be credited with interest at a
minimum guaranteed effective annual rate of 4.0%.

We may also credit additional interest (currently up to an effective annual
rate of 0.75%) on any preferred loan amount. Preferred loans are available each
policy year following the tenth policy anniversary. The amount

available as a preferred loan is 10% of the net policy value, which is the
policy value minus any existing loan balance. The policy value will be
determined at the time of the loan. If you do not borrow the maximum preferred
loan amount in a policy year, the unused amount is not available to increase the
preferred loan amount in any subsequent policy year.

Loan Repayment. You may repay all or part of your loan balance at any time
while the insured is living and the policy is in force. Loan repayments must be
at least $100 each (or the outstanding loan balance, if less). Upon repayment of
the loan balance, the portion of the repayment allocated to a variable
subaccount will be transferred from the fixed account to increase the value in
that variable subaccount. The repayment will be allocated among the variable
subaccounts and the fixed account based on the instructions for net premium
allocations then in effect unless you give us other instructions. Any payment
received when a loan is outstanding will be treated as a premium unless you tell
us it is a loan repayment.

Effect of Policy Loan. A policy loan will affect your policy in several
ways over time, whether or not it is repaid, because the investment results of
the variable subaccounts may be less than or greater than the net interest rate
credited on the amount transferred to the fixed account securing the loan.
First, by comparison to a policy under which no loan has been made, your policy
value will be less if this fixed account net interest rate is less than the
investment return of the applicable variable subaccounts and greater if the
fixed account net interest rate is higher than the investment return of the
applicable variable subaccounts.

Second, if the death benefit becomes payable while a policy loan is
outstanding, the loan balance will be deducted in calculating the death benefit
proceeds.

Third, your policy will terminate if the loan balance exceeds the cash
surrender value on any monthly processing date and the no-lapse guarantee or an
optional death benefit guarantee is not in effect. We will send you, and any
assignee of record, notice of the termination. You will have a 61-day grace
period to pay a sufficient additional premium to avoid termination. If your
policy terminates, there may be tax consequences.

Loans under modified endowment contracts are treated as distributions for
tax purposes. Loans under policies that are not modified endowment contracts are
generally not treated as distributions (see the "Tax Considerations" section of
this prospectus) except that the tax treatment of the preferred loan amount is
unclear, so consult your tax advisor before taking a loan.

Requesting Payments

Written requests for payment must be sent to our administrative office or
given to an authorized United Investors agent for forwarding to this office. We
will ordinarily pay any death benefit, loan amount, withdrawal amounts or the
net cash surrender value within seven days after we receive at our
administrative office all the documents required for such a payment. Other than
the death benefit, which is determined as of the date of the insured's death,
the amount of any payment will be determined as of the date our administrative
office receives all required documents.

Telephone requests may be allowed by us in certain circumstances.

We may delay making a payment of any amount from the variable subaccounts
or processing a transfer request if:

(a) the disposal or valuation of the Variable Account's assets is not
reasonably practicable because

(i) the New York Stock Exchange is closed for other than a regular
holiday or weekend,

(ii) trading is restricted by the SEC, or

(iii) the SEC declares that an emergency exists; or

(b) the SEC by order permits postponement of payment to protect our policy
owners.

We may defer payment of proceeds from the fixed account for up to six months
from the date we receive the request. If we defer payment for more than 30 days,
we will pay interest on the amount deferred at an effective annual rate of at
least 3.5%. However, we will not defer payment of a withdrawal or policy loan
requested to pay a premium due on a United Investors policy. We also may defer
making payments attributable to a premium check that has not cleared your bank.

The policy offers a wide variety of optional ways of receiving proceeds
payable under the policy other than in a lump sum. An authorized United
Investors agent can explain these options to you. None of these options varies
with the investment performance of a variable subaccount because they are all
forms of fixed-benefit annuities.

Policy Changes

We may make changes in the policy at any time if we believe the changes are
necessary:

(a) to assure compliance at all times with the definition of life
insurance prescribed by the Internal Revenue Code;

(b) to make the policy, our operations, or the operation of the Variable
Account conform with any law or regulation issued by any government
agency to which they are subject; or

Only an officer of United Investors has the right to change the policy. No agent
has the authority to change the policy or waive any of its terms. All
endorsements, amendments, or riders must be signed by one of our officers to be
valid.

Reports to Owners

At least once a year, you will be sent a report showing information about
your policy for the period covered by the report. You will also be sent an
annual and a semi-annual report for each portfolio underlying a variable
subaccount in which you have policy value, as required by the 1940 Act. In
addition you will receive a written confirmation of each transaction when you
pay premiums, make a withdrawal, make transfers, or take out a policy loan.

Other Policy Provisions

The policy contains provisions addressing the following matters:

Dividends. The policy is non-participating. This means that no dividends
will be paid on the policy. The policy will not share in our profits or surplus
earnings.

Incontestability. After the policy has been in force during the insured's
lifetime for a period of two years from the policy's effective date, the policy
limits our right to contest the policy as issued, except for material
misstatements contained in any application. This also applies to reinstatements
and increases in the face amount, for two years after the reinstatement date or
effective date of the increase.

Suicide Exclusion. The policy limits the death benefit if the insured dies
by suicide, generally within two years after the policy's effective date or
effective date of the increase. In this instance, our liability will be limited
to the total premiums paid less any withdrawals and any loan balance.

Reinstatement. The policy may be reinstated at any time within five years
after the policy has terminated at the end of the grace period. To reinstate the
policy, the policy owner must:

(a) submit an application for reinstatement;

(b) provide evidence of insurability satisfactory to us;

(d) pay the premium required to reinstate the policy.

The reinstatement date for the policy will be the monthly processing date on or
following the day we approve the application for reinstatement. (See the policy
form for additional information.) The policy cannot be reinstated if you have
surrendered it for the net cash surrender value.

Misstatement of Age or Sex. The death benefit will be adjusted if the
insured's age or sex has been misstated in the application. The benefits paid
will be those which the last monthly cost of insurance charge would have
provided at the correct age and sex.

Automatic Continuation of Benefits. If premium payments cease, insurance
under the policy and any supplemental benefits provided by rider will continue
as provided under the grace period provisions described under "Premiums to
Prevent Termination." The policy will not continue beyond its maturity date. Any
supplemental benefits added by a rider will not continue beyond the termination
date described in the rider.

Entire Contract. The entire contract is made up of the policy, any riders,
and the written application. All statements made in the application, in the
absence of fraud, are considered representations and not warranties. We can use
only the statements made in the written application to defend a claim or void
the policy.

Assignment and Change of Owner

You may assign the policy subject to its terms. We will not be deemed to
know of an assignment unless we receive a written copy of it at our
administrative office. We assume no responsibility for the validity or effect of
any assignment. In certain circumstances, an assignment may be a taxable event.
(See "Tax Considerations".) You may change the policy owner by sending a written
request to us while the insured is alive and the policy is in force. The change
will take effect the date you sign the request, but the change will not affect
any action we have taken before we receive the request. A change of policy owner
may have tax consequences. (See "Tax Considerations.") A change of policy owner
does not change the beneficiary designation. (See "Beneficiary.") Any such
assignment or change must be in a written form acceptable to us.

Death Benefits
================================================================================

If the insured dies while the policy is in force and prior to the policy's
maturity date, we will pay the death benefit when we receive satisfactory proof
at our administrative office of the insured's death. (See "Requesting
Payments.") The death benefit will be paid to the beneficiary.

Amount of Death Benefit Payable

The amount of death benefit payable is:

(a) the base death benefit determined under the death benefit option in
effect on the date of the insured's death; plus

(b) any supplemental benefits provided by riders, including the adjustable
term insurance rider; minus

(d) any past due monthly deductions (if death occurred during a grace
period).

Under certain circumstances, the amount of the death benefit may be further
adjusted. (See "Incontestability" and "Misstatement of Age or Sex.")

Death Benefit Options

The base death benefit depends on the base face amount, the policy value on
the date of death, and the death benefit option in effect on the date of death.
The base face amount is the amount of insurance chosen by you for the policy at
issue, or as subsequently increased or decreased by you.

Death Benefit Option A. The base death benefit under option A is the greater
of:

(1) the base face amount at the beginning of the policy month when the
death occurs; or

(2) the policy value on the date of death, multiplied by the applicable
death benefit factor from the table of death benefit factors below.

Under option A, the base death benefit ordinarily will not change.

Death Benefit Option B. The base death benefit under option B is the
greater of:

(1) the base face amount at the beginning of the policy month when the
death occurs, plus the policy value on the date of death; or

(2) the policy value on the date of death, multiplied by the applicable
death benefit factor from the table of death benefit factors below.

Under option B, the base death benefit will vary directly with your policy
value.

(To see how and when investment performance of the policy may begin to
affect the death benefit, please see the hypothetical illustrations.)

Death Benefit Factors. The death benefit factor is a multiple that ranges
between two-and-one-half times and one times the policy value. It is 2.50 up to
the insured's attained age 40 and declines thereafter as the insured's age
increases, as specified in the following table.

Table of Death Benefit Factors

- ------------------------------------------------------------------------
Attained Attained Attained Attained
Age Factor Age Factor Age Factor Age Factor
- ---------- ------ -------- ------ -------- ------ -------- ------
- ------------------------------------------------------------------------

41 2.43 51 1.78 61 1.28 71 1.13
- ------------------------------------------------------------------------
42 2.36 52 1.71 62 1.26 72 1.11
- ------------------------------------------------------------------------
43 2.29 53 1.64 63 1.24 73 1.09
- ------------------------------------------------------------------------
44 2.22 54 1.57 64 1.22 74 1.07
- ------------------------------------------------------------------------
45 2.15 55 1.50 65 1.20 75-90 1.05
- ------------------------------------------------------------------------
46 2.09 56 1.46 66 1.19 91 1.04
- ------------------------------------------------------------------------
47 2.03 57 1.42 67 1.18 92 1.03
- ------------------------------------------------------------------------
48 1.97 58 1.38 68 1.17 93 1.02
- ------------------------------------------------------------------------
49 1.91 59 1.34 69 1.16 94 1.01
- ------------------------------------------------------------------------
50 1.85 60 1.30 70 1.15 95+ 1.00
- ------------------------------------------------------------------------

The death benefit factors are based on current requirements under the Internal
Revenue Code. We reserve the right to change the table if the death benefit
factors currently in effect become inconsistent with any Federal income tax laws
and/or regulations.

Adjustable Term Insurance Rider and Target Face Amount

An adjustable term insurance rider is available to add death benefit coverage
on the primary insured, above the base face amount, up to a "target" face amount
(initially chosen by you, within certain limits). The target face amount is the
sum of the base face amount and the initial adjustable term insurance rider
amount. The amount of the rider at each monthly processing date will be
determined so that the sum of the rider amount and the base death benefit is
equal to:

(1) the target face amount, if the death benefit option is A; or
(2) the target face amount plus the policy value, if the death benefit option
is B.

The rider amount will decrease when the base death benefit begins increasing
to maintain the required multiple of the policy value as described above. The
adjustable term insurance rider amount may also increase again if the base death
benefit decreases as the policy ages.

If the base death benefit becomes greater than or equal to the target face
amount, the amount of the adjustable term insurance rider will become zero. If
the rider amount reduces to zero, the rider will not terminate, but will remain
attached to the policy in the event that the base death benefit declines below
the target face amount again at a later date. The maximum adjustable term
insurance rider amount that we will issue is limited to nine times the base face
amount.

The relationship of the death benefit to the target face amount also depends
on the death benefit option (in each case, the death benefit will still be
reduced by any loan balance or unpaid monthly deductions):

. Option A: The death benefit is the greater of (1) the base death benefit, or
(2) the target face amount.

. Option B: The death benefit is the greater of (1) the base death benefit, or
(2) the target face amount plus the policy value.

It may be to your economic advantage to use the adjustable term insurance
rider as a part of your insurance coverage. Since target premiums, percentage of
premium sales loads, and surrender charges are only associated with the base
face amount, use of the adjustable term insurance rider can lower the charges
associated with the policy. Use of the adjustable term insurance rider may
reduce sales compensation. However, there is an extra charge for this rider
(i.e., it increases the cost of insurance charge described below) and the
----
optional death benefit guarantee will not apply to any insurance amount provided
by the adjustable term insurance rider.

Calculation of Death Benefit Example. Assume your base face amount is
$150,000, the initial adjustable term insurance rider amount is $100,000, death
benefit option A is in effect, and there are no loans or unpaid monthly
deductions. The target face amount is therefore $250,000, and assuming the
policy value changes as shown below, the following amounts will result:

Death Benefit Policy Base Death Adjustable Term Death
Age Factor Value Benefit Insurance Rider Amount Benefit
--- ------------- ------ ---------- ----------------------- --------
55 1.50 $ 95,000 $150,000 $100,000 $250,000
56 1.46 105,000 153,300 96,700 250,000
57 1.42 107,000 151,940 98,060 250,000

Changing the Death Benefit Option

You select the death benefit option when you apply for the policy. After the
policy has been in force at least one year, you may change the death benefit
option on your policy, subject to the following rules:

(a) each change must be submitted by written request received by our
administrative office;

(b) once you change the death benefit option, you cannot change it again for
one year;

(c) if you change the death benefit option from A to B, the total death
benefit will remain the same, and the policy's base face amount will be
decreased by an amount equal to the policy value on the date of the
change;

(d) if you change the death benefit option from B to A, the total death
benefit will remain the same, and the base face amount will be increased
by an amount equal to the policy value on the date of the change. The
risk class for the last face amount portion to go into effect which is
still in force will apply to the base face amount increase.

The effective date of the change will be the monthly processing date on or
following the date when we approve the request for the change. We will send you
revised policy data pages reflecting the new death benefit option and the
effective date of the change. We do not impose a surrender charge for any
decrease in the base face amount occurring as a result of the change, and there
is no change to the target premium. Changing the death benefit option may have
tax consequences. (See "Tax Considerations.")

Changing the Face Amount

You select the policy's base face amount and adjustable term insurance rider
amount, if any, when you apply for the policy. After the policy has been in
force at least one year, you may change the base face amount or the adjustable
term insurance rider amount on any monthly processing date subject to the
following requirements. Any change in amount must be at least $10,000, and the
minimum base face amount after the first policy year is $50,000. Once you change
the base face amount or the adjustable term insurance rider amount, you cannot
change either amount again for one year. No change will be permitted that may
disqualify your policy as a life insurance contract under the Internal Revenue
Code. Changing the face amount of the policy may have tax consequences. (See
"Tax Considerations" below.)

Increasing the Face Amount. To increase the policy's base face amount or
adjustable term insurance rider amount, you must:

(a) submit an application for the increase;

(b) submit proof satisfactory to us that the insured is an insurable risk;
and

No increases can be made after the insured reaches attained age 75. An
increase will take effect on the monthly processing date on or following the day
we approve the application for the increase.

The risk class that applies for any increase may be different from the risk
class that applies for the policy's initial base face amount or any other
increase. An increase in the base face amount or the adjustable term insurance
rider amount will result in an increase in the no-lapse monthly premium. An
increase in the base face amount will also increase the target premium and
result in additional administrative and sales surrender charges. (See "Impact of
Changes in Base Face Amount on Surrender Charge".) If the face amount is
increased, the cost of insurance will also increase due to the increased death
benefit.

Decreasing the Face Amount. You may decrease the policy's base face amount or
adjustable term insurance rider amount by submitting a written request. The base
face amount may not be decreased below the policy's minimum base face amount.
The no-lapse monthly premium for your policy will be reduced to reflect the
decrease. Any decrease will take effect on the later of:

(a) the monthly processing date on or following the day we receive the
request; or

(b) the monthly processing date one year after the date of the last change in
face amount.

A face amount decrease will be used to reduce the face amount in the following
order:

(a) the amount of any adjustable term insurance rider will be reduced until
it is equal to zero;

(b) any previous base face amount increases then in effect will be reduced,
starting with the latest increase and continuing in the reverse order in
which the increases were made;

We will deduct a charge from the policy value each time the policy's base face
amount is decreased. (See "Impact of Changes in Base Face Amount on Surrender
Charge".)

Effect of Withdrawals on the Death Benefit

A withdrawal will affect your policy's death benefit in the following
respects:

(a) If death benefit option A is in effect, the policy's base face amount
will be reduced by the gross withdrawal amount. If the base face amount
reflects increases in the policy's initial base face amount, any
withdrawal will reduce first the most recent increase, and then the next
most recent increase, if any, in reverse order, and finally the policy's
initial base face amount.

(b) If death benefit option B is in effect, the total death benefit is also
reduced by the gross withdrawal amount, but the policy's base face amount
is not affected.

Beneficiary

You designate the beneficiary (or beneficiaries) when you apply for the
policy. You may change the designated beneficiary (or beneficiaries) by
submitting a satisfactory written request to us. The change will take effect on
the date the request was signed, but it will not apply to payments we make
before we accept the written request. If no beneficiary is living at the
insured's death, we will pay the death benefit proceeds to you, if living, or to
your estate.

Supplemental Benefits

Your policy may have supplemental benefits which are attached to the policy by
rider. A charge will be deducted monthly from your policy value for most
supplemental benefits. Each supplemental benefit is subject to its own
requirements as to eligibility and cost. You may cancel supplemental benefits at
any time. More details will be included in your policy if you choose any of
these benefits. Some of the supplemental benefits listed below may not be
available in all states, and from time to time, we may make available
supplemental benefits other than those listed below. Contact your agent or our
administrative office for a complete list of the supplemental benefits available
in your state.

Terms and conditions for each supplemental benefit are specified in the
applicable rider; the following are only brief descriptions.

Accelerated Death Benefit Rider. This benefit allows accelerated payment of up
to 75% of the death benefit (in a lump sum only) while the insured is still
alive, if the insured is diagnosed as having a terminal illness expected to
cause death within 12 months (unless a shorter period is required by state law).
There is no charge for this rider prior to the time the accelerated benefits are
paid.

Accidental Death Benefit Rider. This benefit will be paid if the insured dies
as a result of an accident before age 70.

Additional Insured Term Insurance Rider. This benefit allows you to provide
for death benefits on up to five family members (spouse and/or children).

Adjustable Term Insurance Rider. This rider is available to add death benefit
coverage on the primary insured to your policy. The initial amount of coverage
is chosen by you within certain limits, and will reduce to keep the target face
amount level if the base death benefit increases due to Internal Revenue Code
requirements. (See "Death Benefits".)

Change of Person Insured Rider. This benefit allows you to change the person
insured under the policy. Satisfactory evidence of insurability must be provided
for the proposed new insured. Future charges under the policy will change, but
the policy value will remain the same as of the date of the change. Changing the
person insured under the policy may have tax consequences. There is no
additional charge for this rider.

Children's Term Insurance Rider. This benefit allows you to add death benefit
coverage for your children.

Death Benefit Guarantee Rider. This rider provides that your base face amount
will remain in force regardless of the sufficiency of the net cash surrender
value for the guarantee period you selected at the time of application, provided
certain conditions are met. Both available guarantee periods require the payment
of higher premiums, and the guarantee does not apply to any rider benefits. As
long as the guarantee is in force, we will deduct a monthly charge from your
policy value. This charge is currently $0.005 per $1,000 of base face amount,
and is guaranteed never to exceed $0.01 per $1,000 of base face amount. (See
"Optional Death Benefit Guarantee".)

Disability Waiver of Monthly Deduction Rider. The benefit provides for waiver
of monthly deductions after the insured has been totally disabled for six
months. The disability must commence after the policy's effective date and prior
to age 60. The waiver continues as long as total disability continues. If you
add this rider to your policy, you may not add the disability waiver of
specified premium rider.

Disability Waiver of Specified Premium Rider. This benefit provides that we
credit a specified premium amount monthly to your policy after the insured has
been totally disabled for six months. At the time of application, you select the
amount of premium to be credited, subject to our limits. The disability must
commence after the policy's effective date and prior to age 60. The waiver
continues as long as total disability continues. If you add this rider to your
policy, you may not add the disability waiver of monthly deduction rider.

Option to Purchase Additional Insurance Rider. This rider will allow you
increase your base face amount without providing evidence of insurability.
Increases are limited in amount and timing.

Charges and Deductions
================================================================================

We deduct the charges described below from your policy. Certain of the charges
depend on a number of variables, and are illustrated in the hypothetical
illustrations depicted in this prospectus. The charges are for the services and
benefits provided, costs and expenses incurred and risks assumed by us under or
in connection with the policy. We intend to make a profit from these charges.

Services and benefits we provide include:

(a) the death benefits, cash and loan benefits provided by the policy;

(b) funding choices, including net premium allocations, dollar-cost averaging
programs, and automatic asset rebalancing programs;

(d) the distribution of various reports to policy owners.

