AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1998

FILE NO.
FILE NO. 811-7337
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. / /
PRE-EFFECTIVE AMENDMENT NO. / /
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 6 /X/

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

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT
(Exact Name of Trust)

PROTECTIVE LIFE INSURANCE COMPANY
(Name of Depositor)

2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)

COPY TO:

NANCY KANE, ESQUIRE STEPHEN E. ROTH, ESQUIRE
2801 Highway 280 South Sutherland, Asbill & Brennan
Birmingham, Alabama 35223 1275 Pennsylvania Avenue, N.W.
(Name and Address of Agent Washington, D.C. 20004-2404
for Service of Process)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the registration statement.

TITLE OF SECURITIES BEING REGISTERED:
Interests in a separate account issued through variable life insurance policies.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), SHALL
DETERMINE.

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PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT
REGISTRATION STATEMENT ON FORM S-6
CROSS-REFERENCE SHEET

FORM N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
- ------------------ -------------------------------------------------------------------------------------------

1 Cover Page
2 Cover Page
3 Inapplicable
4 Sale of the Policies
5 Protective Variable Life Separate Account
6 Protective Variable Life Separate Account
7 Inapplicable
8 Inapplicable
9 Legal Matters
10(a) The Policy
10(b) The Policy
10(c) Surrender Privilege; Withdrawal Privilege; Policy Loans; Settlement Options
10(d) Cancellation Privilege; Exchange Privilege; Withdrawal Privilege; Policy Loans; Settlement
Options
10(e) Policy Lapse and Reinstatement
10(f) Voting Rights
10(g),(h) Other Investors in the Funds; Addition, Deletion and Substitution of Investments; Voting
Rights; Purchasing a Policy; Changes in the Policy or Benefits
10(i) Other Policy Benefits and Provisions; Death Benefit Proceeds; Settlement Options; The Fixed
Account; Maturity Benefits; Limits on the Right to Contest the Policy; Suspension or Delay
of Payments; Arbitration; Supplemental Benefits and/or Riders; Tax Considerations
11 The Funds
12 The Funds
13 Charges and Deductions; Sale of the Policies; Illustrations of Policy Values, Surrender
Values, Death Benefits and Accumulated Premiums
14 Purchasing a Policy; Cancellation Privilege; Premium Payments; Net Premium Allocations;
15 Purchasing a Policy; Cancellation Privilege; Premium Payments; Net Premium Allocations;
16 The Funds
17 Captions referenced under Items 10(c), (d), and (e) above
18 Protective Variable Life Separate Account; The Funds; Calculation of Policy Values; Tax
Considerations
19 Voting Rights; Reports to Policy Owners; Sale of the Policies
20 Captions referenced under Items 6 and 10(g) above
21 Policy Loans
22 Protective Variable Life Separate Account; Financial Statements

FORM N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
- ------------------ -------------------------------------------------------------------------------------------

23 Inapplicable
24 Protective Life Directors and Executive Officers; State Regulation
25 Protective Life Insurance Company
26 Charges and Deductions
27 Protective Life Insurance Company
28 Protective Life Directors and Executive Officers
29 Protective Life Insurance Company
30 Inapplicable
31 Inapplicable
32 Inapplicable
33 Inapplicable
34 Sale of the Policies
35 Protective Life Insurance Company
36 Inapplicable
37 Inapplicable
38 Sale of the Policies
39 Sale of the Policies
40 Sale of the Policies
41(a) Sale of the Policies
42 Inapplicable
43 Inapplicable
44(a) Calculation of Policy Values; Premium Payments; Charges and Deductions
44(b) Charges and Deductions
44(c) Charges and Deductions
45 Inapplicable
46 Calculation of Policy Values; Surrender Privilege; Withdrawal Privilege; Charges and
Deductions; Illustrations of Policy Values, Surrender Values, Death Benefits and
Accumulated Premiums
47 Inapplicable
48 Inapplicable
49 Inapplicable
50 Inapplicable
51 Summary and Diagram of the Policy; The Policy; Policy Benefits
52 Addition, Deletion and Substitution of Investments
53 Tax Considerations
54 Inapplicable
55 Inapplicable
56 Inapplicable
57 Inapplicable
58 Inapplicable
59 Financial Statements

PROSPECTUS

INDIVIDUAL FLEXIBLE PREMIUM VARIABLE AND FIXED LIFE INSURANCE POLICY
- --------------------------------------------------------------------------------

Issued by: PROTECTIVE LIFE INSURANCE COMPANY
2801 Highway 280 South
Birmingham, Alabama 35223
Telephone (800) 866-3555
- --------------------------------------------------------------------------------

This prospectus describes an individual flexible premium variable and fixed
life insurance policy (the "Policy") offered by Protective Life Insurance
Company ("Protective Life"). The Policy is designed to provide insurance
protection on the life of the Insured named in the Policy, and at the same time
provide the Owner with the flexibility to vary the amount and timing of premium
payments and, within certain limits, to change the amount of death benefits
payable under the Policy. This flexibility permits the Owner to provide for
changing insurance needs with a single insurance policy. This Policy may not be
available in all jurisdictions.

The Owner may, within limits, allocate Net Premium payments and Policy Value
to one or more Sub-Accounts of the Protective Variable Life Separate Account
(the "Variable Account") and Protective Life's general account (the "Fixed
Account"). Discussions of values under the Policy in this prospectus generally
relate only to the values allocated to the Variable Account. The assets of each
Sub-Account of the Variable Account are invested in a corresponding investment
portfolio (each, a "Fund") of Protective Investment Company, Oppenheimer
Variable Account Funds, MFS-Registered Trademark- Variable Insurance Trust and
Calvert Variable Series, Inc.

The prospectuses for the Funds describe the investment objective(s) and
risks of investing in the Sub-Account corresponding to each. The Owner bears the
entire investment risk for Policy Value allocated to a Sub-Account.
Consequently, except as to Policy Value allocated to the Fixed Account, the
Policy has no guaranteed minimum Surrender Value.

It may not be advantageous to replace existing insurance with this Policy.
Within certain limits, you may return the Policy, or convert it to a Policy that
provides benefits that do not vary with the investment results of a separate
account by exercising the Special Transfer Right.

POLICIES (EXCEPT FOR POLICIES ISSUED IN CERTAIN STATES) INCLUDE AN
ARBITRATION PROVISION THAT MANDATES RESOLUTION OF ALL DISPUTES ARISING UNDER THE
POLICY THROUGH BINDING ARBITRATION. THIS PROVISION IS INTENDED TO RESTRICT AN
OWNER'S ABILITY TO LITIGATE SUCH DISPUTES. SEE "ARBITRATION".

Please read this prospectus and the prospectus for each of the Funds
carefully and retain copies for future reference. This prospectus must be
accompanied or preceded by the current prospectus for each of the Funds.

AN INVESTMENT IN THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, NOR IS THE POLICY FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN
THE POLICY INVOLVES CERTAIN RISKS, INCLUDING THE LOSS OF PREMIUM PAYMENTS
(PRINCIPAL).

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

, 1998

PROSPECTUS CONTENTS

PAGE
------

DEFINITIONS OF TERMS.................................................. 5
SUMMARY AND DIAGRAM OF THE POLICY..................................... 7
EXPENSE TABLES........................................................ 10
GENERAL INFORMATION ABOUT PROTECTIVE LIFE, THE VARIABLE ACCOUNT AND
THE FUNDS............................................................ 12
Protective Life Insurance Company................................... 12
Protective Variable Life Separate Account........................... 13
The Funds........................................................... 13
- The PIC Funds................................................... 14
- The Oppenheimer Funds........................................... 14
- The MFS Funds................................................... 14
- The Calvert Funds............................................... 15
Other Investors in the Funds........................................ 15
Addition, Deletion or Substitution of Investments................... 16
Voting Rights....................................................... 17
THE POLICY............................................................ 17
Purchasing a Policy................................................. 17
Cancellation Privilege.............................................. 18
Premium Payments.................................................... 18
- Minimum Initial Premium Payment................................. 18
- Planned Periodic Premium Payments............................... 18
- Unscheduled Premium Payments.................................... 19
- Premium Payment Limitations..................................... 19
- No-Lapse Guarantee.............................................. 19
- Premium Payments Upon Increase in Face Amount................... 19
Net Premium Allocations............................................. 20
Policy Lapse and Reinstatement...................................... 20
- Lapse........................................................... 20
- Reinstatement................................................... 20
CALCULATION OF POLICY VALUES.......................................... 21
Variable Account Value.............................................. 21
- Determination of Units.......................................... 21
- Determination of Unit Value..................................... 21
- Net Investment Factor........................................... 21
Fixed Account Value................................................. 21
POLICY BENEFITS....................................................... 22
Transfers of Policy Values.......................................... 22
- General......................................................... 22
- Telephone Transfers............................................. 22
- Reservation of Rights........................................... 22
- Dollar Cost Averaging........................................... 22
- Portfolio Rebalancing........................................... 23
Policy Value Credit................................................. 23
Surrender Privilege................................................. 24
Withdrawal Privilege................................................ 24
Policy Loans........................................................ 24
- General......................................................... 24
- Loan Collateral................................................. 24
- Loan Repayment.................................................. 25
- Interest........................................................ 25
- Non-Payment of Policy Loan...................................... 25

PAGE
------

- Effect of a Policy Loan......................................... 25
Death Benefit Proceeds.............................................. 26
- Calculation of Death Benefit Proceeds........................... 26
- Death Benefit Options........................................... 26
- Changing the Death Benefit Option............................... 26
- Changing the Face Amount........................................ 26
- Additional Coverage from Term Rider for Covered Insured
("CIR").......................................................... 27
Settlement Options.................................................. 28
- Minimum Amounts................................................. 28
- Other Requirements.............................................. 28
THE FIXED ACCOUNT..................................................... 28
The Fixed Account................................................... 29
Interest Credited on Fixed Account Value............................ 29
Payments from the Fixed Account..................................... 29
CHARGES AND DEDUCTIONS................................................ 29
Premium Expense Charge.............................................. 29
Monthly Deduction................................................... 29
- Cost of Insurance Charge........................................ 30
- Cost of Insurance Charge under a CIR............................ 31
- Legal Considerations Relating to Sex -- Distinct Premium
Payments and Benefits............................................ 31
- Monthly Administration Fee...................................... 31
- Supplemental Benefit and/or Rider Charges....................... 31
- Mortality and Expense Risk Charge............................... 31
Transfer Fee........................................................ 32
Surrender Charge (Contingent Deferred Sales Charges)................ 32
Withdrawal Charge................................................... 32
Fund Expenses....................................................... 33
EXCHANGE PRIVILEGE.................................................... 33
Effect of the Exchange Offer........................................ 34
- Tax Considerations.............................................. 35
- Sales Commissions............................................... 35
ILLUSTRATIONS OF POLICY VALUES, SURRENDER VALUES, DEATH BENEFITS AND
ACCUMULATED
PREMIUMS............................................................. 35
OTHER POLICY BENEFITS AND PROVISIONS.................................. 45
Limits on Rights to Contest the Policy.............................. 45
- Incontestability................................................ 45
- Suicide Exclusion............................................... 45
Changes in the Policy or Benefits................................... 45
- Misstatement of Age or Sex...................................... 45
- Other Changes................................................... 45
Suspension or Delay of Payments..................................... 45
Reports to Policy Owners............................................ 45
Assignment.......................................................... 45
Arbitration......................................................... 46
Supplemental Benefits and/or Riders................................. 46
- Children's Term Life Insurance Rider............................ 46
- Accidental Death Benefit Rider.................................. 46
- Disability Benefit Rider........................................ 46
- Guaranteed Insurability Rider................................... 46
- Protected Insurability Benefit Rider............................ 46
- Term Rider for Covered Insured.................................. 46
Reinsurance......................................................... 47

PAGE
------

USES OF THE POLICY.................................................... 47
TAX CONSIDERATIONS.................................................... 47
Introduction........................................................ 47
Tax Status of Protective Life....................................... 48
Taxation of Life Insurance Policies................................. 48
- Tax Status of the Policy........................................ 48
-- Diversification Requirements.................................. 48
-- Ownership Treatment........................................... 48
- Tax Treatment of Life Insurance Death Benefit Proceeds.......... 49
- Tax Deferral During Accumulation Period......................... 49
Policies Which Are Not MEC's........................................ 49
-- Tax Treatment of Withdrawals Generally........................ 49
-- Certain Distributions Required by the Tax Law in the First 15
Policy Years..................................................... 49
-- Tax Treatment of Loans........................................ 50
Policies Which Are MEC's............................................ 50
-- Characterization of a Policy as a MEC......................... 50
-- Tax Treatment of Withdrawals, Loans, Assignments and Pledges
under MECs....................................................... 50
-- Penalty Tax................................................... 51
-- Aggregation of Policies....................................... 51
- Actions to Ensure Compliance with the Tax Law................... 51
- Other Considerations............................................ 51
Federal Income Tax Withholding...................................... 51
OTHER INFORMATION ABOUT THE POLICIES AND PROTECTIVE LIFE.............. 51
Sale of the Policies................................................ 51
Corporate Purchasers................................................ 52
Protective Life Directors and Executive Officers.................... 52
State Regulation.................................................... 54
Additional Information.............................................. 54
Preparation for Year 2000........................................... 54
Experts............................................................. 54
Legal Matters....................................................... 55
Financial Statements................................................ 55
APPENDICES
A-Examples of Death Benefit Options................................. A-1

DEFINITIONS OF TERMS

ALLOCATION OPTION -- Any account within the Fixed Account or any Sub-Account to
which Premium Payments may be allocated or Policy Value may be transferred under
the Policy.

ATTAINED AGE -- The Insured's age as of the nearest birthday on the Policy
Effective Date, plus the number of complete Policy Years since the Policy
Effective Date.

BENEFICIARY -- The person to whom the Death Benefit Proceeds are paid upon the
death of the Insured. Primary, contingent, and irrevocable Beneficiaries may be
named.

CANCELLATION PERIOD -- Period shown in the Policy during which the Owner may
exercise the cancellation privilege and return the Policy for a refund.

CASH VALUE -- Policy Value minus any applicable Surrender Charge.

CIR -- Optional Term Rider for Covered Insured.

CODE -- The Internal Revenue Code of 1986, as amended.

DEATH BENEFIT -- The amount payable to the Beneficiary under a Death Benefit
Option before adjustments if the Insured dies while the Policy is in force.

DEATH BENEFIT OPTION -- One of two options that an Owner may select for the
computation of Death Benefit Proceeds. Face Amount (Option 1), or Face Amount
Plus Policy Value (Option 2).

DEATH BENEFIT PROCEEDS -- The amount payable to the Beneficiary if the Insured
dies while the Policy is in force and is equal to the Death Benefit plus any
death benefit under any rider to the Policy less any Policy Debt less unpaid
monthly deductions if the Insured dies during a grace period.

FACE AMOUNT -- A dollar amount selected by the Owner and shown in the Policy.

FIXED ACCOUNT -- Part of Protective Life's General Account to which Policy Value
may be transferred or Net Premiums allocated under a Policy.

FIXED ACCOUNT VALUE -- The Policy Value in the Fixed Account.

FUND -- A separate investment portfolio of an open-end management investment
company or unit investment trust in which a Sub-Account invests.

GENERAL ACCOUNT -- Protective Life's assets other than those allocated to the
Variable Account or another separate account.

HOME OFFICE -- 2801 Highway 280 South, Birmingham, Alabama 35223.

INITIAL FACE AMOUNT -- The Face Amount on the Policy Effective Date.

INSURED -- The person whose life is covered by the Policy.

ISSUE AGE -- The Insured's age as of the nearest birthday on the Policy
Effective Date.

ISSUE DATE -- The date the Policy is issued. The Issue Date may be a later date
than the Policy Effective Date if the initial premium payment is received at the
Home Office before the Issue Date.

LAPSE -- Termination of the Policy at the expiration of the grace period while
the Insured is still living.

LOAN ACCOUNT -- An account within Protective Life's general account to which
Fixed Account Value and/or Variable Account Value is transferred as collateral
for Policy loans.

LOAN ACCOUNT VALUE -- The Policy Value in the Loan Account.

MINIMUM MONTHLY PREMIUM -- For Policies issued on Insured's Issue Age below 70,
the minimum amount of premium payments that must be paid in order for the
No-Lapse Guarantee to remain in effect.

MONTHLY ANNIVERSARY DAY -- The same day in each month as the Policy Effective
Date.

MONTHLY DEDUCTION -- The fees and charges deducted monthly from the Policy Value
and/or Variable Account Value as described on the Policy Specifications Page of
the Policy.

NET AMOUNT AT RISK -- As of any Monthly Anniversary Day, the Death Benefit under
the Policy (discounted for the upcoming Policy month) less the Policy Value
(before deduction of the

monthly administration fee and monthly supplemental and/or rider benefit charges
on that day).

NET ASSET VALUE PER SHARE -- The value per share of any Fund as computed on any
Valuation Day.

NET PREMIUM -- A Premium Payment minus the applicable Premium expense charges.

OWNER, YOU, YOUR -- The person(s) who owns a Policy.

PIC -- Protective Investment Company.

PLANNED PERIODIC PREMIUM PAYMENT -- The premium determined by the Owner as a
level amount that he or she (or they) plan to pay at fixed intervals over a
specified period of time.

POLICY ANNIVERSARY -- The same day in each Policy Year as the Policy Effective
Date.

POLICY DEBT -- The sum of all outstanding policy loans plus accrued interest.

POLICY EFFECTIVE DATE -- The date shown in the Policy as of which coverage under
the Policy begins. Policy Years are measured from the Policy Effective Date. The
Policy Effective Date is never the 29th, 30th, or 31st of a month.

POLICY VALUE -- The sum of the Variable Account Value, the Fixed Account Value,
and the Loan Account Value.

POLICY YEAR -- Each period of twelve months commencing with the Policy Effective
Date and each Policy Anniversary thereafter.

PREMIUM PAYMENT(S) OR PREMIUMS -- Payments made by the Owner(s) to purchase the
Policy.

PROTECTIVE LIFE, WE, US, OUR, COMPANY -- Protective Life Insurance Company.

SUB-ACCOUNT -- A separate division of the Variable Account established to invest
in a particular Fund.

SUB-ACCOUNT VALUE -- The Policy Value in a Sub-Account.

SURRENDER VALUE -- The Cash Value minus any outstanding Policy Debt.

UNIT -- A unit of measurement used to calculate Sub-Account Values.

UNSCHEDULED PREMIUM PAYMENT -- Any Premium Payment other than a Planned Periodic
Premium Payment.

VALUATION DAY -- Each day the New York Stock Exchange is open for business
except federal and other holidays and days when Protective Life is not open for
business.

VALUATION PERIOD -- The period commencing with the close of regular trading on
the New York Stock Exchange on any valuation day and ending at the close of
regular trading on the New York Stock Exchange on the next succeeding Valuation
Day.

VARIABLE ACCOUNT -- Protective Variable Life Separate Account, a separate
investment account of Protective Life into which Net Premiums may be allocated.

VARIABLE ACCOUNT VALUE -- The sum of all Sub-Account Values.

WITHDRAWAL -- A withdrawal by the Owner of an amount of Cash Value that is less
than the Surrender Value.

WRITTEN NOTICE -- A written notice or request that is received by Protective
Life at the Home Office.

SUMMARY AND DIAGRAM OF THE POLICY

THE FOLLOWING SUMMARY OF PROSPECTUS INFORMATION AND DIAGRAM OF THE POLICY
SHOULD BE READ IN CONJUNCTION WITH THE DETAILED INFORMATION APPEARING ELSEWHERE
IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, THE DESCRIPTION OF THE POLICY IN
THIS PROSPECTUS ASSUMES THAT THE POLICY IS IN FORCE AND THERE IS NO OUTSTANDING
POLICY DEBT.

The Policy is similar in many ways to fixed-benefit life insurance. As with
fixed-benefit life insurance, the Owner of a Policy makes premium payments for
insurance coverage on the person insured. Also, like many fixed-benefit life
insurance policies, the Policy provides for accumulation of Net Premiums and a
Surrender Value which is payable if the Policy is surrendered during the
Insured's lifetime. As with fixed-benefit life insurance, the Surrender Value
during the early Policy Years is likely to be substantially lower than the
aggregate Premium Payments made.

However, the Policy differs from fixed-benefit life insurance in several
important respects. Unlike fixed-benefit life insurance, the Death Benefit may
and the Policy Value will increase or decrease to reflect the investment
performance of any Sub-Accounts to which Policy Value is allocated. Also, unless
the entire Policy Value is allocated to the Fixed Account, there is no
guaranteed minimum Surrender Value. If Policy Value is insufficient to pay
charges due, then, after a grace period, the Policy will lapse without value.
See "Policy Lapse and Reinstatement". However, Protective Life guarantees that
the Policy will remain in force during the first 15 Policy Years (for Insureds
Issue Age 0 through 39), the first 10 Policy Years (for Insureds Issue Age 40
through 64), or the first 5 Policy Years (for Insureds Issue Age 65 and above),
as long as certain requirements related to the Minimum Monthly Premium have been
met. See "Premium Payments -- No-Lapse Guarantee," and "Policy Loans". If a
Policy lapses while loans are outstanding, certain amounts may become subject to
income tax and a 10% penalty tax. See "Tax Considerations".

The most important features of the Policy, such as charges, cash benefits,
death benefits, and calculation of Policy values, are summarized in the diagram
on the following pages.

PURPOSE OF THE POLICY. The Policy is designed to be a long-term investment
providing insurance benefits. A prospective Owner should evaluate the Policy in
conjunction with other insurance policies he or she may own, as well as their
need for insurance and the Policy's long-term investment potential. It may not
be advantageous to replace existing insurance coverage with the Policy. In
particular, replacement should be carefully considered if the decision to
replace existing coverage is based solely on a comparison of Policy
illustrations (see below).

POLICY BENEFITS. Two Death Benefit options are available under the Policy:
a level death benefit ("Option 1") and a variable death benefit ("Option 2").
Protective Life guarantees that the Death Benefit Proceeds will never be less
than the Face Amount of insurance (less any outstanding Policy Debt and past due
charges) as long as sufficient premiums are paid to keep the Policy in force.
The Policy provides for a Surrender Value that can be obtained by surrendering
the Policy. The Policy also permits loans and withdrawals, within limits.

POLICY VALUE CREDITS. Subject to certain significant conditions, on the
tenth Policy Anniversary, and on each Policy Anniversary thereafter, the Company
will make a credit to the Policy's Policy Value equal to (1) .5% of the unloaned
Policy Value if the unloaned Policy Value is more than $50,000 and less than
$500,000, or (2) 1% of unloaned Policy Value if the unloaned Policy is greater
than $500,000.

ILLUSTRATIONS. Illustrations in this prospectus or used in connection with
the purchase of a Policy are based on HYPOTHETICAL rates of return. THESE RATES
ARE NOT GUARANTEED. They are illustrative only and SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE PERFORMANCE. Actual rates of return may be
higher or lower than those reflected in Policy illustrations, and therefore,
actual Policy values will be different from those illustrated.

TAX CONSIDERATIONS. Protective Life intends for the Policy to satisfy the
definition of a life insurance contract under Section 7702 of the Internal
Revenue Code of 1986, as amended. A Policy may be a "modified endowment
contract" under federal tax law depending upon the amount of Premium

Payments made in relation to the Death Benefit provided under the Policy.
Protective Life will monitor Policies and will attempt to notify you on a timely
basis if your Policy is in jeopardy of becoming a modified endowment contract.
For further discussion of the tax status of a Policy and the tax consequences of
being treated as a life insurance contract or a modified endowment contract, see
"Tax Considerations".

CANCELLATION PRIVILEGE. For a limited time after the Policy is issued, you
have the right to cancel your Policy and receive a refund. (See "Cancellation
Privilege"). In certain states, until the end of this "Cancellation Period,"
Protective Life reserves the right to allocate Net Premium payments to the
Sub-Account investing in the PIC Money Market Fund or to the Fixed Account. (See
"Net Premium Allocations").

OWNER INQUIRIES. If you have any questions, you may write or call
Protective Life's Home Office at 2801 Highway 280 South, Birmingham, Alabama
35223, 1-800-265-1545.

DIAGRAM OF POLICY

PREMIUM PAYMENTS

- You select a payment plan but are not required to pay premium payments
according to the plan. You can vary the amount and frequency and can skip
planned Premium Payments. See pages 18 and 19 for rules and limits.

- The Policy's minimum initial premium payment and planned Premium Payment
depend on the Insured's age, sex and underwriting class, Face Amount
selected, and any supplemental benefits and/or riders.

- Unscheduled Premium Payments may be made, within limits. See page 19.

DEDUCTIONS FROM PREMIUM PAYMENTS

- A Premium Expense Charge of 5% will be deducted from each Premium Payment.
See page 29.

NET PREMIUM PAYMENTS

- You direct the allocation of Net Premium among seventeen Sub-Accounts and
the Fixed Account. See page 20 for rules and limits on Net Premium
allocations.

- The Sub-Accounts invest in corresponding Funds. See pages 13 through 15.
Funds available are the PIC Funds, the Oppenheimer Funds, the MFS Funds and
the Calvert Funds (as defined below).

- Interest is credited on amounts allocated to the Fixed Account at a minimum
guaranteed rate of 4%. See page 28 for rules and limits on Fixed Account
allocations.

DEDUCTIONS FROM POLICY VALUE
- Monthly Deduction for cost of insurance, administration fees, mortality and
expense risk charges and charges for any supplemental and/or rider benefits.
Administration fees are $8.00 per month. Monthly Mortality and Expense Risk
Charges are currently equal to .075% multiplied by the Variable Account
Value, which is equivalent to an annual rate of 0.90% of such amount during
Policy Years 1 through 10; and in Policy Years 11 and thereafter there is
currently no monthly Mortality and Expense Risk Charge. The Mortality and
Expense Risk Charge is not deducted from Fixed Account Value. See pages 29
through 32.
DEDUCTIONS FROM ASSETS
- Investment advisory fees and fund operating expenses are also deducted from
the assets of each Fund. See page 33.

POLICY VALUE
- Is equal to Net Premiums, as adjusted each Valuation Day to reflect
Sub-Account investment experience, interest credited on Fixed Account Value,
charges deducted and other Policy transactions (such as transfers and
withdrawals). See page 21.

- Varies from day to day. There is no minimum guaranteed Policy Value. The
Policy may lapse if the Policy Value is insufficient to cover a Monthly
Deduction due. See pages 19 and 20.

- Can be transferred between and among the Sub-Accounts and the Fixed Account.
A transfer fee may apply if more than 12 transfers are made in a Policy
Year. See page 22 for rules and limits. Policy loans reduce the amount
available for allocations and transfers.

- Is the starting point for calculating certain values under a Policy, such as
the Cash Value, Surrender Value, and the Death Benefit used to determine
Death Benefit Proceeds.

CASH BENEFITS
- - Loans may be taken for amounts up to 90% of Surrender Value, at an
effective annual interest rate of 6.0% during the first 10 Policy Years
and 4.5% thereafter. See page 24 for rules and limits.

- - Withdrawals generally can be made provided there is sufficient remaining
Surrender Value. A withdrawal charge of the lesser of $25 or 2% of the
withdrawal amount requested will apply. See pages 23 and 24 for rules and
limits.

- - The Policy may be surrendered in full at any time for its Surrender
Value. A declining deferred sales charge per $1,000 of premium payments
made in the first Policy Year is assessed on surrenders during the first
19 Policy Years. See pages 31 and 32.

- - Settlement Options are available. See pages 27 and 28.

DEATH BENEFITS
- - Available as lump sum or under a variety of Settlement Options.

- - For most Policies, the minimum Face Amount of $100,000.

- - Two Death Benefit Options available: Option 1, equal to the Face Amount,
and Option 2, equal to the Face Amount plus Policy Value. See page 26.

- - Flexibility to change the Death Benefit Option and Face Amount. See page
26 for rules and limits.

- - Supplemental benefits and/or riders may be available. See pages 45 and
46.

EXPENSE TABLES

The following expense information assumes that the entire Policy Value is
Variable Account Value.