Costs and expenses we incur include:

(a) those associated with underwriting applications and changes in face
amount and riders;

(b) various overhead and other expenses associated with providing the
services and benefits provided by the policy (and riders);

(d) other costs of doing business, such as Federal, state and local premium
and other taxes and fees.

Risks we assume include the risks that:

(a) insureds may live for a shorter period of time than estimated, resulting
in the payment of greater death benefits than expected; and

(b) the costs of providing the services and benefits under the policy (and
riders) will exceed the charges deducted.

Premium Expense Charges

We deduct premium expense charges from each premium before allocating the
resulting net premium to the policy value. These charges consist of three types:

(a) 2.5% of each premium is deducted for state premium taxes;

(b) 1.5% of each premium is deducted for our estimate of the cost of the
Federal income tax treatment of deferred acquisition costs;

(c) 4% of each premium is deducted as a sales load, until premiums paid equal
10 times the target premium for the policy.

The "target premium" is not the planned premium that you intend to pay. The
target premium is used only to calculate the sales load part of the premium
expense charge, and to calculate the sales surrender charge (discussed below). A
target premium is determined for the initial base face amount, and an additional
target premium is determined for each increase in the base face amount, based on
the insured's age, sex, and risk class. The target premium is not based on the
amount you plan to pay. The target premium may be more or less than the no-lapse
monthly premium depending on any additional benefits that have been added to the
policy. Your specific target premium will be specified on the policy data page
of your policy.

An addition to the target premium will be made when the base face amount is
increased, and a new sales load will be deducted in determining the net premium.
The new sales load will equal 4% of the premiums paid after the effective date
of the increase which are allocated to the increase, until the premiums
allocated to the increase equal 10 times the increase in the target premium.
Premiums paid after the effective date of the increase will be allocated in
proportion to the target premium for each portion of the base face amount.

Mortality and Expense Risk Charge

We deduct a daily charge from assets in the variable subaccounts for certain
mortality and expense risks we bear. This charge is at an effective annual rate
of 0.75% of the Variable Account assets during the first ten policy years, 0.50%
during the second ten years, and 0.25% thereafter. We guarantee not to increase
the mortality and expense risk charge above these annual rates. The mortality
and expense risk charge does not apply to fixed account assets. Our profit, if
any, from this charge may be used for any purpose, including distribution
expenses.

Monthly Deduction

We deduct a monthly deduction from your policy value on the policy's effective
date and on each monthly processing date. This charge is deducted from the
Variable Account and the fixed account on a pro rata basis. The monthly
deduction for each policy consists of:

(a) the cost of insurance charge discussed below;

(b) an issue expense charge of $20.00 per month payable during the first
policy year only;

(c) a monthly policy charge (currently this is $6.00 per month; it may
increase to a maximum charge of $10.00 per month); and

(d) charges for any supplemental benefits added by riders to the policy. (See
"Supplemental Benefits.")

Surrender Charge

If you surrender the policy before the beginning of the 15th policy year, we
will deduct a surrender charge based on its base face amount at issue. We also
deduct the surrender charge if you surrender the policy before the beginning of
the 15th year following an increase in its base face amount (based on the amount
of the increase). The surrender charge will be deducted before any surrender
proceeds are paid. A portion of the surrender charge will also be deducted for
any base face amount decreases you request, or if the base face amount decreases
due to a withdrawal from your policy value. (See "Impact of Changes in Base
Face Amount on Surrender Charge.")

The surrender charge consists of two types of charges, an administrative
surrender charge and a sales surrender charge. The administrative surrender
charge is $4.00 per $1,000 of base face amount for the first nine policy years
(or the first nine years after a base face amount increase) and declines each
year thereafter until it reaches zero:

- -------------------------------------------------------------------------------------------
Policy Year: 1-9 10 11 12 13 14 15 & up
- -------------------------------------------------------------------------------------------
Charge per $1,000 of Base Face Amount: $4.00 $3.33 $2.67 $2.00 $1.33 $0.67 $0.00
- -------------------------------------------------------------------------------------------

The sales surrender charge is a percentage of actual premiums paid up to a
maximum based on target premiums. The percentages of premium are:

Policy Years 1 - 2: 26% of premium paid up to one target premium, plus
6% of premium paid above one target up to two target
premiums, plus
5% of premium paid above two target premiums.

Policy Years 3 - 9: 46% of premium paid up to one target premium, plus
44% of premium paid above one target up to two target
premiums.

The sales surrender charge at the end of the 9/th/ policy year will be reduced
to zero at the beginning of the 15/th/ policy year by reducing the charge each
year by one-sixth of the amount of the charge in effect at the end of the 9/th/
policy year.

Impact of Changes in Base Face Amount on Surrender Charge. If you request a
decrease to the base face amount while surrender charges are in effect, or take
a withdrawal that decreases the base face amount, we will deduct a portion of
the surrender charge. Decreases in the base face amount as a result of a death
benefit option change do not cause a surrender charge deduction. Similarly,
increases in the base face amount as a result of death benefit option changes do
not result in an increase in the maximum surrender charge. All other increases
in the base face amount will increase the maximum surrender charge.

For decreases that cause a portion of the surrender charge to be deducted, the
calculation of the charge varies for each type of surrender charge. The
administrative surrender charge deduction will be in proportion to the amount of
the base face amount decrease, and the future administrative surrender charge
will be reduced by the amount of the deduction.

The amount of the sales surrender charge deduction will depend of the
relationship of the premiums paid to the target premium for each portion of the
base face amount. When the decrease is made, the target premium for each portion
of the base face amount will be reduced in proportion to the amount of the base
face amount decrease. If the new target premium for each portion of the base
face amount is greater than or equal to the premiums paid which have been
allocated to that portion, there will be no deduction, although the future
maximum sales surrender charge will be lower than before the decrease occurred.
If the new target premium for each portion of the base face amount is less than
the premiums paid which have been allocated to that portion, the deduction will
be the difference between the sales surrender charge before the decrease and the
sales surrender charge after the decrease. The sales surrender charge after the
decrease will be recalculated as if the new target premium for each portion of
the base face amount had always been in effect for that portion.

Calculation of Surrender Charge Example. Assume the base face amount on your
policy is $100,000 and the insured is age 50 when the policy was issued. The
target premium for the policy is $2,000. Assuming that you pay a $2,500 premium
at the beginning of each policy year, the resulting surrender charge for each
policy year is:

Administrative Sales Total
Policy Year Surrender Charge Surrender Charge Surrender Charge
----------- ---------------- ---------------- ----------------
1 $400 $ 550 $ 950
2 400 690 1,090
3 400 1,800 2,200
4 400 1,800 2,200
5 400 1,800 2,200
6 400 1,800 2,200
7 400 1,800 2,200
8 400 1,800 2,200
9 400 1,800 2,200
10 333 1,500 1,833
11 267 1,200 1,467
12 200 900 1,100
13 133 600 733
14 67 300 367
15 0 0 0

Transaction Charges

Certain policyholder transactions that exceed a maximum number in a policy
year may incur a charge.

Withdrawals. A deduction from the policy value equal to the lesser of $25 or
2% of the withdrawal amount will occur for each withdrawal after the first in a
policy year.

Transfers between Subaccounts and/or the Fixed Account. A deduction of $25 for
each transfer after the 12/th/ in a policy year will be made. Transfers under
the dollar cost averaging and the automatic asset rebalancing program are not
counted against the limit of 12 free transfers.

Policy Illustrations. The first illustration of policy values you request each
policy year will be free. For subsequent illustration requests each policy year,
a $25 deduction will be made from your policy value.

Other Charges

In most cases, there is an additional charge for each rider that you elect.

For information about the investment advisory fees and other expenses incurred
by the Portfolios, see the "Summary" of this prospectus and the accompanying
prospectuses for the underlying mutual funds.

Cost of Insurance

The cost of insurance is the primary charge for the death benefit provided by
your policy. The cost of insurance charge depends on a number of variables that
cause the charge to vary from policy to policy and from monthly processing date
to monthly processing date. The cost of insurance charge is equal to (a)
multiplied by the result of (b) minus (c) where:

(a) is the cost of insurance rate divided by 1,000;

(b) is the death benefit at the beginning of the policy month; and

The policy value used in this calculation is the policy value before deduction
of the monthly cost of insurance charge (for both the base face amount and the
adjustable term insurance rider) and the cost of insurance for any disability
waiver of monthly deductions rider, but after monthly deductions for any other
riders and charges. If there is any adjustable term rider amount or if there
have been any increases in the base face amount separate charges will be
calculated for each portion of the death benefit.

The cost of insurance rate is the rate applied to the insurance under the
policy to determine the monthly cost of insurance charge. The cost of insurance
rate is based on the insured's attained age, sex, and applicable risk class as
well as the size of the base face amount and the duration of the policy. We
currently place insureds in the following risk classes (available for male or
female) when we issue the policy, based on our underwriting:

. Preferred;
. Standard Non-Tobacco;
. Standard Tobacco;
. Substandard Non-Tobacco; and
. Substandard Tobacco.

The original risk class applies to the policy's initial face amount. If an
increase in face amount is approved, a different risk class may apply to the
increase, based on the insured's circumstances at the time of the increase. If
you have selected death benefit option A, and if there have been any increases
in the base face amount, the policy value will be considered a part of the
initial base face amount when the charge is calculated. If the policy value
exceeds the initial base face amount, the excess will be considered part of the
increases in base face amount in the order of the increases.

We guarantee that the cost of insurance rates used to calculate the monthly
cost of insurance charge will not exceed the maximum cost of insurance rates set
forth in the policy. The maximum cost of insurance rates are based on the 1980
Commissioners Standard Ordinary Mortality Tables, Male or Female, Smoker or
Non-Smoker, or for

substandard classes, a multiple of the tables and/or a flat addition to the
tables. (See "Hypothetical Illustrations" for examples showing the effects of
the cost of insurance charge.)

Reduction in Charges for Certain Groups

We may waive or reduce the administrative charges, the premium expense
charges, the transaction charges and the surrender charges on policies that have
been sold to:

(a) our employees and sales representatives, or those of our affiliates or
distributors of the policy; or

(b) individuals or groups of individuals where the sale of the policy results
in savings of administrative or commission expenses.

Policy Values
================================================================================

Policy Value

The policy value serves as a starting point for calculating values under a
policy. The policy value is the sum of the variable account value and the fixed
account value credited to the policy. The policy value is determined first on
the policy's effective date and thereafter on each business day. On the maturity
date, the proceeds payable under a policy are equal to the policy value less any
loan balance. The policy value will vary to reflect:

(a) the performance of the variable subaccounts to which amounts have been
allocated;

(b) interest credited on amounts allocated to the fixed account and loan
balance;

(d) transfers;

(e) withdrawals; and

(f) policy loans (including loan repayments).

The policy value may be more or less than premiums paid.

The cash surrender value is the policy value reduced by any surrender charge.

The net cash surrender value is the cash surrender value reduced by any loan
balance. You will receive only the net cash surrender value if you surrender
your policy.

Variable Account Value

The variable account value is the sum of the values of the variable
subaccounts under the policy. On the policy's effective date, the value of each
variable subaccount is equal to:

(a) the initial net premium allocated to that variable subaccount; minus

(b) the portion of the first month's monthly deduction allocated to that
variable subaccount.

On any business day thereafter, the value of each variable subaccount is equal
to:

(a) the value of the variable subaccount on the preceding business day,
multiplied by the appropriate net investment factor (described below) for
the current business day; plus

(b) the sum of all net premiums allocated to the variable subaccount since
the previous business day; plus

(d) the amount of any transfers from other variable subaccounts or the fixed
account to the variable subaccount since the previous business day; minus

(e) the amount of any transfers to other variable subaccounts or to the fixed
account, including amounts transferred to secure a policy loan, from the
variable subaccount since the previous business day; minus

(f) the portion of any gross withdrawals, policyholder transaction charges,
or charges for any face amount decreases allocated to the variable
subaccount since the previous business day; minus

(g) the portion of the monthly deduction allocated to the variable subaccount
since the previous business day.

Unit Values. When you allocate an amount to a variable subaccount, either by
net premium allocation, transfer of policy value or repayment of a policy loan,
your policy is credited with units in that variable subaccount. The number of
units is determined by dividing (i) the amount allocated, transferred or repaid
to the variable subaccount by (ii) the variable subaccount's unit value for the
business day when the allocation, transfer or repayment is effected. The number
of units credited to a policy will decrease when:

(a) the allocated portion of the monthly deduction or other charges is taken
from the variable subaccount;

(b) a policy loan is taken from the variable subaccount;

(d) a withdrawal is taken from the variable subaccount.

The number of the variable subaccount's units may also decrease if the policy's
face amount is decreased.

A variable subaccount's unit value is an index we use to measure investment
performance. Each variable subaccount's unit value varies to reflect the
investment experience of its underlying portfolio, and may increase or decrease
from one business day to the next. Each variable subaccount's unit value was
arbitrarily set at $10.00 when the variable subaccount was established. The unit
value is determined on each business day by multiplying the unit value for the
variable subaccount on the prior business day by the variable subaccount's net
investment factor for the current business day.

Net Investment Factor. The net investment factor is an index used to measure
the investment performance of a variable subaccount from one business day to the
next. The net investment factor for any variable subaccount for any business day
is determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) is:

(1) the net asset value per share of the portfolio shares held in the
variable subaccount determined at the end of the current business
day; plus

(2) the per share amount of any dividend or capital gain distributions on
the portfolio shares held in the variable subaccount, if the
"ex-dividend" date occurs during the current business day; plus or
minus

(3) a per share charge or credit for any taxes reserved for the current
business day which we determine to have resulted from the investment
operations of the variable subaccount;

(b) is:

(1) the net asset value per share of the portfolio shares held in the
variable subaccount, determined at the end of the last prior business
day; plus or minus

(2) the charge or credit for any taxes reserved for the last prior
business day; and

(c) is a deduction for the current mortality and expense risk charge for the
number of days since the last prior business day.

Fixed Account Value

On the policy's effective date, the fixed account value is equal to:

(a) the initial net premium allocated to the fixed account; minus

(b) the portion of the first month's monthly deduction allocated to the
fixed account.

On any monthly processing date thereafter, the fixed account value is equal
to:

(a) the fixed account value on the preceding monthly processing date; plus

(b) the sum of all net premiums allocated to the fixed account since the
previous monthly processing date; plus

(c) the sum of all policy loan repayments allocated to the fixed account
since the previous monthly processing date; plus

(d) total interest credited to the fixed account since the previous monthly
processing date; plus

(e) the amount of any transfers from the variable subaccounts to the fixed
account, including amounts transferred to secure policy loans, since the
previous monthly processing date; minus

(f) the amount of any transfers from the fixed account to the variable
subaccounts since the previous monthly processing date; minus

(g) the portion of any gross withdrawals, policyholder transaction charges,
or charges for any face amount decreases allocated to the fixed account
since the previous monthly processing date; minus

(h) the portion of the monthly deduction allocated to the fixed account
since the previous monthly processing date.

Tax Considerations
================================================================================

The following discussion is general and is not intended as tax advice.

Introduction

The following summary provides a general description of the Federal income tax
considerations relating to the policy. This summary is based upon our
understanding of the present Federal income tax laws as they are currently
interpreted by the Internal Revenue Service ("IRS"). Because of the complexity
of such laws and the fact that tax results will vary according to the factual
status of the specific policy involved, tax advice from a qualified tax advisor
may be needed by a person contemplating the purchase of a policy or the exercise
of certain elections under the policy. These comments concerning Federal income
tax consequences are not an exhaustive discussion of all tax questions that
might arise under the policy. Further, these comments do not take into account
any Federal estate tax and gift, state, or local tax considerations which may be
involved in the purchase of a policy or the exercise of certain elections under
the policy. For complete information on such Federal and state tax
considerations, a qualified tax advisor should be consulted. We do not make any
guarantee regarding the tax status of any policy, and the following summary is
not intended as tax advice.

Tax Status of the Policy

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. Guidance as to how these
requirements are to be applied is limited. Nevertheless, we believe that the
policies should satisfy the applicable requirements. There is less guidance,
however, with respect to policies issued on a substandard basis and it is not
clear whether such policies will in all cases satisfy the applicable
requirements. If it is subsequently determined that a policy does not satisfy
the applicable requirements, we may take appropriate steps to bring the policy
into compliance with such requirements and we reserve the right to restrict
policy transactions in order to do so.

In certain circumstances, owners of variable life insurance contracts have
been considered for Federal income tax purposes to be the owners of the assets
of the variable account supporting their contracts due to their ability to
exercise investment control over those assets. Where this is the case, the
contract owners have been currently taxed on income and gains attributable to
variable account assets. There is little guidance in this area, and some
features of the policies, such as the flexibility of a policy owner to allocate
premium payments and policy values, have not been explicitly addressed in
published rulings. While we believe that the policies do not give policy owners
investment control over Variable Account assets, we reserve the right to modify
the policies as necessary to prevent a policy owner from being treated as the
owner of the Variable Account assets supporting the policy.

In addition, the Code requires that the investments of the Variable Account be
"adequately diversified" in order for the policies to be treated as life
insurance contracts for Federal income tax purposes. It is intended that the
Variable Account, through the underlying mutual funds will satisfy these
diversification requirements.

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

Tax Treatment of Policy Benefits

In General. We believe that the death benefit under a policy should be
excludable from the gross income of the beneficiary. Federal, state and local
transfer, and other tax consequences of ownership or receipt of policy proceeds
depend on the circumstances of each policy owner or beneficiary. A tax advisor
should be consulted on these consequences.

Generally, the policy owner will not be deemed to be in constructive receipt
of the policy value until there is a distribution. When distributions from a
policy occur, or when loans are taken out from or secured by a policy, the tax
consequences depend on whether the policy is classified as a "Modified Endowment
Contract."

Modified Endowment Contracts. A policy may be treated as a modified endowment
contract depending upon the amount of premiums paid in relation to the death
benefit provided under such policy. The premium limitation rules for determining
whether such a policy is a modified endowment contract are extremely complex. In
general, however, a policy will be a modified endowment contract if the
accumulated premiums paid at any time during the first seven policy years exceed
the sum of the net level premiums which would have been paid on or before such
time if the policy provided for paid-up future benefits after the payment of
seven level annual premiums.

In addition, if a policy is "materially changed," it may cause such policy to
be treated as a modified endowment contract. The material change rules for
determining whether a policy is a modified endowment contract are also extremely
complex. In general, however, the determination whether a policy will be a
modified endowment contract after a material change depends upon the
relationship of the death benefit at the time of change to the policy or cash
value at the time of such change and the additional premiums paid in the seven
policy years starting with the date on which the material change occurs.

The manner in which the premium limitation and material change rules should be
applied to certain features of the policy and its riders is unclear.
Nonetheless, under our current procedures, the policy owner will be notified at
the time a policy is issued whether, according to our calculations, the policy
is or is not classified as a modified endowment contract based on the premium
then received.

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

If a policy becomes a modified endowment contract, distributions such as
withdrawals and policy loans that occur during the policy year it becomes a
modified endowment contract and any subsequent policy year will be taxed as
distributions from a modified endowment contract. In addition, distributions
from a policy within two years before it becomes a modified endowment contract
will be taxed in this manner. This means that a distribution made from a policy
that is not a modified endowment contract could later become taxable as a
distribution from a modified endowment contract.

Whether a policy is or is not a modified endowment contract, upon a complete
surrender or a lapse or termination of a policy or when benefits are paid at its
maturity date, if the amount received plus the amount of any indebtedness
exceeds the total investment in the policy, the excess will generally be treated
as ordinary income subject to tax.

Distributions Other than Death Benefits from Policies Classified as Modified
Endowment Contracts. Policies classified as modified endowment contracts will be
subject to the following tax rules:

(1) First, all distributions, including distributions upon surrender and
benefits paid at maturity, from such a policy are treated as ordinary
income subject to tax up to the amount equal to the excess (if any) of
the policy value immediately before the distribution over the "investment
in the policy" (described below) at such time.

(2) Second, loans taken from, or secured by, such a policy (including unpaid
loan interest that is added to the principal of a loan) are treated as
distributions from such a policy and taxed accordingly.

(3) Third, a 10 percent additional tax is imposed on the portion of any
distribution from, or loan taken from or secured by, such a policy that
is included in income except where the distribution or loan:

(a) is made on or after the policy owner reaches actual age 59 1/2

(b) is attributable to the policy owner's becoming disabled, or

(c) is part of a series of substantially equal periodic payments for
the life (or life expectancy) of the policy owner or the joint
lives (or joint life expectancies) of the policy owner and the
policy owner's beneficiary.

Distributions Other than Death Benefits from 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 and only after the
recovery of all investment in the policy as 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 15 policy years may be treated in whole or
in part as ordinary income subject to tax.

Loans from or secured by a policy that is not a modified endowment contract
are generally not treated as distributions. However, the tax consequences
associated with policy loans that are outstanding after the first 15 policy
years are less clear and a tax advisor should be consulted about such loans.

Finally, neither distributions from nor loans from or secured by a policy that
is not a modified endowment contract are subject to the 10 percent additional
income tax.

Policy Loan Interest. Interest paid on a policy loan generally is not tax-
deductible. The policy owner should consult a competent tax advisor if the
deductibility of interest paid on a policy loan is an important issue.

Investment in the Policy. "Investment in the policy" means:

(a) the aggregate amount of any premiums or other consideration paid for a
policy; minus

(b) the aggregate amount received under the policy which is excluded from the
gross income of the policy owner (except that the amount of any loan
from, or secured by, a policy that is a modified endowment contract, to
the extent such amount is excluded from gross income, will be
disregarded); plus

(c) the amount of any loan from, or secured by, a policy that is a modified
endowment contract to the extent that such amount is included in the
gross income of the policy owner.

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 amount
includable in gross income.

Accelerated Death Benefit Rider. We believe that payments received 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" for more information regarding the rider.)
However, you should consult a qualified tax advisor about the consequences of
adding this rider to a policy or requesting payment under this rider.

Other Policy Owner Tax Matters. The tax consequences of continuing the policy
beyond the insured's 100th year are unclear. You should consult a tax advisor if
you intend to keep the policy in force beyond the insured's 100th year.

Businesses can use the policies in various arrangements, including
nonqualified deferred compensation or salary continuance plans, split dollar
insurance plans, executive bonus plans, tax exempt and nonexempt welfare

benefit plans, retiree medical benefit plans and others. The tax consequences of
such plans may vary depending on the particular facts and circumstances. If you
are purchasing the policy for any arrangement the value of which depends in part
on its tax consequences, you should consult a qualified tax advisor. In recent
years, moreover, 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 advisor.

Possible Tax Law Changes. Although the likelihood of legislative changes is
uncertain, there is always the possibility that the tax treatment of the policy
could change by legislation or otherwise. Consult a tax advisor with respect to
legislative developments and their effect on the policy.

Taxation of United Investors

We incur state and local premium taxes, and Federal income taxes resulting
from the treatment of deferred acquisition costs. The amount of the charge we
deduct for such taxes is discussed above under "Charges and Deductions." At the
present time, we make no charge to the Variable Account for any other Federal,
state or local taxes that it incurs which may be attributable to the Variable
Account or to the policies. Nevertheless, we reserve the right in the future to
make a charge for any such tax or other economic burden resulting from the
application of the tax laws that we determine to be properly attributable to the
Variable Account or to the policies.

Employment-Related Benefit Plans

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

Other Information
================================================================================

United Investors Life Insurance Company

We were incorporated in the State of Missouri on August 17, 1981, as the
successor to a company of the same name established in Missouri on September 27,
1961. We are a stock life insurance company, indirectly owned by Torchmark
Corporation. Our principal business is selling life insurance and annuity
contracts. We are admitted to do business in the District of Columbia and all
states except New York.

Published Ratings. We may publish (in advertisements, sales literature, and
reports to policy owners) the ratings and other information assigned to us by
one or more independent insurance industry analysts or rating organizations such
as A. M. Best Company, Standard & Poor's Corporation, and Weiss Research, Inc.
These ratings reflect the organization's current opinion of an insurance
company's financial strength and operating performance in comparison to the
norms for the insurance industry; they do not reflect the strength, performance,
risk, or safety (or lack thereof) of the variable subaccounts. The claims-paying
ability rating as measured by Standard & Poor's is an opinion of an operating
insurance company's financial capacity to meet its obligations under its
outstanding insurance and annuity policies.

Sale of the Policies

United Securities Alliance, Inc., 8 Inverness Drive, Suite 100, Denver,
Colorado, is a principal underwriter of the policies. United Securities
Alliance, Inc. is a corporation organized under the laws of the state of Nevada
in 1994. First Union Securities, Inc., 301 South College Street, Charlotte,
North Carolina, is also a principal underwriter. It is a Delaware corporation
organized in 1999. Both underwriters are registered as broker-dealers

under the Securities Exchange Act of 1934, and are members of the National
Association of Securities Dealers, Inc. The Policies may not be available in all
states. The underwriters may enter into written sales agreements with various
broker-dealers to aid in the sale of the policies. A commission plus bonus
compensation may be paid to broker-dealers or agents in connection with sales of
the policies.

Changing the Variable Account

We have the right to make changes to, and to modify how we operate, the
Variable Account. Specifically, we have the right to:

(a) add subaccounts to, or remove subaccounts from, the Variable Account;

(b) combine the Variable Account with other separate accounts;

(c) replace the shares of a portfolio by substituting shares of another
portfolio of Target/United Funds, Inc. or another investment company

(1) if shares of the portfolio are no longer available for investment, or

(2) if, in our judgment, continued investment in the portfolio is
inappropriate in view of the purposes of the Variable Account;

(d) end the registration of the Variable Account under the 1940 Act;

(e) disregard instructions from policy owners (only if required by state
insurance regulatory authorities or otherwise pursuant to insurance law
or regulation) regarding a change in the investment objectives of a
portfolio or the approval or disapproval of an investment advisory
agreement; and

(f) operate the Variable Account or one or more of its subaccounts in any
other form allowed by law, including a form that permits direct
investments in individual securities (rather than solely investments in a
mutual fund shares).

Voting of Portfolio Shares

We are the legal owner of portfolio shares held in the subaccounts of the
Variable Account and therefore have the right to vote on all matters submitted
to shareholders of the portfolios. However, to the extent required by law, we
will vote shares held in the variable subaccounts at meetings of the
shareholders of the portfolios in accordance with instructions received from
policy owners. The mutual funds generally do not hold regular annual shareholder
meetings. To obtain voting instructions from policy owners before a meeting of
shareholders of a particular portfolio, we may send voting instruction material,
a voting instruction form and any other related material to policy owners with
policy value in the variable subaccount corresponding to that portfolio. We will
vote shares held in a variable subaccount for which no timely instructions are
received in the same proportion as those shares for which voting instructions
are received. If the applicable Federal securities laws, regulations or
interpretations thereof change to permit us to vote shares of the portfolios in
our own right, then we may elect to do so. We may, if required by state
insurance officials, disregard policy owners' voting instructions if such
instructions would require us to vote the shares so as to cause a change in
sub-classification or investment objectives of one or more of the portfolios, or
to approve or disapprove an investment advisory agreement. In addition, we may
under certain circumstances disregard voting instructions that would require
changes in the investment policy or investment adviser of a portfolio, provided
that we reasonably disapprove of such changes in accordance with applicable
Federal regulations. If we ever disregard voting instructions, policy owners
will be advised of that action and of our reasons for doing so in our next
report to policy owners.

Addition, Deletion, or Substitution of Investments

We reserve the right, subject to compliance with applicable law, to make
additions to, deletions from, or substitutions for the shares of the underlying
mutual funds that are held by the Variable Account (or any of its subaccounts)
or that the Variable Account (or any of its subaccounts) may purchase. We
reserve the right to eliminate the shares of any of the portfolios of the
underlying mutual funds and to substitute shares of another portfolio of the
underlying mutual funds or any other investment vehicle or of another open-end,
registered investment company if:

(a) laws or regulations are changed;

(b) the shares of the underlying mutual funds or one of its portfolios are no
longer available for investment, or;

(c) in our judgment, further investment in any portfolio becomes
inappropriate in view of the purposes of the Subaccount.

We will not substitute any shares attributable to your interest in a subaccount
of the Variable Account without notice and prior approval of the U.S. Securities
and Exchange Commission and the insurance regulator of the state where the
policy was delivered, if required. Nevertheless, the representations in this
prospectus will not prevent the Variable Account from purchasing other
securities for other series or classes of policies, or from permitting a
conversion between series or classes of policies on the basis of requests made
by policy owners.

We also reserve the right to establish additional subaccounts of the Variable
Account, each of which would invest in a new portfolio of the mutual funds, or
in shares of another investment company or suitable investment, with a specified
investment objective. We may establish new variable subaccounts when, in our
sole discretion, marketing needs or investment conditions warrant. We may make
available any new variable subaccounts to existing policy owners, and will do so
on a basis that we will determine. We may also eliminate one or more variable
subaccounts if, in our sole discretion, marketing, tax, or investment conditions
warrant.

In the event of any such substitution or change, we may, by appropriate
endorsement, make such changes in this and other policies as may be necessary or
appropriate to reflect such substitution or change. If we deem it to be in the
best interests of persons having voting rights under the policies, the Variable
Account may be:

(a) operated as a management company under the Investment Company Act of
1940;

(b) deregistered under that Act in the event such registration is no longer
required; or

Other Information

A registration statement under the Securities Act of 1933 has been filed with
the SEC relating to the offering described in this prospectus. This prospectus
does not include all the information set forth in the registration statement.
That information may be obtained at the SEC's principal office in Washington,
D.C. by paying the SEC's prescribed fees.

Litigation

No legal or administrative proceeding is pending that would have a material
effect upon the Variable Account.

Legal Matters

Legal advice regarding certain matters relating to Federal securities laws
applicable to the issuance of the policy described in this prospectus has been
provided by Sutherland Asbill & Brennan LLP of Washington, D.C.

Experts

The balance sheets of United Investors Life Insurance Company as of December
31, 1998 and 1997, and the related statements of operations, comprehensive
income, shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1998 have been included herein in reliance
upon the report of KPMG LLP (formerly KPMG Peat Marwick LLP), independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.

Actuarial matters included in this prospectus have been examined by W. Thomas
Aycock, Vice President and Chief Actuary of United Investors, whose opinion is
filed as an exhibit to the registration statement.

Financial Statements

The financial statements of United Investors, which are included in Appendix D
to this prospectus, should be considered only as bearing on our ability to meet
our obligations under the policies. They should not be considered as bearing on
the investment performance of the assets held in the Variable Account. No
financial statements are presented for the Variable Account because it has yet
to commence operations.

Appendix A:
Hypothetical Illustrations
================================================================================

The following illustrations show how certain values under a sample policy
change with assumed investment performance over an extended period of time. In
particular, they illustrate how policy values, net cash surrender values and
death benefits under a policy, covering an insured of a given age on the
policy's effective date, would vary over time if planned premiums were paid
annually and the return on the assets in the variable subaccounts were a uniform
gross annual rate of 0%, 6% or 12%, before deduction of any fees and charges,
including portfolio expenses. The tables also show planned premiums accumulated
at 5% interest. The values under a policy would be different from those shown if
the returns averaged 0%, 6% or 12% but fluctuated over and under those averages
throughout the years shown. The hypothetical investment rates of return are
illustrative only and should not be deemed a representation of past or future
investment rates of return. Actual rates of return for a particular policy may
be more or less than the hypothetical investment rates of return used in the
illustrations.

The illustrations assume an average annual expense ratio of 0.87% of the daily
net assets of the portfolios available under the policies, based on the expense
ratios of each of the portfolios for the last fiscal year of operations. For
information on portfolio expenses, see the mutual funds prospectuses
accompanying this prospectus.

The illustrations also reflect the 0.75% mortality and expense risk charge to
the Variable Account during the first ten policy years, 0.50% during the second
ten years, and 0.25% thereafter. After deduction of average portfolio expenses
and the mortality and expense risk charge, the illustrated gross annual
investment rates of return would correspond to the following approximate net
annual rates of return for the variable subaccounts:

Hypothetical gross rate of return: 0% 6% 12%
----- ---- -----
Net return, policy years 1 - 10: -1.62% 4.38% 10.38%
Net return, policy years 11 - 20: -1.37% 4.63% 10.63%
Net return, policy years 21 & up: -1.12% 4.88% 10.88%

The current illustrations reflect the $6.00 monthly policy charge for all
policy years, while the guaranteed illustrations reflect the $10.00 maximum
monthly policy charge for all policy years. The illustrations also reflect the
deduction of premium expense charges and the monthly deduction for the
hypothetical insured. Our current charges and the higher guaranteed charges we
have the contractual right to deduct from your policy value are reflected in
separate illustrations on each of the following pages. All the illustrations
reflect the fact that no charges for Federal or state income taxes are currently
made against the Variable Account and assume no loan balance or charges for
supplemental benefits.

Upon request, we will furnish a comparable illustration based upon the
proposed insured's individual circumstances. Such illustrations may assume
different hypothetical rates of return than those illustrated in the following
tables.

MALE ISSUE AGE 35, STANDARD NON-TOBACCO
$1,000 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION A
CURRENT CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
------------------------------ ---------------------------- -----------------------------
End of PREMIUMS
Policy +Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
-- -- --- -- -- --- -- -- ---

1 1,050 100,000 100,000 100,000 429 469 509 0 0 0
2 2,153 100,000 100,000 100,000 1,083 1,197 1,317 407 521 641
3 3,310 100,000 100,000 100,000 1,716 1,948 2,199 596 828 1,079
4 4,528 100,000 100,000 100,000 2,329 2,721 3,163 1,209 1,601 2,043
5 5,802 100,000 100,000 100,000 2,919 3,515 4,214 1,799 2,395 3,094
6 7,142 100,000 100,000 100,000 3,487 4,332 5,362 2,367 3,212 4,242
7 8,549 100,000 100,000 100,000 4,030 5,168 6,614 2,910 4,048 5,494
8 10,027 100,000 100,000 100,000 4,548 6,027 7,981 3,428 4,907 6,861
9 11,578 100,000 100,000 100,000 5,079 6,947 9,519 3,959 5,826 8,399
10 13,207 100,000 100,000 100,000 5,585 7,891 11,204 4,652 6,958 10,271
11 14,917 100,000 100,000 100,000 6,075 8,877 13,074 5,328 8,130 12,327
12 16,713 100,000 100,000 100,000 6,548 9,900 15,138 5,988 9,340 14,578
13 18,599 100,000 100,000 100,000 7,047 11,005 17,460 6,674 10,632 17,087
14 20,579 100,000 100,000 100,000 7,509 12,133 20,006 7,322 11,946 19,819
15 22,657 100,000 100,000 100,000 7,831 13,283 22,800 7,931 13,283 22,800
16 24,840 100,000 100,000 100,000 8,307 14,450 25,867 8,307 14,450 25,867
17 27,132 100,000 100,000 100,000 8,635 15,634 29,236 8,635 15,634 29,236
18 29,539 100,000 100,000 100,000 8,908 16,830 32,941 8,908 16,830 32,941
19 32,066 100,000 100,000 100,000 9,124 18,036 37,019 9,124 18,036 37,019
20 34,719 100,000 100,000 100,000 8,278 19,252 41,521 9,278 19,252 41,521
21 37,505 100,000 100,000 100,000 8,567 20,682 46,708 9,567 20,682 46,708
22 40,430 100,000 100,000 100,000 9,804 22,145 52,460 9,804 22,145 52,460
23 43,502 100,000 100,000 100,000 9,983 23,638 58,846 9,983 23,638 58,846
24 46,727 100,000 100,000 100,000 10,099 25,111 65,947 10,099 25,161 65,947
25 50,113 100,000 100,000 100,000 10,143 28,709 73,852 10,143 26,709 73,852
26 53,669 100,000 100,000 107,441 10,107 28,279 82,647 10,107 28,279 82,647
27 57,403 100,000 100,000 118,230 9,979 29,866 92,367 9,979 29,866 92,367
28 61,323 100,000 100,000 129,912 9,750 31,466 103,105 9,750 31,466 103,105
29 85,439 100,000 100,000 142,561 9,412 33,079 114,968 9,412 33,078 114,968
30 69,761 100,000 100,000 156,255 8,953 34,702 128,078 8,953 34,702 128,078

The hypothetical investment rates of return shown above are illustrative only
and should not be deemed a representation of past or future investment rates of
return. Actual rate of return may be more or less than those shown and will
depend on a number of factors, including the allocations made by a policy owner
to one or more variable subaccounts and the investment experience of the
portfolios underlying those variable subaccounts. The death benefit, policy
value and net cash surrender value for a policy would be different from those
shown if the actual gross annual rates of return averaged 0%, 6%, or 12% over a
period of years, but fluctuated above or below those averages for individual
policy years. They would also be different if any policy loans or withdrawals
were made. No representations can be made by us, the Variable Account or the
portfolios that these hypothetical rates of return can be achieved for any one
year or sustained over a period of time.

MALE ISSUE AGE 50, STANDARD NON-TOBACCO
$2,500 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION A
CURRENT CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
----------------------------- ------------------------- --------------------------
End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
-- -- --- -- -- --- -- -- ---

1 2,625 100,000 100,000 100,000 1,486 1,599 1,712 560 673 786
2 5,381 100,000 100,000 100,000 3,152 3,479 3,821 2,088 2,416 2,757
3 8,275 100,000 100,000 100,000 4,752 5,404 6,111 2,660 3,312 4,019
4 11,314 100,000 100,000 100,000 6,284 7,371 8,600 4,192 5,279 6,508
5 14,505 100,000 100,000 100,000 7,741 9,378 11,303 5,649 7,286 9,211
6 17,855 100,000 100,000 100,000 9,121 11,422 14,243 7,029 9,330 12,150
7 21,373 100,000 100,000 100,000 10,455 13,539 17,479 8,363 11,446 15,387
8 25,066 100,000 100,000 100,000 11,826 15,816 21,133 9,734 13,724 19,041
9 28,945 100,000 100,000 100,000 13,237 18,267 25,257 11,145 16,175 23,165
10 33,017 100,000 100,000 100,000 14,639 20,851 29,852 12,896 19,108 28,109
11 37,293 100,000 100,000 100,000 16,168 23,716 35,123 14,773 22,321 33,728
12 41,782 100,000 100,000 100,000 17,600 26,656 40,927 16,554 25,610 38,881
13 46,497 100,000 100,000 100,000 18,944 29,682 47,340 18,247 28,985 46,643
14 51,446 100,000 100,000 100,000 20,202 32,808 54,447 19,853 32,459 54,098
15 56,644 100,000 100,000 100,000 21,376 36,043 62,343 21,376 36,043 62,343
16 62,101 100,000 100,000 100,000 22,424 39,365 71,120 22,424 39,365 71,120
17 67,831 100,000 100,000 100,000 23,332 42,775 80,907 23,332 42,775 80,907
18 73,848 100,000 100,000 108,335 24,081 46,275 91,809 24,081 46,275 91,809
19 80,165 100,000 100,000 121,462 24,652 49,871 103,813 24,652 49,871 103,813
20 86,798 100,000 100,000 135,770 25,027 53,581 117,044 25,027 53,581 117,044
21 93,763 100,000 100,000 151,639 25,193 57,511 131,860 25,193 57,511 131,860
22 101,076 100,000 100,000 167,523 25,165 61,630 148,250 25,165 61,630 148,250
23 108,755 100,000 100,000 184,702 24,925 65,968 166,399 24,925 65,968 166,399
24 116,818 100,000 100,000 203,302 24,445 70,560 186,515 24,445 70,560 186,515
25 125,284 100,000 100,000 223,464 23,694 75,449 208,845 23,694 75,449 208,845
26 134,173 100,000 100,000 245,352 22,632 80,688 233,669 22,632 80,688 233,669
27 143,506 100,000 100,000 274,136 21,210 86,346 261,082 21,210 88,346 261,082
28 153,307 100,000 100,000 305,907 19,365 92,509 291,340 19,365 92,509 291,340
29 163,597 100,000 104,150 340,959 17,027 99,190 324,723 17,027 99,190 324,723
30 174,402 100,000 111,457 379,610 14,107 106,150 361,533 14,107 106,150 361,533

The hypothetical investment rates of return shown above are illustrative only
and should not be deemed a representation of past or future investment rates of
return. Actual rates of return may be more or less than those shown and will
depend on a number of factors, including the allocations made by a policy owner
to one or more variable subaccounts and the investment experience of the
portfolios underlying those variable subaccounts. The death benefit policy value
and net cash surrender value for a policy would be different from those shown if
the actual gross annual rates of return averaged 0%, 6%, or 12% over a period of
years, but fluctuated above or below those averages for individual policy years.
They would also be different if any policy loans or withdrawals were made. No
representations can be made by us, the Variable Account or the portfolios that
these hypothetical rates of return can be achieved for any one year or sustained
over a period of time.