PIC FUNDS (1)

MONEY MARKET
FUND
-------------
Management (Advisory) Fees................................. 0.60%
Other Expenses After Reimbursement........................ 0.00%
----------
Total Annual Fund Expenses................................
(after reimbursements) 0.60%

CORE U.S.
EQUITY
FUND
-------------

Management (Advisory) Fees................................. 0.80%
Other Expenses After Reimbursement........................ 0.00%
----------
Total Annual Fund Expenses................................
(after reimbursements) 0.80%

CAPITAL
GROWTH
FUND
-------------

SMALL CAP
VALUE FUND
-------------

INTERNATIONAL
EQUITY FUND
-------------

Management (Advisory) Fees................................. 1.10%
Other Expenses After Reimbursement........................ 0.00%
----------
Total Annual Fund Expenses................................
(after reimbursements) 1.10%

GROWTH AND
INCOME FUND
-------------

GLOBAL INCOME
FUND
-------------

OPPENHEIMER FUNDS

AGGRESSIVE
GROWTH
FUND
-------------

Management (Advisory) Fees................................. 0.71%
Other Expenses............................................ 0.02%
----------
Total Annual Fund Expenses................................ 0.73%

GROWTH
FUND
-------------
Management (Advisory) Fees................................. 0.73%

Other Expenses............................................ 0.02%
----------
Total Annual Fund Expenses................................ 0.75%

GROWTH &
INCOME
FUND
-------------

Management (Advisory) Fees................................. 0.75%
Other Expenses............................................ 0.08%
----------
Total Annual Fund Expenses................................ 0.83%

STRATEGIC
BOND
FUND
-------------

MFS FUNDS

MFS EMERGING
GROWTH
SERIES
-------------

Management (Advisory) Fees................................. 0.75%
Other Expenses After Reimbursement (2).................... 0.15%
----------
Total Annual Fund Expenses................................
(after reimbursements) .090%

MFS RESEARCH
SERIES
-------------

Management (Advisory) Fees................................. 0.75%
Other Expenses After Reimbursement (2).................... 0.13%
----------
Total Annual Fund Expenses................................
(after reimbursements) 0.88%

MFS GROWTH
WITH INCOME
SERIES
-------------

Management (Advisory) Fees................................. 0.75%
Other Expenses After Reimbursement (2)(3)................. 0.25%
----------
Total Annual Fund Expenses................................
(after reimbursements) (3) 1.00%

MFS TOTAL
RETURN
SERIES
-------------

CALVERT FUNDS

SOCIAL
SMALL CAP
PORTFOLIO
-------------

Management (Advisory) Fees................................. 1.00%
Other Expenses After Reimbursement........................ 0.20%
----------
Total Annual Fund Expenses................................
(after reimbursements) (4) 1.20%

SOCIAL
BALANCED
PORTFOLIO
-------------
Management (Advisory) Fees................................. 0.69%

Other Expenses After Reimbursement........................ 0.12%
----------
Total Annual Fund Expenses................................
(after reimbursements) (4) 0.81%

- ------------------------------
* Protective Life reserves the right to charge a Transfer Fee in the future.
(See "Charges and Deductions".)

(1) The annual expenses listed for all of the PIC Funds are net of certain
reimbursements by PIC's investment manager. (See "The Funds".) Absent the
reimbursements, total expenses for the period ended December 31, 1997 were:
Money Market Fund 1.42%, CORE U.S. Equity Fund 0.86%, Small Cap Value Fund
0.89%, International Equity Fund 1.37%, Growth and Income Fund 0.85%,
Capital Growth Fund 0.97%, and Global Income Fund 1.32%. PIC's investment
manager has voluntarily agreed to reimburse certain of each Fund's expenses
in excess of its management fees. Although this reimbursement may be ended
on 120 days notice to PIC, the investment manager has no present intention
of doing so.

(2) Each Series has an expense offset arrangement which reduces the Series'
custodian fee based on the amount of cash maintained by the Series with its
custodian and dividend disbursing agent, and may enter into other such
arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Series' expenses). Any such fee reductions are not
reflected under "Other Expenses."

(3) The investment advisor has agreed to bear expenses for these Series, subject
to reimbursement by these Series, such that each such Series' "Other
Expenses" shall not exceed 0.25% of the average daily net assets of the
Series during the current fiscal year. See the Funds prospectus,
"Information Concerning Shares of Each Series -- Expenses." Otherwise,
"Other Expenses" for the Growth With Income Series and Total Return Series
would be 0.35% and 0.27%, respectively, and "Total Operating Expenses" would
be 1.10% and 1.02%, respectively, for these Series.

(4) The figures have been restated to reflect an increase in transfer agency
expenses of 0.01% for each portfolio expected to be incurred in 1998.
Management Fees includes for Calvert Social Balanced a performance
adjustment, which depending on performance, could cause the fee to be as
high as 0.85% or as low as 0.55%. Effective December 1, 1997, the Calvert
Social Small Cap Growth advisory fee was reduced from the annual rate of
1.50% to 0.90%, and the administrative services fee was reduced from the
annual rate of 0.20% to 0.10%. The Calvert Social Small Cap Growth expenses
have been restated to reflect the lower advisory fee and administrative
services fee. "Other Expenses" include the fee that could have been charged
by the portfolios' custodian, without reduction for an expense off-set by
the custodian of 0.03% for the Calvert Social Balanced portfolio, and 0.31%
for the Calvert Social Small Cap Growth portfolio. Total annual fund
expenses (restated) after reduction for the expense off-set would be 0.78%
for the Calvert Social Balanced portfolio, and 0.89% for the Calvert Social
Small Cap Growth portfolio. Management Fees for Calvert Social Small Cap
Growth include an administrative service fee of 0.10% paid to the Advisor's
affiliate.

The above tables are intended to assist the owner in understanding the costs
and expenses that he or she will bear directly or indirectly. The tables reflect
the expenses for the Account and reflect the investment management fees and
other expenses and total expenses for each Fund for the period January 1, 1997
to December 31, 1997. For a more complete description of the various costs and
expenses see "Charges and Deductions" and the prospectuses for each of the
Funds, which accompany this prospectus.

GENERAL INFORMATION ABOUT PROTECTIVE LIFE,
THE VARIABLE ACCOUNT AND THE FUNDS

PROTECTIVE LIFE INSURANCE COMPANY

Protective Life is a Tennessee stock life insurance company. Founded in
1907, Protective Life offers individual life and health insurance, annuities,
group life and health insurance, and guaranteed investment contracts. Protective
Life is currently licensed to transact life insurance business in 49 states and
the District of Columbia. As of December 31, 1997, Protective Life had total
assets of approximately $10.1 billion. Protective Life is the principal
operating subsidiary of Protective Life Corporation ("PLC"), an insurance
holding company whose stock is traded on the New York Stock Exchange. PLC, a
Delaware corporation, had consolidated assets of approximately $10.5 billion at
December 31, 1997.

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

Protective Variable Life Separate Account is a separate investment account
of Protective Life established under Tennessee law by the board of directors of
Protective Life on February 22, 1995. The Variable Account is registered with
the Securities and Exchange Commission ("SEC") as a unit investment trust under
the Investment Company Act of 1940 (the "1940 Act") and is a "separate account"
within the meaning of the federal securities laws. This registration does not
involve supervision by the SEC of the management or investment policies of
practices or the Variable Account.

Protective Life owns the assets of the Variable Account. These assets are
held separate from other assets and are not part of Protective Life's General
Account. Assets of the Variable Account equal to the reserves or other contract
liabilities of the Variable Account will not be charged with liabilities that
arise from any other business that Protective Life conducts. Protective Life may
transfer to its General Account any assets of the Variable Account which exceed
the reserves and other contract liabilities of the Variable Account (which
always are at least equal to the aggregate Surrender Values under the Policies).
Protective Life may accumulate in the Variable Account the charge for mortality
and expense risks and investment results applicable to those assets that are in
excess of the reserves and other contract liabilities related to the Policies.
Protective Life is obligated to pay all benefits provided under the Policies.

The Variable Account is divided into Sub-Accounts. The income, gains or
losses, whether or not realized, from the assets of each Sub-Account are
credited to or charged against that Sub-Account without regard to any other
income, gains or losses of Protective Life. Each Sub-Account invests exclusively
in shares of a corresponding Fund. Therefore, the investment experience of your
Policy depends on the experience of the Sub-Accounts you select. In the future,
the Variable Account may include other Sub-Accounts that are not available under
the Policies and are not otherwise discussed in this Prospectus.

The Variable Account has seventeen Sub-Accounts: PIC Money Market; PIC CORE
U.S. Equity; PIC Capital Growth; PIC Small Cap Value; PIC International Equity;
PIC Growth and Income; PIC Global Income; Oppenheimer Aggressive Growth;
Oppenheimer Growth; Oppenheimer Growth & Income; Oppenheimer Strategic Bond; MFS
Emerging Growth; MFS Research; MFS Growth With Income; MFS Total Return; Calvert
Social Small Cap Growth; and Calvert Social Balanced.

THE FUNDS

Each Sub-Account invests in a corresponding Fund. Each Fund is an investment
portfolio of one of the following investment companies: PIC (the "PIC Funds")
managed by Investment Distributions Advisory Services, Inc. and subadvised by
Goldman Sachs Asset Management or Goldman Sachs Asset Management International;
Oppenheimer Variable Account Funds (the "Oppenheimer Funds") managed by
OppenheimerFunds, Inc.; MFS Variable Insurance Trust (the "MFS Funds") managed
by Massachusetts Financial Services Company; or Calvert Variable Series, Inc.
(the "Calvert Funds") managed by Calvert Asset Management Company, Inc. Shares
of these Funds are offered only to: (1) the Variable Account, (2) other separate
accounts of Protective Life supporting variable annuity contracts or variable
life insurance policies, (3) separate accounts of other life insurance companies
supporting variable annuity contracts or variable life insurance policies, and
(4) certain qualified retirement plans. Such shares are not offered directly to
investors but are available only through the purchase of such contracts or
policies or through such plans. See the prospectus for each Fund for details
about that Fund.

There is no guarantee that any Fund will meet its investment objectives.
Please refer to the prospectus for each of the Funds you are considering for
more information.

THE PIC FUNDS

PIC GROWTH AND INCOME FUND. This Fund seeks long-term growth of capital
and growth of income. This Fund will pursue its objectives by investing,
under normal circumstances, at least 65% of its total assets in equity
securities having favorable prospects of capital appreciation and/ or
dividend paying ability.

PIC INTERNATIONAL EQUITY FUND. This Fund seeks long-term capital
appreciation. This Fund will pursue its objective by investing substantially
all, and at least 65% of total assets, in equity and equity-related
securities of companies that are organized outside the United States or
whose securities are primarily traded outside the United States.

PIC GLOBAL INCOME FUND. This Fund seeks high total return, emphasizing
current income and, to a lesser extent, providing opportunities for capital
appreciation. This Fund will pursue its objectives by investing primarily in
high quality fixed-income securities of U.S. and foreign issuers and through
foreign currency transactions.

PIC CORE U.S. EQUITY FUND. This Fund seeks a total return consisting of
capital appreciation plus dividend income. This Fund will pursue its
objective by investing, under normal circumstances, at least 90% of its
total assets in equity securities selected using both fundamental research
and a variety of quantitative techniques that seek to maximize the Fund's
expected return while maintaining risk, style, capitalization and industry
characteristics similar to the S&P 500 Index.

PIC SMALL CAP VALUE (formerly Small Cap Equity) FUND. This Fund seeks
long-term capital growth. This Fund will pursue its objective by investing,
under normal circumstances, at least 65% of its total assets in equity
securities of companies with public stock market capitalizations of $1
billion or less at the time of investment.

PIC MONEY MARKET FUND. This Fund seeks to maximize current income to
the extent consistent with the preservation of capital and maintenance of
liquidity. This Fund will pursue its objective by investing exclusively in
high quality money market instruments. AN INVESTMENT IN THE MONEY MARKET
FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THE FUND
CANNOT ASSURE THAT IT WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF
$1 PER SHARE.

PIC CAPITAL GROWTH FUND. This Fund seeks long-term capital growth. The
Fund will pursue its objective by investing, under normal circumstances, at
least 90% of its total assets in a diversified portfolio of equity
securities having long-term capital appreciation potential.

THE OPPENHEIMER FUNDS

AGGRESSIVE GROWTH (formerly Capital Appreciation) FUND. This Fund seeks
to achieve capital appreciation by investing in "growth-type" companies.

GROWTH FUND. This Fund seeks to achieve capital appreciation by
investing in securities of well-known established companies.

GROWTH & INCOME FUND. This Fund seeks a high total return (which
includes growth in the value of its shares as well as current income) from
equity and debt securities. From time to time this Fund may focus on small
to medium capitalization common stocks, bonds and convertible securities.

STRATEGIC BOND FUND. This Fund seeks a high level of current income
principally derived from interest on debt securities and seeks to enhance
such income by writing covered call options on debt securities.

THE MFS FUNDS
MFS EMERGING GROWTH SERIES. This Fund seeks to provide long-term growth
of capital.

MFS RESEARCH SERIES. This Fund seeks to provide long-term growth of
capital and future income.

MFS GROWTH WITH INCOME SERIES. This Fund seeks to provide reasonable
current income and long-term growth of capital and income.

MFS TOTAL RETURN SERIES. This Fund seeks primarily to provide
above-average income (compared to a portfolio invested entirely in equity
securities) consistent with the prudent employment of capital and
secondarily to provide a reasonable opportunity for growth of capital and
income.

THE CALVERT FUNDS

SOCIAL SMALL CAP (formerly Strategic Growth) PORTFOLIO. This Fund seeks
maximum long-term growth through investments primarily in the equity
securities of small capitalized growth companies that have historically
exhibited exceptional growth characteristics, and that in the Fund Advisor's
opinion, have strong earnings potential relative to the U.S. market as a
whole. The Fund is designed to provide long-term growth of capital by
investing in enterprises that make a significant contribution to society
through their products and services and through the way they do business.

SOCIAL BALANCED PORTFOLIO. This Fund seeks to achieve a total return
above the rate of inflation through an actively managed, non-diversified
portfolio of common and preferred stocks, bonds, and money market
instruments that offer income and capital growth opportunity and that
satisfy the social concern criteria established for the Fund.

THERE IS NO ASSURANCE THAT THE STATED OBJECTIVES AND POLICIES OF ANY OF THE
FUNDS WILL BE ACHIEVED.

MORE DETAILED INFORMATION CONCERNING THE INVESTMENT OBJECTIVES, POLICIES AND
RESTRICTIONS OF THE FUNDS, THE EXPENSES OF THE FUNDS, THE RISKS ATTENDANT TO
INVESTING IN THE FUNDS AND OTHER ASPECTS OF THEIR OPERATIONS CAN BE FOUND IN THE
CURRENT PROSPECTUSES FOR THE FUNDS, WHICH ACCOMPANY THIS PROSPECTUS, AND THE
CURRENT STATEMENT OF ADDITIONAL INFORMATION FOR EACH OF THE FUNDS. THE FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE CONCERNING THE
ALLOCATION OF NET PREMIUMS OR TRANSFERS AMONG THE SUB-ACCOUNTS.

Each Fund sells its shares to the Variable Account in accordance with the
terms of a participation agreement between the appropriate investment company
and Protective Life. The termination provisions of these agreements vary. Should
a participation agreement relating to a Fund terminate, the Variable Account
would not be able to purchase additional shares of that Fund. In that event,
Owners would no longer be able to allocate Variable Account Value or Premium
Payments to Sub-Accounts investing in that Fund. In certain circumstances, it is
also possible that a Fund may refuse to sell its shares to the Variable Account
despite the fact that the participation agreement relating to that Fund has not
been terminated. Should a Fund decide to discontinue selling its shares to the
Variable Account, Protective Life would not be able to honor requests from
Owners to allocate Premium Payments or transfer Account Value to the Sub-Account
investing in shares of that Fund.

Protective Life has entered into agreements with the investment managers or
advisers of several of the Funds pursuant to which each such investment manager
or adviser pays Protective Life a servicing fee based upon an annual percentage
of the average daily net assets invested by the Variable Account (and other
separate accounts of Protective Life) in the Funds managed by that manager or
adviser. These fees are in consideration for administrative services provided to
the Funds by Protective Life. Payments of fees under these agreements by
managers or advisers do not increase the fees or expenses paid by the Funds or
their shareholders.

OTHER INVESTORS IN THE FUNDS

PIC currently sells shares of its Funds only to Protective Life as the
underlying investment for the Variable Account as well as for variable annuity
contracts issued through Protective Life. PIC may

in the future sell shares of its Funds to other separate accounts of Protective
Life or its life insurance company affiliates supporting other variable annuity
contracts or variable life insurance contracts. In addition, upon obtaining
regulatory approval, PIC may sell shares to certain retirement plans qualifying
under Section 401 of the Code. Protective Life currently does not foresee any
disadvantages to Owners that would arise from the possible sale of shares to
support its variable annuity contracts or those of its affiliates or from the
possible sale of shares to such retirement plans. However, the board of
directors of PIC will monitor events in order to identify any material
irreconcilable conflicts that might possibly arise if such shares were also
offered to support variable life insurance contracts other than the Policies or
variable annuity contracts or to retirement plans. In event of such a conflict,
the board of directors would determine what action, if any, should be taken in
response to the conflict. In addition, if Protective Life believes that the
PIC's response to any such conflicts insufficiently protects Owners, it will
take appropriate action on its own, including withdrawing the Account's
investment in the Fund. (See the PIC prospectus for more detail.)

Shares of the Oppenheimer Funds, MFS Funds and Calvert Funds are sold to
separate accounts of insurance companies, which may or may not be affiliated
with Protective Life or each other, a practice known as "shared funding." They
may also be sold to separate accounts to serve as the underlying investment for
both variable annuity contracts and variable life insurance policies, a practice
known as "mixed funding." As a result, there is a possibility that a material
conflict may arise between the interests of Owners of Protective Life's Policies
whose Policy Values are allocated to the Variable Account and of owners of other
contracts whose contract values are allocated to one or more other separate
accounts investing in any one of the Funds. Shares of some of these Funds may
also be sold to certain qualified pension and retirement plans. As a result,
there is a possibility that a material conflict may arise between the interests
of Policy Owners generally or certain classes of Policy Owners, and such
retirement plans or participants in such retirement plans. In the event of any
such material conflicts, Protective Life will consider what action may be
appropriate, including removing the Fund from the Variable Account or replacing
the Fund with another fund. As is the case with PIC, the board of directors (or
trustees) of each of the Oppenheimer Funds, MFS Funds and Calvert Funds monitors
events related to their Funds to identify possible material irreconcilable
conflicts among and between the interests of the Fund's various investors. There
are certain risks associated with mixed and shared funding and with the sale of
shares to qualified pension and retirement plans, as disclosed in each Fund's
prospectus.

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS

Protective Life reserves the right, subject to applicable law, to make
additions to, deletions from, or substitutions for the shares that are held in
the Variable Account or that the Variable Account may purchase. If the shares of
a Fund are no longer available for investment or if in Protective Life's
judgment further investment in any Fund should become inappropriate in view of
the purposes of the Variable Account, Protective Life may redeem the shares, if
any, of that Fund and substitute shares of another Fund. Protective Life will
not substitute any shares attributable to a Policy's interest in the Variable
Account without notice and any necessary approval of the SEC and state insurance
authorities.

Protective Life also reserves the right to establish additional Sub-Accounts
of the Variable Account, each of which would invest in shares corresponding to a
new Fund. Subject to applicable law and any required SEC approval, Protective
Life may, in its sole discretion, establish new Sub-Accounts or eliminate one or
more Sub-Accounts if marketing needs, tax considerations or investment
conditions warrant. Any new Sub-Accounts may be made available to existing
Owner(s) on a basis to be determined by Protective Life.

If any of these substitutions or changes are made, Protective Life may by
appropriate endorsement change the Policy to reflect the substitution or other
change. If Protective Life deems it to be in the best interest of Owner(s), and
subject to any approvals that may be required under applicable law, the Variable
Account may be operated as a management investment company under the 1940 Act,
it

may be deregistered under that Act if registration is no longer required, or it
may be combined with other Protective Life separate accounts. Protective Life
reserves the right to make any changes to the Variable Account required by the
1940 Act or other applicable law or regulation.

VOTING RIGHTS

Protective Life is the legal owner of Fund shares held by the Sub-Accounts
and as such has the right to vote on all matters submitted to shareholders of
the Funds. However, in accordance with applicable law, Protective Life will vote
shares held in the Sub-Accounts at meetings of shareholders of the Funds in
accordance with instructions received from Owners with Policy Value in the Sub-
Accounts. Should the 1940 Act or any regulation thereunder be amended, or should
the current interpretation thereof change, or Protective Life determines that it
is permitted to vote such shares in its own right, it may elect to do so.

Protective Life will send Owners voting instruction forms and other voting
materials (such as Fund proxy statements, reports and other proxy materials)
prior to shareholders meetings. The number of votes as to which an Owner may
give instructions is calculated separately for each Sub-Account and may include
fractional votes.

The number of votes attributable to a Sub-Account for an Owner is determined
by applying the Owner's percentage interest, if any, in a particular Sub-Account
to the total number of votes attributable to that Sub-Account. An Owner holds a
voting interest in each Sub-Account to which Variable Policy Value is allocated
under his or her Policy. Owners only have voting interests while the Insured is
alive. The number of votes for which an Owner may give instructions is
determined as of the date coincident with the date established by the Fund for
determining shareholders eligible to vote at the relevant meeting of that Fund.

Shares as to which no timely instructions are received and shares held
directly by Protective Life are voted by Protective Life in proportion to the
voting instructions that are received with respect to all Policies participating
in a Sub-Account. Voting instructions to abstain on any item are applied to
reduce the votes eligible to be cast on that item.

Protective Life may, if required by state insurance officials, disregard
Owner voting instructions if such instructions would require shares to be voted
so as to cause a change in sub-classification or investment objectives of one or
more of the Funds, or to approve or disapprove the investment management
agreement or an investment advisory agreement. In addition, Protective Life may
under certain circumstances disregard voting instructions that would require
changes in the investment management agreement, investment manager, an
investment advisory agreement or an investment adviser of one or more of the
Funds, provided that Protective Life reasonably disapproves of such changes in
accordance with applicable regulations under the 1940 Act. If Protective Life
ever disregards voting instructions, Owners will be advised of that action and
of the reasons for such action in the next semiannual report.

THE POLICY

PURCHASING A POLICY

To purchase a Policy, a prospective Owner must submit a completed
application (which Protective Life must approve) and an initial Premium Payment
through a licensed representative of Protective Life who is also a registered
representative of a broker-dealer having a distribution agreement with
Investment Distributors, Inc. ("IDI"). The initial Premium Payment must be an
amount at least equal to the minimum required. See "Premium Payments," below.
Protective Life requires satisfactory evidence of the Insured's insurability,
which may include a medical examination of the Insured. Generally, Protective
Life will issue a Policy covering an Insured up to age 75 if evidence of
insurability satisfies Protective Life's underwriting rules. Acceptance of an
application depends on Protective Life's underwriting rules, and Protective Life
reserves the right to reject an application for any reason. With the consent of
the Owner, a Policy may be issued on a basis other than that applied for

(I.E., on a higher premium class basis due to increased risk factors). A POLICY
IS ISSUED AFTER PROTECTIVE LIFE APPROVES THE APPLICATION. PREMIUM IS NOT A
REQUIREMENT TO ISSUE A POLICY. PREMIUM MAY BE COLLECTED AT THE TIME OF POLICY
DELIVERY.

Insurance coverage under a Policy begins on the Policy Effective Date which
generally is also the Issue Date. If however the initial Premium Payment is
submitted with the application and the Policy is issued as applied for in the
application, the Policy Effective Date is the later of the date the application
is signed or any required medical examination is completed. Temporary life
insurance coverage (including various forms of conditional receipts) also may be
provided under the terms of a temporary insurance (or conditional receipt)
agreement. In accordance with the terms of such agreements, the total amount of
insurance which may become effective prior to delivery of the Policy to the
owner may not exceed $250,000 (including the amount of any life insurance and
accidental death benefits then in force or applied for with the Company) and may
not be in effect for more than 90 days.

In order to obtain a more favorable Issue Age, Protective Life may permit
the Owner to "backdate" a Policy by electing a Policy Effective Date up to six
months prior to the date of the original application. Charges for the Monthly
Deduction for the backdated period are deducted as of the new Policy Effective
Date.

The Owner of the Policy may exercise all rights provided under the Policy.
The Insured is the Owner, unless a different person is named as Owner in the
application. By Written Notice while the Insured is living, the Owner may name a
Contingent Owner or a new Owner. If the application names more than one person
as Owner, they are joint Owners. In this event, the exercise of any right under
the Policy (such as transfers of Policy Values) requires the authorization of
all Owners. Unless the Owner provides otherwise, in the event of one joint
Owner's death, ownership passes to any surviving joint Owner(s). Unless a
contingent Owner has been named, ownership of the Policy passes to the estate of
the last surviving Owner upon his or her death. A change in Owner may have tax
consequences. See "Tax Considerations".

CANCELLATION PRIVILEGE

You may cancel your Policy for a refund during the Cancellation Period by
returning it to Protective Life's Home Office or to the sales representative who
sold it along with a written cancellation request. The Cancellation Period is
determined by the law of the state in which the application is signed and is
shown in your Policy. In most states it expires at the latest of (1) ten days
after you receive your Policy, (2) 45 days after you sign your application, or
(3) 10 days after Protective Life mails or delivers a Notice of Right of
Withdrawal. Return of the Policy by mail is effective upon receipt by Protective
Life. We will treat the Policy as if it had never been issued. Within seven
calendar days after receiving the returned Policy, Protective Life will refund
(i) the difference between premiums paid and amounts allocated to the Fixed
Account or the Variable Account, plus (ii) Fixed Account Value determined as of
the date the returned Policy is received, plus (iii) Variable Account Value
determined as of the date the returned Policy is received. This amount may be
more or less than the aggregate Premium Payments. In states where required,
Protective Life will refund Premium Payments.

PREMIUM PAYMENTS

MINIMUM INITIAL PREMIUM PAYMENT. The minimum initial Premium Payment
required depends on a number of factors, including the age, sex and rate class
of the proposed Insured, the Initial Face Amount requested by the applicant, any
supplemental benefits and/or riders requested by the applicant and the Planned
Periodic Premium Payments that the applicant selects. See "Planned Periodic
Premium Payments," below. Consult your sales representative for information
about the Initial Premium required for the coverage you desire.

PLANNED PERIODIC PREMIUMS PAYMENTS. In the application the Owner selects a
plan for paying level Premium Payments at specified intervals (e.g., quarterly,
semi-annually or annually) until the Maturity Date. At the Owner's election,
Protective Life will also arrange for payment of Planned Periodic

Premiums on a monthly basis (on any day except the 29th, 30th, or 31st of a
month) under a pre-authorized payment arrangement. You are not required to pay
Premium Payments in accordance with these plans; rather, you can pay more or
less than planned or skip a Planned Periodic Premium Payment entirely. (See,
however, "Policy Lapse and Reinstatement"). Subject to the limits described
below, you can change the amount and frequency of Planned Periodic Premium
Payments whenever you want by Written Notice to Protective Life.

Unless you have arranged to pay Planned Periodic Premium Payments by
pre-authorized payment arrangement or have otherwise requested, you will be sent
reminder notices for Planned Periodic Premium Payments.

UNSCHEDULED PREMIUM PAYMENTS. Subject to the limitations described below,
additional Unscheduled Premium Payments may be paid in any amount and at any
time. By Written Notice, the Owner may specify that all Unscheduled Premium
Payments are to be applied as repayments of Policy Debt, if any.

PREMIUM PAYMENT LIMITATIONS. Premium Payments may be made by any method
acceptable to Protective Life. If by check, the check must be from an Owner (or
the Owner's designee other than a sales representative), payable to Protective
Life Insurance Company, and be dated prior to its receipt at the Home Office. No
Premium Payments are accepted after a Policy's Maturity Date.

Additional limitations apply to Premium Payments. Premium Payments must be
at least $150 ($50 if paid monthly by a pre-authorized payment arrangement) and
must be remitted to the Home Office. See "Net Premium Allocations. Protective
Life also reserves the right to limit the amount of any Premium Payment. In
addition, at any point in time aggregate Premium Payments made under a Policy
may not exceed guideline premium payment limitations for life insurance policies
set forth in the Code. Protective Life will immediately refund any portion of
any Premium Payment that is determined to be in excess of the limits established
by law to qualify a Policy as a contract for life insurance. Protective Life
will monitor Policies and will attempt to notify the Owner on a timely basis if
his or her Policy is in jeopardy of becoming a modified endowment contract under
the Code. See "Tax Considerations".

"NO-LAPSE" GUARANTEE. In return for paying the Minimum Monthly Premium or
an amount equivalent thereto by the Monthly Anniversary Day, Protective Life
guarantees that a Policy will remain in force during the first 15 Policy Years
(if the Insured's Issue Age is 0 through 39), during the first 10 Policy Years
(if the Insured's Issue Age is 40 through 64), or during the first 5 Policy
Years (for Insured's Issue Age 65 and above) regardless of the Policy Value, if,
for each month that the Policy has been in force since the Policy Effective
Date, the total premiums paid less any withdrawals and Policy Debt is greater
than or equal to the Minimum Monthly Premium (shown in the Policy) multiplied by
the number of complete policy months since the Policy Effective Date, including
the current policy month. The Minimum Monthly Premium payment is calculated for
each Policy based on the age, sex and rate class of the Insured, the requested
Face Amount and any supplemental benefits and/or riders. The Company will not
notify you in the event the No-Lapse Guarantee is no longer in effect.

If you increase your Policy's Face Amount while the "No-Lapse" Guarantee is
in effect, Protective Life will NOT EXTEND the period of this guarantee. The
guarantee period is based on the initial Face Amount. However, upon an increase
in Face Amount, Protective Life will recalculate the Minimum Monthly Premium,
which will generally also increase. Protective Life will notify you of any
increase in the Minimum Monthly Premium and will amend your Policy to reflect
the change.

PREMIUM PAYMENTS UPON INCREASE IN FACE AMOUNT. Depending on the Policy
Value at the time of an increase in the Face Amount and the amount of the
increase requested, an additional Premium Payment may be necessary or a change
in the amount of Planned Periodic Premium Payments may be advisable. See "Death
Benefit Proceeds". You will be notified if a premium payment is necessary or a
change appropriate.

NET PREMIUM ALLOCATIONS

Owners must indicate in the application how Net Premiums are to be allocated
to the Sub-Accounts and/or to the Fixed Account. These allocation instructions
apply to both initial and subsequent Net Premiums. Owners may change the
allocation instructions in effect at any time by Written Notice. Whole
percentages must be used. The minimum percentage that may be allocated to any
Sub-Account or to the Fixed Account is 10% of Net Premiums and the sum of
allocations must add up to 100%.