MALE ISSUE AGE 35, STANDARD NON-TOBACCO
$1,000 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION A
GUARANTEED CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
----------------------------- ---------------------------- -----------------------------

End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
------- ------- ------- ------- ------- ------- ------- ------- -------

1 1,050 100,000 100,000 100,000 382 420 458 0 0 0
2 2,153 100,000 100,000 100,000 988 1,097 1,210 312 421 534
3 3,310 100,000 100,000 100,000 1,575 1,793 2,030 455 673 910
4 4,526 100,000 100,000 100,000 2,142 2,510 2,925 1,022 1,390 1,805
5 5,802 100,000 100,000 100,000 2,687 3,245 3,900 1,567 2,125 2,780
6 7,142 100,000 100,000 100,000 3,210 4,000 4,963 2,090 2,880 3,843
7 8,549 100,000 100,000 100,000 3,709 4,771 6,122 2,589 3,651 5,002
8 10,027 100,000 100,000 100,000 4,183 5,562 7,386 3,063 4,441 6,266
9 11,578 100,000 100,000 100,000 4,671 6,410 8,810 3,551 5,290 7,690
10 13,207 100,000 100,000 100,000 5,133 7,278 10,365 4,200 6,345 9,432
11 14,917 100,000 100,000 100,000 5,580 8,184 12,092 4,833 7,437 11,345
12 16,713 100,000 100,000 100,000 5,996 9,110 13,984 5,436 8,550 13,424
13 18,599 100,000 100,000 100,000 6,382 10,054 16,058 6,009 9,681 15,685
14 20,579 100,000 100,000 100,000 6,735 11,019 18,335 6,548 10,832 18,148
15 22,657 100,000 100,000 100,000 7,052 12,000 20,834 7,052 12,000 20,834
16 24,840 100,000 100,000 100,000 7,332 12,998 23,581 7,332 12,998 23,581
17 27,132 100,000 100,000 100,000 7,570 14,008 26,601 7,570 14,008 26,601
18 29,539 100,000 100,000 100,000 7,758 15,026 29,920 7,758 15,026 29,920
19 32,066 100,000 100,000 100,000 7,893 16,048 33,573 7,893 16,048 33,573
20 34,719 100,000 100,000 100,000 7,966 17,068 37,595 7,966 17,068 37,595
21 37,505 100,000 100,000 100,000 7,993 18,124 42,126 7,993 18,124 42,126
22 40,430 100,000 100,000 100,000 7,945 19,173 47,141 7,945 19,173 47,141
23 43,502 100,000 100,000 100,000 7,818 20,212 52,705 7,818 20,212 52,705
24 46,727 100,000 100,000 100,000 7,606 21,235 58,888 7,606 21,235 58,888
25 50,113 100,000 100,000 100,000 7,296 22,234 65,775 7,296 22,234 65,775
26 53,669 100,000 100,000 100,000 6,877 23,201 73,461 6,877 23,201 73,461
27 57,403 100,000 100,000 105,019 6,335 24,125 82,046 6,335 24,125 82,046
28 61,323 100,000 100,000 115,340 5,651 24,991 91,540 5,651 24,991 91,540
29 65,439 100,000 100,000 126,496 4,802 25,782 102,013 4,802 25,782 102,013
30 69,761 100,000 100,000 138,554 3,764 26,479 113,589 3,764 26,479 113,569

MALE ISSUE AGE 50, STANDARD NON-TOBACCO
$2,500 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION A
GUARANTEED CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
------------------------ ----------------------------- ----------------------------

End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
--- --- ---- --- --- ---- --- --- ----

1 2,625 100,000 100,000 100,000 1,427 1,538 1,650 501 612 724
2 5,381 100,000 100,000 100,000 3,034 3,354 3,689 1,971 2,291 2,625
3 8,275 100,000 100,000 100,000 4,576 5,211 5,900 2,484 3,119 3,808
4 11,314 100,000 100,000 100,000 6,047 7,105 8,300 3,955 5,013 6,208
5 14,505 100,000 100,000 100,000 7,444 9,033 10,904 5,352 6,941 8,812
6 17,855 100,000 100,000 100,000 8,762 10,993 13,731 6,670 8,901 11,639
7 21,373 100,000 100,000 100,000 9,995 12,982 16,803 7,903 10,890 14,711
8 25,066 100,000 100,000 100,000 11,191 15,051 20,204 9,099 12,959 18,112
9 28,945 100,000 100,000 100,000 12,349 17,207 23,975 10,257 15,115 21,883
10 33,017 100,000 100,000 100,000 13,410 19,393 28,099 11,667 17,650 26,356
11 37,293 100,000 100,000 100,000 14,403 21,659 32,693 13,008 20,264 31,298
12 41,782 100,000 100,000 100,000 15,286 23,957 37,752 14,240 22,911 36,706
13 46,497 100,000 100,000 100,000 16,044 26,282 43,334 15,347 25,585 42,637
14 51,446 100,000 100,000 100,000 16,662 28,625 49,510 16,313 28,276 49,161
15 56,644 100,000 100,000 100,000 17,123 30,982 56,366 17,123 30,982 56,366
16 62,101 100,000 100,000 100,000 17,411 33,347 64,008 17,411 33,347 64,008
17 67,831 100,000 100,000 100,000 17,513 35,721 72,568 17,513 35,721 72,568
18 73,848 100,000 100,000 100,000 17,410 38,102 82,206 17,410 38,102 82,206
19 80,165 100,000 100,000 108,823 17,085 40,493 93,011 17,085 40,493 93,011
20 86,798 100,000 100,000 121,673 16,511 42,892 104,890 16,511 42,892 104,890
21 93,763 100,000 100,000 135,942 15,692 45,405 118,210 15,692 45,405 118,210
22 101,076 100,000 100,000 150,210 14,532 47,928 132,930 14,532 47,928 132,930
23 108,755 100,000 100,000 165,625 12,960 50,449 149,212 12,960 50,449 149,212
24 116,818 100,000 100,000 182,300 10,889 52,960 167,248 10,889 52,960 167,248
25 125,284 100,000 100,000 200,375 8,221 55,455 187,266 8,221 55,455 187,266
26 134,173 100,000 100,000 220,017 4,854 57,943 209,540 4,854 57,943 209,540
27 143,506 100,000 100,000 245,790 669 60,437 234,085 669 60,437 234,085
28 153,307 100,000 100,000 274,174 (4,477) 62,957 261,118 0 62,957 261,118
29 163,597 100,000 100,000 305,419 (10,755) 65,533 290,875 0 65,533 290,875
30 174,402 100,000 100,000 339,788 (18,401) 68,197 323,608 0 68,197 323,608

MALE ISSUE AGE 35, STANDARD NON-TOBACCO
$1,000 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION B
CURRENT CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
-------------------------- --------------------------- ------------------------------

End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
-- -- --- -- -- --- -- -- ---

1 1,050 100,428 100,468 100,508 428 468 508 0 0 0
2 2,153 101,080 101,194 101,313 1,080 1,194 1,313 404 518 637
3 3,310 101,710 101,940 102,191 1,710 1,940 2,191 590 820 1,070
4 4,526 102,317 102,707 103,146 2,317 2,707 3,146 1,197 1,587 2,026
5 5,802 102,901 103,493 104,187 2,901 3,493 4,187 1,781 2,373 3,066
6 7,142 103,461 104,298 105,319 3,461 4,298 5,319 2,341 3,178 4,199
7 8,549 103,994 105,121 106,550 3,994 5,121 6,550 2,874 4,001 5,430
8 10,027 104,501 105,960 107,889 4,501 5,960 7,889 3,381 4,840 6,769
9 11,578 105,017 106,857 109,390 5,017 6,857 9,390 3,897 5,737 8,270
10 13,207 105,506 107,773 111,027 5,506 7,773 11,027 4,573 6,840 10,094
11 14,917 105,976 108,723 112,834 5,976 8,723 12,834 5,229 7,976 12,087
12 16,713 106,428 109,704 114,819 6,428 9,704 14,819 5,868 9,144 14,259
13 18,599 106,906 110,765 117,052 6,906 10,765 17,052 6,533 10,392 16,679
14 20,579 107,344 111,840 119,485 7,344 11,840 19,485 7,156 11,653 19,298
15 22,657 107,736 112,924 122,135 7,736 12,924 22,135 7,736 12,924 22,135
16 24,840 108,078 114,011 125,018 8,078 14,011 25,018 8,078 14,011 25,018
17 27,132 108,366 115,098 128,157 8,366 15,098 28,157 8,366 15,098 28,157
18 29,539 108,594 116,178 131,568 8,594 16,178 31,568 8,594 16,178 31,568
19 32,066 108,757 117,243 135,277 8,757 17,243 35,277 8,757 17,243 35,277
20 34,719 108,851 118,291 139,314 8,851 18,291 39,314 8,851 18,291 39,314
21 37,505 109,092 119,562 144,007 9,092 19,562 44,007 9,092 19,562 44,007
22 40,430 109,274 120,836 149,151 9,274 20,836 49,151 9,274 20,836 49,151
23 43,502 109,390 122,107 154,787 9,390 22,107 54,787 9,390 22,107 54,787
24 46,727 109,436 123,369 160,962 9,436 23,369 60,962 9,436 23,369 60,962
25 50,113 109,402 124,610 167,725 9,402 24,610 67,725 9,402 24,610 67,725
26 53,669 109,279 125,819 175,129 9,279 25,819 75,129 9,279 25,819 75,129
27 57,403 109,055 126,981 183,228 9,055 26,981 83,228 9,055 26,981 83,228
28 61,323 108,721 128,084 192,090 8,721 28,084 92,090 8,721 28,084 92,090
29 65,439 108,270 129,116 201,786 8,270 29,116 101,786 8,270 29,116 101,786
30 69,761 107,691 130,062 212,397 7,691 30,062 112,397 7,691 30,062 112,397

The hypothetical investment rates of return shown above are illustrative only
and should not be deemed a representation of past or future investment rates of
return. Actual rate of return may be more or less than those shown and will
depend on a number of factors, including the allocations made by a policy owner
to one or more variable subaccounts and the investment experience of the
portfolios underlying those variable subaccounts. The death benefit policy value
and net cash surrender value for a policy would be different from those shown if
the actual gross annual rates of return averaged 0%, 6%, or 12% over a period of
years, but fluctuated above or below those averages for individual policy years.
They would also be different if any policy loans or withdrawals were made. No
representation can be made by us, the Variable Account or the portfolios that
these hypothetical rates of return can be achieved for any one year or sustained
over a period of time.

MALE ISSUE AGE 50, STANDARD NON-TOBACCO
$2,500 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION B
CURRENT CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
----------------------------- ------------------------------ ---------------------------

End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
------- ------- ------- ------- ------- ------- ------- ------- -------

1 2,625 101,477 101,589 101,702 1,477 1,589 1,702 551 663 776
2 5,381 103,125 103,449 103,788 3,125 3,449 3,788 2,061 2,386 2,724
3 8,275 104,697 105,340 106,038 4,697 5,340 6,038 2,605 3,248 3,946
4 11,314 106,188 107,256 108,462 6,188 7,256 8,462 4,095 5,164 6,370
5 14,505 107,590 109,189 111,070 7,590 9,189 11,070 5,498 7,097 8,978
6 17,855 108,899 111,135 113,873 8,899 11,135 13,873 6,807 9,043 11,781
7 21,373 110,149 113,126 116,927 10,149 13,126 16,927 8,057 11,034 14,835
8 25,066 111,427 115,255 120,351 11,427 15,255 20,351 9,335 13,163 18,259
9 28,945 112,734 117,532 124,188 12,734 17,532 24,188 10,642 15,440 22,096
10 33,017 114,024 119,912 128,429 14,024 19,912 28,429 12,281 18,169 26,686
11 37,293 115,448 122,570 133,306 15,448 22,570 33,306 14,053 21,175 31,911
12 41,782 116,748 125,243 138,592 16,748 25,243 38,592 15,702 24,197 37,546
13 46,497 117,931 127,937 144,332 17,931 27,937 44,332 17,234 27,240 43,635
14 51,446 118,999 130,653 150,578 18,999 30,653 50,578 18,650 30,304 50,229
15 56,644 119,950 133,390 157,379 19,950 33,390 57,379 19,950 33,390 57,379
16 62,101 120,731 136,091 164,735 20,731 36,091 64,735 20,731 36,091 64,735
17 67,831 121,317 138,728 172,678 21,317 38,728 72,678 21,317 38,728 72,678
18 73,848 121,686 141,270 181,242 21,686 41,270 81,242 21,686 41,270 81,242
19 80,165 121,810 143,682 190,460 21,810 43,682 90,460 21,810 43,682 90,460
20 86,798 121,660 145,930 200,384 21,660 45,930 100,384 21,660 45,930 100,384
21 93,763 121,199 148,012 211,208 21,199 48,012 111,208 21,199 48,012 111,208
22 101,076 120,479 149,923 222,928 20,479 49,923 122,928 20,479 49,923 122,928
23 108,755 119,482 151,633 235,619 19,482 51,633 135,619 19,482 51,633 135,619
24 116,818 118,184 153,105 249,360 18,184 53,105 149,360 18,184 53,105 149,360
25 125,284 116,557 154,293 264,229 16,557 54,293 164,229 16,557 54,293 164,229
26 134,173 114,569 155,148 280,313 14,569 55,148 180,313 14,569 55,148 180,313
27 143,506 112,185 155,611 297,699 12,185 55,611 197,699 12,185 55,611 197,699
28 153,307 109,359 155,615 316,481 9,359 55,615 216,481 9,359 55,615 216,481
29 163,597 106,056 155,093 336,763 6,056 55,093 236,763 6,056 55,093 236,763
30 174,402 102,228 153,965 358,653 2,228 53,965 258,653 2,228 53,965 258,653

MALE ISSUE AGE 35, STANDARD NON-TOBACCO
$1,000 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION B
GUARANTEED CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
------------------------------- ---------------------------------- -------------------------------
End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
- - -- - - -- - - --

1 1,050 100,381 100,419 100,457 381 419 457 0 0 0
2 2,153 100,985 101,093 101,207 985 1,093 1,207 309 417 531
3 3,310 101,569 101,786 102,022 1,569 1,786 2,022 449 666 902
4 4,526 102,131 102,497 102,910 2,131 2,497 2,910 1,011 1,377 1,789
5 5,802 102,670 103,224 103,874 2,670 3,224 3,874 1,550 2,104 2,754
6 7,142 103,186 103,969 104,923 3,186 3,969 4,923 2,066 2,848 3,803
7 8,549 103,676 104,727 106,062 3,676 4,727 6,062 2,555 3,607 4,942
8 10,027 104,139 105,500 107,300 4,139 5,500 7,300 3,019 4,380 6,180
9 11,578 104,614 106,327 108,689 4,614 6,327 8,689 3,494 5,206 7,569
10 13,207 105,060 107,168 110,199 5,060 7,168 10,199 4,127 6,235 9,266
11 14,917 105,488 108,041 111,867 5,488 8,041 11,867 4,741 7,294 11,120
12 16,713 105,884 108,926 113,684 5,884 8,926 13,684 5,324 8,366 13,124
13 18,599 106,245 109,822 115,663 6,245 9,822 15,663 5,872 9,449 15,290
14 20,579 106,571 110,728 117,820 6,571 10,728 17,820 6,384 10,541 17,633
15 22,657 106,857 111,640 120,169 6,857 11,640 20,169 6,857 11,640 20,169
16 24,840 107,102 112,556 122,728 7,102 12,556 22,728 7,102 12,556 22,728
17 27,132 107,300 113,469 125,513 7,300 13,469 25,513 7,300 13,469 25,513
18 29,539 107,445 114,372 128,539 7,445 14,372 28,539 7,445 14,372 28,539
19 32,066 107,530 115,258 131,826 7,530 15,258 31,826 7,530 15,258 31,826
20 34,719 107,549 116,117 135,393 7,549 16,117 35,393 7,549 16,117 35,393
21 37,505 107,514 116,982 139,351 7,514 16,982 39,351 7,514 16,982 39,351
22 40,430 107,399 117,805 143,653 7,399 17,805 43,653 7,399 17,805 43,653
23 43,502 107,199 118,579 148,332 7,199 18,579 48,332 7,199 18,579 48,332
24 46,727 106,907 119,295 153,420 6,907 19,295 53,420 6,907 19,295 53,420
25 50,113 106,514 119,937 158,950 6,514 19,937 58,950 6,514 19,937 58,950
26 53,669 106,007 120,489 164,956 6,007 20,489 64,956 6,007 20,489 64,956
27 57,403 105,376 120,933 171,476 5,376 20,933 71,476 5,376 20,933 71,476
28 61,323 104,602 121,244 178,547 4,602 21,244 78,547 4,602 21,244 78,547
29 65,439 103,666 121,395 186,206 3,666 21,395 86,206 3,666 21,395 86,206
30 69,761 102,548 121,354 194,492 2,548 21,354 94,492 2,548 21,354 94,492

The hypothetical investment rates of return shown above are illustrative only
and should not be deemed a representation of past or future investment rates of
return. Actual rate of return may be more or less than those shown and will
depend on a number of factors, including the allocations made by a policy owner
to one or more variable subaccounts and the investment experience of the
portfolios underlying those variable subaccounts. The death benefit, policy
value and net cash surrender value for a policy would be different from those
shown if the actual gross annual rates of return averaged o%, 6%, or 12% over a
period of years, but fluctuated above or below those averages for individual
policy years. They would also be different if any policy loans or withdrawals
were made. No representations can be made by us, the Variable Account or the
portfolios that these hypothetical rates of return can be achieved for any one
year or sustained over a period of time.

MALE ISSUE AGE 50, STANDARD NON-TOBACCO
$2,500 ANNUAL PREMIUM
$100,000 FACE AMOUNT, OPTION B
GUARANTEED CHARGES

NET CASH
DEATH BENEFITS POLICY VALUES SURRENDER VALUES
-------------------------- ---------------------------- --------------------------
End of PREMIUMS
Policy + Interest at
Year 5% Per Year 0% 6% 12% 0% 6% 12% 0% 6% 12%
-- -- --- -- -- --- -- -- ---

1 2,625 101,418 101,529 101,639 1,418 1,529 1,639 492 603 713
2 5,381 103,007 103,324 103,656 3,007 3,324 3,656 1,944 2,261 2,592
3 8,275 104,520 105,147 105,827 4,520 5,147 5,827 2,428 3,054 3,735
4 11,314 105,951 106,990 108,163 5,951 6,990 8,163 3,859 4,898 6,071
5 14,505 107,294 108,846 110,672 7,294 8,846 10,672 5,202 6,754 8,580
6 17,855 108,541 110,708 113,364 8,541 10,708 13,364 6,449 8,616 11,272
7 21,373 109,688 112,568 116,249 9,688 12,568 16,249 7,596 10,476 14,157
8 25,066 110,777 114,471 119,394 10,777 14,471 19,394 8,685 12,379 17,302
9 28,945 111,807 116,415 122,825 11,807 16,415 22,825 9,715 14,323 20,733
10 33,017 112,715 118,336 126,500 12,715 18,336 26,500 10,972 16,593 24,757
11 37,293 113,527 120,270 130,502 13,527 20,270 30,502 12,132 18,875 29,107
12 41,782 114,197 122,159 134,790 14,197 22,159 34,790 13,151 21,113 33,744
13 46,497 114,709 123,981 139,375 14,709 23,981 39,375 14,012 23,284 38,678
14 51,446 115,044 125,712 144,267 15,044 25,712 44,267 14,695 25,363 43,918
15 56,644 115,181 127,324 149,473 15,181 27,324 49,473 15,181 27,324 49,473
16 62,101 115,103 128,791 155,006 15,103 28,791 55,006 15,103 28,791 55,006
17 67,831 114,797 130,087 160,881 14,797 30,087 60,881 14,797 30,087 60,881
18 73,848 114,244 131,186 167,116 14,244 31,186 67,116 14,244 31,186 67,116
19 80,165 113,431 132,058 173,727 13,431 32,058 73,727 13,431 32,058 73,727
20 86,798 112,334 132,667 180,728 12,334 32,667 80,728 12,334 32,667 80,728
21 93,763 110,952 133,044 188,322 10,952 33,044 88,322 10,952 33,044 88,322
22 101,076 109,207 133,048 196,339 9,207 33,048 96,339 9,207 33,048 96,339
23 108,755 107,043 132,600 204,762 7,043 32,600 104,762 7,043 32,600 104,762
24 116,818 104,397 131,607 213,563 4,397 31,607 113,563 4,397 31,607 113,563
25 125,284 101,210 129,976 222,713 1,210 29,976 122,713 1,210 29,976 122,713
26 134,173 100,000 127,630 232,203 (2,558) 27,630 132,203 0 27,630 132,203
27 143,506 100,000 124,487 242,023 (6,943) 24,487 142,023 0 24,487 142,023
28 153,307 100,000 120,471 252,169 (11,977) 20,471 152,169 0 20,471 152,169
29 163,597 100,000 115,506 262,642 (17,684) 15,506 162,642 0 15,506 162,642
30 174,402 100,000 109,494 273,426 (24,106) 9,494 173,426 0 9,494 173,426

Appendix B:
Directors and Officers of United Investors
================================================================================

We are managed by a board of directors. The following table sets forth the
name and principal occupations during the past five years of each of our
directors and senior officers. Unless otherwise noted, the address for each
person is United Investors Life Insurance Company, 2001 Third Avenue South,
Birmingham, Alabama 35233.

- -------------------------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation
with United Investors During the Past Five Years
- -------------------------------------------------------------------------------------------------------------------------------

W. Thomas Aycock Vice President and Chief Actuary of United Investors since November 1992.
Director, Vice President and
Chief Actuary
- -------------------------------------------------------------------------------------------------------------------------------
Tony G. Brill* Executive Vice President and Chief Administrative Officer of Torchmark Corporation since
Director and Executive September 1999. Executive Vice President-Administration of United Investors since September
Vice President- 1998. Senior Vice President of United Investors, March 1998-September 1998. Senior Vice
Administration President of Torchmark Corporation, January 1997-September 1999. Managing Partner of KPMG Peat
Marwick LLP, Birmingham, Alabama Office, 1984-December 1996.
- -------------------------------------------------------------------------------------------------------------------------------
Terry W. Davis Vice President-Administration of United Investors since January 1999 and Liberty National Life
Director and Vice Insurance Company since December 1996. Second Vice President-Administration of Liberty
President-Administration National Life Insurance Company since March 1988.
- -------------------------------------------------------------------------------------------------------------------------------
C.B. Hudson* Chairman of the Board of Directors and Chief Executive Officer of Torchmark Corporation since
Director March 1998 and United Investors, March 1998-September 1999. Director of Liberty National Life
Insurance Company, United American Insurance Company, and Globe Life And Accident Insurance
Company since September 1999. Chairman of Insurance Operations of Torchmark Corporation,
January 1993-March 1998. Chairman of Liberty National Life Insurance Company, United American
Insurance Company, and Globe Life And Accident Insurance Company, 1991- September 1999.
- -------------------------------------------------------------------------------------------------------------------------------
Larry M. Hutchison* Executive Vice President and General Counsel of Torchmark Corporation since September 1999.
Director Vice President and General Counsel of Torchmark, February 1997-September 1999. Vice President,
Secretary and General Counsel of United American Insurance Company since 1992.
- -------------------------------------------------------------------------------------------------------------------------------
Michael J. Klyce Vice President of Torchmark Corporation since January 1984.
Vice President and Treasurer
- -------------------------------------------------------------------------------------------------------------------------------
John H. Livingston Secretary and Counsel of United Investors since May 1995. Secretary and Associate Counsel of
Director, Secretary United Investors, December 1994-May 1995. Associate Counsel of United Investors, July 1990-
and Counsel December 1994. Associate Counsel of Liberty National Life Insurance Company since October,
1986.
- -------------------------------------------------------------------------------------------------------------------------------
James L. Mayton, Jr. Vice President & Controller of Liberty National Life Insurance Company since January 1985.
Vice President and Controller
- -------------------------------------------------------------------------------------------------------------------------------
Mark S. McAndrew* Executive Vice President of Torchmark Corporation and Chairman of the Board and Chief
Senior Vice Executive Officer of United American Insurance Company and Globe Life And Accident Insurance
President-Marketing Company since September 1999. Senior Vice President-Marketing of United Investors since
March 1998. Director of Torchmark Corporation since April 1998. President of United American
Insurance Company and Globe Life And Accident Insurance Company since 1991.
- -------------------------------------------------------------------------------------------------------------------------------
Carol A. McCoy Secretary of Torchmark Corporation since February 1994. Associate Counsel of Torchmark
Director and Assistant Corporation since January 1985.
Secretary
- -------------------------------------------------------------------------------------------------------------------------------
Anthony L. McWhorter Chairman of the Board of Directors and Chief Executive Officer of United Investors and Liberty
Chairman of the National Life Insurance Company, and Executive Vice President of Torchmark Corporation since
Board of Directors, September 1999. President of United Investors since September 1998. President of Liberty
President and Chief National Life Insurance Company since December 1994. Executive Vice President and Chief
Executive Officer Actuary of Liberty National, November 1993-December 1994. Senior Vice President and Chief
Actuary of Liberty National, September 1991-November 1993.
- -------------------------------------------------------------------------------------------------------------------------------
Ross W. Stagner Vice President of United Investors since January 1992.
Director and Vice President
- -------------------------------------------------------------------------------------------------------------------------------

* Principal business address: Torchmark Corporation, 3700 South Stonebridge,
McKinney, Texas 75070.

Appendix C:
Glossary
================================================================================

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

Administrative Office P. O. Box 10287, Birmingham, Alabama 35202-0287, (800) 340-3787.
- ----------------------------------------------------------------------------------------------------------------------
Attained Age The age of the insured on his or her birthday nearest the policy effective date,
increased by the number of policy years elapsed since the policy date.
- ----------------------------------------------------------------------------------------------------------------------
Base Face Amount The amount of insurance chosen by you for the policy at issue, or as subsequently
increased or decreased by you. This amount does not include any benefit provided by
riders, and is prior to any death benefit changes required by the Internal Revenue Code
to continue to qualify as life insurance.
- ----------------------------------------------------------------------------------------------------------------------
Business Day Each day that the New York Stock Exchange and our administrative office are open.
Currently, the Friday after Thanksgiving and, in most years, December 24 (Christmas Eve
day) and December 31 (New Year's Eve day) are not Business Days.
- ----------------------------------------------------------------------------------------------------------------------
Cash Surrender Value Policy value less any applicable surrender charge.
- ----------------------------------------------------------------------------------------------------------------------
Death Benefit The amount of insurance payable to the beneficiary on the death of the insured.
- ----------------------------------------------------------------------------------------------------------------------
Death Benefit Option One of two options under the policy that is used to determine the amount of the death
benefit.
----------------------------------------------------------------------------------------------------------------------
Fixed Account A part of our general account. The general account consists of all of our assets other
than those in any separate account.
- ----------------------------------------------------------------------------------------------------------------------
Fixed Account Value The policy value in the fixed account.
- ----------------------------------------------------------------------------------------------------------------------
Gross Withdrawal A withdrawal plus any applicable transaction charge and any surrender charge.
- ----------------------------------------------------------------------------------------------------------------------
Loan Balance The sum of all outstanding loans including principal and interest.
- ----------------------------------------------------------------------------------------------------------------------
Maturity Date Policy anniversary nearest the insured's 100th birthday.
- ----------------------------------------------------------------------------------------------------------------------
Monthly Processing Date The same day each month as the policy's effective date. If the monthly processing date
falls on a date other than a business day, the next following business day will be
deemed the monthly processing date.
- ----------------------------------------------------------------------------------------------------------------------
Net Cash Surrender Cash surrender value less any loan balance.
Value
- ----------------------------------------------------------------------------------------------------------------------
Net Premium The premium received less the premium expense charge.
- ----------------------------------------------------------------------------------------------------------------------
No-lapse Monthly The minimum amount of premium required to keep the policy in force during the first
Premium three policy years regardless of the sufficiency of the cash surrender value to pay
monthly deductions.
- ----------------------------------------------------------------------------------------------------------------------
Policy Anniversary The same day and month as the policy's effective date each year that the policy remains
in force. If the policy anniversary falls on a date other than a business day, the next
following business day will be deemed the policy anniversary.
- ----------------------------------------------------------------------------------------------------------------------
Policy's Effective Date The date from which policy anniversaries and policy years are determined. Your policy's
effective date is shown in your policy.
- ----------------------------------------------------------------------------------------------------------------------
Policy Loan A request to borrow a portion of the net cash surrender value.
- ----------------------------------------------------------------------------------------------------------------------
Policy Month The first policy month starts on the policy's effective date. Subsequent policy months
start on each monthly processing date.
- ----------------------------------------------------------------------------------------------------------------------
Policy Value The sum of the variable account value and the fixed account value.
- ----------------------------------------------------------------------------------------------------------------------
Target Face Amount The sum of the base face amount and the initial adjustable term insurance rider amount.
The amount of the rider will vary as necessary to keep the sum of the rider amount and
the base death benefit equal to the target face amount, when the base death benefit
varies due to Internal Revenue Code requirements.
- ----------------------------------------------------------------------------------------------------------------------
Target Premium The premium amount we use to calculate the maximum sales load charge and the sales
surrender charge. A target premium is determined for the initial base face amount at
issue, and an additional target premium is determined for each increase in base face
amount
- ----------------------------------------------------------------------------------------------------------------------
Variable Account The sum of the values of the variable subaccounts under your policy.
Value
- ----------------------------------------------------------------------------------------------------------------------

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

We, Us, or United United Investors Life Insurance Company.
Investors
- ----------------------------------------------------------------------------------------------------------------------
Withdrawal A request to withdraw a portion of the net cash surrender value. A withdrawal may be
subject to a transaction charge and a surrender charge.
- ----------------------------------------------------------------------------------------------------------------------
You and Your The policy owner.
- ----------------------------------------------------------------------------------------------------------------------

Appendix D:

Financial Statements
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

INDEPENDENT AUDITORS' REPORT

The Board of Directors
United Investors Life Insurance Company
Birmingham, Alabama

We have audited the accompanying balance sheets of United Investors Life
Insurance Company as of December 31, 1998 and 1997 and the related statements
of operations, comprehensive income, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United Investors Life
Insurance Company at December 31, 1998 and 1997 and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1998 in conformity with generally accepted accounting
principles.

KPMG PEAT MARWICK LLP

Birmingham, Alabama
January 29, 1999

F-1

UNITED INVESTORS LIFE INSURANCE COMPANY

BALANCE SHEETS
(Dollar amounts in thousands)

At December 31,
---------------------
1998 1997
---------- ----------

ASSETS
Investments:
Fixed maturities-available for sale, at fair value
(cost: 1998--$612,586; 1997--$612,600)................. $ 643,151 $ 635,643
Preferred stock of affiliate (cost: 1998--$188,212:
1997--$0).............................................. 188,212 0
Policy Loans............................................ 18,009 15,817
Other long term investments............................. 0 22,488
Short term investments.................................. 12,680 13,423
---------- ----------
Total investments.................................... 862,052 687,371
Cash..................................................... 11,426 5,288
Accrued investment income (includes amounts from
affiliates: 1998--$582; 1997--$473)..................... 11,747 11,270
Receivables.............................................. 3,113 2,826
Due from affiliate (includes funds withheld on
reinsurance: 1998--$229,194; 1997--$190,235)............ 278,458 225,235
Deferred acquisition cost................................ 183,033 176,897
Value of business purchased.............................. 30,600 33,754
Goodwill................................................. 29,465 6,771
Property and equipment................................... 96 141
Other assets............................................. 1,786 1,149
Separate account assets.................................. 2,425,262 1,876,439
---------- ----------
Total assets......................................... $3,837,038 $3,027,141
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Future policy benefits (includes reserves assumed from
affiliates: 1998--$241,357; 1997--$210,276)............ $ 776,461 $ 736,975
Unearned and advance premiums........................... 2,822 2,975
Other policy benefits................................... 6,973 8,713
---------- ----------
Total policy liabilities............................. 786,256 748,663
Accrued income taxes.................................... 55,498 58,270
Other liabilities....................................... 2,174 2,825
Due to affiliates....................................... 8,268 9,374
Separate account liabilities............................ 2,425,262 1,876,439
---------- ----------
Total liabilities.................................... 3,277,458 2,695,571
Shareholders' equity:
Common stock, par value $6 per share authorized, issued
and outstanding: 500,000 shares........................ 3,000 3,000
Additional paid in capital.............................. 350,388 138,469
Unrealized investment gains, net of applicable taxes.... 15,654 14,700
Retained earnings....................................... 190,538 175,401
---------- ----------
Total shareholder's equity........................... 559,580 331,570
---------- ----------
Total liabilities and shareholder's equity........... $3,837,038 $3,027,141
========== ==========

See accompanying Notes to Financial Statements.

F-2

UNITED INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(Dollar amounts in thousands)

Year Ended December 31,
---------------------------
1998 1997 1996
-------- -------- --------

Revenue:
Premium income.................................... $ 69,987 $ 68,723 $ 65,114
Policy charges and fees........................... 45,113 36,582 29,403
Net investment income (includes amounts from af-
filiates 1998--$13,082;
1997--$2,863; 1996--$2,847)...................... 61,373 51,514 51,128
Realized investment gains (losses)................ 9,401 (5,365) 925
Other income from affiliates...................... 13,665 11,876 0
-------- -------- --------
Total revenue................................... 199,539 163,330 146,570
Benefits and expenses:
Policy benefits:
Individual life.................................. 63,689 57,954 47,355
Annuity.......................................... 13,633 15,165 15,807
-------- -------- --------
Total policy benefits........................... 77,322 73,119 63,162
Amortization of deferred acquisition costs........ 27,874 24,898 19,850
Commissions and premium taxes (includes amounts to
affiliates:
1998--$1,013; 1997--$4,928; 1996--$4,723)........ 5,580 6,251 5,248
Other operating expenses (includes amounts to af-
filiates: 1998--$3,252;
1997--$3,217; 1996--$2,181)...................... 6,579 5,470 3,966
-------- -------- --------
Total benefits and expenses..................... 117,355 109,738 92,226
Net operating income before income taxes........... 82,184 53,592 54,344
Income taxes....................................... 25,567 18,843 19,078
-------- -------- --------
Net income...................................... $ 56,617 $ 34,749 $ 35,266
======== ======== ========

See accompanying Notes to Financial Statements.

F-3

UNITED INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF COMPREHENSIVE INCOME
(Dollar amounts in thousands)

Year Ended December 31,
--------------------------
1998 1997 1996
------- ------- --------

Net income......................................... $56,617 $34,749 $ 35,266

Other comprehensive income (loss):
Unrealized investment gains (losses):
Unrealized investment gains (losses) on
securities:
Unrealized holding gains arising during period.. 7,021 13,362 (21,413)
Less: reclassification adjustment for (gains)
losses
on securities included in net income .......... (1) 5,235 (924)
Less: reclassification adjustment for
amortization of
(discount) and premium......................... 502 744 570
------- ------- --------
7,522 19,341 (21,767)
Unrealized gains (losses) on other investments.. (6,330) 1,798 861

Unrealized gains (losses) on deferred
acquisition costs............................. 276 (5,387) 8,857
------- ------- --------
Total unrealized gains (losses) ................ 1,468 15,752 (12,049)

Applicable tax.................................. (514) (5,512) 4,217
------- ------- --------

Other comprehensive income (loss).................. 954 10,240 (7,832)

Comprehensive income............................ $57,571 $44,989 $ 27,434
======= ======= ========

See accompanying Notes to Financial Statements.

F-4

UNITED INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)

Additional Unrealized Total
Common Paid-in Gains Retained Shareholders'
Stock Capital (Losses) Earnings Equity
------ ---------- ---------- -------- -------------

Year Ended at December
31, 1996
Balance at January 1,
1996.................... $3,000 $137,950 $12,292 $159,886 $313,128
Comprehensive income..... (7,832) 35,266 27,434
Dividends................ (28,500) (28,500)
------ -------- ------- -------- --------
Balance at December 31,
1996................... 3,000 137,950 4,460 166,652 312,062

Year Ended at December
31, 1997
Comprehensive income..... 10,240 34,749 44,989
Dividends................ (26,000) (26,000)
Exercise of stock op-
tions................... 519 519
------ -------- ------- -------- --------
Balance at December 31,
1997................... 3,000 138,469 14,700 175,401 331,570

Year Ended at December
31, 1998
Comprehensive income..... 954 56,617 57,571
Dividends................ (33,500) (33,500)
Impact from reorganiza-
tion of Waddell & Reed.. -- 211,851 (7,980) 203,871
Exercise of stock op-
tions................... 68 68
------ -------- ------- -------- --------
Balance at December 31,
1998................... $3,000 $350,388 $15,654 $190,538 $559,580
====== ======== ======= ======== ========

See accompanying Notes to Financial Statements.

F-5

UNITED INVESTORS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)

Year Ended December 31,
------------------------------
1998 1997 1996
-------- -------- --------

Net income.................................... $ 56,617 $ 34,749 $ 35,266
Adjustment to reconcile net income to cash
provided from operations:
Increase in future policy benefits.......... 13,871 17,878 20,692
Increase (decrease) in other policy liabili-
ties....................................... (1,892) 749 2,154
Deferral of policy acquisition costs........ (42,857) (33,485) (33,744)
Value of business acquired.................. 0 (10,000) 0
Amortization of deferred acquisition costs.. 27,874 24,898 19,850
Change in accrued income taxes.............. 1,079 10,212 (3,033)
Depreciation................................ 39 42 44
Realized (gains) losses on sale of invest-
ments and properties....................... (9,401) 5,365 (925)
Other accruals and adjustments.............. (3,240) 1,817 (997)
-------- -------- --------
Cash provided from operations................. 42,090 52,225 39,307
-------- -------- --------
Cash used for investment activities:
Investments sold or matured:
Fixed maturities available for sale-sold..... 46,039 113,035 15,246
Fixed maturities available for sale-matured,
called and repaid........................... 76,583 66,469 44,523
Other long-term investments.................. 25,596 2,199 482
-------- -------- --------
Total investments sold or matured.......... 148,218 181,703 60,251
Acquisition of investments:
Fixed maturities available for sale.......... (123,111) (176,905) (68,214)
Net increase in policy loans................. (2,192) (1,485) (2,033)
Other long-term investments.................. (36) (1,517) (1,183)
-------- -------- --------
Total acquisition of investments........... (125,339) (179,907) (71,430)
Net (increase) decrease in short-term
investments.................................. 747 (11,589) 2,389
Funds loaned to affiliates.................... (13,026) (24,080) (3,500)
Funds repaid from affiliates.................. 2,400 24,080 3,500
Funds borrowed from affiliates................ 14,800 0 0
Funds repaid to affiliates.................... (14,800) 0 0
Disposition of properties..................... 5 0 34
Additions of properties....................... (37) (27) (117)
-------- -------- --------
Cash provided from (used for) investment
activities................................... 12,968 (9,820) (8,873)
-------- -------- --------
Cash used for financing activities:
Cash dividends paid to shareholders......... (33,500) (27,000) (27,500)
Net receipts from deposit product opera-
tions...................................... (15,420) (12,521) (6,572)
-------- -------- --------
Cash used for financing activities............ (48,920) (39,521) (34,072)
Increase (decrease) in cash................... 6,138 2,884 (3,638)
Cash at beginning of year..................... 5,288 2,404 6,042
-------- -------- --------
Cash at end of year........................... $ 11,426 $ 5,288 $ 2,404
======== ======== ========

See accompanying Notes to Financial Statements.

F-6

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
(Dollar amounts in thousands)

Note 1--Summary of Significant Accounting Policies

Organization: United Investors Life Insurance Company ("UILIC") was a wholly
owned subsidiary of Waddell & Reed Financial, Inc. ("WDR") (formerly known as
United Investors Management Company), a subsidiary of Torchmark Corporation. On
March 3, 1998, to facilitate the initial public offering ("IPO") by Torchmark
Corporation ("TMK") of 36% of the common stock of WDR, several transactions
were completed to reorganize the assets held by WDR. The following transactions
directly affected UILIC:

(i) WDR contributed 188,212 shares of TMK 6 1/2% Cumulative Preferred Stock,
Series A to UILIC.

(ii) WDR dividended the common stock of its subsidiary UILIC pro rata to
Liberty National Life Insurance Company ("LNL"), an 81.18% owner, and
TMK, an 18.82% owner. LNL is a wholly owned subsidiary of TMK.

(iii) Upon reorganization, UILIC recorded additional goodwill in the amount of
$23,639. This goodwill represented UILIC's portion of United Investors
Management Company's goodwill which was allocated between Waddell & Reed
and UILIC upon dividend of UILIC to TMK and LNL.

(iv) TMK transferred to UILIC a deferred commission credit of $7,980, net of
applicable tax of $4,297. This credit is being amortized over
approximately 10 years.

Description of Business: The Company is a life insurer licensed in 49
states. The Company offers a full range of life, annuity and variable products
through its agents and is subject to competition from other insurers throughout
the United States. The Company is subject to regulation by the insurance
department of states in which it is licensed, and undergoes periodic
examinations by those departments.

In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and revenues and expenses for the reporting period.
Actual results could differ significantly from those estimates.