For Policies issued in states where, upon cancellation during the
Cancellation Period, Protective Life returns at least your Premium Payments,
Protective Life reserves the right to allocate your initial Net Premium Payment
(and any subsequent Net Premium Payments made during the Cancellation Period) to
the PIC Money Market Sub-Account or the Fixed Account until the expiration of
the number of days in the Cancellation Period plus 6 days starting from the date
that the Policy is mailed from the Home Office. Thereafter, the Policy Value in
the PIC Money Market Sub-Account or the Fixed Account and all Net Premiums will
be allocated according to your allocation instructions then in effect.

Planned Periodic Premium payments and unscheduled premium payments not
requiring additional underwriting will be credited to the Policy and the Net
Premiums will be invested as requested on the Valuation Date they are received
by the Home Office. However, any Premium Payment in connection with an increase
in Face Amount will be allocated to the Fixed Account until underwriting has
been completed. When approved, the Policy Value in the Fixed Account
attributable to the resulting Net Premium will be credited to the Policy and
allocated in accordance to your allocation instructions then in effect. If an
additional Premium Payment is rejected, Protective Life will return the Premium
Payment immediately, without any adjustment for investment experience.

Unless designated by the Owner as a loan repayment, payments received from
Owners (other than Planned Periodic Premium Payments) are treated as Unscheduled
Premium Payments.

POLICY LAPSE AND REINSTATEMENT

LAPSE. Unlike a conventional life insurance policy, failure to make Planned
Periodic Premium Payments will not necessarily cause a Policy to lapse.
Conversely, making all Planned Periodic Premium Payments will not necessarily
prevent a Policy from lapsing. Rather, except when the "No-Lapse" Guarantee is
in effect, whether a Policy lapses depends on whether its Policy Value is
sufficient to cover the Monthly Deduction (See "Monthly Deduction") on the
Monthly Anniversary Day.

If the Policy Value on a Monthly Anniversary Day is less than the amount of
the Monthly Deduction due on that date and the "No-Lapse" Guarantee is not in
effect, the Policy will be in default and a grace period will begin. This could
happen if investment experience has been sufficiently unfavorable that it has
resulted in a decrease in Policy Value or the Policy Value has decreased because
you have not paid sufficient Net Premiums to offset prior Monthly Deductions.

In the event of a Policy default, the Owner has a 61-day grace period to
make a payment of Net Premium sufficient to cover the current and past-due
Monthly Deductions. Protective Life will send to the Owner, at the last known
address and the last known address of any assignee of record, notice of the
Premium Payment required to prevent lapse. The grace period will begin when the
notice is sent. A Policy will remain in effect during the grace period. If the
Insured should die during the grace period, the Death Benefit Proceeds payable
to the Beneficiary will reflect a reduction for the Monthly Deductions due on or
before the date of the Insured's death as well as any unpaid Policy Debt. See
"Death Benefit Proceeds". Unless the Premium Payment stated in the notice is
paid before the grace period ends, the Policy will lapse.

REINSTATEMENT. An Owner may reinstate a Policy within 5 years of its lapse
provided that: (1) a request for reinstatement is made by Written Notice, (2)
the Insured is still living, (3) the Maturity Date has not been reached, (4) the
Owner pays Net Premiums equal to (a) all Monthly Deductions that were due but
unpaid during the grace period, and (b) which are at least sufficient to keep
the

reinstated Policy in force for three months, (5) the Insured provides Protective
Life with satisfactory evidence of insurability, (6) the Owner repays or
reinstates any Policy Debt which existed at the end of the grace period; and (7)
the Policy has not been surrendered. The "Approval Date" of a reinstated Policy
is the date that Protective Life approves the Owner's request for reinstatement
and requirements 1-7 above have been met.

CALCULATION OF POLICY VALUES

VARIABLE ACCOUNT VALUE

THE VARIABLE ACCOUNT VALUE REFLECTS THE INVESTMENT EXPERIENCE OF THE
SUB-ACCOUNTS TO WHICH IT IS ALLOCATED, ANY PREMIUM PAYMENTS ALLOCATED TO THE
SUB-ACCOUNTS, TRANSFERS IN OR OUT OF THE SUB-ACCOUNTS, OR ANY WITHDRAWALS OF
VARIABLE ACCOUNT VALUE. THERE IS NO GUARANTEED MINIMUM VARIABLE ACCOUNT VALUE. A
POLICY'S VARIABLE ACCOUNT VALUE THEREFORE DEPENDS UPON A NUMBER OF FACTORS. THE
VARIABLE ACCOUNT VALUE FOR A POLICY AT ANY TIME IS THE SUM OF THE SUB-ACCOUNT
VALUES FOR THE POLICY ON THE VALUATION DAY MOST RECENTLY COMPLETED.

DETERMINATION OF UNITS. For each Sub-Account, the Net Premium Payment(s) or
Policy Value transferred are converted into Units. The number of Units credited
is determined by dividing the dollar amount directed to each Sub-Account by the
value of the Unit for that Sub-Account for the Valuation Day on which the Net
Premium Payment(s) or transferred amount is invested in the Sub-Account.
Therefore, Net Premium Payments allocated to or amounts transferred to a
Sub-Account under a Policy increase the number of Units of that Sub-Account
credited to the Policy.

DETERMINATION OF UNIT VALUE. The Unit value for each Sub-Account was
arbitrarily initially set at $10, except the PIC Money Market Sub-Account, which
was arbitrarily initially set at $1. Thereafter, the Unit value at the end of
every Valuation Day is the Unit value at the end of the previous Valuation Day
times the net investment factor, as described below. The Sub-Account Value for a
Policy is determined on any day by multiplying the number of Units attributable
to the Policy in that Sub-Account by the Unit value for that Sub-Account on that
day.

NET INVESTMENT FACTOR. The net investment factor is an index applied to
measure the investment performance of a Sub-Account from one Valuation Period to
the next. Each Sub-Account has a net investment factor for each Valuation Period
which may be greater or less than one. Therefore, the value of a Unit may
increase or decrease. The net investment factor for any Sub-Account for any
Valuation Period is determined by dividing (1) by (2), where:

(1) is the result of:

a. the Net Asset Value per share of the Fund held in the Sub-Account,
determined at the end of the current Valuation Period; plus

b. the per share amount of any dividend or capital gain distributions
made by the Fund to the Sub-Account, if the "ex-dividend" date occurs during
the current Valuation Period; plus or minus

c. a per share charge or credit for any taxes reserved for, which is
determined by Protective Life to have resulted from the operations of the
Sub-Account.

(2) is the Net Asset Value per share of the Fund held in the Sub-Account,
determined at the end of the last prior Valuation Period.

FIXED ACCOUNT VALUE

The Fixed Account Value under a Policy at any time is equal to: (1) the Net
Premium Payment(s) allocated to the Fixed Account, plus (2) amounts transferred
to the Fixed Account, plus (3) interest credited to the Fixed Account, less (4)
transfers from the Fixed Account (including any transfer fees

deducted), less (5) withdrawals from the Fixed Account (including any withdrawal
charges deducted), less (6) surrender charges deducted in the event of a
decrease in Face Amount, less (7) monthly deductions. See "The Fixed Account,"
for a discussion of how interest is credited to the Fixed Account.

POLICY BENEFITS

TRANSFERS OF POLICY VALUES

GENERAL. Upon receipt of Written Notice at any time on or after the later
of the following: (1) thirty days after the Policy Effective Date, or (2) six
days after the expiration of the Cancellation Period, you may transfer the Fixed
Account Value or any Policy Value in a Sub-Account to other Sub-Accounts or the
Fixed Account, subject to certain restrictions. Transfers (including telephone
transfers -- described below) are processed as of the date a request is received
at the Home Office. Protective Life may, however defer transfers under the same
conditions that payment of Death Benefit Proceeds, withdrawals and surrenders
may be delayed. See "Suspension or Delay of Payments". The minimum amount that
may be transferred is the lesser of $100 or the entire Policy Value in any
Sub-Account or the Fixed Account from which the transfer is made. If, after the
transfer, the Policy Value remaining in a Sub-Account(s) or the Fixed Account
would be less than $100, Protective Life reserves the right to transfer the
entire amount instead of the requested amount. The maximum amount which may be
transferred from the Fixed Account in any Policy Year is the greater of (1)
$2500, or (2) 25% of the Fixed Account Value. Protective Life reserves the right
to limit transfers to 12 per Policy Year. For each additional transfer over 12
in any Policy Year, Protective Life reserves the right to charge a transfer fee.
The transfer fee, if any, is deducted from the amount being transferred. See
"Transfer Fee".

TELEPHONE TRANSFERS. Transfers may be made upon instructions given by
telephone, provided the appropriate election has been made on the application or
written authorization is provided.

Protective Life will send you a confirmation of all instructions
communicated by telephone to determine if they are genuine. For telephone
transfers We require a form of personal identification prior to acting on
instructions received by telephone. We also make a tape-recording of the
instructions given by telephone. If We follow these procedures We are not liable
for any losses due to unauthorized or fraudulent instructions. Protective Life
reserves the right to suspend telephone transfer privileges at any time for any
class of Policies.

RESERVATION OF RIGHTS. Protective Life reserves the right without prior
notice to modify, restrict, suspend or eliminate the transfer privileges
(including telephone transfers) at any time, for any class of Policies, for any
reason. In particular, We reserve the right not to honor transfer requests by a
third party holding a power of attorney from an Owner where that third party
requests simultaneous transfers on behalf of the Owners of two or more Policies.

DOLLAR-COST AVERAGING. If you elect at the time of application or at any
time thereafter by written notice to Protective Life, you may systematically and
automatically transfer, on a monthly or quarterly basis, specified dollar
amounts from or to the Fixed Account or any of the Sub-Account(s). This is known
as the dollar-cost averaging method of investment. By transferring on a
regularly scheduled basis as opposed to allocating the total amount at one
particular time, an Owner may be less susceptible to the impact of market
fluctuations in Sub-Account Unit Values. Protective Life, however, makes no
guarantee that the dollar-cost averaging method will result in a profit or
protect against loss.

To elect dollar-cost averaging, Policy Value in the source Sub-Account or
the Fixed Account Value must be at least $5,000 at the time of election.
Automatic transfers for dollar-cost averaging are subject to all transfer
restrictions other than the maximum transfer amount from the Fixed Account
restriction. You may elect dollar cost averaging for periods of at least 12
months but no longer than 48 months. At least $100 must be transferred each
month or $300 each quarter. Dollar-cost averaging

transfers may commence on any day of the month that you request following six
days after the end of the Cancellation Period, except the 29th, 30th, or 31st.
If no day is selected, transfers will occur on the Monthly Anniversary Date.

Once elected, Protective Life will continue to process dollar-cost averaging
transfers until the earlier of the following: (1) the number of designated
transfers has been completed, or (2) the Policy Value in the source Sub-Account
or the Fixed Account is depleted, (3) the Owner, by Written Notice, instructs
Protective Life to cease the automatic transfers, (4) a grace period begins
under the Policy, or (5) the maximum amount of Policy Value has been transferred
under a dollar-cost averaging election.

Automatic transfers made to facilitate dollar-cost averaging will not count
toward the 12 transfers permitted each Policy Year if Protective Life elects to
limit the number of transfers or impose the transfer fee. Protective Life
reserves the right to discontinue offering automatic dollar-cost averaging
transfers upon 30 days' written notice to the Owner.

PORTFOLIO REBALANCING. At the time of application or at any time thereafter
by written notice to Protective Life, you may instruct Protective Life to
automatically transfer, on a quarterly, semi-annual or annual basis, your
Variable Account Value among specified Sub-Accounts to achieve a particular
percentage allocation of Variable Account Value among such Sub-Accounts
("Portfolio Rebalancing"). Such percentage allocations must be in whole numbers
and must allocate amounts only among the Sub-Accounts. No amounts will be
transferred to the Fixed Account as part of Portfolio Rebalancing. A minimum
Variable Account Value of $100 is required for Portfolio Rebalancing. Unless you
instruct otherwise when electing rebalancing, the percentage allocation of your
Variable Account Value for Portfolio Rebalancing will be based on your Purchase
Payment allocation instructions in effect at the time of rebalancing. Any
allocation instructions that you give us that differ from your then current
Purchase Payment allocation instructions will be deemed to be a request to
change your Purchase Payment allocation. Portfolio Rebalancing may commence on
any day of the month that you request following six days after the end of the
Cancellation Period except the 29th, 30th or 31st. If no day is selected,
rebalancing will occur on each applicable monthly Anniversary Day.

Once elected, Portfolio Rebalancing begins on the first quarterly,
semi-annual or annual anniversary following election. You may change or
terminate Portfolio Rebalancing by written instruction to Protective Life, or by
telephone if you have previously authorized us to take telephone instructions.
Portfolio Rebalancing transfers do not count as one of the 12 free transfers
available during any Policy Year. Protective Life reserves the right to assess a
processing fee for this service or to discontinue Portfolio Rebalancing upon 30
days written notice to the Owner.

POLICY VALUE CREDIT

Subject to the conditions described below, on the tenth Policy Anniversary
and on each Policy Anniversary thereafter, the Company will make a credit to the
Policy's Policy Value. The amount of the credit depends on the unloaned Policy
Value on the appropriate Policy Anniversary. On Policy Anniversaries as of which
unloaned Policy Value is at least $50,000 but less than $500,000, the credit is
equal to .5% of the unloaned Policy Value. On Policy Anniversaries as of which
the unloaned Policy Value is equal to or greater than $500,000, the credit is
equal to 1% of the unloaned Policy Value. No credit is made on Policy
Anniversaries as of which unloaned Policy Value is less than $50,000 or on
Policy Anniversaries one through nine. In addition, the Company will only make
the credit on Policy Anniversaries as of which the current annual effective
interest rate being credited to Fixed Account Value exceeds the initial annual
effective interest rate shown in the Policy.

When made, the Company will allocate credits to Policy Value among and
between the various Sub-Accounts and the Fixed Account in accordance with the
Owner's allocation instructions for Net Premiums. Credits to Policy Value are
not subject to the premium expense charge or the surrender charge and are not
treated as Net Premium for tax purposes.

SURRENDER PRIVILEGE

At any time prior to the Maturity Date while the Insured is still living,
You may surrender your Policy for its Surrender Value. Surrender Value is
determined as of the Valuation Day on or next following the day Written Notice
requesting the surrender, the Policy and any other required documents are
received by Protective Life. A Surrender Charge may apply. See "Surrender
Charges". The Surrender Value is paid in a lump sum unless the Owner requests
payment under a payment option. See "Payment Options". Payment is generally made
within seven calendar days. See "Suspension or Delay of Payments", and "Payments
from the Fixed Account". A Policy terminates upon surrender if payments are
taken in one lump sum and cannot later be reinstated.

WITHDRAWAL PRIVILEGE

At any time after the first Policy Year, an Owner, by Written Notice, may
make a withdrawal of Surrender Value in minimum amounts of $500. Protective Life
will withdraw the amount requested, plus a withdrawal charge, from Policy Value
as of the Valuation Day we receive the request. See "Withdrawal Charge".

The Owner may specify the amount of the withdrawal to be made from any
Sub-Account or the Fixed Account. If the Owner does not so specify, or if the
Sub-Account Value or Fixed Account Value is insufficient to carry out the
request, the withdrawal from each Sub-Account and the Fixed Account is based on
the proportion that such Sub-Account Value(s) and Fixed Account Value bears to
the total unloaned Policy Value on the Valuation Day immediately prior to the
Withdrawal. Payment is generally made within seven calendar days. See
"Suspension or Delay of Payments", and "Payments from the Fixed Account".

If Death Benefit Option 1 is in effect, Protective Life reserves the right
to reduce the Face Amount by the withdrawn amount (exclusive of withdrawal
charge). Protective Life may reject a Withdrawal request if the Withdrawal would
reduce the Face Amount below the minimum amount for which the Policy would be
issued under Protective Life's then-current rules, or if the Withdrawal would
cause the Policy to fail to qualify as a life insurance contract under
applicable tax laws, as interpreted by Protective Life. If the Face Amount at
the time of the Withdrawal includes increases from the Initial Face Amount and
the Withdrawal requires a decrease of Face Amount, the reduction is made first
from the most recent increase, then from prior increases, if any, in reverse
order of their being made and finally from the Initial Face Amount.

POLICY LOANS

GENERAL. After the first Policy Anniversary and while the Insured is still
living, an Owner may borrow $500 or more from Protective Life using the Policy
as the security for the loan. Policy loans must be requested by Written Notice
and the maximum amount that an Owner may borrow is an amount equal to 90% of the
Policy's Surrender Value on the date that the loan request is received.
Outstanding Policy loans therefore reduce the amount available for new Policy
loans. Loan proceeds generally are mailed within seven calendar days of the loan
being approved. See "Suspension or Delay of Payments", and "Payments from the
Fixed Account".

LOAN COLLATERAL. When a Policy loan is made, an amount equal to the loan is
transferred out of the Sub-Accounts and the Fixed Account and into a Loan
Account established for the Policy. Like the Fixed Account, a Policy's Loan
Account is part of Protective Life's General Account and amounts therein earn
interest as credited by Protective Life from time to time. Because Loan Account
values are part of Policy Value, a loan will have no immediate effect on the
Policy Value. In contrast, Surrender Value (including, as applicable, Variable
Account Value and Fixed Account Value) under a Policy is reduced immediately by
the amount transferred to the Loan Account. The Owner(s) can specify the
Sub-Accounts and the Fixed Account from which collateral is transferred to the
Loan Account. If no allocation is specified, collateral is transferred from each
Sub-Account and from the Fixed Account in the same proportion that the value in
each Sub-Account and the Fixed Account bears to the total unloaned Policy Value
on the date that the loan is made.

On each Policy Anniversary, an amount of Policy Value equal to any due and
unpaid loan interest (explained below), is also transferred to the Loan Account.
Such interest is transferred from each Sub-Account and the Fixed Account in the
same proportion that each Sub-Account Value and the Fixed Account Value bears to
the total unloaned Policy Value.

LOAN REPAYMENT. You may repay all or part of your Policy Debt (the amount
borrowed plus unpaid interest) at any time while the Insured is living and the
Policy is in force. Loan repayments must be sent to the Home Office and are
credited as of the date received. The Owner may specify in writing that any
Unscheduled Premium Payments made while a loan is outstanding be applied as loan
repayments. (Loan repayments, unlike Unscheduled Premium Payments, are not
subject to the premium expense charge.) When a loan repayment is made, Policy
Value in the Loan Account in an amount equal to the repayment is transferred
from the Loan Account to the Sub-Accounts and the Fixed Account. Thus, a loan
repayment will have no immediate effect on the Policy Value, but the Surrender
Value (including, as applicable, Variable Account Value and Fixed Account Value)
under a Policy is increased immediately by the amount transferred from the Loan
Account. Unless specified otherwise by the Owner(s), amounts are transferred to
the Sub-Accounts and the Fixed Account in the same proportion that Net Premiums
are allocated.

INTEREST. During the first ten Policy Years, Protective Life will charge
interest daily on any outstanding loan at an effective annual rate of 6.0%.
During Policy Years 11 and thereafter, Protective Life will charge interest
daily on any outstanding loan at an effective annual rate of 4.5%. Interest is
due and payable at the end of each Policy Year while a loan is outstanding. We
will notify you of the amount due. If interest is not paid when due, the amount
of the interest is added to the loan and becomes part of the Policy Debt.

The Loan Account is credited with interest at an effective annual rate of
not less than 4%. Thus, the maximum net cost of a loan is 2.0% per year during
Policy Years 1 through 10, and 0.5% thereafter (the difference between the rate
of interest charged on Policy loans and the amount credited on the equivalent
amount held in the Loan Account). Protective Life determines the rate of
interest to be credited to the Loan Account in advance of each calendar year.
The rate, once determined, is applied to the calendar year which follows the
date of determination. On each Policy Anniversary, the interest earned on the
Loan Account since the previous Policy Anniversary is transferred to the
Sub-Accounts and to the Fixed Account. The interest is transferred and allocated
to the Sub-Accounts and the Fixed Account in the same proportion that Net
Premiums are allocated.

NON-PAYMENT OF POLICY LOAN. If the Insured dies while a loan is
outstanding, the Policy Debt is deducted from the Death Benefit in calculating
the Death Benefit Proceeds.

If the Loan Account Value exceeds the Cash Value (I.E., the Surrender Value
becomes zero) on any Valuation Date, the Policy may be in default. If this
occurs, you, and any assignee of record, will be sent notice of the default. You
will have a 31-day grace period to submit a sufficient payment to avoid a lapse
(I.E., termination) of the Policy. The notice will specify the amount that must
be repaid to prevent lapse.

EFFECT OF A POLICY LOAN. A loan, whether or not repaid, has a permanent
effect on the Death Benefit and Policy values because the investment results of
the Sub-Accounts and current interest rates credited on Fixed Account Value do
not apply to Policy Value in the Loan Account. The larger the loan and longer
the loan is outstanding, the greater will be the effect of Policy Value being
held as collateral in the Loan Account. See "No Lapse Guarantee". Depending on
the investment results of the Sub-Accounts or credited interest rates for the
Fixed Account while the loan is outstanding, the effect could be favorable or
unfavorable. Policy loans also may increase the potential for Lapse if
investment results of the Sub-Accounts to which Surrender Value is allocated is
unfavorable. If a Policy lapses with loans outstanding, certain amounts may be
subject to income tax. In addition, if your Policy is a "modified endowment
contract," loans may be currently taxable and subject to a 10% penalty tax. See
"Tax Considerations," for a discussion of the tax treatment of Policy loans.

DEATH BENEFIT PROCEEDS

As long as the Policy remains in force, Protective Life will pay the Death
Benefit Proceeds upon receipt at the Home Office of satisfactory proof of the
Insured's death. Protective Life may require return of the Policy. The Death
Benefit Proceeds are paid to the primary Beneficiary or a contingent
Beneficiary. The Owner may name one or more primary or contingent Beneficiaries
and change such Beneficiaries, as provided for in the Policy. If no Beneficiary
survives the Insured, the Death Benefit Proceeds are paid to the Owner or the
Owner's estate. Death Benefit Proceeds are paid in a lump sum or under a
Settlement Option (see "Settlement Options").

CALCULATION OF DEATH BENEFIT PROCEEDS. The Death Benefit Proceeds are equal
to the Death Benefit under the Death Benefit option selected calculated as of
the date of the Insured's death, plus any supplemental and/or rider benefits,
minus any Policy Debt on that date and, if the Insured died during a grace
period, minus any past due Monthly Deductions. Under certain circumstances, the
amount of the Death Benefit may be further adjusted. See "Limits on Rights to
Contest the Policy" and "Misstatement of Age or Sex".

If part or all of the Death Benefit is paid in one sum, Protective Life will
pay interest on this sum as required by applicable state law from the date of
receipt of due proof of the Insured's death to the date of payment.

DEATH BENEFIT OPTIONS. The Policy Owner may choose one of two Death Benefit
Options for use in determining the Death Benefit. Under Death Benefit Option 1,
the Death Benefit is the greater of: (1) the Face Amount under the Policy on the
date of the Insured's death, or (2) a specified percentage of Policy Value on
the date of the Insured's death. Under Death Benefit Option 2, the Death Benefit
is the greater of: (1) the Face Amount under the Policy plus the Policy Value on
the date of the Insured's death, or (2) the same specified percentage of the
Policy Value on the date of the Insured's death.

The specified percentage is 250% when the Insured has reached an "Attained
Age" of 40 or less by date of death, and decreases each year thereafter to 100%
when the Insured has reached an "Attained Age" of 95 at death. A table showing
these percentages for Attained Ages 0 to 95 and examples of Death Benefit
calculations for both Death Benefit Options are found in Appendix A.

Under Death Benefit Option 1, the Death Benefit remains level at the Face
Amount unless the Policy Value multiplied by the specified percentage exceeds
that Face Amount, in which event the Death Benefit will vary as the Policy Value
varies. Owners who are satisfied with the amount of their insurance coverage
under the Policy and who prefer to have favorable investment performance and
additional Premium Payments reflected in higher Policy Value, rather than
increased Death Benefits, generally should select Option 1. Under Death Benefit
Option 2, the Death Benefit always varies as the Policy Value varies (although
it is never less than the Face Amount). Owners who prefer to have favorable
investment performance and additional Premium Payments reflected in increased
Death Benefits generally should select Option 2.

CHANGING THE DEATH BENEFIT OPTION. On or after the first Policy
Anniversary, you may change the Death Benefit option on your Policy subject to
the following rules. After any change, the Face Amount must be at least
$100,000. The effective date of the change will be the Monthly Anniversary Day
that coincides with or next follows the day that Protective Life receives and
accepts the request. Protective Life may require satisfactory evidence of
insurability.

When a change from Option 1 to Option 2 is made, the Face Amount after the
change is effected will be equal to the Face Amount before the change less the
Policy Value on the effective date of the change. When a change from Option 2 to
Option 1 is made, the Face Amount after the change will be equal to the Face
Amount before the change is effected plus the Policy Value on the effective date
of the change.

CHANGING THE FACE AMOUNT. On or after the first Policy Anniversary, you may
request a change in the Face Amount. If a change in the Face Amount would result
in total Premiums paid exceeding the

premium limitations prescribed under current tax law to qualify your Policy as a
life insurance contract, Protective Life will immediately return to you the
amount of such excess above the premium limitations.

Protective Life reserves the right to decline a requested decrease in the
Face Amount if compliance with the guideline premium limitations under current
tax law resulting from such a decrease would result in immediate termination of
the Policy, or if to effect the requested decrease, payments to the Owner would
have to be made from Policy Value for compliance with the guideline premium
limitations, and the amount of such payments would exceed the Surrender Value
under the Policy.

Any increase in the Face Amount must be at least $10,000 and an application
must be submitted. Protective Life reserves the right to require satisfactory
evidence of insurability. In addition, the Insured's Attained Age must be less
than the current maximum Issue Age for the Policies, as determined by Protective
Life from time to time. A change in Planned Periodic Premium Payments may be
advisable. See "Premium Payments Upon Increase in Face Amount". The increase in
Face Amount will become effective on the date shown on the supplemental Policy
Specifications Page which will be issued and attached to the Policy, and the
Policy Value will be adjusted to the extent necessary to reflect a monthly
deduction as of the effective date based on the increase in Face Amount. When
the "No-Lapse" Guarantee is in effect, the Policy's Minimum Monthly Premium
amount is also generally increased. See "No-Lapse Guarantee," and "Premium
Payments Upon Increase in Face Amount".

An increase in Face Amount may be cancelled by the Owner in accordance with
the Policy's cancellation privilege provisions, which also apply to increases in
Face Amount. In such case, the amount refunded will be calculated in accordance
with such provisions described above, except that if no additional Premium
Payments are required in connection with the Face Amount increase, then the
amount refunded is limited to that portion of the first Monthly Deduction
following the increase that is attributable to cost of insurance charges for the
increase and the monthly administration fee for the increase. See "Cancellation
Privilege".

The Face Amount after any decrease must be at least $100,000. Protective
Life reserves the right to prohibit any decrease in Face Amount (i) for three
years following an increase in Face Amount; and (ii) for one Policy Year
following the last decrease in Face Amount. If the Initial Face Amount of the
Policy has been increased prior to the requested decrease, then the decrease
will first be applied against any previous increases in Face Amount in the
reverse order in which they occurred. The decrease will then be applied to the
Initial Face Amount. A decrease in Face Amount will become effective on the
Monthly Anniversary Day that coincides with or next follows receipt and
acceptance of a request at the Home Office.

Decreasing the Face Amount of the Policy may have the effect of decreasing
monthly cost of insurance charges. However, if the Face Amount is decreased
during the first nineteen Policy Years, a Surrender Charge will apply. See
"Surrender Charge".

ADDITIONAL COVERAGE FROM TERM RIDER FOR COVERED INSURED ("CIR"). An owner
may also obtain additional insurance coverage by purchasing a CIR at the time
the Policy is issued (or later, subject to availability and additional
underwriting). A CIR increases the Death Benefit under the Policy by the face
amount of the CIR. The face amount of the CIR does not vary with the investment
experience of the Variable Account (see "Supplemental Benefits and/or Riders").
In addition, a CIR may be canceled separately from the Policy (I.E., it can be
canceled without causing the Policy to be canceled or to Lapse). The cost of
insurance charge for the CIR will be deducted from the Policy Value as part of
the Monthly Deduction (see "Monthly Deduction -- Cost of Insurance Charge under
a CIR"). No additional surrender or premium expense charge is assessed in
connection with a CIR.

Owners may increase or decrease the face amount of a CIR separately from the
Face Amount of a Policy. Likewise, the Face Amount of a Policy may be increased
or decreased without affecting the face amount of a CIR. Since no surrender
charge is assessed in connection with a decrease of face amount under a CIR,
such a decrease may be less expensive than a decrease in Face Amount of the
Policy if the

Face Amount decrease would be subject to a surrender charge. On the other hand,
continuing coverage on such an increment of Face Amount may have a cost of
insurance charge that is higher than the same increment of face amount under the
CIR. Owners should consult their sales representative before deciding whether to
decrease Face Amount or CIR face amount.

Owners should consult their sales representative when deciding whether to
purchase a CIR.

SETTLEMENT OPTIONS

The Policy offers a variety of ways of receiving proceeds payable under the
Policy, such as on surrender or death, other than in a lump sum. These
Settlement Options are summarized below. Any sales representative authorized to
sell this Policy can further explain these Settlement Options upon request. All
of these Settlement Options are forms of fixed-benefit annuities (except Option
3) which do not vary with the investment performance of a separate account.
Under each Settlement Option (other than Option 3), no surrender or Withdrawal
may be made once payments have begun.