The estimates susceptible to significant change are those used in
determining the liability for policy reserves, losses and claims. Although some
variability is inherent in these estimates, management believes the amounts
provided are adequate.

Basis of Presentation: The accompanying financial statements include the
accounts of United Investors Life Insurance Company ("United Investors") an
indirectly wholly-owned subsidiary of TMK, is owned by Liberty National Life
Insurance Company (81.18%) and Torchmark Corporation (18.82%). The financial
statements have been prepared on the basis of generally accepted accounting
principles ("GAAP").

Investments: United Investors classifies all of its fixed maturity
investments, which includes bonds and redeemable preferred stocks, as available
for sale. Investments classified as available for sale are carried at fair
value with unrealized gains and losses, net of deferred taxes, reflected
directly in shareholder's equity. Investments in equity securities, which
include common and nonredeemable preferred stocks, are reported at fair value
with unrealized gains and losses, net of deferred taxes, reflected directly in
shareholder's equity. Policy loans are carried at unpaid principal balances.
Short-term investments include investments in certificates of deposit and other
interest-bearing time deposits with original maturities within three months.
Other long-term investments consist of investments in mutual funds which are
carried at fair value. If an investment becomes permanently impaired, such
impairment is treated as a realized loss and the investment is adjusted to net
realizable value.

F-7

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 1--Summary of Significant Accounting Policies (continued)

Gains and losses realized on the disposition of investments are recognized
as revenues and are determined on a specific identification basis.

Realized investment gains and losses and investment income attributable to
separate accounts are credited to the separate accounts and have no effect on
United Investor's net income. Investment income attributable to policyholders
is included in United Investor's net investment income. Net investment income
for the years ended December 31, 1998, 1997 and 1996 included approximately
$37,000, $37,800, and $37,600, respectively, which was allocable to
policyholder reserves or accounts. Realized investment gains and losses are not
allocable to policyholders.

Determination of Fair Values of Financial Instruments: Fair value for cash,
short-term investments, receivables and payables approximates carrying value.
Fair values for investment securities are based on quoted market prices, where
available. Otherwise, fair values are based on quoted market prices of
comparable instruments. Fair value of future benefits for universal life and
current interest products and annuity products are based on the fund value.

Cash: Cash consists of balances on hand and on deposit in banks and
financial institutions.

Recognition of Revenue and Related Expenses: Premiums for insurance
contracts which are not defined as universal life-type according to the
Financial Accounting Standards Board's Statement of Accounting Standards (SFAS)
97 are recognized as revenue over the premium-paying period of the policy.
Premiums for limited-payment life insurance contracts as defined by SFAS 97 are
recognized over the contract period. Premiums for universal life-type and
annuity contracts are added to the policy account value, and revenues from such
products are recognized as charges to the policy account value for mortality,
administration, and surrenders (retrospective deposit method). The related
benefits and expenses are matched with revenues by means of the provision for
future policy benefits and the amortization of deferred acquisition costs in a
manner which recognizes profits as they are earned over the same period.

Future Policy Benefits: The liability for future policy benefits for
universal life-type products according to SFAS 97 is represented by policy
account value. Annuity Contracts are accounted for as deposit contracts. The
liability for future policy benefits for other products is provided on the net
level premium method based on estimated investment yields, mortality,
persistency and other assumptions which were appropriate at the time the
policies were issued. Assumptions used are based on United Investor's
experience as adjusted to provide for possible adverse deviation. These
estimates are periodically reviewed and compared with actual experience. If it
is determined that future expected experience differs significantly from that
assumed, the estimates are revised.

Deferred acquisition costs: The costs of acquiring new insurance business
are deferred. Such costs consist of sales commissions, underwriting expenses,
and certain other selling expenses. The costs of acquiring new business through
the purchase of other companies and blocks of insurance business are also
deferred.

Deferred acquisition costs, including the value of insurance purchased, for
policies other than universal life-type policies according to SFAS 97, are
amortized with interest over an estimate of the premium-paying period of the
policies in a manner which charges each year's operations in proportion to the
receipt of premium income. For limited-payment contracts, acquisition costs are
amortized over the contract period. For universal life-type policies,
acquisition costs are amortized with interest in proportion to estimated gross
profits. The assumptions used as to interest, withdrawals and mortality are
consistent with those used in computing the liability for future policy
benefits and expenses. If it is determined that future experience differs
significantly

F-8

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 1--Summary of Significant Accounting Policies (continued)

from that previously assumed, the estimates are revised. Deferred acquisition
costs are adjusted to reflect the amounts associated with unrealized investment
gains and losses pertaining to universal life-type products.

Income Taxes: Income taxes are accounted for under the asset and liability
method in accordance with SFAS 109. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement book
values and tax bases of assets and liabilities. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

Interest Expense: Interest expense includes interest on borrowed funds not
used in the production of investment income. Interest expense relating to the
production of investment income is deducted from investment income.

Property and Equipment: Property and equipment is reported at cost less
allowances for depreciation. Depreciation is provided on the straight-line
method over the estimated useful lives of these assets which range from three
to ten years.

Goodwill: Goodwill represents the excess cost over the fair value of the net
assets acquired when United Investors was purchased by Torchmark Corporation
(Torchmark) in 1981 and is being amortized on a straight-line basis over forty
years. In 1998 United Investors recorded an additional goodwill of $23,639 upon
the reorganization of the company as outlined in Note 1--"Organization." This
additional goodwill is being amortized on a straight-line basis over thirty-
five years, which is the period United Investors Management Company had
remaining out of the original forty year estimated benefit period.

Reclassification: Certain amounts in the financial statements presented have
been reclassified from amounts previously reported in order to be comparable
between years. These reclassifications have no effect on previously reported
shareholders' equity or net income during the periods involved.

Comprehensive Income: United Investors adopted SFAS 130, "Reporting
Comprehensive Income," effective January 1, 1998. This standard defines
comprehensive income as the change in equity of a business enterprise during a
period from transactions from all nonowner sources. It requires the company to
display comprehensive income for the period, consisting of net income and other
comprehensive income. In compliance with SFAS 130, a Statement of Comprehensive
Income is included as an integral part of the financial statements.

Year 2000 Compliance: The new millennium poses a significant concern to all
businesses which use computer systems or electronic data in their operations.
The concern arises because these organizations have computer systems and
programs that cannot always identify a proper date. For many years, programs
were written using a two digit code to represent a year. At the beginning of
the year 2000, more digits are needed to accurately determine the date in these
programs. Without addressing this issue, many computer programs could fail or
produce erroneous results. Additionally, companies which are electronically
engaged with other businesses or which rely on other businesses for services
are exposed to risk of failure by the electronic devices and computer systems
of those other entities to the extent they are not Year 2000 compliant. The
potential of failure of these systems creates considerable uncertainty and
could potentially adversely affect the ongoing operations and stability of a
business.

United Investors relies on computer systems which are supported and
maintained by Torchmark, its ultimate parent, and its various affiliates.
Torchmark is exposed to these risks should its computer systems fail

F-9

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 1--Summary of Significant Accounting Policies (continued)

due to date-related problems. Torchmark is also reliant on a number of third
party businesses and governmental agencies with which it either interacts
electronically or depends upon for services in the conduct of its business.
These institutions include but are not limited to banks, financial
institutions, telecommunication companies, utilities, mail delivery
organizations, and a variety of governmental agencies. Should Torchmark's
computer systems or the systems of its third-party business partners not be
compliant the Company and Torchmark may be exposed to considerable risks,
including business interruption, loss of revenue, increased expense, loss of
policyholders, and litigation.

To reduce its business risk to an acceptable level, Torchmark has
established a project plan to insure that the company's business-critical
computer systems will be Year 2000 compliant. This plan also addresses third-
party compliance issues. Under the direction of executive management,
objectives and timetables have been set forth to achieve compliance in each
geographic location where Torchmark operates. Progress toward achieving those
objectives is constantly monitored. Torchmark currently expects the entire
project, including all Year 2000 testing activities, to be completed during
1999.

As of December 31, 1998, Torchmark remains on schedule to meet all of its
Year 2000 compliance requirements. All known required software changes have
been completed, and the related testing is in process with plans for completion
in 1999. With regard to third party concerns, Torchmark has in process the
following procedures:

1) Torchmark is confirming, with its software vendors, the Year 2000
readiness of its purchased software packages because Torchmark has purchased
software packages on all of its computer platforms;

2) Torchmark is verifying the Year 2000 compliance status of its financial
business partners computer and data communications systems to insure readiness,
including data interface testing with third parties; and

3) All of Torchmark's electronic operational systems (telephones, security,
utility, environmental) are being evaluated for Year 2000 compliance.

As an example of Torchmark's interface testing with selected third parties,
Torchmark is utilizing electronic data from selected third parties in
processing Medicare Supplement benefit data using Year 2000 test data.
Torchmark is also arranging similar testing with a selected number of banks.
While Torchmark is making every effort to verify the compliance of third
parties, no assurances as to the compliance of their computer systems can be
given.

Torchmark has used primarily its own employees to complete its Year 2000
project. Other than completion of software testing, all significant Year 2000
project milestones for internal computer systems have been completed.
Confirmation of third party compliance and electronic data interface testing
with third parties is continuing with completion expected during 1999.
Torchmark has spent $5 million on its Year 2000 project activities to date,
including internal programming costs, outside contractors, and replacement
costs. These costs have been expensed as incurred. Total project cost is
expected to be approximately $6 million.

Year 2000 contingency plans are being developed for critical risk areas.
Management throughout the organization has established and documented a
contingency plan for Torchmark's most critical systems and interfaces with
business partners within each individual's responsibility. Such contingency
plans include possible manual operation efforts, staff adjustments, outside
services, and alternative procedures. These contingency plans will be
maintained well into 2000.

F-10

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 2--Statutory Accounting

United Investors is required to file statutory financial statements with
state insurance regulatory authorities. Accounting principles used to prepare
these statutory financial statements differ from GAAP. Net income and
shareholders' equity on a statutory basis for United Investors were as follows:

Net Income Shareholders' Equity
Year Ended December 31, At December 31,
---------------------------------------- ---------------------------------
1998 1997 1996 1998 1997
-------- -------- -------- ---------- ----------

$47,294 $34,537 $26,640 $169,757 $156,676

The excess of shareholders' equity on a GAAP basis over that determined on a
statutory basis is not available for distribution to shareholders without
regulatory approval.

A reconciliation of United Investors' statutory net income to GAAP net
income is as follows:

Year Ended December 31,
----------------------------
1998 1997 1996
-------- -------- --------

Statutory net income........................... $ 47,294 $ 34,537 $ 26,640
Deferral of acquisition costs.................. 42,857 33,485 33,744
Amortization of acquisition costs.............. (27,874) (24,898) (19,850)
Differences in policy liabilities.............. 1,417 (2,113) (4,361)
Deferred income taxes.......................... (6,422) (6,053) (773)
Other.......................................... (655) (209) (134)
-------- -------- --------
GAAP net income................................ $ 56,617 $ 34,749 $ 35,266
======== ======== ========

A reconciliation of United Investors' statutory shareholders' equity to GAAP
shareholders' equity is as follows:

Year Ended December 31,
------------------------
1998 1997
----------- -----------

Statutory shareholders' equity................... $ 169,757 $ 156,676
Differences in policy liabilities................ 9,208 9,540
Deferred acquisition cost and value of insurance
purchased....................................... 213,633 210,651
Deferred income taxes............................ (59,575) (52,639)
Asset valuation reserve.......................... 4,781 9,513
Nonadmitted assets............................... 3,348 1,850
Fair value adjustment on fixed maturities
available for sale.............................. 30,565 23,043
Fair value adjustment on preferred stock of
affiliate....................................... 188,212 0
Goodwill......................................... 29,465 6,771
Due and deferred premiums........................ (30,317) (30,334)
Other............................................ 503 (3,501)
----------- -----------
GAAP shareholders' equity........................ $559,580 $331,570
=========== ===========

The NAIC requires that a risk based capital formula be applied to all life
and health insurers. The risk based capital formula is a threshold formula
rather than a target capital formula. It is designed only to identify companies
that require regulatory attention and is not to be used to rate or rank
companies that are adequately capitalized. United Investors is adequately
capitalized under the risk based capital formula.

F-11

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 3--Investment Operations

Investment income is summarized as follows:

Year Ended December 31,
--------------------------
1998 1997 1996
------- ------- --------

Fixed maturities.................................. $45,889 $46,000 $ 46,366
Policy loans...................................... 1,186 1,107 1,001
Other long-term investments....................... 84 1,614 1,211
Short-term investments............................ 743 436 287
Other income...................................... 954 0 0
Interest and dividends from affiliates............ 13,082 2,863 2,847
------- ------- --------
61,938 52,020 51,712
Less investment expense........................... (565) (506) (584)
------- ------- --------
Net investment income............................. $61,373 $51,514 $ 51,128
======= ======= ========

Analysis of gains (losses) from investments:
Realized investments gains (losses)
Fixed maturities................................ $ 1 $(5,235) $ 925
Mutual funds.................................... 9,400 (130) 0
------- ------- --------
$ 9,401 $(5,365) $ 925
======= ======= ========

Analysis of change in unrealized gains (losses):
Net change in unrealized investments gains
(losses) on fixed maturities available for sale
before tax....................................... 7,522 19,340 (21,767)
Net change in unrealized investments gains
(losses) on short-term investments before tax.... (2) 0 0
Other (includes $(5,946) related to sale of mutual
fund shares in 1998)............................. (6,328) 1,799 861
Adjustment for deferred acquisition cost.......... 276 (5,387) 8,857
Applicable tax.................................... (514) (5,512) 4,217
------- ------- --------
Net change in unrealized gains (losses) on short-
term investments and fixed maturities securities
available for sale............................... $ 954 $10,240 $ (7,832)
======= ======= ========

F-12

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 3--Investment Operations (continued)

A summary of fixed maturities available for sale by amortized cost and
estimated fair value at December 31, 1998 and 1997 is as follows:

Gross Gross Amount per
Amortized Unrealized Unrealized Fair the Balance
1998: Cost Gains Losses Value Sheet
- ----- --------- ---------- ---------- -------- -----------

Fixed maturities avail-
able for sale:
Bonds:
U.S. Government direct
obligations and
agencies............... $ 21,441 $ 1,959 $ 0 $ 23,400 $ 23,400
GNMA's.................. 89,674 4,022 (18) 93,678 93,678
Mortgage-backed
securities, GNMA
collateral............. 7,488 71 (1) 7,558 7,558
Other mortgage-backed
securities............. 20,961 1,368 0 22,329 22,329
States, municipalities
and political
subdivisions........... 28,610 1,236 0 29,846 29,846
Public utilities........ 31,454 2,287 0 33,741 33,741
Industrial and
miscellaneous.......... 412,958 21,971 (2,330) 432,599 432,599
-------- ------- ------- -------- --------
Total fixed maturities.. $612,586 $32,914 $(2,349) $643,151 $643,151
======== ======= ======= ======== ========

1997:
- -----

Fixed maturities avail-
able for sale:
Bonds:
U.S. Government direct
obligations and
agencies............... $ 22,035 $ 857 $ 0 $ 22,892 $ 22,892
GNMA's.................. 124,549 5,992 (146) 130,395 130,395
Mortgage-backed
securities, GNMA
collateral............. 23,125 591 (3) 23,713 23,713
Other mortgage-backed
securities............. 20,980 916 0 21,896 21,896
States, municipalities
and political
subdivisions........... 28,603 517 0 29,120 29,120
Foreign governments..... 3,298 135 0 3,433 3,433
Public utilities........ 37,189 1,504 (39) 38,654 38,654
Industrial and
miscellaneous.......... 352,821 12,986 (267) 365,540 365,540
-------- ------- ------- -------- --------
Total fixed maturities.. $612,600 $23,498 $ (455) $635,643 $635,643
======== ======= ======= ======== ========

F-13

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 3--Investment Operations (continued)

A schedule of fixed maturities by contractual maturity at December 31, 1998
is shown below on an amortized cost basis and on a fair value basis. Actual
maturities could differ from contractual maturities due to call or prepayment
provisions.

Amortized Fair
Cost Value
--------- --------

Fixed maturities available for sale;
Due in one year or less................................. $ 13,218 $ 13,359
Due after one year through five years................... 115,995 120,078
Due after five years through ten years.................. 202,843 213,213
Due after ten years..................................... 153,602 164,940
-------- --------
485,658 511,590
Mortgage- and asset-backed securities.................... 126,928 131,561
-------- --------
$612,586 $643,151
======== ========

Proceeds from sales of fixed maturities available for sale were $46,039 in
1998, $113,035 in 1997, and $15,246 in 1996. Gross gains realized on these
sales were $928 in 1998, $112 in 1997, and $749 in 1996. Gross losses on these
sales were $927 in 1998, $5,716 in 1997, and $0 in 1996.

Note 4--Deferred Acquisition Costs

An analysis of deferred acquisition costs and the value of insurance
purchased is as follows:

1998 1997 1996
--------------------- --------------------- ---------------------
Deferred Value of Deferred Value of Deferred Value of
Acquisition Insurance Acquisition Insurance Acquisition Insurance
Cost Purchased Cost Purchased Cost Purchased
----------- --------- ----------- --------- ----------- ---------

Balance at beginning of
year................... $176,897 $33,754 $169,986 $16,160 $144,716 $18,679
Additions:
Deferred during peri-
od:
Commissions........... 36,328 0 27,664 0 28,492 0
Other expenses........ 6,529 0 5,821 0 5,252 0
-------- ------- -------- ------- -------- -------
Total deferred....... 42,857 0 33,485 0 33,744 0
Value of insurance
purchased............ 0 0 0 21,305 0 0
Adjustment attributable
to unrealized invest-
ment loss (1)......... 276 0 0 0 8,857 0
-------- ------- -------- ------- -------- -------
Total additions...... 43,133 0 33,485 21,305 42,601 0
Deductions:
Amortized during peri-
od................... (24,720) (3,154) (21,019) (3,711) (16,894) (2,519)
Adjustment
attributable to
unrealized investment
gains (1)............ 0 0 (5,387) 0 0 0
Adjustment attribut-
able to realized
investment gains
(1).................. 0 0 (168) 0 (437) 0
Adjustment to deferred
commissions due to
reorganization....... (12,277) 0 0 0 0 0
-------- ------- -------- ------- -------- -------
Total deductions..... (36,997) (3,154) (26,574) (3,711) (17,331) (2,519)
-------- ------- -------- ------- -------- -------
Balance at end of year.. $183,033 $30,600 $176,897 $33,754 $169,986 $16,160
======== ======= ======== ======= ======== =======

F-14

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
- --------
(1) Represents amounts pertaining to investments relating to universal life-
type products.

The amount of interest accrued on the unamortized balance of value of
insurance purchased was approximately $755, $938, and $1,100 for the years
ended December 31, 1998, 1997 and 1996, respectively. The average interest
accrual rates used were 6.15%, 6.29% and 6.44%, respectively. The estimated
amount of the unamortized value of business purchased balance at December 31,
1998 to be amortized during each of the next five years is: 1999, $2,452;
2000, $2,137; 2001, $1,876; 2002, $1,659; 2003, $1,479.

In the event of lapses or early withdrawals in excess of those assumed,
deferred acquisition costs and the value of insurance purchased may not be
recoverable.

Note 5--Property and Equipment

A summary of property and equipment used in the business is as follows:

At December 31, At December 31,
1998 1997
------------------- -------------------
Accumulated Accumulated
Cost Depreciation Cost Depreciation
------ ------------ ------ ------------

Data processing equipment.............. $ 227 $ 178 $ 216 $ 161
Transportation equipment............... 72 36 132 55
Furniture and office equipment ........ 928 917 922 913
------ ------ ------ ------
Total................................ $1,227 $1,131 $1,270 $1,129
====== ====== ====== ======

Depreciation expense on property and equipment used in the business was $39,
$42 and $44 in each of the years 1998, 1997, and 1996, respectively.

Note 6--Future Policy Benefit Reserves

A summary of the assumptions used in determining the liability for future
policy benefits at December 31, 1998 is as follows:

Individual Life Insurance

Interest Assumptions:

Percent of
Years of Issue Interest Rates Liability
-------------- -------------------------- ----------

1962-1998 3.00% level to 6.00% level 12%
1986-1992 7.00% graded to 6.00% 22%
1962-1985 8.50% graded to 6.00% 4%
1981-1985 8.50% graded to 7.00% 4%
1984-1998 Interest Sensitive 58%
----
100%
====

Mortality assumptions:
The mortality tables used are various statutory mortality tables and
modifications of:

1965-70 Select and Ultimate Table
1975-80 Select and Ultimate Table

Withdrawal assumptions:
Withdrawal assumptions are based on United Investors' experience.

F-15

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 7--Income Taxes

United Investors is included in the life-nonlife consolidated federal income
tax return filed by Torchmark. Under the tax allocation agreement with
Torchmark, a company with taxable income pays tax equal to the amount it would
pay if it filed a separate tax return. A company with a loss is paid a tax
benefit currently to the extent that affiliated companies with taxable income
utilize that loss.

Total income taxes were allocated as follows:

Year Ended December 31,
-------------------------
1998 1997 1996
------- ------- -------

Net operating income before income taxes......... $25,567 $18,843 $19,078
Shareholders' equity:
Unrealized gains (losses)....................... 514 5,512 (4,217)
Tax basis compensation expense in excess of
amounts recognized for financial reporting
purposes from the exercise of stock options.... (68) (519) 0
Tax benefit received on deferred commission
credit due to reorganization................... (4,297) 0 0
Other........................................... 300 1 (152)
------- ------- -------
$22,016 $23,837 $14,709
======= ======= =======

Income tax expense before the adjustments to shareholder's equity is
summarized below:

Year Ended December 31,
-----------------------
1998 1997 1996
------- ------- -------

Current income tax expense......................... $19,145 $12,790 $18,305
Deferred income tax expense........................ 6,422 6,053 773
------- ------- -------
$25,567 $18,843 $19,078
======= ======= =======

In 1998, 1997, and 1996, deferred income tax expense was incurred because of
the difference between net operating income before income taxes as reported on
the statements of operations and taxable income as reported on United
Investor's income tax returns. As explained in Note 1, this difference caused
the financial statement book values of some assets and liabilities to be
different from their respective tax bases.

The effective income tax rate differed from the expected 35% rate in 1998,
1997 and 1996 as shown below:

Year Ended December 31,
----------------------------------------
1998 % 1997 % 1996 %
------- --- ------- --- ------- ---

Expected income taxes............... $28,764 35% $18,757 35% $19,020 35%
Increase (reduction) in income taxes
resulting from:
Tax-exempt investment income....... (3,532) (4) (18) 0 (38) 0
Purchase accounting differences.... 331 0 99 0 99 0
Other.............................. 4 0 5 0 (3) 0
------- --- ------- --- ------- ---
Income taxes........................ $25,567 31% $18,843 35% $19,078 35%
======= === ======= === ======= ===

F-16

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 7--Income Taxes (continued)

The tax effects of temporary differences that gave rise to significant
portions of the deferred tax assets and deferred tax liabilities are presented
below:

Year Ended December 31,
-----------------------
1997 1996
----------- -----------

Deferred tax assets:
Future policy benefits and unearned and advance
premiums.......................................... $ 0 $ 4,777
Present value of future policy surrender charges... 20,153 13,925
Other liabilities, principally due to the current
nondeductibilty for tax purposes of certain
accrued expenses.................................. 132 203
----------- -----------
Total gross deferred tax assets.................... 20,285 18,905
Deferred tax liability:
Future policy benefits and unearned and advance
premiums.......................................... 2,022 0
Deferred acquisition costs......................... 61,881 62,863
Unrealized investment gains........................ 8,428 7,914
Other.............................................. 7,529 767
----------- -----------
Total gross deferred tax liabilities............... 79,860 71,544
----------- -----------
Net deferred tax liability......................... $ 59,575 $ 52,639
=========== ===========

In United Investor's opinion, all deferred tax assets will be recoverable.

United Investors has not recognized a deferred tax liability of
approximately $2,200 that arose prior to 1984 on temporary differences related
to its policyholders' surplus account. A current tax expense will be recognized
in the future if and when this tax becomes payable.

Note 8--Postretirement Benefits

Pension Plans: United Investors has retirement benefit plans and savings
plans which cover substantially all employees. There is also a nonqualified
excess benefit plan which covers certain employees. The plans cover primarily
employees of United Investors, Liberty National and Torchmark. The total cost
of these retirement plans charged to UILIC's operations was as follows:

Defined
Defined Benefit
Year Ended Contribution Pension
December 31, Plans Plans
------------ ------------ -------

1998.................................................. $42 $114
1997.................................................. 44 118
1996.................................................. 41 115

United Investors accrues expense for the defined contribution plans based on
a percentage of the employees contributions. The plans are funded by the
employee contributions and a United Investors contribution equal to the amount
of accrued expense.

F-17

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 8--Postretirement Benefits (continued)

Cost for the defined benefit pension plans has been calculated on the
projected unit credit actuarial cost method. Contributions are made to the
pension plans subject to minimums required by regulation and maximums allowed
for tax purposes. Accrued pension expense in excess of amounts contributed has
been recorded as a liability in UILIC's financial statements and was $55
thousand and $55 thousand at December 31, 1998 and 1997, respectively. The
total unfunded plan liability recorded at December 31, 1998 was $459. The plans
covering the majority of employees are organized as trust funds whose assets
consist primarily of investments in marketable long-term fixed maturities and
equity securities which are valued at market.

The excess benefit pension plan provides the benefits that an employee would
have otherwise received from a defined benefit pension plan in the absence of
the Internal Revenue Codes limitation on benefits payable under a qualified
plan. Although this plan is unfunded, pension cost is determined in a similar
manner as for the funded plans. UILIC's liability for the excess benefit plan
was $19 thousand and $19 thousand as of December 31, 1998 and 1997,
respectively.

Net periodic pension cost for the defined benefit plans by expense component
was as follows:

Year Ended December 31,
-------------------------
1998 1997 1996
------- ------- -------

Service cost--benefits earned during period..... $ 679 $ 638 $ 638
Interest cost on projected benefit obligation... 1,657 1,575 1,478
Actual return on assets......................... (3,118) (2,335) (1,940)
Net amortization and deferral................... 1,942 1,351 1,032
------- ------- -------
Total net periodic cost........................ 1,160 1,229 1,208
Periodic cost allocated to other participating
employers..................................... 1,046 1,111 1,093
------- ------- -------
UILIC's net periodic cost....................... $ 114 $ 118 $ 115
======= ======= =======

F-18

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 8--Postretirement Benefits (continued)

United Investors adopted FASB Statement No. 132, Employers Disclosures about
Pensions and Other Postretirement Benefits, effective for year-end 1998 with
comparative periods restated. In accordance with this Standard, the following
table presents a reconciliation from the beginning to the end of the year of
the benefit obligation and plan assets. This table also presents a
reconciliation of the plans funded status with the.amounts recognized on United
Investors's and Liberty National's balance sheet.

Pension
Benefits For
the year ended
December 31,
----------------
1998 1997
------- -------

Changes in benefit obligation:
Obligation at the beginning of year...................... $21,841 $19,706
Service cost............................................. 679 638
Interest cost............................................ 1,657 1,575
Actuarial gain (loss).................................... 1,061 775
Benefits paid............................................ (2,008) (853)
------- -------
Obligation at the end of year............................ 23,230 21,841

Changes in plan assets:
Fair value at the beginning of year...................... 16,054 13,811
Return on assets......................................... 3,118 2,335
Contributions............................................ 976 761
Benefits paid............................................ (2,008) (853)
------- -------
Fair value at the end of year............................ 18,140 16,054
------- -------

Funded status at year end............................ (5,090) (5,787)

Unrecognized amounts at year end:
Unrecognized actuarial loss (gain)....................... (775) 12
Unrecognized prior service cost.......................... 1,044 1,137
Unrecognized transition obligation....................... 0 0
------- -------
Net amount recognized at year end...................... $(4,821) $(4,638)
======= =======
Amounts recognized consist of:
Prepaid benefit cost..................................... $ (459) $ (459)
Accrued benefit liability................................ (4,707) (5,415)
Intangible asset......................................... 345 1,236
------- -------
Net amount recognized at year end....................... (4,821) (4,638)
Net amount recognized allocated to other participating
employers.............................................. (4,747) (4,564)
------- -------
UILIC's net amount recognized at year end................ $ (74) $ (74)
======= =======

The weighted average assumed discount rates used in determining the
actuarial benefit obligations was 7.0% in 1998 and 7.5% in 1997. The rate of
assumed compensation increase was 4.0% in 1998 and 4.5% in 1997 while the
expected long-term rate of return on plan assets was 9.25% in 1998 and 9.25% in
1997.

Postretirement Benefit Plans Other Than Pensions: United Investors provides
postretirement life insurance benefits for most retired employees, and also
provides additional postretirement life insurance benefits for certain key
employees. The majority of the life insurance benefits are accrued over the
working lives of active employees.

F-19

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 8--Postretirement Benefits (continued)

For retired employees over age sixty-five, United Investors does not provide
postretirement benefits other than pensions. United Investors does provide a
portion of the cost for health insurance benefits for employees who retired
before February 1, 1993 and before age sixty-five, covering them until they
reach age sixty-five. Eligibility for this benefit was generally achieved at
age fifty-five with at least fifteen years of service. This subsidy is minimal
to retired employees who did not retire before February 1,1993. This plan is
unfunded.

The components of net periodic postretirement benefit cost other than
pensions is as follows:

Year Ended December 31,
-------------------------
1998 1997 1996
------- ------- -------

Service cost ................................... $ 112 $ 86 $ 76
Interest on accumulated postretirement. benefit
obligation..................................... 377 357 403
Actual return on assets......................... 0 0 0
Net amortization and deferral................... (251) (374) (242)
------- ------- -------
Total net periodic postretirement cost......... 238 69 237
Periodic cost allocated to other participating
employers..................................... 233 68 232
------- ------- -------
UILIC's net periodic postretirement cost........ $ 5 $ 1 $ 5
======= ======= =======

The following table presents a reconciliation of the benefit obligation and
plan assets from the beginning to the end of the year, also reconciling the
funded status to the accrued benefit liability.

Benefits Other than Pension
For the year ended
December 31,
----------------------------
1998 1997
------------- -------------

Changes in benefit obligation:
Obligation at the beginning of year.......... $ 4,775 $ 5,010
Service cost................................. 112 86
Interest cost................................ 377 357
Actuarial gain (loss)........................ 559 0
Benefits paid................................ (561) (678)
------------- -------------
Obligation at the end of year................ 5,262 4,775

Changes in plan assets:
Fair value at the beginning of year.......... 0 0
Return on assets............................. 0 0
Contributions................................ 561 678
Benefits paid................................ (561) (678)
------------- -------------
Fair value at the end of year................ 0 0
------------- -------------

Funded status at year end.................. (5,262) ( 4,775)

Unrecognized amounts at year end:
Unrecognized actuarial loss (gain)........... (553) (1,157)
Unrecognized prior service cost.............. (357) (563)
------------- -------------
Net amount recognized at year end as accrued
benefit liability.......................... (6,172) (6,495)
Net amount recognized allocated to other
participating employers.................... (6,070) (6,386)
------------- -------------
UILIC's net amount recognized at year end as
accrued benefit liability................... $ (102) $ (109)
============= =============

F-20

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 8--Postretirement Benefits (continued)

For measurement purposes, a 7.0% to 8.0% annual rate of increase in per
capita cost of covered healthcare benefits was assumed for 1998. These rates
grade to ranges of 4.5% to 5.5% by the year 2007. The health care cost trend
rate assumption has a significant effect on the amounts reported, as
illustrated in the following table which presents the effect of a one-
percentage-point increase and decrease on the service and interest cost
components and the benefit obligation:

Effect on:

Change in Trend
Rate
-----------------
1% 1%
Increase Decrease
-------- --------

Service and interest cost components....................... $ 35 $ (31)
Benefit obligation......................................... 326 (300)

The weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.00% in 1998 and 7.50% in 1997.

Note 9--Related Party Transactions

United Investors was charged for space, equipment and services provided by
an affiliate amounting to $1,840 in 1998, $1,852 in 1997 and $1,797 in 1996.

Torchmark performed certain administrative services for United Investors for
which it was charged $612 in 1998, $468 in 1997 and $384 in 1996.

In November 1994, United Investors loaned Torchmark $35,000 at an interest
rate of 8.110%, and in October 1998, United Investors loaned Torchmark an
additional $10,626 at an interest rate of 7.875%. Interest income related to
the Torchmark loans totaling $2,989, $2,838 and $2,838 for 1998, 1997 and 1996,
respectively, is included in the accompanying financial statements. In January
1996, United Investors loaned Liberty National $3,500 at an interest rate of
5.75%. This loan was paid in full in February 1996. Interest income related to
this loan totaling $9 at December 31, 1996 is included in the accompanying
financial statements. In 1997, United Investors loaned Torchmark, Liberty
National and United American $8,060, $10,520 and $5,500 respectively at an
interest rate of 5.5% all of which were repaid prior to December 31, 1997.
Interest income related to these loans totaling $1, $2 and $22 respectively is
included in the accompanying financial statements. In 1998, United Investors
loaned Liberty National and United American $1,400 and $1,000 respectively at
an interest rate of 5.5% all of which were repaid prior to December 31, 1998.
Interest income related to these loans totaling $2 and $2 respectively is
included in the accompanying financial statements. During 1998, TMK loaned
United Investors $14,800 in a series of six separate loans at an interest rate
of 5.5% all of which were repaid prior to December 31, 1998. Interest expenses
related to these loans totaling $34 is included in the accompanying financial
statements.

Effective January 1, 1997 United Investors assumed a block of annuity
products totaling $200,321 from United American Insurance Company (United
American), an affiliated company, on 100% funds withheld coinsurance basis. In
connection with this transaction, United Investors paid a ceding fee totaling
$21,305, $10,000 of which was paid in cash, and recorded a due from affiliates
totaling $189,016 at the end of 1997. The funds withheld totaled $229,194 and
$190,235 at December, 1998 and 1997, respectively. Interest income totaled
$13,665 and $11,876 in 1998 and 1997, respectively, and is included in other
income. The reserve for annuity balances assumed in connection with this
business totaled $241,357 and $210,276 as of December 31, 1998 and 1997,
respectively. United Investors reimbursed United American for administrative
expenses in the amount of $800 in 1998 and $897 in 1997.

F-21

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

United Investors serves as sponsor to four separate accounts. During 1997,
United Investors was also a investor in two of the separate accounts. These
investments were sold during 1998 for $18.4 million and United Investors is no
longer a depositor to any of its separate accounts.

On March 3, 1998, Waddell & Reed Financial, Inc. contributed 188,212 shares
of TMK 6 1/2% Cumulative Preferred Stock, Series A to UILIC due the
reorganization discussed in Note 1--Summary of Significant Accounting Policies.
Dividend income, on these shares, in the amount of $10,093 is included in the
accompanying financial statements.

Note 10--Commitments and Contingencies

Reinsurance: United Investors reinsures that portion of insurance risk which
is in excess of its retention limit. The maximum net retention limit for
ordinary life insurance is $500 per life. Life insurance ceded represented 2%
of total life insurance in force at December 31, 1998 and 3% of premium income
for 1998. United Investors would be liable for the reinsured risks ceded to
other companies to the extent that such reinsuring companies are unable to meet
their obligation. Except as disclosed in Note 9, United Investors does not
assume insurance risks of other companies.

Restrictions on the transfer of funds: Regulatory restrictions exist on the
transfer of funds from insurance companies. These restrictions generally limit
the payment of dividends to the statutory net gain from operations of the prior
year in the absence of special approval. Additionally, insurance companies are
not permitted to distribute the excess of shareholder's equity as determined on
a GAAP basis over that determined on a statutory basis. Restricted net assets
at December 31, 1998 in compliance with all regulations were $392,823.

Litigation: United Investors is engaged in routine litigation arising from
the normal course of business. In management's opinion, this litigation will
not materially affect United Investors' financial position or results of
operations.

Concentration of credit risk: United Investors maintains a highly
diversified investment portfolio with limited concentration in any given
region, industry, or economic characteristic. The investment consists of
investment grade corporate bonds (55.7%), securities of the U.S. government or
U.S. government-backed securities (18.2%), non investment grade securities
(12.3%), municipal governments (4.4%), non government guaranteed mortgage
backed securities (3.3%), and policy loans (2.6%) which are secured by the
underlying policy value. The balance of the portfolio is invested in short-term
investments (3.5%).

Investments in municipal governments and corporations are made throughout
the U.S. with no concentration in any given state. Corporate debt investments
are made in a wide range of industries. At December 31, 1998, 1% or more of the
portfolio was invested in the following industries: financial services (19.8%);
chemicals and allied products (6.2%); manufacturing (5.8%); consumer goods
(5.5%); public utilities (4.9%); media and communications (4.6%);
transportation (4.2%); services (4.1%); retailing (3.9%); machinery and
equipment (3.3%); petroleum (2.7%); asset-backed securities (1.2%); paper and
allied products (1.1%). At the end of 1998, 12.3% of the carrying value of
fixed securities was rated below investment grade. Par value of these
investments was $84.249, amortized cost was $83.731, and market value was
$84.588. While these investments could be subject to additional credit risk,
such risk should generally be reflected in market value.

Collateral requirements: United Investors requires collateral for
investments in instruments where collateral is available and typically required
because of the nature of the investment. Since the majority of United
Investor's investments are in government, government-secured, or corporate
securities, the requirement for collateral is rare.

F-22

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)
Note 11--Supplemental Disclosures for Cash Flow Statement

The following table summarizes United Investors' noncash transactions, which
are not reflected on the statement of cash flow as required by GAAP:

Year Ended December 31,
-------------------------
1998 1997 1996
-------- -------- -------

Due from affiliates........................... $229,194 $189,016 $ 0
Value of business purchased................... 0 11,305 0
Future policy benefits........................ 241,357 200,321 0
Impact from reorganization of
Waddell & Reed .............................. 203,871 0 0

The following table summarizes certain amounts paid during the period:

Year Ended December 31,
-------------------------
1998 1997 1996
-------- -------- -------

Taxes paid.................................... $26,054 $8,631 $22,111

Note 12--Business Segments

United Investors' segments are based on the insurance product lines it
markets and administers, life insurance and annuities. These major product
lines are set out as segments because of the common characteristics of products
within these categories, comparability of margins, and the similarity in
regulatory environment and management techniques. There is also an investment
segment which manages the investment portfolio, debt, and cash flow for the
insurance segments and the corporate function.

Life insurance products include traditional and interest-sensitive whole
life insurance as well as term life insurance. Annuities include both fixed-
benefit and variable contracts. Variable contracts allow policyholders to
choose from a variety of mutual funds in which to direct their deposits.

United Investors markets its insurance products through a number of
distribution channels, each of which sells the products of one or more of
United Investors's insurance segments. The tables below present segment premium
revenue by each of United Investors's marketing groups.

For the Year 1998
------------------------------------------
Life Annuity Total
------------- ------------ -------------
% of % of % of
Distribution Channel Amount Total Amount Total Amount Total
- -------------------- ------- ----- ------ ----- ------- -----

Independent Producers............... $ 8,004 11.5% $ $ 8,004 11.4%
Waddell & Reed...................... 61,511 88.4% 61,511 87.9%
United American .................... 415 100.0% 415 0.6%
Globe Direct Response............... 57 0.1% 57 0.1%
------- ----- ---- ----- ------- -----
$69,572 100.0% $415 100.0% $69,987 100.0%
======= ===== ==== ===== ======= =====

F-23

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 12--Business Segments (continued)

For the Year 1997
------------------------------------------
Life Annuity Total
------------- ------------ -------------
% of % of % of
Distribution Channel Amount Total Amount Total Amount Total
- -------------------- ------- ----- ------ ----- ------- -----

Independent Producers............... $ 7,264 10.6% $ $ 7,264 10.6%
Waddell & Reed...................... 61,149 89.4% 61,149 89.0%
United American .................... 310 100.0% 310 0.4%
------- ----- ---- ----- ------- -----
$68,413 100.0% $310 100.0% $68,723 100.0%
======= ===== ==== ===== ======= =====

For the Year 1996
------------------------------------------
Life Annuity Total
------------- ------------ -------------
% of % of % of
Distribution Channel Amount Total Amount Total Amount Total
- -------------------- ------- ----- ------ ----- ------- -----

Independent Producers............... $ 6,795 10.4% $ $ 6,795 10.4%
Waddell & Reed...................... 58,319 89.6% 58,319 89.6%
------- ----- ---- ----- ------- -----
$65,114 100.0% $ 0.0% $65,114 100.0%
======= ===== ==== ===== ======= =====

Because of the nature of the insurance industry, United Investors has no
individual or group which would be considered a major customer. Substantially
all of United Investors's business is conducted in the United States, primarily
in the Southeastern and Southwestern regions.