The following Settlement Options may be elected.

OPTION 1 -- PAYMENT FOR A FIXED PERIOD. Equal monthly payments will be made
for any period of up to 30 years. The amount of each payment depends on the
total amount applied, the period selected and the monthly payment rates
Protective Life is using when the first payment is due.

OPTION 2 -- LIFE INCOME WITH PAYMENTS FOR A GUARANTEED PERIOD. Equal
monthly payments are based on the life of the named annuitant. Payments will
continue for the lifetime of the annuitant with payments guaranteed for 10 or 20
years. Payments stop at the end of the selected guaranteed period or when the
named person dies, whichever is later.

OPTION 3 -- INTEREST INCOME. Protective Life will hold any amount applied
under this Option. Interest on the unpaid balance will be paid each month at a
rate determined by Protective Life. This rate will not be less than the
equivalent of 3% per year.

OPTION 4 -- PAYMENTS FOR A FIXED AMOUNT. Equal monthly payments will be
made of an agreed fixed amount. The amount of each payment may not be less than
$10 for each $1,000 applied. Interest will be credited each month on the unpaid
balance and added to it. This interest will be at a rate set by us, but not less
than an effective rate of 3% per year. Payments continue until the amount
Protective Life holds runs out. The last payment will be for the balance only.

MINIMUM AMOUNTS. Protective Life reserves the right to pay the total amount
of the Policy in one lump sum, if less than $5,000. If monthly payments are less
than $50, payments may be made quarterly, semi-annually, or annually at
Protective Life's option.

OTHER REQUIREMENTS. Settlement Options must be elected by Written Notice.
The Owner may elect Settlement Options during the Insured's lifetime;
Beneficiaries may elect Settlement Options thereafter if Death Benefit Proceeds
are payable in a lump sum. The effective date of an Option applied to Death
Benefit Proceeds is the date of the Insured's death. The effective date of an
Option applied to Surrender Value is the date as of which the Withdrawal or
surrender is executed.

If Protective Life has available at the time a Settlement Option is elected
Options or rates on a more favorable basis than those guaranteed, the higher
benefits will apply.

THE FIXED ACCOUNT

BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN THE FIXED
ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR HAS THE
FIXED ACCOUNT BEEN 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 OF THESE ACTS AND, AS A RESULT, THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN
THIS PROSPECTUS RELATING TO THE FIXED ACCOUNT.

THE DISCLOSURE REGARDING THE FIXED ACCOUNT MAY, HOWEVER, BE SUBJECT TO CERTAIN
GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE
ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

THE FIXED ACCOUNT

The Fixed Account consists of assets owned by Protective Life with respect
to the Policies, other than those in the Variable Account. It is part of
Protective Life's general account assets. Protective Life's general account
assets are used to support its insurance and annuity obligations other than
those funded by separate accounts, and are subject to the claims of Protective
Life's general creditors. Subject to applicable law, Protective Life has sole
discretion over the investment of the assets of the Fixed Account. The Loan
Account is part of the Fixed Account. Guarantees of Net Premiums allocated to
the Fixed Account, and interest credited thereto, are backed by Protective Life.
The Fixed Account Value is calculated daily. See "Fixed Account Value".

INTEREST CREDITED ON FIXED ACCOUNT VALUE

Protective Life guarantees that the interest credited during the first
Policy Year to the initial Net Premiums allocated to the Fixed Account will not
be less than the initial annual effective interest rate shown in the Policy. The
interest rate credited to subsequent Net Premiums allocated to or amounts
transferred to the Fixed Account will be the annual effective interest rate in
effect on the date that the Net Premium(s) is received by Protective Life or the
date that the transfer is made. The interest rate is guaranteed to apply to such
amounts for a twelve month period which begins on the date that the Net
Premium(s) is allocated or the date that the transfer is made.

After an interest rate guarantee expires as to a Net Premium or amount
transferred, (I.E., 12 months after the Premium Payment(s) or transfer is placed
in the Fixed Account) we will credit interest on the Fixed Account Value
attributable to such Net Premium or transferred amount at the current interest
rate in effect. New current interest rates are effective for such Fixed Account
Value for 12 months from the time that they are first applied. Protective Life,
in Our sole discretion, may declare a new current interest rate from time to
time. The initial annual effective interest rate and the current interest rates
that Protective Life will credit are annual effective interest rates of not less
than 4.00%. For purposes of crediting interest, amounts deducted, transferred or
withdrawn from the Fixed Account are accounted for on a "first-in-first-out"
(FIFO) basis.

PAYMENTS FROM THE FIXED ACCOUNT

Payments from the Fixed Account for a Withdrawal, surrender or loan request
may be deferred for up to six months from the date Protective Life receives the
written request. If a payment from the Fixed Account is deferred for 30 days or
more, it will bear interest at a rate of 4% per year (or an alternative rate if
required by applicable state insurance law), compounded annually while payment
is deferred.

CHARGES AND DEDUCTIONS

PREMIUM EXPENSE CHARGE

Premium Expense Charge compensates Protective Life for certain sales and tax
expenses associated with the Policies and the Variable Account. The premium
expense charge is currently equal to 5% of each Premium Payment.

MONTHLY DEDUCTION

On the Issue Date, Protective Life will deduct the Monthly Deduction from
the Policy Value. Subsequent Monthly Deductions will be made on each Monthly
Anniversary Day thereafter. The Monthly Deduction consists of (1) cost of
insurance charges ("cost of insurance charge"), (2) administration charges (the
"monthly administration fee"), (3) mortality and expense risk charge (the
"Mortality and Expense Risk Charge") and (4) any charges for supplemental
benefits and/or riders ("supplemental charges"), as described below. The Monthly
Deduction is deducted from the Sub-Accounts and the Fixed Account pro-rata on
the basis of the relative Policy Value in each.

COST OF INSURANCE CHARGE. This charge compensates Protective Life for the
expense of underwriting the Death Benefit. The charge depends on a number of
variables and therefore will vary from Policy to Policy and from Monthly
Anniversary Day to Monthly Anniversary Day. For any Policy, the cost of
insurance on a Monthly Anniversary Day is calculated by multiplying the current
cost of insurance rate for the Insured by the Net Amount at Risk under the
Policy for that Monthly Anniversary Day.

The cost of insurance rate for a Policy is based on and varies with the
Issue Age, duration, sex and rate class of the Insured and on the number of
years that a Policy has been in force. Protective Life currently places Insureds
in the following rate classes, based on underwriting: Preferred (ages 18-75) or
Nonsmoker (ages 0-75), or Tobacco (ages 15-75) or Smoker (ages 15-75), and
substandard rate classes, which involve a higher mortality risk than the Smoker,
Tobacco or Nonsmoker classes.

Protective Life will determine a cost of insurance rate for increments of
Face Amount above the Initial Face Amount based on the Issue Age, duration, sex
and rate class of the Insured at the time of the request for an increase. The
following rules will apply for purposes of determining the Net Amount at Risk
for each rate.

Protective Life places the Insured in a rate class when the Policy is
issued, based on Protective Life's underwriting of the application. This
original rate class applies to the Initial Face Amount. When an increase in Face
Amount is requested, Protective Life conducts underwriting before approving the
increase (except as noted below) to determine whether a different rate class
will apply to the increase. If the rate class for the increase has lower cost of
insurance rates than the original rate class, the rate class for the increase
also will be applied to the Initial Face Amount. If the rate class for the
increase has a higher cost of insurance rate than the original rate class, the
rate class for the increase will apply only to the increase in Face Amount, and
the original rate class will continue to apply to the Initial Face Amount.

Protective Life does not conduct underwriting for an increase in Face Amount
if the increase is requested as part of a conversion from a term or a graded
premium whole life contract or on exercise of a guaranteed option to increase
the Face Amount without underwriting. See "Supplemental Benefits and/or Riders".

In the case of a term conversion, the rate class that applies to the increase is
the same rate class that applied to the term contract. In the case of a
guaranteed option, the Insured's rate class for an increase will be the class in
effect when the guaranteed option rider was issued.

Where, as in Death Benefit Option 1, the Net Amount at Risk is equal to the
Death Benefit less Policy Value, the entire Policy Value is applied first to
offset the Death Benefit derived from the Initial Face Amount. Only if the
Policy Value exceeds the Initial Face Amount is the excess applied to offset the
portion of the Death Benefit derived from increases in Face Amount in the order
of the increases. If there is the decrease in Face Amount after an increase, the
decrease is applied first to decrease any prior increases in Face Amount,
starting with the most recent increase and then each prior increase.

Protective Life guarantees 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 Policies. The guaranteed rates for standard
classes are based on the 1980 Commissioners' Standard Ordinary Mortality Tables,
Male or Female, Smoker or Nonsmoker Mortality Rates ("1980 CSO Tables"). The
guaranteed rates for substandard classes are based on multiples of or additions
to the 1980 CSO Tables.

Protective Life's current cost of insurance rates may be less than the
guaranteed rates that are set forth in the Policy. Current cost of insurance
rates will be determined based on Protective Life's expectations as to future
mortality, investment earnings, expenses, taxes, and persistency experience.

Cost of insurance rates (whether guaranteed or current) for an Insured in a
nonsmoker standard class are lower than guaranteed rates for an Insured of the
same age and sex in a smoker standard

class. Cost of insurance rates (whether guaranteed or current) for an Insured in
a nonsmoker or smoker standard class are generally lower than guaranteed rates
for an Insured of the same age and sex and smoking status in a substandard
class.

COST OF INSURANCE CHARGE UNDER A CIR. The cost of insurance charge is
determined in a similar manner for the face amount under a CIR and for any
increase in the face amount under a CIR. Generally, both the current and the
guaranteed cost of insurance rates under a CIR are substantially the same as the
current and guaranteed cost of insurance rates on the Face Amount of the Policy.

LEGAL CONSIDERATIONS RELATING TO SEX -- DISTINCT PREMIUM PAYMENTS AND
BENEFITS. Mortality tables for the Policies generally distinguish between males
and females. Thus, Premium Payments and benefits under Policies covering males
and females of the same age will generally differ.

Protective Life does, however, also offer Policies based on unisex mortality
tables if required by state law. Employers and employee organizations
considering purchase of a Policy should consult with their legal advisors to
determine whether purchase of a Policy based on sex-distinct actuarial tables is
consistent with Title VII of the Civil Rights Act of 1964 or other applicable
law. Upon request, Protective Life may offer Policies with unisex mortality
tables to such prospective purchasers.

MONTHLY ADMINISTRATION FEE. This charge compensates Protective Life for
administration expenses associated with the Policies and the Variable Account.
These expenses relate to Premium Payment billing and collection, recordkeeping,
processing death benefit claims, Policy loans, Policy changes, reporting and
overhead costs, processing applications and establishing Policy records. The
monthly administration fee is a flat charge of $8 per month. In addition, for
the first twelve months following the effective date of an increase in Face
Amount, the monthly administration fee will also include an administration
charge for the increase, based on the amount of the increase. The monthly
administration charge for an increase is equal to a fee per $1,000 of increase
in face amount, which varies depending on Issue Age, sex, and rate
classification of the Insured and is set forth in your Policy. Representative
administration charges per $1,000 of increase for an Insured male non-smoker at
each specified Issue Age are set forth below:

ADMINISTRATIVE CHARGE
ISSUE AGE PER $1,000 INCREASE
- -------------- ---------------------

35 $ 0.71
40 0.81
45 0.95
50 1.13
55 1.37
60 1.71
65 1.73
70 1.72
75+ 1.71

SUPPLEMENTAL BENEFIT AND/OR RIDER CHARGES. See "Supplemental Benefits
and/or Riders".

MORTALITY AND EXPENSE RISK CHARGE. This charge compensates Protective Life
for the mortality risk it assumes which is that the Insureds on the Policies may
die sooner than anticipated and therefore Protective Life will pay an aggregate
amount of death benefits greater than anticipated. The expense risk Protective
Life assumes is that expenses incurred in issuing and administering the Policies
and the Variable Account will exceed the amounts realized from the
administrative charges assessed against the Policies.

Protective Life deducts a monthly charge from assets in the Sub-Accounts
attributable to the Policies. This charge does not apply to Fixed Account assets
attributable to the Policies. The maximum monthly Mortality and Expense Risk
Charge to be deducted is equal to .075% multiplied by the

Variable Account Value, which is equivalent to an annual rate of 0.90% of such
amount. Protective Life reserves the right to charge less than the maximum
charge. In Policy Years 11 and thereafter, there is currently no Monthly
Mortality and Expense Risk Charge.

TRANSFER FEE

Protective Life reserves the right to impose a $25 transfer fee on any
transfer of Policy Value between or among the Sub-Accounts or the Fixed Account
in excess of the 12 free transfers permitted each Policy Year. If the fee is
imposed, it will be deducted from the amount requested to be transferred. If an
amount is being transferred from more than one Sub-Account or the Fixed Account,
the transfer fee will be deducted proportionately from the amount being
transferred from each. This fee, if imposed, will reimburse Protective Life for
administrative expenses incurred in effecting transfers.

SURRENDER CHARGE (CONTINGENT DEFERRED SALES CHARGE)

If the Policy is surrendered, or if the Initial Face Amount is reduced,
through the first nineteen Policy Years, a Surrender Charge will be deducted
from the Policy Value for the Initial Face Amount (or the reduction thereof).
The Surrender Charge, which is a contingent deferred sales charge, will be
deducted before any Surrender Value is paid.

The Surrender Charge varies depending on Issue Age, sex and rate
classification of the Insured and is set forth in your Policy. Representative
Surrender Charges per $1,000 of Initial Face Amount for the first Policy Year
for an Insured male non-smoker at each specified Issue Age are set forth below.
The Surrender Charge decreases over the nineteen-year period. For a decrease in
the Initial Face Amount, the charge shown is per $1,000 of decrease.

SURRENDER CHARGE (FIRST
YEAR)
PER $1,000 OF
ISSUE AGE INITIAL FACE AMOUNT
- ------------- ---------------------------

30 $ 18.50
35 20.50
40 23.00
45 26.25
50 30.50
55 36.25
60 44.00
65 54.50
70 57.75
75 57.25

After the 19th Policy Year, there is no Surrender Charge for the Initial
Face Amount.

In the event of a decrease in the Initial Face Amount, the pro-rated
Surrender Charge will be allocated to each Sub-Account and to the Fixed Account
based on the proportion of Policy Value in each Sub-Account and in the Fixed
Account. A Surrender Charge imposed in connection with a reduction in the
Initial Face Amount reduces the remaining Surrender Charge that may be imposed
in connection with a surrender of the Policy.

The purpose of the Surrender Charge is to reimburse Protective Life for some
of the expenses incurred in the distribution of the Policies. Protective Life
also deducts a premium expense charge from each Premium Payment. See "Premium
Expense Charge".

WITHDRAWAL CHARGE

Protective Life will deduct an administrative charge upon a Withdrawal. This
charge is the lesser of 2% of the amount withdrawn or $25. This charge will be
deducted from the Policy Value in addition to the amount requested to be
withdrawn and will be considered to be part of the withdrawn amount. See
"Withdrawal Privilege" for rules for allocating the deduction.

FUND EXPENSES

The value of the net assets of each Sub-Account reflects the investment
advisory fees and other expenses incurred by the corresponding Fund in which the
Sub-Account invests. See the prospectus for the Funds.

EXCHANGE PRIVILEGE

The Company is offering, where allowed by law, to owners of certain existing
life policies (the "Existing Life Policy" and/or "Existing Life Policies")
issued by it the opportunity to exchange such a life policy for this Policy. The
Company reserves the right to modify, amend, terminate or suspend the Exchange
Privilege at any time or from time to time. Owners of Existing Life Policies
may, exchange their Existing Life Policies for this Policy. Owners of Existing
Life Policies may also make a partial or full surrender from their Existing Life
Policies and use the proceeds to purchase this Policy. All charges and
deductions described in this prospectus are equally applicable to Policies
purchased in an exchange. All charges and deductions may not be assessed under
an Existing Life Policy in connection with an exchange, surrender, or partial
surrender of an Existing Life Policy.

The Policy differs from the Existing Life Policies in many significant
respects. Most importantly, the Policy Value under this Policy may consist,
entirely or in part, of Variable Account Value which fluctuates in response to
the net investment return of the Variable Account. In contrast, the policy
values under the Existing Life Policies always reflect interest credited by the
Company. While a minimum rate of interest (typically 4 or 4 1/2 percent) is
guaranteed, the Company in the past has credited interest at higher rates.
Accordingly, policy values under the Existing Life Policies reflect changing
current interest rates and do not vary with the investment performance of a
Variable Account.

Other significant differences between the Policy and the Existing Life
Policies include: (1) additional charges applicable under the Policy not found
in the Existing Life Policies; (2) different surrender charges; (3) different
death benefits; and (4) differences in federal and state laws and regulations
applicable to each of the types of policies.

A table which generally summarizes the different charges under the
respective policies is as follows. For more complete details owners of Existing
Life Policies should refer to their policy forms for a complete description.

EXISTING LIFE POLICY POLICY

Sales Charges/Premium Ranges from 0% to 12% of premium 5% of each Premium Payment in
Expense Charge payments in all policy years. all Policy Years
The premium expense charge can
vary by age.
Administrative Fees Ranges from $4 to $5 monthly. $8 per month in all Policy Years
Mortality and Expense None A monthly charge equal to .075%
Charges multiplied by the Variable
Account Value, which is
equivalent to annual rate of
.90% of such amount during
Policy Years 1-10; there is
currently no charge in Policy
Years 11 and thereafter.
Withdrawal Charges $25 The lesser of $25 or 2% of the
withdrawal amount requested.
Monthly Deductions A monthly deduction consisting A monthly deduction consisting
of: (1) cost of insurance of: (1) cost of insurance
charges (2) administrative fees charges (2) administrative fees
(see above) (3) any charges for (see above) (3) monthly
supplemental benefits and/or mortality and expense charges
riders. (applies to Existing (see above) and (4) any charges
Life Policies which are for supplemental benefits
universal life plans) and/or riders.
Surrender Charges Surrender charges vary by policy A declining deferred sales
type and are incurred during a charge per $1,000 of Premium
surrender charge period which Payments made in the first
ranges from 0 years up to 19 Policy Year is assessed on
years. surrender charges during the
first 19 Policy Years.
Guaranteed Interest Rate Ranges from 4% to 5%. Only Fixed Account : 4%.

EFFECT OF THE EXCHANGE OFFER

1. This Policy will be issued to Existing Life Policy Owners. Evidence of
insurability may be required.

2. If an Existing Life Policy owner is within current issue age limits, the
Owner may carry over existing Riders and/or Supplement Benefits if available
with the Policy. Evidence of insurability may be required. An increase or
addition of Riders &/or Supplemental Benefits will require full evidence of
insurability.

3. The Contestable and Suicide provisions in the Policy will begin again as
of the effective date of the exchange, if evidence of insurability is required.
If evidence of insurability is not required on the exchange, the Contestable and
Suicide provisions will not begin again.

TAX CONSIDERATIONS. Owners of Existing Life Policies should carefully
consider whether it will be advantageous to replace an Existing Life Policy with
a Policy. IT MAY NOT BE ADVANTAGEOUS TO EXCHANGE AN EXISTING LIFE POLICY FOR A
POLICY (OR TO SURRENDER IN FULL OR IN PART AN EXISTING LIFE POLICY AND USE THE
SURRENDER OR PARTIAL SURRENDER PROCEEDS TO PURCHASE A POLICY.)

The Company believes that an exchange of an Existing Life Policy for a
Policy generally should be treated as a nontaxable exchange within the meaning
of Section 1035 of the Code. A Policy purchased in exchange will generally be
treated as a newly issued contract as of the effective date of the Policy. This
could have various tax consequences. (See "Federal Tax Matters".)

IF YOU SURRENDER YOUR EXISTING LIFE POLICY IN WHOLE OR IN PART AND AFTER
RECEIPT OF THE PROCEEDS YOU USE THE SURRENDER PROCEEDS OR PARTIAL SURRENDER
PROCEEDS TO PURCHASE A POLICY IT WILL NOT BE TREATED AS A NON-TAXABLE EXCHANGE.
THE SURRENDER PROCEEDS WILL GENERALLY BE INCLUDIBLE IN INCOME.

Owners of Existing Life Policies should consult their tax advisers before
exchanging an Existing Life Policy for this Policy, or before surrendering in
whole or in part their Existing Life Policy and using the proceeds to purchase
this Policy.

SALES COMMISSIONS. Sales representatives offering the Policies to Existing
Life Policies Owners will receive a sales commission. In most cases, this sales
commission will be somewhat less than that paid in connection with sales of the
Policies to other purchasers. A standard sales commission will be paid. (See
"Sale of Policies")

ILLUSTRATIONS OF POLICY VALUES, SURRENDER VALUES,
DEATH BENEFITS AND ACCUMULATED PREMIUM PAYMENTS

The following tables have been prepared to illustrate hypothetically how
certain values under a Policy change with investment performance over an
extended period of time. The tables illustrate how Policy Values, Surrender
Values and Death Benefits under a Policy covering an Insured of a given age on
the Issue Date, would vary over time if planned premium payments were paid
annually and the return on the assets in each of the Funds were an assumed
uniform gross annual rate of 0%, 6% and 12%. The values 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 tables also show Planned Periodic
Premiums accumulated at 5% interest compounded annually. 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 and will depend on a number of factors including the
investment allocations made by an Owner and prevailing rates. These
illustrations assume that Net Premiums are allocated equally among the
Sub-Accounts available under the Policy, and that no amounts are allocated to
the Fixed Account.

The illustrations reflect the fact that the net investment return on the
assets held in the Sub-Accounts is lower than the gross after tax return of the
selected Funds. The tables assume an average annual expense ratio of 0.88% of
the average daily net assets of the Funds available under the Policies. This
average annual expense ratio is based on the expense ratios of each of the Funds
for the last fiscal year, adjusted, as appropriate, for any material changes in
expenses effective for the current fiscal year of a Fund. For information on
Fund expenses, see the prospectus for each of the Funds accompanying this
prospectus.

In addition, the illustrations reflect the monthly charge to the Variable
Account for assuming mortality and expense risks, which is equal to .075%
multiplied by the Variable Account Value, which is equivalent to a effective
annual charge of 0.90% of such amount during Policies Years 1-10 (currently
there is no mortality and expense risk charge in Policy Years 11 and
thereafter). After deduction of Fund expenses and the mortality and expense risk
charge, the illustrated gross annual investment

rates of return of 0%, 6% and 12% would correspond to approximate net annual
rates for Policy Years 1-10 of -1.78%, 4.22% and 10.22%, respectively and for
Policy Years 11 and thereafter -0.88%, 5.12% and 11.12%, respectively.

The illustrations also reflect the deduction of the Premium Expense Charge,
the Monthly Expense Charge and the monthly cost of insurance charge for the
hypothetical Insured. The Surrender Charge is reflected in the column "Surrender
Value". Protective Life's current cost of insurance charges, and the guaranteed
maximum cost of insurance charges that Protective Life has the contractual right
to charge, 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
Policy Debt or charges for supplemental and/or rider benefits.

The illustrations are based on Protective Life's sex distinct rates for
nonsmokers. Upon request, Owner(s) will be furnished with a comparable
illustration based upon the proposed Insured's individual circumstances. Such
illustrations may assume different hypothetical rates of return in addition to
those illustrated in the following tables.

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
MALE ISSUE AGE: 45 NON-SMOKER

$1,800 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 1
USING CURRENT COST OF INSURANCE RATES

PREMIUM 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
ACCUMULATED GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS
END OF AT --------------------------- ---------------------------- -------------------------------
POLICY 5% INTEREST POLICY SURRENDER DEATH POLICY SURRENDER DEATH POLICY SURRENDER DEATH
AGE YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---- ------ ----------- ------ --------- ------- ------- --------- ------- --------- --------- ---------

46 1 1,890 1,261 0 100,000 1,349 0 100,000 1,437 0 100,000
47 2 3,875 2,478 0 100,000 2,733 0 100,000 2,999 0 100,000
48 3 5,958 3,651 601 100,000 4,152 1,102 100,000 4,697 1,647 100,000
49 4 8,146 4,779 1,779 100,000 5,607 2,607 100,000 6,542 3,542 100,000
50 5 10,443 5,859 2,909 100,000 7,095 4,145 100,000 8,550 5,600 100,000
51 6 10,966 6,890 3,990 100,000 8,618 5,718 100,000 10,735 7,835 100,000
52 7 13,404 7,868 5,043 100,000 10,171 7,346 100,000 13,113 10,288 100,000
53 8 15,964 8,787 6,012 100,000 11,752 8,977 100,000 15,700 12,925 100,000
54 9 18,652 9,645 6,920 100,000 13,359 10,634 100,000 18,517 15,792 100,000
55 10 21,475 10,787 8,137 100,000 15,331 12,681 100,000 21,915 19,265 100,000
56 11 24,439 11,986 9,386 100,000 17,518 14,918 100,000 25,872 23,272 100,000
57 12 25,661 13,130 10,605 100,000 19,778 17,253 100,000 30,241 27,716 100,000
58 13 28,834 14,201 11,751 100,000 22,100 19,650 100,000 35,060 32,610 100,000
59 14 32,165 15,203 12,803 100,000 24,491 22,091 100,000 40,390 37,990 100,000
60 15 35,664 16,124 13,799 100,000 26,950 24,625 100,000 46,292 43,967 100,000
61 16 39,337 16,934 15,074 100,000 29,455 27,595 100,000 53,087 51,227 100,000
62 17 43,194 17,666 16,271 100,000 32,041 30,646 100,000 60,692 59,297 100,000
63 18 45,353 18,311 17,381 100,000 34,712 33,782 100,000 69,222 68,292 100,000
64 19 49,511 18,863 18,398 100,000 37,472 37,007 100,000 78,811 78,346 100,000
65 20 53,876 19,314 19,314 100,000 40,326 40,326 100,000 89,574 89,574 107,489
66 21 58,460 19,836 19,836 100,000 43,415 43,415 100,000 101,606 101,606 120,911
67 22 63,273 20,256 20,256 100,000 46,627 46,627 100,000 114,997 114,997 135,696
68 23 68,327 20,562 20,562 100,000 49,969 49,969 100,000 129,897 129,897 151,979
69 24 71,743 20,741 20,741 100,000 53,721 53,721 100,000 146,474 146,474 169,910
70 25 77,220 20,780 20,780 100,000 57,666 57,666 100,000 164,916 164,916 189,653
71 26 82,972 20,661 20,661 100,000 61,825 61,825 100,000 185,429 185,429 209,534
72 27 89,010 20,368 20,368 100,000 66,227 66,227 100,000 208,292 208,292 231,204
73 28 95,351 19,884 19,884 100,000 70,905 70,905 100,000 233,794 233,794 254,835
74 29 102,008 19,208 19,208 100,000 75,907 75,907 100,000 262,270 262,270 280,629
75 30 108,999 18,290 18,290 100,000 81,272 81,272 100,000 294,093 294,093 308,798
76 31 116,338 17,094 17,094 100,000 87,059 87,059 100,000 329,700 329,700 346,185
77 32 124,045 15,574 15,574 100,000 93,343 93,343 100,000 369,334 369,334 387,801
78 33 132,138 13,712 13,712 100,000 100,121 100,121 105,127 413,444 413,444 434,116
79 34 140,635 11,413 11,413 100,000 107,245 107,245 112,607 462,506 462,506 485,631
80 35 149,556 8,652 8,652 100,000 114,730 114,730 120,467 519,639 519,639 545,621
81 36 158,924 5,300 5,300 100,000 122,588 122,588 128,717 583,456 583,456 612,629
82 37 168,760 1,251 1,251 100,000 130,830 130,830 137,371 654,706 654,706 687,441
83 38 179,088 * * * 139,475 139,475 146,449 734,241 734,241 770,953
84 39 189,933 * * * 148,532 148,532 155,958 822,957 822,957 864,105
85 40 201,319 * * * 158,017 158,017 165,918 921,886 921,886 967,980
86 41 213,275 * * * 167,934 167,934 176,331 1,032,092 1,032,092 1,083,697
87 42 225,829 * * * 178,298 178,298 187,213 1,154,803 1,154,803 1,212,543
88 43 237,121 * * * 189,115 189,115 198,571 1,291,339 1,291,339 1,355,906
89 44 248,977 * * * 200,394 200,394 210,413 1,443,142 1,443,142 1,515,300
90 45 261,425 * * * 212,141 212,141 222,748 1,611,797 1,611,797 1,692,387
91 46 274,497 * * * 224,364 224,364 233,339 1,799,045 1,799,045 1,871,007
92 47 288,221 * * * 237,408 237,408 244,530 2,009,648 2,009,648 2,069,938
93 48 302,633 * * * 251,386 251,386 256,413 2,247,146 2,247,146 2,292,089
94 49 317,764 * * * 266,430 266,430 269,094 2,515,737 2,515,737 2,540,894
95 50 333,652 * * * 282,695 282,695 282,695 2,820,429 2,820,429 2,820,429
96 51 350,335 * * * 300,362 300,362 300,362 3,167,218 3,167,218 3,167,218
97 52 367,852 * * * 319,027 319,027 319,027 3,556,423 3,556,423 3,556,423
98 53 386,244 * * * 338,745 338,745 338,745 3,993,233 3,993,233 3,993,233
99 54 405,557 * * * 359,577 359,577 359,577 4,483,470 4,483,470 4,483,470
100 55 425,834 * * * 381,584 381,584 381,584 5,033,668 5,033,668 5,033,668