The measure of profitability for insurance segments is underwriting income
before other income and administrative expenses, in accordance with the manner
the segments are managed. It essentially represents gross profit margin on
insurance products before insurance administrative expenses and consists of
premium, less net policy obligations, acquisition expenses, and commissions. It
differs from GAAP pretax operating income before other income and
administrative expense for two primary reasons. First, there is a reduction to
policy obligations for interest credited by contract to policyholders because
this interest is earned and credited by the investment segment. Second,
interest is also added to acquisition expense which represents the implied
interest cost of deferred acquisition costs, which is funded by and is
attributed to the investment segment.

F-24

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 12--Business Segments (continued)

The measure of profitability for the investment segment is excess investment
income, which represents the income earned on the investment portfolio in
excess of net policy requirements. The investment segment is measured on a tax-
equivalent basis, equating the return on tax-exempt investments to the pretax
return on taxable investments. Other than the above-mentioned interest
allocations, there are no other intersegment revenues or expenses. All other
unallocated revenues and expenses on a pretax basis, including insurance
administrative expense, are included in the "Other" segment category. The table
below sets forth a reconciliation of United Investors's revenues and operations
by segment to its major income statement line items.

For the Year 1998
-----------------------------------------------------------
Life Annuity Investment Other Adjustments Total
-------- -------- ---------- ------- ----------- -------

Revenues
Premium................ $ 69,572 $ 415 $ $ $ $69,987
Policy Charges and
fees.................. 12,048 33,065 45,113
Net Investment income.. 61,373 61,373
Other income........... 13,665 13,665
-------- -------- -------- ------- --- -------
Total Revenues........ 81,620 47,145 61,373 190,138

Benefits and Expenses
Policy Benefits........ 51,430 25,892 77,322
Required reserve
interest.............. (18,832) (18,162) 36,994 0
Amortization of
acquisition costs..... 16,306 11,568 27,874
Commissions and premium
taxes................. 5,182 398 5,580
Required interest on
acquisition costs..... 7,958 4,814 (12,772) 0
-------- -------- -------- ------- --- -------
Total Expenses........ 62,044 24,510 24,222 110,776
-------- -------- -------- ------- --- -------

Underwriting income
before other income
and administrative
expense............... 19,576 22,635 37,151 79,362
Administrative
Expense............... 5,633 5,633
Goodwill amortization.. 946 946
Deferred acquisition
cost adjustment.......
-------- -------- -------- ------- --- -------
Pretax operating
income................ $ 19,576 $ 22,635 $ 37,151 $(6,579) $ 0 72,783
======== ======== ======== ======= ===
Realized investment gains/losses and deferred acquisition cost
adjustment............................................................. 9,401
-------
Pretax income.......................................................... $82,184
=======

F-25

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 12--Business Segments (continued)

For the Year 1997
----------------------------------------------------------
Life Annuity Investment Other Adjustments Total
------- ------- ---------- ------- ----------- --------

Revenues
Premium................ $68,413 $ 310 $ $ $ $ 68,723
Policy Charges and
fees.................. 9,573 27,009 36,582
Net Investment income.. 51,514 51,514
Other income........... 11,876 11,876
------- ------- ------- ------- ----- --------
Total Revenues........ 77,986 39,195 51,514 168,695

Benefits and Expenses
Policy Benefits........ 47,930 25,189 73,119
Required reserve
interest.............. (18,067) (19,735) 37,802 0
Amortization of
acquisition costs..... 14,671 10,227 24,898
Commissions and premium
taxes................. 5,647 604 6,251
Required interest on
acquisition costs..... 8,044 4,287 (12,331) 0
------- ------- ------- ------- ----- --------
Total Expenses........ 58,225 20,572 25,471 104,268
------- ------- ------- ------- ----- --------

Underwriting income
before other income
and administrative
expense............... 19,761 18,623 26,043 64,427
Administrative
Expense............... 5,186 5,186
Goodwill amortization.. 284 284
Deferred acquisition
cost adjustment....... 168 168
------- ------- ------- ------- ----- --------
Pretax operating
income................ $19,761 $18,623 $26,043 $(5,470) $(168) 58,789
======= ======= ======= ======= =====
Realized investment gains/losses and deferred acquisition cost
adjustment........................................................... (5,197)
--------
Pretax income........................................................ $ 53,592
========

F-26

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 12--Business Segments (continued)

For the Year 1996
------------------------------------------------------------
Life Annuity Investment Other Adjustments Total
-------- -------- ---------- ------- ----------- --------

Revenues
Premium................ $ 65,114 $ $ $ $ $ 65,114
Policy Charges and
fees.................. 8,722 20,681 29,403
Net Investment income.. 51,128 51,128
Other income........... 0
-------- -------- -------- ------- ----- --------
Total Revenues........ 73,836 20,681 51,128 145,645

Benefits and Expenses
Policy Benefits........ 47,355 15,807 63,162
Required reserve inter-
est................... (17,021) (20,599) 37,620 0
Amortization of acqui-
sition costs.......... 12,817 7,033 19,850
Commissions and premium
taxes................. 4,995 253 5,248
Required interest on
acquisition costs..... 8,045 3,712 (11,757) 0
-------- -------- -------- ------- ----- --------
Total Expenses........ 56,191 6,206 25,863 88,260
-------- -------- -------- ------- ----- --------

Underwriting income be-
fore other income and
administrative ex-
pense................. 17,645 14,475 25,265 57,385
Administrative Ex-
pense................. 3,682 3,682
Goodwill amortization.. 284 284
Deferred acquisition
cost adjustment....... 437 437
-------- -------- -------- ------- ----- --------
Pretax operating in-
come.................. $ 17,645 $ 14,475 $ 25,265 $(3,966) $(437) 52,982
======== ======== ======== ======= =====
Realized investment gains/losses and deferred acquisition cost
adjustment............................................................. 1,362
--------
Pretax income.......................................................... $ 54,344
========

Assets for each segment are reported based on a specific identification
basis. The insurance segments' assets contain deferred acquisition costs, value
of insurance purchased, and separate account assets. The investment segment
includes the investment portfolio, cash, and accrued investment income.
Goodwill is assigned to corporate operations. All other assets, representing
less than 2% of total assets, are included in the other category. The table
below reconciles segment assets to total assets as reported in the financial
statements.

At December 31, 1998
--------------------------------------------------------------
Life Annuity Investment Other Adjustments Total
-------- ---------- ---------- -------- ----------- ----------

Cash and invested
assets................. $ $ $873,478 $ $ $ 873,478
Accrued investment
income................. 11,747 11,747
Deferred acquisition
costs.................. 113,057 100,576 213,633
Goodwill................ 29,465 29,465
Separate account
assets................. 2,425,262 2,425,262
Other Assets............ 283,453 283,453
-------- ---------- -------- -------- --- ----------
Total Assets............ $113,057 $2,525,838 $885,225 $312,918 $ 0 $3,837,038
======== ========== ======== ======== === ==========

F-27

UNITED INVESTORS LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--(Continued)
(Dollar amounts in thousands)

Note 12--Business Segments (continued)

At December 31, 1997
--------------------------------------------------------------
Life Annuity Investment Other Adjustments Total
-------- ---------- ---------- -------- ----------- ----------

Cash and invested
assets................. $ $ $692,659 $ $ $ 692,659
Accrued investment
income................. 11,270 11,270
Deferred acquisition
costs.................. 117,410 93,241 210,651
Goodwill................ 6,771 6,771
Separate account
assets................. 1,876,439 1,876,439
Other Assets............ 229,351 229,351
-------- ---------- -------- -------- ----- ----------
Total Assets............ $117,410 $1,969,680 $703,929 $236,122 $ 0 $3,027,141
======== ========== ======== ======== ===== ==========

At December 31, 1996
--------------------------------------------------------------
Life Annuity Investment Other Adjustments Total
-------- ---------- ---------- -------- ----------- ----------

Cash and invested
assets................. $ $ $664,861 $ $ $ 664,861
Accrued investment
income................. 10,781 10,781
Deferred acquisition
costs.................. 120,083 66,063 186,146
Goodwill................ 7,055 7,055
Separate account
assets................. 1,420,025 1,420,025
Other Assets............ 39,748 39,748
-------- ---------- -------- -------- ----- ----------
Total Assets............ $120,083 $1,486,088 $675,642 $ 46,803 $ 0 $2,328,616
======== ========== ======== ======== ===== ==========

F-28

United Investors Life Insurance Company
Balance Sheet (Unaudited)
as of September 30, 1999

(Amounts in thousands, except share and per share amounts)

ASSETS

Investments:

Fixed maturities $ 773,347
Equity securities 3,060
Policy loans 18,913
Other long term investments 0
Short term investments 10,160
---------------
Total investments 805,480

Cash 2,152
Accrued investment income 11,086
Receivables 2,590
Receivables from affiliates 362,529
Deferred acquisition cost 224,347
Value of business purchased 8,927
Goodwill 28,755
Property and equipment 214
Other assets 3,242
Separate accounts 2,704,602
---------------
$4,153,924
===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Future policy benefits $ 812,104
Unearned and advance premiums 2,821
Other policy benefits 6,897
---------------
Total policy liabilities 821,822

Accrued income taxes 51,504
Other liabilities 5,967
Due to affiliates 30,762
Separate account liabilities 2,704,602
---------------
Total liabilities 3,614,657

Shareholders' equity:
Common stock, par value per $6 per share
authorized, issued and outstanding:
500,000 shares 3,000
Additional paid in capital 350,388
Unrealized investment gains, net of applicable taxes (6,696)
Retained earnings 192,575
---------------
Total shareholders' equity 539,267
---------------
Total liabilities and shareholders' equity $4,153,924
===============

United Investors Life Insurance Company
Statement of Cash Flows (Unaudited)
for the nine-month period ended September 30, 1999

(Amounts in thousands)

Cash flow from operating activities
Net Income $ 43,037
Adjustments to reconcile net income to net cash
(used in) operating activities:
Net interest credited and product charges on
universal life and investment products (560)
Increase in liability for future benefits (78)
Amortization of deferred acquisition costs 24,513
Policy acquisition costs (42,971)
Change in tax liability 7,607
Change in other liabilities 3,792
Change in receivables (3,913)
Amortization of goodwill 709
Amortization of investments 329
Adjustment for realized gains 2,806
Change in payable/receivable from affiliates (4,019)
---------
Net cash (used in) operating activities 31,252
---------
Cash flows from investing activities:
Proceeds from investments:
Fixed investments 168,251
Other invested assets 0
---------
Total investments sold or matured 168,251
Cost of investments acquired:
Fixed investments (158,045)
Equity securities (3,400)
Other invested assets 0
Net change in policy loans (904)
---------
Total acquisition of investments (162,349)
Net (increase) decrease in short-term investments 2,513
Funds loaned to affiliates (62,024)
Funds repaid from affiliates 54,200
Funds borrowed from affiliates 3,000
Funds repaid to affiliates (3,000)
Additions to property (118)
---------
Cash provided from (used for) investment activities 473
Cash used for financing activities: ---------

Cash dividends paid to shareholders (41,000)
---------
(41,000)
Increase (decrease) in cash (9,275)
Cash at the beginning of the year 11,427
---------
Cash at end of year $ 2,152
=========

United Investors Life Insurance Company
Statement of Equity (Unaudited)
for the nine-month period ended September 30, 1999

(Amounts in thousands)

Net
Unrealized
Additional Appreciation Total
Common Paid-in (Depreciation) Retained Shareholders'
Stock Capital on Securities Earnings Equity
------ ---------- --------------- ---------- ---------------

Balance at January 1, 1999........................... $3,000 $350,388 $15,654 $190,538 $559,580

Net income........................................... 43,037 43,037

Other comprehensive income, net of tax:
Change in unrealized appreciation (depreciation)... (22,350) (22,350)
--------

Total comprehensive income........................... 20,687

Dividends............................................ (41,000) (41,000)
------ -------- ------- -------- --------

Balance on September 30, 1999........................ $3,000 $350,388 ($6,696) $192,575 $539,267
====== ======== ======= ======== ========

United Investors Life Insurance Company
Statement of Income (Unaudited)
for the nine-month period ended September 30, 1999

(Amounts in thousands)

Revenues:
Premiums $ 54,976
Policy charges and fees 40,162
Net investment income 47,557
Net realized investment gains (2,806)
Other income 12,891
--------

Total revenue 152,780

Benefits and expenses:
Policy benefits
Individual Life 38,097
Annuity 19,675
--------
Total policy benefits 57,772

Amortization of deferred acquisition costs 25,222
Commissions and premium taxes 4,467
Other operating expenses 4,431
--------

Total benefits and expenses 91,892
--------

Net operating income before taxes 60,888

Income tax expense 17,851
--------

Net income $ 43,037
========

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 Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

RULE 484 UNDERTAKING

Insofar as indemnification for liability arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

Article XII of United Investors' By-Laws provides as follows:

Each Director or officer, or former Director or officer, of this
Corporation, and his legal representatives, shall be indemnified
by the Corporation against liabilities, expenses, counsel fees
and costs, reasonably incurred by him or his estate in connection
with, or arising out of, any action, suit, proceeding or claim in
which he is made a party by reason of his being, or having been,
such Director or officer; and any person who, at the request of
this Corporation, serves as Director or officer of another
corporation in which this Corporation owns corporate stock, and
his legal representatives, shall in like manner be indemnified by
this Corporation; provided that, in either case shall the
Corporation indemnify such Director or officer with respect to
any matters as to which he shall be finally adjudged in any such
action, suit or proceeding to have been liable for misconduct in
the performance of his duties as such Director or officer. The
indemnification herein provided for shall apply also in respect
of any amount paid in compromise of any such action, suit,
proceeding or claim asserted against such Director or officer
(including expenses, counsel fees, and costs reasonably incurred
in connection therewith), provided that the Board of Directors
shall have first approved such proposed compromise settlement and
determined that the officer or Director involved is not guilty of
misconduct, but in taking such action any Director involved shall
not be qualified to vote thereof, and if for this reason a quorum
of the Board cannot be obtained to vote on such matters, it shall
be determined by a committee of three (3) persons appointed by
the shareholders at a duly called

special meeting or at a regular meeting. In determining whether
or not a Director or officer is guilty of misconduct in relation
to any such matter, the Board of Directors or committee appointed
by the shareholders, as the case shall be, may rely conclusively
upon an opinion of independent legal counsel selected by such
Board or committee. The rights to indemnification herein provided
shall not be exclusive of any other rights to which such Director
or officer may be lawfully entitled.

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

United Investors Life Insurance Company hereby 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 United Investors Life Insurance Company.

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet.
The prospectus consisting of ___ pages.
Undertaking to file reports.
Rule 484 undertaking.
Representation pursuant to Section 26(e)(2)(A).
The signatures.
Written consents of the following persons: John H. Livingston
W. Thomas Aycock
KPMG LLP
Sutherland Asbill & Brennan LLP.

The following exhibits, corresponding to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:

1. A.
(1) Resolution of the Board of Directors of United Investors Life
Insurance Company establishing Titanium Universal Life Variable
Account*
(2) Not Applicable
(3) (a) First Union Securities, Inc. draft Agreements:
(i) Distribution Agreement;**
(ii) Selling Group Agreement;**
(iii) Commission Schedule.**
(b) United Securities Alliance, Inc. draft Agreements:
(i) Distribution Agreement;**
(ii) Selling Group Agreement;**
(iii) Commission Schedule.**
(4) Not applicable
(5) Specimen Flexible Premium Variable Life Insurance Policy, Form
TL99** (including Riders)
(6) (a) Articles of Incorporation of United Investors Life Insurance
Company \1\
(b) By-laws of United Investors Life Insurance Company/1/
(7) Not applicable
(8) Forms of Participation Agreements with:
(a) AIM Variable Insurance Funds, Inc./2/
(b) The Alger American Fund**
(c) BT Insurance Funds Trust**
(d) Dreyfus Variable Investment Fund**
(e) Evergreen Variable Annuity Trust**
(f) INVESCO Variable Investment Funds, Inc.**
(g) MFS Variable Insurance Trust/3/

(h) Strong Variable Insurance Funds, Inc.**
(i) Templeton Variable Products Series Fund**
(9) Not applicable
(10) Application form**
(11) Description of issuance, transfer and redemption procedures**

B. Not applicable

C. Not applicable

2. Opinion and consent of John H. Livingston, Esquire as to the legality
of the securities being registered**

3. Not applicable

4. Not applicable

5. Not applicable

6. Opinion and consent of W. Thomas Aycock as to actuarial matters
pertaining to the securities being registered**

7. (a) Consent of independent accountants**
(b) Consent of Sutherland Asbill & Brennan LLP**

______________

* Incorporated by reference to the exhibit filed with the initial filing of
this Form S-6 registration statement, File No. 333-89875, on October 28,
1999.

** Filed herewith.

/1/ Incorporated herein by reference to the Exhibit filed electronically with
Post-Effective Amendment No. 12 to the registration statement on Form S-6
(File No. 33-11465), filed on behalf of United Investors Life Variable
Account on April 29, 1998 (previously filed on January 22, 1987 as an
Exhibit to the Form S-6 registration statement, File No. 33-11465).

/2/ Incorporated herein by reference to the Exhibit filed with Post-Effective
Amendment No. 1 to the Registration Statement on Form N-4 (File No. 333-
12507) filed on behalf of the RetireMAP Variable Account on June 29, 1998.

/3/ Incorporated herein by reference to the Exhibit filed with Pre-Effective
Amendment No. 2 to the Registration Statement on Form N-4 (File No. 333-
12507) filed on behalf of the RetireMAP Variable Account on July 2, 1997.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant,
Titanium Universal Life Variable Account, has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal to be hereunto affixed and attested, all in the
City of Birmingham and the State of Alabama, on the 21st day of January, 2000.

TITANIUM UNIVERSAL LIFE VARIABLE ACCOUNT
(SEAL) (Registrant)

By: UNITED INVESTORS LIFE INSURANCE COMPANY
(Depositor)

Attest: /s/ John H. Livingston By: /s/ Anthony L. McWhorter
------------------------ ------------------------
John H. Livingston Anthony L. McWhorter
Secretary and Counsel President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, United
Investors Life Insurance Company has duly caused this registration statement to
be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City of Birmingham and the
State of Alabama, on the 21st day of January, 2000.

(SEAL) UNITED INVESTORS LIFE INSURANCE COMPANY

Attest: /s/ John H. Livingston By: /s/ Anthony L. McWhorter
------------------------- ------------------------
John H. Livingston Anthony L. McWhorter
Secretary and Counsel President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on the date(s) set forth below.

Signature Title Date
- --------- ----- ----

_________________________ Director
C.B. Hudson

/s/ Anthony L. McWhorter Chairman of the Board of Directors,
- -------------------------
Anthony L. McWhorter President and Chief Executive
Officer January 21, 2000

/s/ W. Thomas Aycock Director, Vice President and
- -------------------------
W. Thomas Aycock Chief Actuary January 21, 2000

Director and Executive Vice
- ------------------------
Tony G. Brill President--Marketing

________________________ Senior Vice President--Marketing
Mark S. McAndrew

________________________ Director
Larry M. Hutchison

/s/ Michael J. Klyce Vice President and Treasurer January 21, 2000
- -------------------------
Michael J. Klyce

/s/ John H. Livingston Director, Secretary and Counsel January 21, 2000
- --------------------------
John H. Livingston

/s/ James L. Mayton, Jr. Vice President and Controller January 21, 2000
- --------------------------
James L. Mayton, Jr.

/s/ Carol A. McCoy Director and Assistant Secretary January 21, 2000
- --------------------------
Carol A. McCoy

/s/ Ross W. Stagner Director and Vice President January 21, 2000
- --------------------------
Ross W. Stagner

/s/ Terry W. Davis Director and Vice President-- January 21, 2000
- --------------------------
Terry W. Davis Administration

EXHIBIT INDEX

Exhibit No. Name of Exhibit
- ----------- ---------------

1.A.(3)(a) First Union Securities, Inc. draft Agreements:
(i) Distribution Agreement;**
(ii) Selling Group Agreement;**
(iii) Commission Schedule.**

1.A.(3)(b) United Securities Alliance, Inc. draft Agreements:
(i) Distribution Agreement;**
(ii) Selling Group Agreement;**
(iii) Commission Schedule.**

1.A.(5) Specimen Flexible Premium Variable Life Insurance Policy, Form
TL99 (including Riders)

1.A.(8) Forms of Participation Agreements

1.A.(10) Application form

1.A.(11) Description of issuance, transfer and redemption procedures

2. Opinion and consent of John H. Livingston, Esquire as to the
legality of the securities being registered

6. Opinion and consent of W. Thomas Aycock as to actuarial matters
pertaining to the securities being registered

7.(a) Consent of independent accountants

7.(b) Consent of Sutherland Asbill & Brennan LLP