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

* In the absence of an additional Premium, the Policy would lapse.
(1) Assumes that no Policy loans have been made.
(2) Current values reflect applicable Premium Expense Charge, current cost of
insurance rates, a monthly administrative charge of $8.00 per month in all
Policy Years, and a monthly mortality and expense risk charge equal to .075%
multiplied by the Variable Account Value, which is equivalent to an annual
rate of 0.90% of such amount during Policy Years 1-10; and no monthly
mortality and expense risk charge in Policy Years 11 and thereafter.
(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.
(4) Assumes that the Planned Premium Payment is made at the beginning of each
Policy Year. Values would be different if the Premiums are paid with a
different frequency or in different amounts.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND POLICY VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6% OR 12% OVER A
PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
MALE ISSUE AGE: 45 NON-SMOKER

$1,800 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 1
USING GUARANTEED COST OF INSURANCE RATES

PREMIUM 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
ACCUMULATED GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS
END OF AT -------------------------- --------------------------- ----------------------------------
POLICY 5% INTEREST POLICY SURRENDER DEATH POLICY SURRENDER DEATH POLICY SURRENDER DEATH
AGE YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---- ------ ------------ ------ --------- ------- ------- --------- ------- ------------ --------- ---------

46 1 1,890 1,261 0 100,000 1,349 0 100,000 1,438 0 100,000
47 2 3,875 2,478 0 100,000 2,733 0 100,000 2,999 0 100,000
48 3 5,958 3,651 601 100,000 4,152 1,102 100,000 4,696 1,646 100,000
49 4 8,146 4,778 1,778 100,000 5,606 2,606 100,000 6,541 3,541 100,000
50 5 10,443 5,857 2,907 100,000 7,094 4,144 100,000 8,548 5,598 100,000
51 6 10,966 6,888 3,988 100,000 8,616 5,716 100,000 10,733 7,833 100,000
52 7 13,404 7,866 5,041 100,000 10,170 7,345 100,000 13,111 10,286 100,000
53 8 15,964 8,786 6,011 100,000 11,751 8,976 100,000 15,698 12,923 100,000
54 9 18,652 9,644 6,919 100,000 13,357 10,632 100,000 18,514 15,789 100,000
55 10 21,475 10,434 7,784 100,000 14,984 12,334 100,000 21,581 18,931 100,000
56 11 24,439 11,152 8,552 100,000 16,628 14,028 100,000 24,923 22,323 100,000
57 12 25,661 11,792 9,267 100,000 18,287 15,762 100,000 28,570 26,045 100,000
58 13 28,834 12,352 9,902 100,000 19,960 17,510 100,000 32,560 30,110 100,000
59 14 32,165 12,827 10,427 100,000 21,645 19,245 100,000 36,931 34,531 100,000
60 15 35,664 13,209 10,884 100,000 23,335 21,010 100,000 41,730 39,405 100,000
61 16 39,337 13,489 11,629 100,000 25,027 23,167 100,000 47,007 45,147 100,000
62 17 43,194 13,657 12,262 100,000 26,714 25,319 100,000 52,824 51,429 100,000
63 18 45,353 13,698 12,768 100,000 28,388 27,458 100,000 59,253 58,323 100,000
64 19 49,511 13,595 13,130 100,000 30,037 29,572 100,000 66,377 65,912 100,000
65 20 53,876 13,329 13,329 100,000 31,650 31,650 100,000 74,299 74,299 100,000
66 21 58,460 12,882 12,882 100,000 33,217 33,217 100,000 83,145 83,145 100,000
67 22 63,273 12,236 12,236 100,000 34,733 34,733 100,000 92,930 92,930 109,658
68 23 68,327 11,372 11,372 100,000 36,188 36,188 100,000 103,637 103,637 121,255
69 24 71,743 10,267 10,267 100,000 37,573 37,573 100,000 115,350 115,350 133,806
70 25 77,220 8,892 8,892 100,000 38,875 38,875 100,000 128,165 128,165 147,389
71 26 82,972 7,199 7,199 100,000 40,075 40,075 100,000 142,181 142,181 160,664
72 27 89,010 5,077 5,077 100,000 41,108 41,108 100,000 157,557 157,557 174,888
73 28 95,351 2,558 2,558 100,000 42,008 42,008 100,000 174,470 174,470 190,173
74 29 102,008 * * * 42,697 42,697 100,000 193,088 193,088 206,604
75 30 108,999 * * * 43,127 43,127 100,000 213,623 213,623 224,304
76 31 116,338 * * * 43,253 43,253 100,000 236,335 236,335 248,151
77 32 124,045 * * * 43,023 43,023 100,000 261,189 261,189 274,249
78 33 132,138 * * * 42,375 42,375 100,000 288,375 288,375 302,794
79 34 140,635 * * * 41,233 41,233 100,000 318,097 318,097 334,001
80 35 149,556 * * * 39,492 39,492 100,000 350,569 350,569 368,098
81 36 158,924 * * * 36,996 36,996 100,000 386,021 386,021 405,322
82 37 168,760 * * * 33,531 33,531 100,000 424,687 424,687 445,921
83 38 179,088 * * * 28,796 28,796 100,000 466,811 466,811 490,152
84 39 189,933 * * * 22,370 22,370 100,000 512,644 512,644 538,276
85 40 201,319 * * * 13,694 13,694 100,000 562,450 562,450 590,572
86 41 213,275 * * * 2,013 2,013 100,000 616,509 616,509 647,335
87 42 225,829 * * * * * * 675,124 675,124 708,881
88 43 237,121 * * * * * * 738,614 738,614 775,544
89 44 248,977 * * * * * * 807,321 807,321 847,687
90 45 261,425 * * * * * * 881,600 881,600 925,680
91 46 274,497 * * * * * * 961,810 961,810 1,000,282
92 47 288,221 * * * * * * 1,050,826 1,050,826 1,082,351
93 48 302,633 * * * * * * 1,150,071 1,150,071 1,173,072
94 49 317,764 * * * * * * 1,261,272 1,261,272 1,273,885
95 50 333,652 * * * * * * 1,386,546 1,386,546 1,386,546
96 51 350,335 * * * * * * 1,528,702 1,528,702 1,528,702
97 52 367,852 * * * * * * 1,685,251 1,685,251 1,685,251
98 53 386,244 * * * * * * 1,857,648 1,857,648 1,857,648
99 54 405,557 * * * * * * 2,047,499 2,047,499 2,047,499
100 55 425,834 * * * * * * 2,256,570 2,256,570 2,256,570

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

* In the absence of an additional Premium, the Policy would lapse.
(1) Assumes that no Policy loans have been made.
(2) Guaranteed values reflect applicable Premium Expense Charge, guaranteed cost
of insurance rates, a monthly administrative charge of $8.00 per month in
all Policy Years, and a monthly mortality and expense risk charge equal to
.075% multiplied by the Variable Account Value, which is equivalent to an
annual rate of 0.90% of such amount during all Policy Years.
(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.
(4) Assumes that the Planned Premium Payment is made at the beginning of each
Policy Year. Values would be different if the Premiums are paid with a
different frequency or in different amounts.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND POLICY VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6% OR 12% OVER A
PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
MALE ISSUE AGE: 45 NON-SMOKER

$4,000 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 2
USING CURRENT COST OF INSURANCE RATES

PREMIUM 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
ACCUMULATED GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS
END OF AT --------------------------- ---------------------------- ----------------------------------
POLICY 5% INTEREST POLICY SURRENDER DEATH POLICY SURRENDER DEATH POLICY SURRENDER DEATH
AGE YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---- ------ ----------- ------ --------- ------- ------- --------- ------- ---------- ---------- ----------

46 1 4,200 3,309 134 103,309 3,521 346 103,521 3,733 558 103,733
47 2 8,610 6,533 3,433 106,533 7,163 4,063 107,163 7,818 4,718 107,818
48 3 13,241 9,673 6,623 109,673 10,927 7,877 110,927 12,285 9,235 112,285
49 4 18,103 12,725 9,725 112,725 14,817 11,817 114,817 17,172 14,172 117,172
50 5 23,208 15,690 12,740 115,690 18,834 15,884 118,834 22,517 19,567 122,517
51 6 24,368 18,565 15,665 118,565 22,981 20,081 122,981 28,364 25,464 128,364
52 7 29,786 21,346 18,521 121,346 27,256 24,431 127,256 34,757 31,932 134,757
53 8 35,476 24,026 21,251 124,026 31,656 28,881 131,656 41,742 38,967 141,742
54 9 41,450 26,604 23,879 126,604 36,183 33,458 136,183 49,375 46,650 149,375
55 10 47,722 29,464 26,814 129,464 41,239 38,589 141,239 58,422 55,772 158,422
56 11 54,308 32,528 29,928 132,528 46,887 44,287 146,887 69,012 66,412 169,012
57 12 57,024 35,508 32,983 135,508 53,030 50,505 153,030 80,779 78,254 180,779
58 13 64,075 38,383 35,933 138,383 59,438 56,988 159,438 93,834 91,384 193,834
59 14 71,478 41,156 38,756 141,156 66,127 63,727 166,127 108,332 105,932 208,332
60 15 79,252 43,812 41,487 143,812 73,099 70,774 173,099 124,424 122,099 224,424
61 16 87,415 46,313 44,453 146,313 80,327 78,467 180,327 142,254 140,394 242,254
62 17 95,986 48,697 47,302 148,697 87,865 86,470 187,865 162,063 160,668 262,063
63 18 100,785 51,209 50,279 151,209 95,718 94,788 195,718 184,073 183,143 284,073
64 19 110,024 53,595 53,130 153,595 103,895 103,430 203,895 208,528 208,063 308,528
65 20 119,725 55,842 55,842 155,842 112,399 112,399 212,399 235,701 235,701 335,701
66 21 129,912 58,170 58,170 158,170 121,476 121,476 221,476 266,141 266,141 366,141
67 22 140,607 60,357 60,357 160,357 130,929 130,929 230,929 299,995 299,995 399,995
68 23 151,838 62,388 62,388 162,388 140,764 140,764 240,764 337,645 337,645 437,645
69 24 159,430 64,249 64,249 164,249 150,986 150,986 250,986 379,517 379,517 479,517
70 25 171,601 65,921 65,921 165,921 161,598 161,598 261,598 426,085 426,085 526,085
71 26 184,381 67,385 67,385 167,385 172,601 172,601 272,601 477,877 477,877 577,877
72 27 197,800 68,625 68,625 168,625 183,999 183,999 283,999 538,146 538,146 638,146
73 28 211,890 69,623 69,623 169,623 195,796 195,796 295,796 605,533 605,533 705,533
74 29 226,685 70,388 70,388 170,388 208,022 208,022 308,022 680,917 680,917 780,917
75 30 242,219 70,865 70,865 170,865 220,644 220,644 320,644 765,217 765,217 865,217
76 31 258,530 71,023 71,023 171,023 233,652 233,652 333,652 859,489 859,489 959,489
77 32 275,656 70,828 70,828 170,828 247,029 247,029 347,029 964,913 964,913 1,064,913
78 33 293,639 70,281 70,281 170,281 260,799 260,799 360,799 1,082,857 1,082,857 1,182,857
79 34 312,521 69,305 69,305 169,305 274,900 274,900 374,900 1,214,764 1,214,764 1,314,764
80 35 332,347 67,911 67,911 167,911 289,362 289,362 389,362 1,362,353 1,362,353 1,462,353
81 36 353,165 66,008 66,008 166,008 304,109 304,109 404,109 1,527,445 1,527,445 1,627,445
82 37 375,023 63,555 63,555 163,555 319,114 319,114 419,114 1,712,134 1,712,134 1,812,134
83 38 397,974 60,583 60,583 160,583 334,420 334,420 434,420 1,918,846 1,918,846 2,018,846
84 39 422,073 56,987 56,987 156,987 349,935 349,935 449,935 2,150,039 2,150,039 2,257,541
85 40 447,376 52,781 52,781 152,781 365,680 365,680 465,680 2,407,917 2,407,917 2,528,313
86 41 473,945 47,583 47,583 147,583 381,520 381,520 481,520 2,695,190 2,695,190 2,829,950
87 42 501,842 41,650 41,650 141,650 397,443 397,443 497,443 3,015,057 3,015,057 3,165,810
88 43 531,134 34,922 34,922 134,922 413,387 413,387 513,387 3,370,959 3,370,959 3,539,507
89 44 561,891 27,341 27,341 127,341 429,284 429,284 529,284 3,766,657 3,766,657 3,954,990
90 45 594,186 18,862 18,862 118,862 445,078 445,078 545,078 4,206,277 4,206,277 4,416,591
91 46 628,095 9,456 9,456 109,456 460,724 460,724 560,724 4,694,360 4,694,360 4,882,135
92 47 663,700 * * * 476,232 476,232 576,232 5,243,327 5,243,327 5,400,627
93 48 701,085 * * * 491,565 491,565 591,565 5,862,402 5,862,402 5,979,650
94 49 740,339 * * * 509,202 509,202 609,202 6,562,533 6,562,533 6,662,533
95 50 781,556 * * * 526,809 526,809 626,809 7,351,072 7,351,072 7,451,072
96 51 824,834 * * * 544,352 544,352 644,352 8,234,872 8,234,872 8,334,872
97 52 870,275 * * * 561,797 561,797 661,797 9,225,554 9,225,554 9,325,554
98 53 913,789 * * * 579,108 579,108 679,108 10,336,161 10,336,161 10,436,161
99 54 959,479 * * * 596,245 596,245 696,245 11,581,328 11,581,328 11,681,328
100 55 1,007,453 * * * 613,166 613,166 713,166 12,977,481 12,977,481 13,077,481

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

* In the absence of an additional Premium, the Policy would lapse.
(1) Assumes that no Policy loans have been made.
(2) Current values reflect applicable Premium Expense Charge, guaranteed cost of
insurance rates, a monthly administrative charge of $8.00 per month in all
Policy Years, and a monthly mortality and expense risk charge equal to .075%
multiplied by the Variable Account Value, which is equivalent to an annual
rate of 0.90% of such amount during Policy Years 1-10; and no monthly
mortality and expense risk charge in Policy Years 11 and thereafter.
(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.
(4) Assumes that the Planned Premium Payment is made at the beginning of each
Policy Year. Values would be different if the Premiums are paid with a
different frequency or in different amounts.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND POLICY VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6% OR 12% OVER A
PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
MALE ISSUE AGE: 45 NON-SMOKER

$4,000 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 2
USING GUARANTEED COST OF INSURANCE RATES

PREMIUM 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
ACCUMULATED GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS
END OF AT --------------------------- ---------------------------- -------------------------------
POLICY 5% INTEREST POLICY SURRENDER DEATH POLICY SURRENDER DEATH POLICY SURRENDER DEATH
AGE YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- --- ------ ----------- ------ --------- ------- ------- --------- ------- --------- --------- ---------

46 1 4,200 3,309 134 103,309 3,521 346 103,521 3,734 559 103,734
47 2 8,610 6,533 3,433 106,533 7,163 4,063 107,163 7,818 4,718 107,818
48 3 13,241 9,672 6,622 109,672 10,927 7,877 110,927 12,285 9,235 112,285
49 4 18,103 12,725 9,725 112,725 14,816 11,816 114,816 17,171 14,171 117,171
50 5 23,208 15,689 12,739 115,689 18,833 15,883 118,833 22,516 19,566 122,516
51 6 24,368 18,564 15,664 118,564 22,979 20,079 122,979 28,362 25,462 128,362
52 7 29,786 21,344 18,519 121,344 27,254 24,429 127,254 34,754 31,929 134,754
53 8 35,476 24,025 21,250 124,025 31,655 28,880 131,655 41,740 38,965 141,740
54 9 41,450 26,602 23,877 126,602 36,182 33,457 136,182 49,373 46,648 149,373
55 10 47,722 29,069 26,419 129,069 40,830 38,180 140,830 57,709 55,059 157,709
56 11 54,308 31,419 28,819 131,419 45,598 42,998 145,598 66,812 64,212 166,812
57 12 57,024 33,648 31,123 133,648 50,483 47,958 150,483 76,752 74,227 176,752
58 13 64,075 35,752 33,302 135,752 55,484 53,034 155,484 87,607 85,157 187,607
59 14 71,478 37,728 35,328 137,728 60,599 58,199 160,599 99,464 97,064 199,464
60 15 79,252 39,564 37,239 139,564 65,820 63,495 165,820 112,410 110,085 212,410
61 16 87,415 41,252 39,392 141,252 71,140 69,280 171,140 126,543 124,683 226,543
62 17 95,986 42,781 41,386 142,781 76,550 75,155 176,550 141,971 140,576 241,971
63 18 100,785 44,137 43,207 144,137 82,033 81,103 182,033 158,804 157,874 258,804
64 19 110,024 45,301 44,836 145,301 87,574 87,109 187,574 177,164 176,699 277,164
65 20 119,725 46,256 46,256 146,256 93,150 93,150 193,150 197,180 197,180 297,180
66 21 129,912 46,985 46,985 146,985 98,743 98,743 198,743 219,001 219,001 319,001
67 22 140,607 47,475 47,475 147,475 104,338 104,338 204,338 242,791 242,791 342,791
68 23 151,838 47,713 47,713 147,713 109,914 109,914 209,914 268,730 268,730 368,730
69 24 159,430 47,685 47,685 147,685 115,453 115,453 215,453 297,017 297,017 397,017
70 25 171,601 47,371 47,371 147,371 120,928 120,928 220,928 327,862 327,862 427,862
71 26 184,381 46,740 46,740 146,740 126,299 126,299 226,299 361,487 361,487 461,487
72 27 197,800 45,694 45,694 145,694 131,454 131,454 231,454 398,064 398,064 498,064
73 28 211,890 44,305 44,305 144,305 136,451 136,451 236,451 437,957 437,957 537,957
74 29 226,685 42,453 42,453 142,453 141,154 141,154 241,154 481,372 481,372 581,372
75 30 242,219 40,089 40,089 140,089 145,491 145,491 245,491 528,601 528,601 628,601
76 31 258,530 37,180 37,180 137,180 149,403 149,403 249,403 579,987 579,987 679,987
77 32 275,656 33,698 33,698 133,698 152,833 152,833 252,833 635,911 635,911 735,911
78 33 293,639 29,620 29,620 129,620 155,728 155,728 255,728 696,798 696,798 796,798
79 34 312,521 24,931 24,931 124,931 158,039 158,039 258,039 763,121 763,121 863,121
80 35 332,347 19,598 19,598 119,598 159,697 159,697 259,697 835,385 835,385 935,385
81 36 353,165 13,563 13,563 113,563 160,600 160,600 260,600 914,118 914,118 1,014,118
82 37 375,023 6,745 6,745 106,745 160,624 160,624 260,624 999,875 999,875 1,099,875
83 38 397,974 * * * 159,610 159,610 259,610 1,093,245 1,093,245 1,193,245
84 39 422,073 * * * 157,382 157,382 257,382 1,194,858 1,194,858 1,294,858
85 40 447,376 * * * 153,776 153,776 253,776 1,305,435 1,305,435 1,405,435
86 41 473,945 * * * 148,653 148,653 248,653 1,425,797 1,425,797 1,525,797
87 42 501,842 * * * 141,891 141,891 241,891 1,556,877 1,556,877 1,656,877
88 43 531,134 * * * 133,379 133,379 233,379 1,699,713 1,699,713 1,799,713
89 44 561,891 * * * 123,028 123,028 223,028 1,855,482 1,855,482 1,955,482
90 45 594,186 * * * 110,726 110,726 210,726 2,025,447 2,025,447 2,126,719
91 46 628,095 * * * 96,335 96,335 196,335 2,209,716 2,209,716 2,309,716
92 47 663,700 * * * 79,684 79,684 179,684 2,412,219 2,412,219 2,512,219
93 48 701,085 * * * 60,541 60,541 160,541 2,633,371 2,633,371 2,733,371
94 49 740,339 * * * 38,585 38,585 138,585 2,874,837 2,874,837 2,974,837
95 50 781,556 * * * 13,142 13,142 113,142 3,138,101 3,138,101 3,238,101
96 51 824,834 * * * * * * 3,424,215 3,424,215 3,524,215
97 52 870,275 * * * * * * 3,733,198 3,733,198 3,833,198
98 53 913,789 * * * * * * 4,062,640 4,062,640 4,162,640
99 54 959,479 * * * * * * 4,404,834 4,404,834 4,504,834
100 55 1,007,453 * * * * * * 4,749,726 4,749,726 4,849,726

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

* In the absence of an additional Premium, the Policy would lapse.
(1) Assumes that no Policy loans have been made.
(2) Guaranteed values reflect applicable Premium Expense Charge, current cost of
insurance rates, a monthly administrative charge of $8.00 per month in all
Policy Years, and a monthly mortality and expense risk charge equal to .075%
multiplied by the Variable Account Value, which is equivalent to an annual
rate of 0.90% of such amount during all Policy Years.
(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.
(4) Assumes that the Planned Premium Payment is made at the beginning of each
Policy Year. Values would be different if the Premiums are paid with a
different frequency or in different amounts.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND POLICY VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6% OR 12% OVER A
PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
FEMALE ISSUE AGE: 45 NON-SMOKER

$1,500 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 1
USING CURRENT COST OF INSURANCE RATES

PREMIUM 0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
ACCUMULATED GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS GROSS INVESTMENT RETURNS
END OF AT ------------------------------ ---------------------------- ----------------------------------
POLICY 5% INTEREST POLICY SURRENDER DEATH POLICY SURRENDER DEATH POLICY SURRENDER DEATH
AGE YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---- ------ ----------- --------- --------- ------- ------- --------- ------- ---------- ---------- ----------

46 1 1,575 1,013 0 100,000 1,085 0 100,000 1,157 0 100,000
47 2 3,229 1,991 0 100,000 2,199 0 100,000 2,416 0 100,000
48 3 4,965 2,935 185 100,000 3,342 592 100,000 3,784 1,034 100,000
49 4 6,788 3,842 1,142 100,000 4,513 1,813 100,000 5,271 2,571 100,000
50 5 8,703 4,713 2,038 100,000 5,713 3,038 100,000 6,891 4,216 100,000
51 6 9,138 5,545 2,920 100,000 6,941 4,316 100,000 8,654 6,029 100,000
52 7 11,170 6,576 4,001 100,000 8,439 5,864 100,000 10,818 8,243 100,000
53 8 13,303 7,568 5,043 100,000 9,981 7,456 100,000 13,184 10,659 100,000
54 9 15,544 8,523 6,023 100,000 11,568 9,068 100,000 15,773 13,273 100,000
55 10 17,896 9,439 6,989 100,000 13,201 10,751 100,000 18,608 16,158 100,000
56 11 20,366 10,408 8,008 100,000 15,016 12,616 100,000 21,910 19,510 100,000
57 12 21,384 11,342 8,992 100,000 16,901 14,551 100,000 25,562 23,212 100,000
58 13 24,028 12,237 9,937 100,000 18,855 16,555 100,000 29,605 27,305 100,000
59 14 26,804 13,075 10,825 100,000 20,869 18,619 100,000 34,071 31,821 100,000
60 15 29,720 13,871 11,671 100,000 22,958 20,758 100,000 39,024 36,824 100,000
61 16 32,781 14,593 12,733 100,000 25,101 23,241 100,000 44,505 42,645 100,000
62 17 35,995 15,268 13,873 100,000 27,326 25,931 100,000 50,852 49,457 100,000
63 18 37,794 15,892 14,962 100,000 29,637 28,707 100,000 57,956 57,026 100,000
64 19 41,259 16,469 16,004 100,000 32,043 31,578 100,000 65,921 65,456 100,000
65 20 44,897 16,989 16,989 100,000 34,545 34,545 100,000 74,859 74,859 100,000
66 21 48,717 17,565 17,565 100,000 37,241 37,241 100,000 84,935 84,935 101,073
67 22 52,728 18,084 18,084 100,000 40,053 40,053 100,000 96,195 96,195 113,511
68 23 56,939 18,548 18,548 100,000 42,991 42,991 100,000 108,747 108,747 127,234
69 24 59,786 18,944 18,944 100,000 46,060 46,060 100,000 122,735 122,735 142,373
70 25 64,350 19,275 19,275 100,000 49,273 49,273 100,000 138,327 138,327 159,076
71 26 69,143 19,522 19,522 100,000 52,896 52,896 100,000 155,701 155,701 175,943
72 27 74,175 19,684 19,684 100,000 56,717 56,717 100,000 175,087 175,087 194,346
73 28 79,459 19,736 19,736 100,000 60,746 60,746 100,000 196,719 196,719 214,424
74 29 85,007 19,673 19,673 100,000 65,007 65,007 100,000 220,873 220,873 236,334
75 30 90,832 19,458 19,458 100,000 69,515 69,515 100,000 247,853 247,853 260,245
76 31 96,949 19,080 19,080 100,000 74,302 74,302 100,000 278,014 278,014 291,914
77 32 103,371 18,513 18,513 100,000 79,403 79,403 100,000 311,628 311,628 327,209
78 33 110,115 17,720 17,720 100,000 84,861 84,861 100,000 349,080 349,080 366,534
79 34 117,195 16,640 16,640 100,000 90,728 90,728 100,000 390,789 390,789 410,328
80 35 124,630 15,249 15,249 100,000 97,072 97,072 101,925 437,228 437,228 459,089
81 36 132,437 13,498 13,498 100,000 103,777 103,777 108,966 488,915 488,915 513,360
82 37 140,634 11,329 11,329 100,000 110,826 110,826 116,367 549,138 549,138 576,595
83 38 149,240 8,675 8,675 100,000 118,230 118,230 124,142 616,453 616,453 647,276
84 39 158,277 5,413 5,413 100,000 126,001 126,001 132,301 691,647 691,647 726,229
85 40 167,766 1,486 1,486 100,000 134,154 134,154 140,862 775,619 775,619 814,400
86 41 177,729 * * * 142,702 142,702 149,837 869,350 869,350 912,817
87 42 188,191 * * * 151,657 151,657 159,239 973,917 973,917 1,022,613
88 43 199,175 * * * 161,030 161,030 169,082 1,090,511 1,090,511 1,145,037
89 44 210,709 * * * 170,836 170,836 179,377 1,220,446 1,220,446 1,281,468
90 45 222,820 * * * 181,083 181,083 190,137 1,365,163 1,365,163 1,433,421
91 46 233,961 * * * 191,784 191,784 199,456 1,526,249 1,526,249 1,587,299
92 47 245,659 * * * 203,164 203,164 209,259 1,707,250 1,707,250 1,758,467
93 48 257,942 * * * 215,306 215,306 219,612 1,911,045 1,911,045 1,949,266
94 49 270,839 * * * 228,307 228,307 230,590 2,141,031 2,141,031 2,162,441
95 50 284,381 * * * 242,283 242,283 242,283 2,401,229 2,401,229 2,401,229
96 51 298,600 * * * 257,367 257,367 257,367 2,696,425 2,696,425 2,696,425
97 52 313,530 * * * 273,304 273,304 273,304 3,027,727 3,027,727 3,027,727
98 53 329,206 * * * 290,140 290,140 290,140 3,399,551 3,399,551 3,399,551
99 54 345,666 * * * 307,926 307,926 307,926 3,816,853 3,816,853 3,816,853
100 55 362,950 * * * 326,717 326,717 326,717 4,285,197 4,285,197 4,285,197

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

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
FEMALE ISSUE AGE: 45 NON-SMOKER

$1,500 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 1
USING GUARANTEED COST OF INSURANCE RATES

46 1 1,575 1,012 0 100,000 1,085 0 100,000 1,157 0 100,000
47 2 3,229 1,991 0 100,000 2,199 0 100,000 2,415 0 100,000
48 3 4,965 2,934 184 100,000 3,341 591 100,000 3,783 1,033 100,000
49 4 6,788 3,841 1,141 100,000 4,512 1,812 100,000 5,270 2,570 100,000
50 5 8,703 4,712 2,037 100,000 5,712 3,037 100,000 6,890 4,215 100,000
51 6 9,138 5,543 2,918 100,000 6,940 4,315 100,000 8,652 6,027 100,000
52 7 11,170 6,335 3,760 100,000 8,195 5,620 100,000 10,572 7,997 100,000
53 8 13,303 7,084 4,559 100,000 9,477 6,952 100,000 12,663 10,138 100,000
54 9 15,544 7,786 5,286 100,000 10,781 8,281 100,000 14,940 12,440 100,000
55 10 17,896 8,442 5,992 100,000 12,108 9,658 100,000 17,424 14,974 100,000
56 11 20,366 9,049 6,649 100,000 13,460 11,060 100,000 20,137 17,737 100,000
57 12 21,384 9,608 7,258 100,000 14,836 12,486 100,000 23,105 20,755 100,000
58 13 24,028 10,120 7,820 100,000 16,240 13,940 100,000 26,359 24,059 100,000
59 14 26,804 10,588 8,338 100,000 17,676 15,426 100,000 29,935 27,685 100,000
60 15 29,720 11,010 8,810 100,000 19,144 16,944 100,000 33,869 31,669 100,000
61 16 32,781 11,379 9,519 100,000 20,642 18,782 100,000 38,199 36,339 100,000
62 17 35,995 11,689 10,294 100,000 22,163 20,768 100,000 42,968 41,573 100,000
63 18 37,794 11,924 10,994 100,000 23,698 22,768 100,000 48,222 47,292 100,000
64 19 41,259 12,069 11,604 100,000 25,234 24,769 100,000 54,013 53,548 100,000
65 20 44,897 12,106 12,106 100,000 26,761 26,761 100,000 60,406 60,406 100,000
66 21 48,717 12,030 12,030 100,000 28,273 28,273 100,000 67,484 67,484 100,000
67 22 52,728 11,830 11,830 100,000 29,768 29,768 100,000 75,343 75,343 100,000
68 23 56,939 11,504 11,504 100,000 31,247 31,247 100,000 84,097 84,097 100,000
69 24 59,786 11,052 11,052 100,000 32,713 32,713 100,000 93,794 93,794 108,802
70 25 64,350 10,464 10,464 100,000 34,162 34,162 100,000 104,433 104,433 120,099
71 26 69,143 9,714 9,714 100,000 35,583 35,583 100,000 116,105 116,105 131,198
72 27 74,175 8,770 8,770 100,000 36,956 36,956 100,000 128,935 128,935 143,118
73 28 79,459 7,579 7,579 100,000 38,251 38,251 100,000 143,047 143,047 155,922
74 29 85,007 6,078 6,078 100,000 39,434 39,434 100,000 158,580 158,580 169,680
75 30 90,832 4,201 4,201 100,000 40,469 40,469 100,000 175,696 175,696 184,481
76 31 96,949 1,878 1,878 100,000 41,323 41,323 100,000 194,587 194,587 204,317
77 32 103,371 * * * 41,963 41,963 100,000 215,302 215,302 226,067
78 33 110,115 * * * 42,356 42,356 100,000 238,005 238,005 249,905
79 34 117,195 * * * 42,462 42,462 100,000 262,876 262,876 276,020
80 35 124,630 * * * 42,225 42,225 100,000 290,106 290,106 304,612
81 36 132,437 * * * 41,560 41,560 100,000 319,898 319,898 335,893
82 37 140,634 * * * 40,348 40,348 100,000 352,463 352,463 370,086
83 38 149,240 * * * 38,428 38,428 100,000 388,021 388,021 407,422
84 39 158,277 * * * 35,580 35,580 100,000 426,799 426,799 448,139
85 40 167,766 * * * 31,531 31,531 100,000 469,038 469,038 492,490
86 41 177,729 * * * 25,910 25,910 100,000 514,990 514,990 540,740
87 42 188,191 * * * 18,224 18,224 100,000 564,921 564,921 593,167
88 43 199,175 * * * 7,774 7,774 100,000 619,104 619,104 650,059
89 44 210,709 * * * * * * 677,828 677,828 711,719
90 45 222,820 * * * * * * 741,378 741,378 778,447
91 46 233,961 * * * * * * 810,046 810,046 842,448
92 47 245,659 * * * * * * 885,985 885,985 912,564
93 48 257,942 * * * * * * 970,357 970,357 989,764
94 49 270,839 * * * * * * 1,064,595 1,064,595 1,075,241
95 50 284,381 * * * * * * 1,170,499 1,170,499 1,170,499
96 51 298,600 * * * * * * 1,290,469 1,290,469 1,290,469
97 52 313,530 * * * * * * 1,422,585 1,422,585 1,422,585
98 53 329,206 * * * * * * 1,568,076 1,568,076 1,568,076
99 54 345,666 * * * * * * 1,728,297 1,728,297 1,728,297
100 55 362,950 * * * * * * 1,904,738 1,904,738 1,904,738

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

ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
FEMALE ISSUE AGE: 45 NON-SMOKER

$3,000 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 2
USING CURRENT COST OF INSURANCE RATES

46 1 3,150 2,409 0 102,409 2,566 0 102,566 2,723 0 102,723
47 2 6,458 4,755 1,980 104,755 5,218 2,443 105,218 5,700 2,925 105,700
48 3 9,930 7,039 4,289 107,039 7,959 5,209 107,959 8,956 6,206 108,956
49 4 13,577 9,259 6,559 109,259 10,791 8,091 110,791 12,517 9,817 112,517
50 5 17,406 11,414 8,739 111,414 13,715 11,040 113,715 16,411 13,736 116,411
51 6 18,276 13,503 10,878 113,503 16,731 14,106 116,731 20,669 18,044 120,669
52 7 22,340 15,780 13,205 115,780 20,106 17,531 120,106 25,599 23,024 125,599
53 8 26,607 17,993 15,468 117,993 23,598 21,073 123,598 31,002 28,477 131,002
54 9 31,087 20,142 17,642 120,142 27,210 24,710 127,210 36,926 34,426 136,926
55 10 35,792 22,227 19,777 122,227 30,946 28,496 130,946 43,421 40,971 143,421
56 11 40,731 24,465 22,065 124,465 35,122 32,722 135,122 51,254 48,854 151,254
57 12 42,768 26,649 24,299 126,649 39,477 37,127 139,477 59,967 57,617 159,967
58 13 48,056 28,775 26,475 128,775 44,015 41,715 144,015 69,654 67,354 169,654
59 14 53,609 30,823 28,573 130,823 48,723 46,473 148,723 80,409 78,159 180,409
60 15 59,439 32,807 30,607 132,807 53,894 51,694 153,894 92,371 90,171 192,371
61 16 65,561 34,692 32,832 134,692 59,272 57,412 159,272 105,641 103,781 205,641
62 17 71,989 36,506 35,111 136,506 64,897 63,502 164,897 120,404 119,009 220,404
63 18 75,589 38,247 37,317 138,247 70,780 69,850 170,780 136,829 135,899 236,829
64 19 82,518 39,917 39,452 139,917 76,938 76,473 176,938 155,112 154,647 255,112
65 20 89,794 41,503 41,503 141,503 83,372 83,372 183,372 175,456 175,456 275,456
66 21 97,434 43,146 43,146 143,146 90,242 90,242 190,242 198,251 198,251 298,251
67 22 105,456 44,705 44,705 144,705 97,428 97,428 197,428 223,633 223,633 323,633
68 23 113,878 46,183 46,183 146,183 104,950 104,950 204,950 251,906 251,906 351,906
69 24 119,572 47,565 47,565 147,565 112,810 112,810 212,810 283,391 283,391 383,391
70 25 128,701 48,852 48,852 148,852 121,028 121,028 221,028 318,464 318,464 418,464
71 26 138,286 50,273 50,273 150,273 129,602 129,602 229,602 357,520 357,520 457,520
72 27 148,350 51,581 51,581 151,581 138,548 138,548 238,548 401,021 401,021 501,021
73 28 158,918 52,745 52,745 152,745 147,857 147,857 247,857 449,454 449,454 549,454
74 29 170,014 53,759 53,759 153,759 157,540 157,540 257,540 505,891 505,891 605,891
75 30 181,664 54,579 54,579 154,579 167,575 167,575 267,575 569,028 569,028 669,028
76 31 193,897 55,196 55,196 155,196 177,968 177,968 277,968 639,673 639,673 739,673
77 32 206,742 55,580 55,580 155,580 188,710 188,710 288,710 718,712 718,712 818,712
78 33 220,229 55,694 55,694 155,694 199,782 199,782 299,782 807,132 807,132 907,132
79 34 234,391 55,475 55,475 155,475 211,136 211,136 311,136 906,010 906,010 1,006,010
80 35 249,260 54,909 54,909 154,909 222,772 222,772 322,772 1,016,612 1,016,612 1,116,612
81 36 264,873 53,961 53,961 153,961 234,668 234,668 334,668 1,140,329 1,140,329 1,240,329
82 37 281,267 52,592 52,592 152,592 246,796 246,796 346,796 1,278,724 1,278,724 1,378,724
83 38 298,480 50,765 50,765 150,765 259,132 259,132 359,132 1,433,551 1,433,551 1,533,551
84 39 316,554 48,154 48,154 148,154 271,595 271,595 371,595 1,606,727 1,606,727 1,706,727
85 40 335,532 45,023 45,023 145,023 284,199 284,199 384,199 1,800,501 1,800,501 1,900,501
86 41 355,459 41,338 41,338 141,338 296,911 296,911 396,911 2,017,350 2,017,350 2,118,218
87 42 376,382 37,051 37,051 137,051 309,682 309,682 409,682 2,259,626 2,259,626 2,372,607
88 43 398,351 32,125 32,125 132,125 322,472 322,472 422,472 2,529,767 2,529,767 2,656,255
89 44 421,418 26,525 26,525 126,525 335,240 335,240 435,240 2,830,814 2,830,814 2,972,355
90 45 445,639 20,214 20,214 120,214 347,941 347,941 447,941 3,166,111 3,166,111 3,324,417
91 46 471,071 13,158 13,158 113,158 360,527 360,527 460,527 3,539,332 3,539,332 3,680,905
92 47 497,775 5,340 5,340 105,340 372,969 372,969 472,969 3,958,695 3,958,695 4,077,456
93 48 525,814 * * * 385,218 385,218 485,218 4,430,874 4,430,874 4,530,874
94 49 555,254 * * * 397,222 397,222 497,222 4,962,808 4,962,808 5,062,808
95 50 586,167 * * * 408,927 408,927 508,927 5,558,792 5,558,792 5,658,792
96 51 618,625 * * * 420,277 420,277 520,277 6,226,618 6,226,618 6,326,618
97 52 652,707 * * * 431,208 431,208 531,208 6,975,031 6,975,031 7,075,031
98 53 685,342 * * * 441,658 441,658 541,658 7,813,845 7,813,845 7,913,845
99 54 719,609 * * * 451,557 451,557 551,557 8,754,075 8,754,075 8,854,075
100 55 755,589 * * * 460,834 460,834 560,834 9,808,083 9,808,083 9,908,083

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ILLUSTRATION OF POLICY VALUES
PROTECTIVE LIFE INSURANCE COMPANY
FEMALE ISSUE AGE: 45 NON-SMOKER
$3,000 ANNUAL PLANNED PREMIUM
$100,000 FACE AMOUNT
DEATH BENEFIT OPTION 2
USING GUARANTEED COST OF INSURANCE RATES

46 1 3,150 2,409 0 102,409 2,565 0 102,565 2,722 0 102,722
47 2 6,458 4,755 1,980 104,755 5,218 2,443 105,218 5,700 2,925 105,700
48 3 9,930 7,039 4,289 107,039 7,959 5,209 107,959 8,956 6,206 108,956
49 4 13,577 9,258 6,558 109,258 10,790 8,090 110,790 12,516 9,816 112,516
50 5 17,406 11,413 8,738 111,413 13,714 11,039 113,714 16,410 13,735 116,410
51 6 18,276 13,502 10,877 113,502 16,730 14,105 116,730 20,668 18,043 120,668
52 7 22,340 15,523 12,948 115,523 19,841 17,266 119,841 25,324 22,749 125,324
53 8 26,607 17,473 14,948 117,473 23,045 20,520 123,045 30,415 27,890 130,415
54 9 31,087 19,349 16,849 119,349 26,342 23,842 126,342 35,979 33,479 135,979
55 10 35,792 21,150 18,700 121,150 29,734 27,284 129,734 42,061 39,611 142,061
56 11 40,731 22,874 20,474 122,874 33,222 30,822 133,222 48,712 46,312 148,712
57 12 42,768 24,523 22,173 124,523 36,808 34,458 136,808 55,988 53,638 155,988
58 13 48,056 26,097 23,797 126,097 40,497 38,197 140,497 63,952 61,652 163,952
59 14 53,609 27,599 25,349 127,599 44,296 42,046 144,296 72,675 70,425 172,675
60 15 59,439 29,029 26,829 129,029 48,205 46,005 148,205 82,233 80,033 182,233
61 16 65,561 30,379 28,519 130,379 52,221 50,361 152,221 92,700 90,840 192,700
62 17 71,989 31,640 30,245 131,640 56,339 54,944 156,339 104,159 102,764 204,159
63 18 75,589 32,798 31,868 132,798 60,544 59,614 160,544 116,691 115,761 216,691
64 19 82,518 33,834 33,369 133,834 64,821 64,356 164,821 130,383 129,918 230,383
65 20 89,794 34,731 34,731 134,731 69,151 69,151 169,151 145,334 145,334 245,334
66 21 97,434 35,481 35,481 135,481 73,527 73,527 173,527 161,658 161,658 261,658
67 22 105,456 36,077 36,077 136,077 77,941 77,941 177,941 179,486 179,486 279,486
68 23 113,878 36,520 36,520 136,520 82,392 82,392 182,392 198,967 198,967 298,967
69 24 119,572 36,812 36,812 136,812 86,881 86,881 186,881 220,267 220,267 320,267
70 25 128,701 36,945 36,945 136,945 91,399 91,399 191,399 243,561 243,561 343,561
71 26 138,286 36,898 36,898 136,898 95,922 95,922 195,922 269,023 269,023 369,023
72 27 148,350 36,639 36,639 136,639 100,415 100,415 200,415 296,838 296,838 396,838
73 28 158,918 36,123 36,123 136,123 104,825 104,825 204,825 327,189 327,189 427,189
74 29 170,014 35,295 35,295 135,295 109,088 109,088 209,088 360,271 360,271 460,271
75 30 181,664 34,104 34,104 134,104 113,139 113,139 213,139 396,301 396,301 496,301
76 31 193,897 32,507 32,507 132,507 116,918 116,918 216,918 435,524 435,524 535,524
77 32 206,742 30,469 30,469 130,469 120,371 120,371 220,371 478,219 478,219 578,219
78 33 220,229 27,962 27,962 127,962 123,447 123,447 223,447 524,698 524,698 624,698
79 34 234,391 24,960 24,960 124,960 126,094 126,094 226,094 575,309 575,309 675,309
80 35 249,260 21,420 21,420 121,420 128,242 128,242 228,242 630,416 630,416 730,416
81 36 264,873 17,278 17,278 117,278 129,793 129,793 229,793 690,393 690,393 790,393
82 37 281,267 12,445 12,445 112,445 130,620 130,620 230,620 755,629 755,629 855,629
83 38 298,480 6,814 6,814 106,814 130,570 130,570 230,570 826,530 826,530 926,530
84 39 316,554 263 263 100,263 129,465 129,465 229,465 903,523 903,523 1,003,523
85 40 335,532 * * * 127,145 127,145 227,145 987,107 987,107 1,087,107
86 41 355,459 * * * 123,446 123,446 223,446 1,077,831 1,077,831 1,177,831
87 42 376,382 * * * 118,218 118,218 218,218 1,176,324 1,176,324 1,276,324
88 43 398,351 * * * 111,297 111,297 211,297 1,283,267 1,283,267 1,383,267
89 44 421,418 * * * 102,529 102,529 202,529 1,399,432 1,399,432 1,499,432
90 45 445,639 * * * 91,727 91,727 191,727 1,525,638 1,525,638 1,625,638
91 46 471,071 * * * 78,699 78,699 178,699 1,662,792 1,662,792 1,762,792
92 47 497,775 * * * 63,208 63,208 163,208 1,811,853 1,811,853 1,911,853
93 48 525,814 * * * 44,952 44,952 144,952 1,973,822 1,973,822 2,073,822
94 49 555,254 * * * 23,511 23,511 123,511 2,149,692 2,149,692 2,249,692
95 50 586,167 * * * * * * 2,340,299 2,340,299 2,440,299
96 51 618,625 * * * * * * 2,546,000 2,546,000 2,646,000
97 52 652,707 * * * * * * 2,766,013 2,766,013 2,866,013
98 53 685,342 * * * * * * 2,997,088 2,997,088 3,097,088
99 54 719,609 * * * * * * 3,230,610 3,230,610 3,330,610
100 55 755,589 * * * * * * 3,455,578 3,455,578 3,555,578

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* In the absence of an additional Premium, the Policy would lapse.
(1) Assumes that no Policy loans have been made.
(2) Guaranteed values reflect applicable Premium Expense Charge, guaranteed cost
of insurance rates, a monthly administrative charge of $8.00 per month in
all Policy Years, and a monthly mortality and expense risk charge equal to
.075% multiplied by the Variable Account Value, which is equivalent to an
annual rate 0.90% of such amount during all Policy Years.
(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.
(4) Assumes that the Planned Premium Payment is made at the beginning of each
Policy Year. Values would be different if the Premiums are paid with a
different frequency or in different amounts.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND POLICY VALUE FOR A POLICY WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6% OR 12% OVER A
PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.

OTHER POLICY BENEFITS AND PROVISIONS

LIMITS ON RIGHTS TO CONTEST THE POLICY

INCONTESTABILITY. Protective Life will not contest the Policy, or any
supplemental benefit and/or rider, after the Policy or rider has been in force
during the Insured's lifetime for two years from the Policy Effective Date or
the effective date of the rider, unless fraud is involved. Any increase in the
Face Amount will be incontestable with respect to statements made in the
evidence of insurability for that increase after the increase has been in force
during the life of the Insured for two years after the effective date of the
increase.

SUICIDE EXCLUSION. If the Insured dies by suicide, while sane or insane,
within two years after the Policy Effective Date, the Death Benefit will be
limited to the premium payments made before death, less any Policy Debt and any
withdrawals. If the Insured dies by suicide within two years after an increase
in Face Amount, the Death Benefit with respect to the increase will be limited
to the sum of the monthly cost of insurance charges made for that increase.

CHANGES IN THE POLICY OR BENEFITS

MISSTATEMENT OF AGE OR SEX. If the Insured's age or sex has been misstated
in the application for the Policy or in any application for supplemental
benefits and/or riders, the Death Benefit under the Policy or such supplemental
benefits and/or riders is the amount which would have been provided by the most
recent cost of insurance charge, and the cost of such supplemental benefits
and/or riders, at the correct age and sex.

OTHER CHANGES. At any time Protective Life may make such changes in the
Policy as are necessary to assure compliance with any applicable laws,
regulations or rulings issued by a government agency. This includes, but is not
limited to, changes necessary to comply at all times with the definition of life
insurance prescribed by the Code. Any such changes will apply uniformly to all
affected Policies and Owners will receive notification of such changes.

SUSPENSION OR DELAY IN PAYMENTS

Protective Life will ordinarily pay any Death Benefit proceeds, Policy
loans, withdrawals, or surrenders within seven calendar days after receipt at
the Home Office of all the documents required for such a payment. Other than the
Death Benefit, which is determined as of the date of death, the amount will be
determined as of the date of receipt of all required documents. However,
Protective Life may delay making a payment or processing a transfer request if
(1) the New York Stock Exchange is closed for other than a regular holiday or
weekend, trading on the Exchange is restricted by the SEC, or the SEC declares
that an emergency exists as a result of which the disposal or valuation of
Variable Account assets is not reasonably practicable; or (2) the SEC by order
permits postponement of payment to protect Owners. See also "Payments from the
Fixed Account".

REPORTS TO POLICY OWNERS

Each year you will be sent a report at your last known address showing, as
of the end of the current report period: the Death Benefit; Policy Value; Fixed
Account Value; Variable Account Value; Loan Account Value; Sub-Account Values;
premiums paid since the last report; withdrawals since the last report; any
Policy loans and accrued interest; Surrender Value; current Net Premium
allocations; charges deducted since the last report; and any other information
required by law. You will also be sent an annual and a semi-annual report for
each Fund underlying a Sub-Account to which you have allocated Policy Value,
including a list of the securities held in each Fund, as required by the 1940
Act. In addition, when you pay Premium Payments or request any other financial
transaction under your Policy you will receive a written confirmation of these
transactions.

ASSIGNMENT

The Policy may be assigned in accordance with its terms. In order for any
assignment to be binding upon Protective Life, it must be in writing and filed
at the Home Office. Once Protective Life has received a signed copy of the
assignment, the Owner's rights and the interest of any Beneficiary

(or any other person) will be subject to the assignment. Protective Life assumes
no responsibility for the validity or sufficiency of any assignment. An
assignment is subject to any Policy Debt. An assignment may result in certain
amounts being subject to income tax and a 10% penalty tax. See "Tax
Considerations".

ARBITRATION

The Policy provides that any controversy, dispute or claim by any Owner(s),
Insured, or Beneficiary (a "claimant") arising out of insurance provided under
the Policy will be submitted to binding arbitration pursuant to the Federal
Arbitration Act. Arbitration will be binding upon any claimant as well as
Protective Life and may not be set aside in later litigation except upon the
limited circumstances set forth in the Federal Arbitration Act. Arbitration
expenses will be borne by the losing party or in such proportion as the
arbitrator(s) shall decide. Consult the Policy for additional information. This
provision does not apply to Policies issued in certain states.

SUPPLEMENTAL BENEFITS AND/OR RIDERS

The following supplemental benefits and/or riders are available and may be
added to your Policy. Monthly charges for these benefits and/or riders will be
deducted from your Policy Value as part of the monthly deduction (see "Monthly
Deduction"). The supplemental benefits and/or riders available with the Policies
provide fixed benefits that do not vary with the investment experience of the
Variable Account.

CHILDREN'S TERM LIFE INSURANCE RIDER. Provides a death benefit payable on
the death of a covered child. More than one child can be covered. There is no
cash value for this benefit.

ACCIDENTAL DEATH BENEFIT RIDER. Provides an additional death benefit
payable if the Insured's death results from certain accidental causes. There is
no cash value for this benefit.

DISABILITY BENEFIT RIDER. Provides for the crediting of a specific Premium
Payment to a Policy on each Monthly Anniversary during the total disability of
the Insured. After the Insured has been totally disabled (as defined in the
rider) for six months, the Company will credit Premium Payments to the Policy
equal to the disability benefit amount shown in the Policy multiplied by the
number of Monthly Anniversary Days that have occurred since the onset of total
disability. Monthly Anniversary Days that occur more than one calendar year
prior to the date that We receive a claim under a rider are not included for the
purpose of this calculation. Subsequent to the time that the Insured has been
totally disabled for six months, We will credit a Premium Payment equal to the
disability benefit amount on each Monthly Anniversary Day. The Owner may change
the disability benefit amount by Written Notice at any time before the Insured
becomes totally disabled.

GUARANTEED INSURABILITY RIDER. Provides the right to increase the Face
Amount of your Policy under two options. The Option exercise date depends on the
rider selected: Variable Option or Survivor's Choice. Under the Variable Option
you can increase the Face Amount at designated future points in time (selected
at issue) without evidence of insurability. Under the Survivor's Choice Option,
you specify (at issue) a designated life (other than the Insured). When the
designated person dies, the Owner has the option to increase the Face Amount
without evidence of insurability. See "Changing the Face Amount".

PROTECTED INSURABILITY BENEFIT RIDER. Provides the right to increase the
Face Amount of your Policy at designated option dates at age 25, 28, 31, 34, 37
and 40 without evidence of insurability.

TERM RIDER FOR COVERED INSURED. Provides an additional death benefit
payable on the death of the covered Insured without increasing the Policy's Face
Amount. The CIR may be purchased at the time the Policy is issued (or later,
subject to availability and additional underwriting). A CIR may be canceled
separately from the Policy (I.E., it can be canceled without causing the Policy
to be canceled or to lapse). There is no cash or loan value for this benefit.

Additional rules and limits apply to these supplemental benefits and/or
riders. Not all such benefits may be available at any time, and supplemental
benefits and/or riders in addition to those listed above may be made available.
Please ask your Protective Life agent for further information, or contact the
Home Office.

REINSURANCE

The Company may reinsure a portion of the risks assumed under the Policies.

USES OF THE POLICY

Life insurance, including variable life insurance, can be used to provide
for many individual and business needs, in addition to providing a death
benefit. Possible applications of a variable life insurance policy, such as this
Policy include: (1) serving as vehicle for accumulating funds for a college
education, (2) estate planning, (3) serving as an investment vehicle on various
types of deferred compensation arrangements, (4) buy-sell arrangements, (5)
split dollar arrangements, and (6) a supplement to other retirement plans.

As with any investment, using this Policy under these or other applications
entails certain risks. For example, if investment performance of Sub-Accounts to
which Policy Value is allocated is poorer than expected or if sufficient
premiums are not paid, the Policy may lapse or may not accumulate Cash Value or
Surrender Value sufficient to adequately fund the application for which the
Policy was purchased. Similarly, certain transactions under a Policy entail
risks in connection with the application for which the Policy is purchased.
Withdrawals, policy loans and interest paid on policy loans may significantly
affect current and future Policy Value, Cash Value, Surrender Value or Death
Benefit Proceeds. If, for example, a policy loan is taken but not repaid prior
to the death of the Insured, the Policy Debt is subtracted from the Death
Benefit in computing the Death Benefit Proceeds to be paid to a Beneficiary.

Prior to utilizing this Policy or the above applications you should consider
whether the anticipated duration of the Policy is appropriate for the
application for which you intend to purchase it.

In addition, you need to consider the tax implications of using the Policy
with these applications. (The tax implications of using this Policy with these
applications can be complex and generally are not addressed in the discussion of
"Tax Considerations" below.) Loans and withdrawals will affect the Policy Value
and Death Benefit. There may be penalties and taxes if the policy is withdrawn,
surrendered, lapses or matures. BECAUSE OF THESE RISKS, YOU NEED TO CAREFULLY
CONSIDER HOW YOU USE THIS POLICY. THIS POLICY MAY NOT BE SUITABLE FOR ALL
PERSONS, UNDER ANY OF THESE APPLICATIONS.

TAX CONSIDERATIONS

INTRODUCTION

The following discussion of the federal income tax treatment of the Policy
is not exhaustive, does not purport to cover all situations, and is not intended
as tax advice. The federal income tax treatment of the Policy is unclear in
certain circumstances, and a qualified tax adviser should always be consulted
with regard to the application of law to individual circumstances. This
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Department regulations, and interpretations existing on the
date of this Prospectus. These authorities, however, are subject to change by
Congress, the Treasury Department, and judicial decisions.

This discussion does not address state or local tax consequences associated
with the purchase of the Policy. In addition, PROTECTIVE LIFE MAKES NO GUARANTEE
REGARDING ANY TAX TREATMENT -- FEDERAL, STATE OR LOCAL -- OF ANY POLICY OR OF
ANY TRANSACTION INVOLVING A POLICY.

TAX STATUS OF PROTECTIVE LIFE

Protective Life is taxed as a life insurance company under the Code. Since
the operations of the Variable Account are a part of, and are taxed with, the
operations of Protective Life, the Variable Account is not separately taxed as a
"regulated investment company" under the Code. Under existing federal income tax
laws, Protective Life is not taxed on investment income and realized capital
gains of the Variable Account, although Protective Life's federal taxes are
increased in respect of the Policies because of the federal tax law's treatment
of deferred acquisition costs. Currently, a charge for federal income taxes is
not deducted from the Sub-Accounts or the Policy's Cash Value. However,
Protective Life does deduct a premium expense charge from each Premium Payment
in all Policy Years in part to compensate it for the federal tax treatment of
deferred acquisition costs. Protective Life reserves the right in the future to
make a charge against the Variable Account or the Cash Values of a Policy for
any federal, state, or local income taxes that it incurs and determines to be
properly attributable to the Variable Account or the Policy. Protective Life
will promptly notify You of any such charge.

TAXATION OF LIFE INSURANCE POLICIES

TAX STATUS OF THE POLICY. Section 7702 of the Code establishes a statutory
definition of life insurance for federal tax purposes. Protective Life believes
that the Policy will meet the current statutory definition of life insurance,
which places limitations on the amount of premiums that may be paid and the
Policy Values that can accumulate relative to the Death Benefit. As a result,
the Death Benefit payable under the Policy will generally be excludable from the
Beneficiary's gross income, and interest and other income credited under the
Policy will not be taxable unless certain withdrawals are made (or are deemed to
be made) from the Policy prior to the Insured's death, as discussed below. This
tax treatment will only apply, however, if (1) the investments of the Variable
Account are "adequately diversified" in accordance with Treasury Department
regulations, and (2) Protective Life, rather than the Owner, is considered the
owner of the assets of the Variable Account for federal income tax purposes.

DIVERSIFICATION REQUIREMENTS. The Code and Treasury Department
regulations prescribe the manner in which the investments of a segregated
asset account, such as the Variable Account, are to be "adequately
diversified". If the Variable Account fails to comply with these
diversification standards, the Policy will not be treated as a life
insurance contract for federal income tax purposes and the Owner would
generally be taxable currently on the income on the contract (as defined in
the tax law). Protective Life expects that the Variable Account, through the
Funds, will comply with the diversification requirements prescribed by the
Code and Treasury Department regulations.

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

The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of the assets of a
segregated asset account. For example, the Owner of this Policy has the
choice of more investment options to which to allocate Premium Payments and
Variable Account Values, and may be able to transfer among investment
options more frequently, than in such rulings. These differences could
result in the Policy Owner being treated as the owner of a portion of the
assets of the Variable Account and thus subject to current taxation on the
income and gains from those assets. In addition, Protective Life does not
know what standards will be set forth in the regulations or rulings which
the Treasury Department has stated it expects to issue. Protective Life
therefore reserves the right to modify the Policy as necessary to attempt to
prevent Owners from being considered the owners of the assets of the
Variable Account. However, there is no assurance that such efforts would be
successful.

The remainder of this discussion assumes that the Policy will be treated as
a life insurance contract for federal tax purposes.

TAX TREATMENT OF LIFE INSURANCE DEATH BENEFIT PROCEEDS. In general, the
amount of the Death Benefit Proceeds payable from a Policy by reason of the
death of the Insured is excludable from gross income under Section 101 of the
Code. Certain transfers of the Policy for valuable consideration, however, may
result in a portion of the Death Benefit Proceeds being taxable.

If the Death Benefit Proceeds are not received in a lump sum and are,
instead, applied under either Settlement Options 1, 2, or 4, generally payments
will be prorated between amounts attributable to the Death Benefit which will be
excludable from the Beneficiary's income and amounts attributable to interest
(accruing after the Insured's death) which will be includible in the
Beneficiary's income. If the Death Benefit Proceeds are applied under Option 3
(Interest Income), the interest payments will be includible in the Beneficiary's
income.

TAX DEFERRAL DURING ACCUMULATION PERIOD. Under existing provisions of the
Code, except as described below, any increase in an Owner's Policy Value is
generally not taxable to the Owner unless amounts are received (or are deemed to
be received) from the Policy prior to the Insured's death. If there is a
surrender of the Policy, an amount equal to the excess of the Cash Value over
the "investment in the contract" will be includible in the Owner's income. The
"investment in the contract" generally is the aggregate Premium Payments less
the aggregate amount received under the Policy previously to the extent such
amounts received were excludable from gross income. Whether Withdrawals (or
other amounts deemed to be distributed) from the Policy constitute income to the
Owner depends, in part, upon whether the Policy is considered a "modified
endowment contract" ("MEC") for federal income tax purposes.

POLICIES WHICH ARE NOT MECS

TAX TREATMENT OF WITHDRAWALS GENERALLY. If the Policy is not a MEC
(described below), the amount of any Withdrawal from the Policy generally
will be treated first as non-taxable recovery of Premium and then as income
from the Policy. Thus, a Withdrawal from a Policy that is not a MEC
generally will not be includible in income except to the extent it exceeds
the investment in the contract immediately before the Withdrawal.

CERTAIN DISTRIBUTIONS REQUIRED BY THE TAX LAW IN THE FIRST 15 POLICY
YEARS. As indicated above, Section 7702 places limitations on the amount of
premiums that may be paid and the Policy Values that can accumulate relative
to the Death Benefit. Where cash distributions are required under Section
7702 in connection with a reduction in benefits during the first 15 years
after the Policy is issued (or if Withdrawals are made in anticipation of a
reduction in benefits, within the meaning of the tax law, during this
period), some or all of such amounts may be includible in income
notwithstanding the general rule described in the preceding paragraph. A
reduction in benefits may result upon a decrease in the Face Amount, a
change from one Death Benefit Option to the other, if Withdrawals are made,
and in certain other instances.

TAX TREATMENT OF LOANS. If a Policy is not classified as a MEC, a loan
received under the Policy generally will be treated as indebtedness of the
Owner. As a result, no part of any loan under a Policy will constitute
income to the Owner so long as the Policy remains in force. If a Policy
lapses when a loan is outstanding, the amount of the loan outstanding will
be treated as the proceeds of a surrender for purposes of determining
whether any amounts are includable in the Owner's income.

Generally, interest paid on any loans under this Policy will not be tax
deductible. The non-deductibility of interest includes interest paid or
accrued on indebtedness with respect to one or more life insurance policies
owned by a taxpayer covering any individual who is or has been an officer or
employee of, or financially interested in, any trade or business carried on
by the taxpayer. A limited exception to this rule exists for certain
interest paid in connection with certain "key person" insurance. In the case
of interest paid in connection with a loan with respect to a Policy covering
the life of any key person, interest is deductible only to the extent that
the aggregate amount of loans under one or more life insurance policies does
not exceed $50,000. Further, even as to such loans up to $50,000, interest
would not be deductible if the Policy were deemed for federal tax purposes
to be a single premium life insurance policy or, in certain circumstances,
if the loans were treated as "systematic borrowing" within the meaning of
the tax law. A "key person" is an individual who is either an officer or a
twenty percent owner of the taxpayer. The maximum number of individuals who
can be treated as key persons may not exceed the greater of (1) 5
individuals or (2) the lesser of 5 percent of the total number of officers
and employees of the taxpayer or 20 individuals. Owners should consult a tax
advisor regarding the deductibility of interest incurred in connection with
this Policy.

In addition, in the case of Policies issued to a non-natural taxpayer,
or held for the benefit of such an entity, a portion of the taxpayer's
otherwise deductible interest expenses may not be deductible as a result of
ownership of a Policy even if no loans are taken under the Policy. An
exception to the latter rule is provided for certain life insurance
contracts which cover the life of an individual who is a 20-percent owner,
or an officer, director, or employee of, a trade or business. Entities that
are considering purchasing the Policy, or entities that will be
beneficiaries under a Policy, should consult a tax advisor.

POLICIES WHICH ARE MECS

CHARACTERIZATION OF A POLICY AS A MEC. In general, a Policy will be
considered a MEC for federal income tax purposes if (1) the Policy is
received in exchange for a life insurance contract that was a MEC, or (2)
the Policy is entered into after June 21, 1988 and premiums are paid into
the Policy more rapidly than the rate defined by a "7-Pay Test". This test
generally provides that a Policy will fail this test (and thus be considered
a MEC) if the accumulated amount paid under the Policy at any time during
the 1st 7 Policy Years exceeds the cumulative sum of the net level premiums
which would have been paid to that time if the Policy provided for paid-up
future benefits after the payment of 7 level annual premiums. A material
change of the Policy (as defined in the tax law) will generally result in a
re-application of the 7-Pay Test. In addition, any reduction in benefits
during the 7-Pay period will affect the application of this test. Protective
Life will monitor the Policies and will attempt to notify Owners on a timely
basis if a Policy is in jeopardy of becoming a MEC. The Policy Owner may
then request that Protective Life take whatever steps are available to avoid
treating the Policy as a MEC, if that is desired.

TAX TREATMENT OF WITHDRAWALS, LOANS, ASSIGNMENTS AND PLEDGES UNDER
MECS. If the Policy is a MEC, Withdrawals from the Policy will be treated
first as Withdrawals of income and then as a recovery of Premiums paid.
Thus, Withdrawals will be includible in income to the extent the Policy
Value exceeds the investment in the contract. The amount of any Policy Debt
will be treated as a Withdrawal for tax purposes. In addition, the
discussion of interest on loans and of lapses while loans are outstanding
under the caption "Policies Which Are Not MECs" also applies to Policies
which are MECs.

If the Owner assigns or pledges any portion of the Policy Value (or
agrees to assign or pledge any portion), such portion will be treated as a
Withdrawal for tax purposes. The Owner's investment in the contract is
increased by the amount includible in income with respect to any assignment,
pledge, or loan, though it is not affected by any other aspect of the
assignment, pledge, or loan (including its release or repayment). Before
assigning, pledging, or requesting a loan under a Policy treated as a MEC,
an Owner should consult a qualified tax advisor.

PENALTY TAX. Generally, proceeds of a surrender or a Withdrawal (or the
amount of any deemed Withdrawal) from a MEC are subject to a penalty tax
equal to 10% of the portion of the proceeds that is includible in income,
unless the surrender or withdrawal is made (1) after the Owner attains age
59 1/2, (2) because the Owner has become disabled (as defined in the tax
law), or (3) as substantially equal periodic payments over the life or life
expectancy of the Owner (or the joint lives or life expectancies of the
Owner and his or her beneficiary, as defined in the tax law).

AGGREGATION OF POLICIES. All life insurance contracts which are treated
as MECs and which are purchased by the same person from Protective Life or
any of its affiliates within the same calendar year will be aggregated and
treated as one contract for purposes of determining the tax on Withdrawals
(including deemed Withdrawals). The effects of such aggregation are not
clear; however, it could affect the amount of a Withdrawal (or a deemed
Withdrawal) that is taxable and the amount which might be subject to the 10%
penalty tax described above.

ACTIONS TO ENSURE COMPLIANCE WITH THE TAX LAW. Protective Life believes
that the maximum amount of Premiums it has determined for the Policies will
comply with the federal tax definition of life insurance. Protective Life will
monitor the amount of Premiums paid, and, if the Premiums paid exceed those
permitted by the tax definition of life insurance, Protective Life will
immediately refund the excess Premiums. Protective Life also reserves the right
to increase the Death Benefit (which may result in larger charges under a
Policy) or to take any other action deemed necessary to ensure the compliance of
the Policy with the federal tax definition of life insurance.

OTHER CONSIDERATIONS. Changing the Owner, exchanging the Policy, changing
from one Death Benefit option to another, and other changes under the Policy may
have tax consequences (other than those discussed herein) depending on the
circumstances of such change or Withdrawal. Federal estate and state and local
estate, inheritance and other tax consequences of ownership or receipt of Policy
proceeds depend on the circumstances of each Policy Owner or Beneficiary.

FEDERAL INCOME TAX WITHHOLDING

Protective Life will withhold and remit to the federal government a part of
the taxable portion of a surrender and Withdrawal made under a Policy unless the
Owner notifies Protective Life in writing at or before the time of the surrender
or Withdrawal that he or she elects not to have any amounts withheld. Regardless
of whether the Owner requests that no taxes be withheld or whether Protective
Life withholds a sufficient amount of taxes, the Owner will be responsible for
the payment of any taxes including any penalty tax that may be due on the
amounts received. The Owner may also be required to pay penalties under the
estimated tax rules, if the Owner's withholding and estimated tax payments are
insufficient to satisfy the Owner's total tax liability.

OTHER INFORMATION ABOUT THE POLICIES AND PROTECTIVE LIFE

SALE OF THE POLICIES

Investment Distributors, Inc. ("IDI"), a wholly-owned subsidiary of
Protective Life Corporation, acts as a principal underwriter of the Policies.
IDI also acts as principal underwriter of variable annuity contracts issued
through Protective Variable Annuity Separate Account. IDI is a registered
broker-dealer under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. The Policies are sold by
certain registered representatives of broker-dealers (including Pro Equities,
Inc., an affiliate of Protective Life and IDI) that have entered into selling
agreements with IDI, who are also appointed and licensed as insurance agents of
Protective Life.

Registered representatives may be paid commissions on Policies they sell based
on Premium Payments paid in amounts up to 120% of a targeted first year premium
payment. A targeted first year premium payment is approximately equal to your
minimum initial Premium on an annual basis. For Premium Payments paid in the
first Policy Year which exceed this targeted amount, registered representatives
may receive up to 5% on Premium Payments in excess of target. For Premium
Payments received during policy years two through ten, the registered
representatives may be paid up to 5% on Premium Payments, and .25% on unloaned
Policy Value after the first ten Policy Years. Other allowances and overrides,
and non-cash compensation, also may be paid. Registered representatives who meet
certain productivity and profitability standards may be eligible for additional
compensation.

Protective Life may reduce or waive the sales charge, administrative fees
and/or any other charges on any Policy sold to (i) directors, officers or
employees of Protective Life or any of its affiliates, (ii) employees and
registered representatives of any broker-dealer that has entered into a selling
agreement with Protective Life or IDI, as well as employees of such registered
representatives and (iii) the immediate family of the above persons, due to the
generally lower sales and administrative expenses attributable to such
individuals. No such reduction or waiver will be permitted where it would be
unfairly discriminatory against any person.

CORPORATE PURCHASERS

The Policy is available for individuals and for corporations and other
institutions. For corporate or other group or sponsored arrangements purchasing
one or more Policies, the Company may reduce the amount of the premium expense
charge, monthly administration fee, or other charges where the expenses
associated with the sale of the Policy or Policies or the underwriting or other
administrative costs associated with the Policy or Policies are reduced. Sales,
underwriting or other administrative expenses may be reduced for reasons such as
expected economies resulting from a corporate purchase or a group or sponsored
arrangement, from the amount of the initial Premium Payment or Payments, or the
amount of projected Premium Payments.

PROTECTIVE LIFE DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the name, age, address and principal
occupations during the past five years of each of Protective Life's directors
and executive officers.

NAME AGE POSITION WITH PROTECTIVE LIFE
- -------------------- --- -------------------------------------------------------------------

Drayton Nabers, Jr. 57 Chairman of the Board and Director
John D. Johns 46 President and Director
R. Stephen Briggs 48 Executive Vice President and Director
Jim E. Massengale 55 Executive Vice President, Acquisitions and Director
A.S. Williams III 61 Executive Vice President, Investments, Treasurer and Director
Danny L. Bentley 40 Senior Vice President, Dental and Consumer Benefits and Director
Richard J. Bielen 37 Senior Vice President, Investments and Director
Carolyn King 47 Senior Vice President, Investment Products and Director
Deborah J. Long 44 Senior Vice President, General Counsel, Secretary and Director
Steven A. Schultz 44 Senior Vice President, Financial Institutions and Director
Wayne E. Stuenkel 44 Senior Vice President and Chief Actuary and Director
Judy Wilson 40 Senior Vice President, Guaranteed Investment Contracts
Jerry W. DeFoor 45 Vice President and Controller, and Chief Accounting Officer

Mr. Nabers has been Chairman of the Board and a Director of Protective Life
since August 1996. Mr. Nabers has been Chairman of the Board and Chief Executive
Officer of PLC and a Director since August 1996. From May 1994 to August 1996,
Mr. Nabers was Chairman of the Board, President and Chief Executive Officer and
a Director of PLC. From May 1992 to May 1994, he was President and Chief
Executive Officer and a Director of PLC. Mr. Nabers has served in various
capacities with PLC and its subsidiaries since 1979. He is also a director of
Energen Corporation, National Bank of Commerce of Birmingham, and Alabama
National Bancorporation.

Mr. Johns has been President of Protective Life and President and Chief
Operating Officer of PLC since August 1996. He was Executive Vice President and
Chief Financial Officer of Protective Life and PLC from October 1993 to August
1996. From August 1988 to October 1993, he served as Vice President and General
Counsel of Sonat Inc. He is a director of National Bank of Commerce of
Birmingham and Alabama National Bancorporation.

Mr. Briggs has been Executive Vice President of Protective Life and PLC
since October 1993. From January 1993 to October 1993 he was Senior Vice
President, Life Insurance and Investment Products of Protective Life and PLC.
Mr. Briggs had been Senior Vice President, Ordinary Marketing of Protective Life
since April 1986 and PLC since August 1988. Mr. Briggs has been associated with
PLC and its subsidiaries since 1977.

Mr. Massengale has been Executive Vice President, Acquisitions of Protective
Life and PLC since August 1996. From May 1992 to August 1996 he served as Senior
Vice President of Protective Life and PLC. Mr. Massengale has been employed by
PLC and its subsidaries since 1983.

Mr. Williams has been Executive Vice President, Investments and Treasurer of
Protective Life and PLC since August 1996. From July 1981 to August 1996 he was
Senior Vice President, Investments and Treasurer of Protective Life and PLC. Mr.
Williams has been employed by the PLC and its subsidiaries since 1964.

Mr. Danny L. Bentley has been Senior Vice President, Dental and Consumer
Benefits of Protective Life and PLC since August 1996. From May 1989 to August
1996, he was Vice President, Group Marketing of Protective Life. Mr. Bentley has
been employed by PLC and its subsidiaries since 1980.

Mr. Bielen has been Senior Vice President, Investments of Protective Life
and PLC since August 1996. From August 1991 to August 1996, he was Vice
President, Investments of Protective Life.

Ms. King has been Senior Vice President, Investment Products Division of
Protective Life and PLC since April 1995. From August 1994 to March 1995, she
served as Senior Vice President and Chief Investment Officer of Provident Life
and Accident Insurance Company and of its parent company, Provident Life and
Accident Insurance Company of America. She served as President of Provident
National Assurance Company from November 1987 to March 1995. From November 1986
to August 1994, she served as Vice President of Provident Life and Accident
Insurance Company of America.

Ms. Long has been Senior Vice President, Secretary and General Counsel of
Protective Life since September 1996 and of PLC since November 1996. Ms. Long
was Senior Vice President and General Counsel of Protective Life from February
1994 to September 1996 and of PLC from February 1994 to November 1996. From
August 1993 to January 1994, Ms. Long served as General Counsel of PLC and from
February 1984 to January 1994 she practiced law with the law firm of Maynard,
Cooper & Gale, P.C.

Mr. Schultz has been Senior Vice President, Financial Institutions of
Protective Life and PLC since March 1993. Mr. Schultz served as Vice President,
Financial Institutions of Protective Life from February 1989 to March 1993 and
of PLC from February 1993 to March 1993. Mr. Schultz has been employed by PLC
and its subsidiaries since 1989.

Mr. Stuenkel has been Senior Vice President and Chief Actuary of Protective
Life and PLC since March 1987. Mr. Stuenkel is a Fellow in the Society of
Actuaries and has been employed by PLC and its subsidiaries since 1978.

Ms. Wilson has been Senior Vice President, Guaranteed Investment Contracts
of Protective Life and PLC since January 1995. From July 1991 to December 31,
1994, she served as Vice President, Guaranteed Investment Contracts of
Protective Life.

Mr. DeFoor has been Vice President and Controller, and Chief Accounting
Officer of Protective Life and PLC since April 1989, Mr. DeFoor is a certified
public accountant and has been employed by PLC and its subsidiaries since August
1982.

STATE REGULATION

Protective Life is subject to regulation by the Department of Insurance of
the State of Tennessee, which periodically examines the financial condition and
operations of Protective Life. Protective Life is also subject to the insurance
laws and regulations of all jurisdictions where it does business. The Policy
described in this prospectus has been filed with and, where required, approved
by, insurance officials in those jurisdictions where it is sold.

Protective Life is required to submit annual statements of operations,
including financial statements, to the insurance departments of the various
jurisdictions where it does business to determine solvency and compliance with
applicable insurance laws and regulations.

ADDITIONAL 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. The omitted information may be obtained at the SEC's principal office
in Washington, D.C. by paying the SEC's prescribed fees.

PREPARATION FOR YEAR 2000

Older computer hardware and software often denote the year using two digits
rather than four; for example, the year 1997 often is denoted by such hardware
and software as "97." It is probable that such hardware and software will
malfunction when calculations involving the year 2000 are attempted because the
hardware and/or software will interpret "00" as representing the year 1900
rather than the year 2000. This "Year 2000" issue potentially affects all
individuals and companies (including Protective, its customers, business
partners, suppliers, banks, custodians and administrators) who rely on computers
or devices containing computer chips.

Protective has developed and is implementing a Year 2000 transition plan
intended to identify and modify or replace primary hardware and/or software
systems on which it relies that have a Year 2000 issue. Protective is also
developing and implementing a plan to identify and modify or replace secondary
hardware and/or software systems on which it relies that have a Year 2000 issue.
Substantial resources are being devoted to this effort; however the costs to
develop and implement these plans are not expected to be material. Protective is
also confirming that its service providers are implementing plans to identify
and modify or replace their systems that have a Year 2000 issue.

Protective currently anticipates that its systems will be able to process
transactions dated beyond 1999 on or before December 31, 1999. There can be no
assurance, however, that Protective's efforts will be successful, that
interaction with other service providers with Year 2000 issues will not impair
Protective's operations, or that the Year 2000 issue will not otherwise
adversely affect Protective.

EXPERTS

The audited statement of assets and liabilites of the Protective Variable
Life Separate Account (comprised of seventeen Sub-Accounts) as of December 31,
1996 and December 31, 1997 and the related statements of operations and changes
in net assets for the period from June 19, 1996 (date of inception) through
December 31, 1996 and for the year ended December 31, 1997 and included in this
Prospectus, have been included herein in reliance on the report of Coopers and
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.

The consolidated balance sheets of Protective Life as of December 31, 1997
and 1996 and the consolidated statements of income, stockholder's equity and
cash flows for each of the three years in the period ended December 31, 1997 and
the related financial statement schedules included in this Prospectus, have been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.

Actuarial matters included in this prospectus have been examined by Stephen
Peeples whose opinion is filed as an exhibit to the registration statement.

LEGAL MATTERS

Sutherland, Asbill & Brennan, L.L.P. of Washington, D.C. has provided advice
on certain matters relating to the federal securities laws.

FINANCIAL STATEMENTS

The audited statement of assets and liabilities of the Protective Variable
Life Separate Account (comprised of seventeen Sub-Accounts) as of December 31,
1996 and December 31, 1997 and the related statements of operations and changes
in net assets for the period from June 19, 1996 (date of inception) through
December 31, 1996 and for the year ended December 31, 1997 as well as the Report
of Independent Accountants are contained herein.

The audited consolidated balance sheets for Protective Life as of December
31, 1997 and 1996 and the related consolidated statements of income,
stockholder's equity, and cash flows for the years ended December 31, 1997, 1996
and 1995 as well as the Report of Independent Accountants are contained herein.

INDEX TO FINANCIAL STATEMENTS

THE PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT
Report of Independent Accountants.................................................... F-2
Statement of Assets and Liabilities as of December 31, 1997.......................... F-3
Statement of Assets and Liabilities as of December 31, 1996.......................... F-5
Statement of Operations for the period ended December 31, 1997....................... F-6
Statement of Operations for the period from June 19, 1996 (date of inception) through
December 31, 1996................................................................... F-8
Statement of Changes in Net Assets for the period ended December 31, 1997............ F-9
Statement of Changes in Net Assets for the period from June 19, 1996 (date of
inception) through December 31, 1996................................................ F-11
Notes to Financial Statements........................................................ F-12

PROTECTIVE LIFE INSURANCE COMPANY
Report of Independent Accountants.................................................... F-18
Consolidated Statements of Income for the years ended
December 31, 1997, 1996 and 1995.................................................... F-19
Consolidated Balance Sheets as of December 31, 1997 and 1996......................... F-20
Consolidated Statements of Stockholder's Equity for the years ended
December 31, 1997, 1996 and 1995.................................................... F-21
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995.................................................... F-22
Notes to Consolidated Financial Statements........................................... F-23
Financial Statement Schedules:
Schedule III -- Supplementary Insurance Information.................................. S-1
Schedule IV -- Reinsurance........................................................... S-2

All other schedules to the consolidated financial statements required by
Article 7 of Regulation S-X are not required under the related instructions or
are inapplicable and therefore have been omitted.

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Contractowners and Board of Directors
of Protective Life Insurance Company

We have audited the financial statements of the Protective Variable Life
Separate Account (comprised of seventeen subaccounts) included on pages F-3
through F-16 of this registration statement on Form S-6. These financial
statements are the responsibility of the management of the Protective Variable
Life Separate Account. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of shares owned as of December 31, 1997 and 1996, by correspondence
with the transfer agents. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Protective Variable Life
Separate Account as of December 31, 1997 and 1996, the results of its
operations, and the changes in its net assets for the year ended December 31,
1997, and for the period from June 19, 1996 (date of inception) through December
31, 1996, in conformity with generally accepted accounting principles.

Birmingham, Alabama
March 5, 1998

F-2

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

PIC PIC PIC PIC PIC
MONEY GROWTH & INTERNAT'L GLOBAL SMALL CAP
MARKET INCOME EQUITY INCOME EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ----------- -----------

ASSETS
Investment in Sub-accounts at market
value................................. $ 50,888 $ 997,651 $ 542,113 $ 112,638 $ 562,384
Receivable from Protective Life
Insurance Company..................... 5,779 5,792 5,263
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS............................ $ 50,888 $1,003,430 $ 547,905 $ 112,638 $ 567,647
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
LIABILITIES
Payable to Protective Life Insurance
Company............................... 1 32
----------- ----------- ----------- ----------- -----------
NET ASSETS.............................. $ 50,887 $1,003,430 $ 547,905 $ 112,606 $ 567,647
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

ACACIA
CAPITAL ACACIA
CORPORATION CAPITAL
PIC PIC CRI CORPORATION
CORE US CAPITAL SMALL CAP CRI
EQUITY GROWTH GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ------------ ------------

ASSETS
Investment in Sub-accounts at market
value................................. $ 418,436 $ 631,283 $ 77 $ 86
Receivable from Protective Life
Insurance Company..................... 1,206 5,482
----------- ----------- --- ---
TOTAL ASSETS............................ $ 419,642 $ 636,765 $ 77 $ 86
----------- ----------- --- ---
----------- ----------- --- ---
LIABILITIES
Payable to Protective Life Insurance
Company............................... 7 7
----------- ----------- --- ---
NET ASSETS.............................. $ 419,642 $ 636,765 $ 70 $ 79
----------- ----------- --- ---
----------- ----------- --- ---

See accompanying notes to financial statements.

F-3

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

MFS MFS MFS
EMERGING MFS GROWTH W/ TOTAL
GROWTH RESEARCH INCOME RETURN
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------

ASSETS
Investment in Sub-accounts at market
value................................. $ 59,898 $ 121,167 $ 7,004 $ 2,890
Receivable from Protective Life
Insurance Company.....................
----------- ----------- ----------- -----------
TOTAL ASSETS............................ $ 59,898 $ 121,167 $ 7,004 $ 2,890
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
LIABILITIES
Payable to Protective Life Insurance
Company...............................
----------- ----------- ----------- -----------
NET ASSETS.............................. $ 59,898 $ 121,167 $ 7,004 $ 2,890
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

OPPENHEIMER OPPENHEIMER OPPENHEIMER
CAP OPPENHEIMER GROWTH & STRATEGIC
APPRECIATION GROWTH INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------

ASSETS
Investment in Sub-accounts at market
value................................. $ 56,236 $ 74,477 $ 11,957 $ 10,236
Receivable from Protective Life
Insurance Company..................... 377 353
----------- ----------- ----------- -----------
TOTAL ASSETS............................ $ 56,236 $ 74,477 $ 12,334 $ 10,589
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
LIABILITIES
Payable to Protective Life Insurance
Company...............................
----------- ----------- ----------- -----------
NET ASSETS.............................. $ 56,236 $ 74,477 $ 12,334 $ 10,589
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

See accompanying notes to financial statements.

F-4

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996

INTERNATIONAL
MONEY MARKET GROWTH AND INCOME EQUITY GLOBAL INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------ ------------ -------------

ASSETS
Investment in Protective Investment Company at market
value................................................... $ 14,144 $ 149,418 $ 122,118 $ 21,153
------------- ---------- ------------ -------------
TOTAL ASSETS.............................................. $ 14,144 $ 149,418 $ 122,118 $ 21,153
------------- ---------- ------------ -------------
------------- ---------- ------------ -------------

SMALL CAP EQUITY SELECT EQUITY CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
---------------- ------------- --------------

ASSETS
Investment in Protective Investment Company at market
value................................................... $ 129,053 $ 76,118 $ 105,334
---------------- ------------- --------------
TOTAL ASSETS.............................................. $ 129,053 $ 76,118 $ 105,334
---------------- ------------- --------------
---------------- ------------- --------------

See accompanying notes to financial statements.

F-5

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

INVESTMENT INCOME
Dividends............................... $ 1,088 $ 7,094 $ 9,487 $ 9,209 $ 1,630
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gain from redemption of
investment shares..................... 669 338 2 (211)
Capital gain distribution............... 132,504 29,384 1,394 61,983
----------- ----------- ----------- ----------- -----------
Net realized gain on investments........ 133,173 29,722 1,396 61,772
Net unrealized appreciation
(depreciation) on investments during
the period............................ (1) (19,493) (31,321) (4,150) 38,214
----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss)
on investments........................ (1) 113,680 (1,599) (2,754) 99,986
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 1,087 $ 120,774 $ 7,888 $ 6,455 $ 101,616
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

INVESTMENT INCOME
Dividends............................... $ 3,427 $ 3,803 $ 2
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gain from redemption of
investment shares..................... 1 142
Capital gain distribution............... 33,252 39,296 $ 7 4
----------- ----------- --- ---
Net realized gain on investments........ 33,253 39,438 7 4
Net unrealized appreciation
(depreciation) on investments during
the period............................ 20,629 53,776 (8) (4)
----------- ----------- --- ---
Net realized and unrealized gain (loss)
on investments........................ 53,882 93,214 (1)
----------- ----------- --- ---
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 57,309 $ 97,017 $ (1) $ 2
----------- ----------- --- ---
----------- ----------- --- ---

See accompanying notes to financial statements.

F-6

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

MFS MFS OPPENHEIMER OPPENHEIMER OPPENHEIMER
EMERGING MFS GROWTH W/ MFS CAP OPPENHEIMER GROWTH & STRATEGIC
GROWTH RESEARCH INCOME TOTAL RETURN APPRECIATION GROWTH INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ------------ ------------ ------------ ------------ ------------

INVESTMENT
INCOME
Dividends..... $ 28 $ 29 $ 199
NET REALIZED
AND
UNREALIZED
GAINS
(LOSSES) ON
INVESTMENTS
Net realized
gain from
redemption
of
investment
shares...... $ (549) $ (176) 1 $ 89 $ (95) $ 67 (3 )
Capital gain
distribution... 132
----------- ----------- ----- --- --- --- --- -----
Net realized
gain on
investments... (549) (176) 133 89 (95) 67 (3 )
Net unrealized
appreciation
(depreciation)
on
investments
during the
period...... (656) 1,111 210 (13) 1
----------- ----------- ----- --- --- --- --- -----
Net realized
and
unrealized
gain (loss)
on
investments... (1,205) 935 343 76 (95) 67 (3 ) 1
----------- ----------- ----- --- --- --- --- -----
NET INCREASE
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS... $ (1,205) $ 935 $ 371 $ 76 $ (95) $ 67 $ 26 $ 200
----------- ----------- ----- --- --- --- --- -----
----------- ----------- ----- --- --- --- --- -----

See accompanying notes to financial statements.

F-7

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 19, 1996 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1996

INTERNATIONAL
MONEY MARKET GROWTH AND INCOME EQUITY GLOBAL INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ------------------- ------------- -----------------

INVESTMENT INCOME
Dividends............................................... $ 115 $ 1,798 $ 45 $ 916
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gain from redemption of investment shares.... 68 17 34
Capital gain distribution................................. 8,973 2,300 331
----- -------- ------------- -----
Net realized gain on investments.......................... 9,041 2,317 365
Net unrealized appreciation (depreciation) on investments
during the period....................................... 956 2,181 (749)
----- -------- ------------- -----
Net realized and unrealized gain (loss) on investments.... 9,997 4,498 (384)
----- -------- ------------- -----
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.............................................. $ 115 $ 11,795 $ 4,543 $ 532
----- -------- ------------- -----
----- -------- ------------- -----

SMALL CAP EQUITY SELECT EQUITY CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
---------------- ------------- ---------------

INVESTMENT INCOME
Dividends............................................... $ 322 $ 822 $ 1,027
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gain from redemption of investment shares.... 3 17 50
Capital gain distribution................................. 12,584 1,684 1,302
---------------- ------------- -------
Net realized gain on investments.......................... 12,587 1,701 1,352
Net unrealized appreciation (depreciation) on investments
during the period....................................... (13,378) 631 4,452
---------------- ------------- -------
Net realized and unrealized gain (loss) on investments.... (791) 2,332 5,804
---------------- ------------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS.............................................. ($ 469) $ 3,154 $ 6,831
---------------- ------------- -------
---------------- ------------- -------

See accompanying notes to financial statements.

F-8

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

PIC PIC PIC PIC PIC PIC
MONEY GROWTH & INTERNAT'L GLOBAL SMALL CAP CORE US
MARKET INCOME EQUITY INCOME EQUITY EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ----------- ----------- -----------

FROM OPERATIONS
Investment Income....................... $ 1,088 $ 7,094 $ 9,487 $ 9,209 $ 1,630 $ 3,427
Net realized gain on investments........ 133,173 29,722 1,396 61,772 33,253
Net unrealized appreciation
(depreciation) of investments during
the period............................ (1) (19,493) (31,321) (4,150) 38,214 20,629
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations............. 1,087 120,774 7,888 6,455 101,616 57,309
----------- ----------- ----------- ----------- ----------- -----------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments............ 35,259 321,067 215,507 30,685 187,628 136,656
Mortality and expense risk charges...... (168) (5,176) (3,190) (528) (3,317) (2,130)
Cost of insurance and administrative
charges............................... (1,092) (112,846) (76,380) (10,388) (77,291) (46,805)
Surrenders.............................. (6,520) (2,450) (5,949) (4,572)
Death benefits..........................
Net policy loan repayments
(withdrawals)......................... (18,635) (18,054)
Transfer from other portfolios.......... 1,657 536,713 284,412 65,229 254,542 221,120
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from variable life policy
transactions.......................... 35,656 733,238 417,899 84,998 336,978 286,215
----------- ----------- ----------- ----------- ----------- -----------
Total increase in net assets............ 36,743 854,012 425,787 91,453 438,594 343,524
NET ASSETS
Beginning of Year....................... 14,144 149,418 122,118 21,153 129,053 76,118
----------- ----------- ----------- ----------- ----------- -----------
End of Year............................. $ 50,887 $1,003,430 $ 547,905 $ 112,606 $ 567,647 $ 419,642
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------

ACACIA
CAPITAL ACACIA
CORPORATION CAPITAL
PIC CRI CORPORATION
CAPITAL SMALL CAP CRI
GROWTH GROWTH BALANCED
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------

FROM OPERATIONS
Investment Income....................... $ 3,803 $ 2
Net realized gain on investments........ 39,438 $ 7 4
Net unrealized appreciation
(depreciation) of investments during
the period............................ 53,776 (8) (4)
----------- --- ---
Net increase (decrease) in net assets
resulting from operations............. 97,017 (1) 2
----------- --- ---
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments............ 216,169 77 78
Mortality and expense risk charges...... (3,108)
Cost of insurance and administrative
charges............................... (78,798) (6) (6)
Surrenders.............................. (2,247)
Death benefits..........................
Net policy loan repayments
(withdrawals).........................
Transfer from other portfolios.......... 302,398 5
----------- --- ---
Net increase in net assets resulting
from variable life policy
transactions.......................... 434,414 71 77
----------- --- ---
Total increase in net assets............ 531,431 70 79
NET ASSETS
Beginning of Year....................... 105,334
----------- --- ---
End of Year............................. $ 636,765 $ 70 $ 79
----------- --- ---
----------- --- ---

See accompanying notes to financial statements.

F-9

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997

MFS MFS MFS
EMERGING MFS GROWTH TOTAL
GROWTH RESEARCH W/INCOME RETURN
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------

FROM OPERATIONS
Investment income....................... $ 28
Net realized gain on investments........ $ (549) $ (176) 133 $ 89
Net unrealized appreciation
(depreciation) of investments during
the period............................. (656) 1,111 210 (13)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations.............. (1,205) 935 371 76
----------- ----------- ----------- -----------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments............ 18,430 31,577 196 656
Mortality and expense risk charges...... (118) (173) (14) (8)
Cost of insurance and administrative
charges................................ (4,009) (6,344) (274) (151)
Surrenders.............................. (4,062) (839)
Death benefits..........................
Net policy loan repayments
(withdrawals).......................... (16,061) (17,201)
Transfer from other portfolios.......... 66,923 113,212 6,725 2,317
----------- ----------- ----------- -----------
Net increase in net assets resulting
from variable life policy
transactions........................... 61,103 120,232 6,633 2,814
----------- ----------- ----------- -----------
Total increase in net assets............ 59,898 121,167 7,004 2,890
----------- ----------- ----------- -----------
NET ASSETS
Beginning of Year.......................
----------- ----------- ----------- -----------
End of Year............................. $ 59,898 $ 121,167 $ 7,004 $ 2,890
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

OPPENHEIMER OPPENHEIMER OPPENHEIMER
CAP OPPENHEIMER GROWTH & STRATEGIC
APPRECIATION GROWTH INCOME BOND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------

FROM OPERATIONS
Investment income....................... $ 29 $ 199
Net realized gain on investments........ $ (95) $ 67 (3)
Net unrealized appreciation
(depreciation) of investments during
the period............................. 1
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations.............. (95) 67 26 200
----------- ----------- ----------- -----------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments............ 16,910 22,365 2,485 1,135
Mortality and expense risk charges...... (80) (83) (22) (21)
Cost of insurance and administrative
charges................................ (3,993) (3,954) (571) (423)
Surrenders.............................. (3,835) (546)
Death benefits..........................
Net policy loan repayments
(withdrawals)..........................
Transfer from other portfolios.......... 47,329 56,628 10,416 9,698
----------- ----------- ----------- -----------
Net increase in net assets resulting
from variable life policy
transactions........................... 56,331 74,410 12,308 10,389
----------- ----------- ----------- -----------
Total increase in net assets............ 56,236 74,477 12,334 10,589
----------- ----------- ----------- -----------
NET ASSETS
Beginning of Year.......................
----------- ----------- ----------- -----------
End of Year............................. $ 56,236 $ 74,477 $ 12,334 $ 10,589
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

See accompanying notes to financial statements.

F-10

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JUNE 19, 1996 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 1996

INTERNATIONAL
MONEY MARKET GROWTH AND INCOME EQUITY GLOBAL INCOME
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------------ ------------ -------------

FROM OPERATIONS
Investment income......................................... $ 115 $ 1,798 $ 45 $ 916
Net realized gain on investments.......................... 9,041 2,317 365
Net unrealized appreciation (depreciation) of investments
during the period....................................... 956 2,181 (749)
------------- ---------- ------------ -------------
Net increase (decrease) in net assets resulting from
operations.............................................. 115 11,795 4,543 532
------------- ---------- ------------ -------------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments.............................. 19,439 21,311 3,651
Mortality and expense risk charges........................ (21) (215) (180) (35)
Cost of insurance and administrative charges.............. (100) (7,846) (6,427) (697)
Surrenders................................................ (314) (725) (949)
Transfers from other portfolios........................... 14,150 126,559 103,596 18,651
------------- ---------- ------------ -------------
Net increase in net assets resulting from variable life
policy transactions..................................... 14,029 137,623 117,575 20,621
------------- ---------- ------------ -------------
Total increase in net assets.............................. 14,144 149,418 122,118 21,153

NET ASSETS
Beginning of Year.........................................
------------- ---------- ------------ -------------

End of Year............................................... $ 14,144 $ 149,418 $ 122,118 $ 21,153
------------- ---------- ------------ -------------
------------- ---------- ------------ -------------

SELECT
SMALL CAP EQUITY EQUITY CAPITAL GROWTH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
---------------- ------------ --------------

FROM OPERATIONS
Investment income......................................... $ 322 $ 822 $ 1,027
Net realized gain on investments.......................... 12,587 1,701 1,352
Net unrealized appreciation (depreciation) of investments
during the period....................................... (13,378) 631 4,452
---------------- ------------ --------------
Net increase (decrease) in net assets resulting from
operations.............................................. (469) 3,154 6,831
---------------- ------------ --------------
FROM VARIABLE LIFE POLICY TRANSACTIONS
Contractowners' net payments.............................. 17,811 10,387 17,280
Mortality and expense risk charges........................ (189) (100) (157)
Cost of insurance and administrative charges.............. (6,579) (2,868) (5,933)
Surrenders................................................ (245) (576) (307)
Transfers from other portfolios........................... 118,724 66,121 87,620
---------------- ------------ --------------
Net increase in net assets resulting from variable life
policy transactions..................................... 129,522 72,964 98,503
---------------- ------------ --------------
Total increase in net assets.............................. 129,053 76,118 105,334
NET ASSETS
Beginning of Year.........................................
---------------- ------------ --------------
End of Year............................................... $ 129,053 $ 76,118 $ 105,334
---------------- ------------ --------------
---------------- ------------ --------------

See accompanying notes to financial statements.

F-11

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS

1. ORGANIZATION

Protective Variable Life Separate Account (Separate Account) was established
by Protective Life Insurance Company (Protective Life) under the provisions of
Tennessee law and commenced operations on June 19, 1996. The Separate Account is
a separate investment account to which assets are allocated to support the
benefits payable under flexible premium variable life insurance polices.

Protective Life has structured the Separate Account into a unit investment
trust form registered with the U.S. Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Separate Account is comprised of
seven proprietary sub-accounts and ten independent sub-accounts. The seven
proprietary sub-accounts are the Money Market, Growth and Income, International
Equity, Global Income, Small Cap Equity, CORE US Equity, and Capital Growth sub-
accounts. Funds are transferred to Protective Investment Company (the Fund) in
exchange for shares of the corresponding portfolio of the Fund.

The ten independent sub-accounts are the Acacia Capital Corporation CRI
Small Cap Growth, Acacia Capital Corporation CRI Balanced, MFS Emerging Growth,
MFS Research, MFS Growth with Income, MFS Total Return, Oppenheimer Capital
Appreciation, Oppenheimer Growth, Oppenheimer Growth & Income, and Oppenheimer
Strategic Bond sub-accounts. The Acacia Capital Corporation CRI Small Cap Growth
and Acacia Capital Corporation CRI Balanced subaccounts were added July 1, 1997,
with sales beginning July 1, 1997. The Acacia Capital Corporation CRI Small Cap
Growth and Balanced Funds were renamed Calvert Social Small Cap Growth and
Calvert Social Balanced Funds on January 1, 1998. The MFS Emerging Growth,
Research, Growth with Income, and Total Return subaccounts were added July 1,
1997, with sales beginning July 1, 1997. The Oppenheimer Capital Appreciation,
Growth, Growth & Income, and Strategic Bond subaccounts were added July 1, 1997,
with sales beginning July 1, 1997. The Fund invests contractholder's funds in
exchange for shares in the independent funds. The Fund then holds the shares for
the contractowners.

Gross premiums from the Contracts are allocated to the sub-accounts in
accordance with contractowner instructions and are recorded as life policy
contract transactions in the statement of changes in net assets. Such amounts
are used to provide money to pay contract values under the Contracts (Note 4).
The Separate Account's assets are the property of Protective Life.

Contractowners may allocate some or all of gross premiums or transfer some
or all of the contract value to the fixed account, which is part of Protective
Life's general account. The assets of Protective Life's general account support
its insurance and annuity obligations and are subject to Protective Life's
general liabilities from business operations.

Transfers to/from other portfolios, included in the statement of changes in
net assets, are transfers between the individual sub-accounts and the
sub-accounts and the fixed account.

2. SIGNIFICANT ACCOUNTING POLICIES

INVESTMENT VALUATION: Investments are made in shares and are valued at the
net asset values of the respective portfolios. Transactions with the Funds are
recorded on the trade date. Dividend income is recorded on the ex-dividend date.

REALIZED GAINS AND LOSSES: Realized gains and losses on investments include
gains and losses on redemptions of the Fund's shares (determined on the
last-in-first-out (LIFO) basis) and capital gain distributions from the Fund.

F-12

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DIVIDEND INCOME AND CAPITAL GAIN DISTRIBUTIONS: Dividend income and capital
gain distributions are recorded on the ex-dividend date. Distributions are from
net investment income and net realized gains recorded in the Investment Company
financials.

USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
various estimates that affect the reported amounts of assets and liabilities, at
the date of the financial statements, as well as the reported amounts of income
and expenses, during the reporting period. Actual results could differ from
those estimates.

FEDERAL INCOME TAXES: The operation of the Separate Account is included in
the Federal income tax return of Protective Life. Under the provisions of the
Contracts, Protective Life has the right to charge the Separate Account for
Federal income tax attributable to the Separate Account. No charge is currently
being made against the Separate Account for such tax.

3. INVESTMENTS

At December 31, 1997, the investments by the respective sub-accounts were as
follows:

SHARES COST MARKET VALUE
--------- ------------- ------------

Money Market.......................................... 50,888 $ 50,888 $ 50,888
Growth and Income..................................... 63,291 $ 1,016,188 $ 997,651
International Equity.................................. 43,537 $ 571,254 $ 542,113
Global Income......................................... 11,115 $ 117,537 $ 112,638
Small Cap Equity...................................... 47,961 $ 537,548 $ 562,384
CORE US Equity........................................ 22,731 $ 397,175 $ 418,436
Capital Growth........................................ 39,905 $ 573,054 $ 631,283
Acacia Capital Corporation CRI Small Cap Growth....... 6 $ 85 $ 77
Acacia Capital Corporation CRI Balanced............... 43 $ 89 $ 86
MFS Emerging Growth................................... 3,711 $ 60,271 $ 59,898
MFS Research.......................................... 7,674 $ 120,606 $ 121,167
MFS Growth With Income................................ 426 $ 7,013 $ 7,004
MFS Total Return...................................... 174 $ 2,785 $ 2,890
Oppenheimer Capital Appreciation...................... 1,373 $ 56,519 $ 56,236
Oppenheimer Growth.................................... 2,296 $ 73,927 $ 74,477
Oppenheimer Growth & Income........................... 581 $ 11,737 $ 11,957
Oppenheimer Strategic Bond............................ 1,999 $ 10,355 $ 10,236

At December 31, 1996, the investments by the respective sub-accounts were as
follows:

SHARES COST MARKET VALUE
--------- ------------- ------------

Money Market.......................................... 14,144 $ 14,144 $ 14,144
Growth and Income..................................... 10,535 $ 148,462 $ 149,418
International Equity.................................. 9,492 $ 119,937 $ 122,118
Global Income......................................... 2,078 $ 21,902 $ 21,153
Small Cap Equity...................................... 12,878 $ 142,431 $ 129,053
Select Equity......................................... 4,931 $ 75,847 $ 76,118
Capital Growth........................................ 8,329 $ 100,881 $ 105,334

F-13

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

3. INVESTMENTS (CONTINUED)
During the year ended December 31, 1997, transactions in shares were as
follows:

PIC PIC PIC SMALL PIC PIC
PIC MONEY PIC GROWTH INTERNATIONAL GLOBAL CAP SELECT CAPITAL
MARKET & INCOME EQUITY INCOME EQUITY EQUITY GROWTH
--------- ----------- ------------- --------- --------- --------- ---------

Shares purchased.................... 87,115 47,611 35,341 8,494 35,094 19,091 32,867
Shares received from reinvestment of
dividends......................... 1,088 9,094 3,142 1,045 5,514 2,037 2,783
--------- ----------- ------------- --------- --------- --------- ---------
Total shares acquired............... 88,203 56,705 38,483 9,539 40,608 21,128 35,650
Shares redeemed..................... (51,459) (3,949) (4,438) (502) (5,525) (3,328) (4,074)
--------- ----------- ------------- --------- --------- --------- ---------
Net increase in shares owned........ 36,744 52,756 34,045 9,037 35,083 17,800 31,576
Shares owned, beginning of the
period............................ 14,144 10,535 9,492 2,078 12,878 4,931 8,329
--------- ----------- ------------- --------- --------- --------- ---------
Shares owned, end of the period..... 50,888 63,291 43,537 11,115 47,961 22,731 39,905
--------- ----------- ------------- --------- --------- --------- ---------
--------- ----------- ------------- --------- --------- --------- ---------
Cost of shares acquired............. 88,203 935,011 510,945 101,056 461,282 383,087 532,941
--------- ----------- ------------- --------- --------- --------- ---------
--------- ----------- ------------- --------- --------- --------- ---------
Cost of Shares redeemed............. (51,459) (67,285) (59,628) (5,421) (66,165) (61,399) (60,768)
--------- ----------- ------------- --------- --------- --------- ---------
--------- ----------- ------------- --------- --------- --------- ---------

ACACIA ACACIA
CAPITAL CAPITAL
CORPORATION CORPORATION MFS MFS MFS OPPENHEIMER
CRI SMALL CRI EMERGING MFS GROWTH W/ TOTAL CAPTIAL
CAP GROWTH+ BALANCED+ GROWTH+ RESEARCH+ INCOME+ RETURN+ APPRECIATION+
------------ ------------ -------- ---------- --------- -------- --------------

Shares purchased................... 5 43 4,911 9,082 428 300 1,467
Shares received from reinvestment
of dividends..................... 1 3 0 0 10 0 0
--- --- -------- ---------- --------- -------- -------
Total shares acquired.............. 6 46 4,911 9,082 438 300 1,467
Shares redeemed.................... 0 (3) (1,200) (1,408) (12) (126) (94)
--- --- -------- ---------- --------- -------- -------
Net increase in shares owned....... 6 43 3,711 7,674 426 174 1,373
Shares owned, beginning of the
period........................... 0 0 0 0 0 0 0
--- --- -------- ---------- --------- -------- -------
Shares owned, end of the period.... 6 43 3,711 7,674 426 174 1,373
--- --- -------- ---------- --------- -------- -------
--- --- -------- ---------- --------- -------- -------
Cost of shares acquired............ 91 95 79,661 142,783 7,206 4,762 60,457
--- --- -------- ---------- --------- -------- -------
--- --- -------- ---------- --------- -------- -------
Cost of Shares redeemed............ (6) (6) (19,390) (22,177) (193) (1,977) (3,983)
--- --- -------- ---------- --------- -------- -------
--- --- -------- ---------- --------- -------- -------

OPPENHEIMER OPPENHEIMER
OPPENHEIMER GROWTH & STRATEGIC
GROWTH+ INCOME+ BOND+
----------- ----------- -----------

Shares purchased................... 2,418 599 2,012
Shares received from reinvestment
of dividends..................... 0 1 39
----------- ----------- -----------
Total shares acquired.............. 2,418 600 2,051
Shares redeemed.................... (122) (19) (52)
----------- ----------- -----------
Net increase in shares owned....... 2,296 581 1,999
Shares owned, beginning of the
period........................... 0 0 0
----------- ----------- -----------
Shares owned, end of the period.... 2,296 581 1,999
----------- ----------- -----------
----------- ----------- -----------
Cost of shares acquired............ 77,973 12,131 10,623
----------- ----------- -----------
----------- ----------- -----------
Cost of Shares redeemed............ (4,046) (394) (268)
----------- ----------- -----------
----------- ----------- -----------

- ------------------------
+ date of inception, July 1, 1997

F-14

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

3. INVESTMENTS (CONTINUED)
During the period from June 19, 1996 (date of inception) to December 31,
1996, transactions in shares were as follows:

PIC PIC SMALL PIC PIC
PIC MONEY PIC GROWTH INTERNATIONAL PIC GLOBAL CAP SELECT CAPITAL
MARKET & INCOME EQUITY INCOME EQUITY EQUITY GROWTH
----------- ----------- ------------- ----------- --------- --------- ---------

Shares purchased...................... 14,150 10,744 9,922 2,419 12,553 5,028 9,228
Shares received from reinvestment of
dividends........................... 115 762 185 122 1,307 159 183
Total shares acquired................. 14,265 11,506 10,107 2,541 13,860 5,187 9,411
Shares redeemed....................... (121) (971) (615) (463) (982) (256) (1,082)
----------- ----------- ------------- ----------- --------- --------- ---------
Net increase in shares owned.......... 14,144 10,535 9,492 2,078 12,878 4,931 8,329
Shares owned, beginning of the
period.............................. -- -- -- -- -- -- --
----------- ----------- ------------- ----------- --------- --------- ---------
Shares owned, end of the period....... 14,144 10,535 9,492 2,078 12,878 4,931 8,329
----------- ----------- ------------- ----------- --------- --------- ---------
----------- ----------- ------------- ----------- --------- --------- ---------
Cost of shares acquired............... 14,265 162,293 127,758 26,787 153,488 79,410 113,977
----------- ----------- ------------- ----------- --------- --------- ---------
----------- ----------- ------------- ----------- --------- --------- ---------
Cost of shares redeemed............... (121) (13,831) (7,821) (4,885) (11,057) (3,923) (13,096)
----------- ----------- ------------- ----------- --------- --------- ---------
----------- ----------- ------------- ----------- --------- --------- ---------

4. RELATED PARTY TRANSACTIONS

Contractowners' net payments represent premiums received from policyholders
less certain deductions made by Protective Life. These deductions may include
(1) sales charges, (2) federal tax charges, (3) premium tax charges, (4)
transfer fees, (5) surrender charges, and (6) withdrawal charges.

The sales charge is 2.75% of each Premium Payment in Policy Years 1 through
10, and .75% of each premium payment in Policy Years 11 and thereafter. The
sales charge partially compensates Protective Life for the expenses of selling
and distributing the Policies, including paying sales commissions, printing
prospectuses, preparing sales literature and paying for other promotional
activities.

The federal tax charge is 1.25% of all Premium Payments in all Policy Years
and compensates Protective Life for its federal income tax liability resulting
from Section 848 of the Code.

A 2.25% charge of state and local premium taxes is deducted from each
premium payment. This charge reimburses Protective Life for premium taxes
associated with the Policies.

Protective Life has the right to charge $25 for each transfer after the
first twelve transfers in any contract year. No transfer fees were assessed
during the year ended December 31, 1997 or the period from June 19, 1996 (date
of inception) through December 31, 1996, as no customer has requested more than
twelve transfers in a contract year.

If a Contract has not been in force for fourteen years, upon surrender or
for certain withdrawals, a surrender charge is deducted from the proceeds.
Surrender charges may be decreased or waived on Contracts meeting certain
restrictions as determined by Protective Life. Surrender charges were waived
during this initial period; surrenders totaled $31,020 and $3,116 during 1997
and the period from June 19, 1996 (date of inception) through December 31, 1996.

Protective Life will deduct an administrative charge upon a withdrawal. This
charge is the lesser of 2% of the amount withdrawn or $25.

F-15

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

4. RELATED PARTY TRANSACTIONS (CONTINUED)
The Separate Account is also charged by Protective Life for the cost of
insurance protection. This charge compensates Protective Life for the expense of
underwriting the Death Benefit. The cost of insurance rate for a Policy is based
on and varies with the issue age, duration, sex and rate class of the Insured
and on the number of years that a Policy has been in force.

An administrative charge is assessed on an monthly basis. The fee is a flat
charge of $31 per month during the first Policy Year, and $6 per month during
each Policy Year thereafter. In addition, for the first twelve months following
the effective date of an increase in Face Amount, the monthly administration fee
will also include an administration charge for the increase based on the amount
of the increase.

The Separate Account is charged a monthly mortality and expense risk charge
at an annual rate of .90% of the Variable Account Value, during the first 10
Policy Years. In Policy Years 11 and thereafter, the Separate Account will be
charged a monthly mortality and expense risk charge at an annual rate of .25%.
Protective Life assumes mortality risk in that the Insureds on the Policies may
die sooner than anticipated and therefore Protective Life will pay an aggregate
amount of death benefits greater than anticipated. The expense risk Protective
Life assumes is that expenses incurred in issuing and administering the Policies
and the Variable Account will exceed the amounts realized from the
administrative charges assessed against the policies. The death benefit payment
has two options. Under Option 1, the death benefit is the greater of: (1) the
Face Amount under the Policy on the date of the Insured's death, or (2) a
specified percentage of Policy Value on the date of the Insured's death. Under
Option 2, the death benefit is the greater of: (1) the Face Amount under the
Policy plus the Policy Value on the date of the Insured's death, or (2) the same
specified percentage of the Policy Value on the date of the Insured's death.

The net assets of each sub-account of the Separate Account reflect the
investment management fees and other operating expenses incurred by the Funds.

Protective Life offers a loan privilege to contractowners of section 403(b)
policies that are not subject to Title I of ERISA. Such contractowners may
obtain loans using the Contract as the only security for the loan. Loans are
subject to provisions of The Internal Revenue Code of 1986, as amended, and to
applicable retirement program rules. There were no loans outstanding as of
December 31, 1997 or 1996.

F-16

INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants.................................................... F-18

Consolidated Statements of Income for the years ended December 31, 1997, 1996, and
1995............................................................................... F-19

Consolidated Balance Sheets as of December 31, 1997 and 1996......................... F-20

Consolidated Statements of Stockholder's Equity for the years ended December 31,
1997, 1996, and 1995............................................................... F-21

Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1996,
and 1995........................................................................... F-22

Notes to Consolidated Financial Statements........................................... F-23

Financial Statement Schedules:

Schedule III -- Supplementary Insurance Information................................ S-1

Schedule IV -- Reinsurance......................................................... S-2

F-17

REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors and Stockholder
Protective Life Insurance Company
Birmingham, Alabama

We have audited the consolidated financial statements and the financial
statement schedules of Protective Life Insurance Company and Subsidiaries listed
in the index on page F-17 of this Form S-6. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Protective Life
Insurance Company and Subsidiaries as of December 31, 1997 and 1996, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedules referred to above, when considered in relation to the basic
financial statements taken as a whole, present fairly, in all material respects,
the information required to be included therein.

/s/ COOPERS & LYBRAND L.L.P.
February 11, 1998
Birmingham, Alabama

F-18

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31
--------------------------------
1997 1996 1995
---------- --------- ---------

REVENUES
Premiums and policy fees (net of reinsurance ceded:
1997-$334,899; 1996-$308,174; 1995-$333,173).......... $ 480,206 $ 462,050 $ 411,682
Net investment income................................... 557,488 498,781 458,433
Realized investment gains............................... 1,824 5,510 1,951
Other income............................................ 6,149 5,010 1,355
---------- --------- ---------
1,045,667 971,351 873,421
---------- --------- ---------
BENEFITS AND EXPENSES
Benefits and settlement expenses (net of reinsurance
ceded: 1997-$180,605; 1996-$215,424; 1995-$247,224)... 658,872 626,893 553,100
Amortization of deferred policy acquisition costs....... 107,175 91,001 82,700
Other operating expenses (net of reinsurance ceded:
1997-$90,045; 1996-$81,839; 1995-$84,855)............. 129,870 128,148 119,888
---------- --------- ---------
895,917 846,042 755,688
---------- --------- ---------
INCOME BEFORE INCOME TAX.................................. 149,750 125,309 117,733
INCOME TAX EXPENSE (BENEFIT)
Current................................................. 66,283 44,908 47,009
Deferred................................................ (13,981) (2,142) (6,972)
---------- --------- ---------
52,302 42,766 40,037
---------- --------- ---------
NET INCOME................................................ $ 97,448 $ 82,543 $ 77,696
---------- --------- ---------
---------- --------- ---------

See notes to consolidated financial statements.

F-19

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

DECEMBER 31
-----------------------
1997 1996
----------- ----------

ASSETS
Investments:
Fixed maturities, at market (amortized cost: 1997-$6,221,871; 1996-$4,648,525)........ $ 6,348,252 $4,662,997
Equity securities, at market (cost: 1997-$24,983; 1996-$31,669)....................... 15,006 35,250
Mortgage loans on real estate......................................................... 1,313,478 1,503,781
Investment real estate, net of accumulated depreciation (1997-$671; 1996-$911)........ 13,469 14,172
Policy loans.......................................................................... 194,109 166,704
Other long-term investments........................................................... 54,704 29,193
Short-term investments................................................................ 54,337 101,215
----------- ----------
Total investments................................................................... 7,993,355 6,513,312
Cash.................................................................................... 39,197 114,384
Accrued investment income............................................................... 94,095 70,541
Accounts and premiums receivable, net of allowance for uncollectible amounts
(1997-$5,292; 1996-$2,525)............................................................ 42,255 43,469
Reinsurance receivables................................................................. 591,457 332,614
Deferred policy acquisition costs....................................................... 632,605 488,201
Property and equipment, net............................................................. 36,407 35,489
Other assets............................................................................ 14,445 14,636
Assets related to separate accounts..................................................... 931,465 550,697
----------- ----------
$10,375,281 $8,163,343
----------- ----------
----------- ----------
LIABILITIES
Policy liabilities and accruals:
Future policy benefits and claims..................................................... $ 3,324,294 $2,448,449
Unearned premiums..................................................................... 396,696 257,553
----------- ----------
3,720,990 2,706,002
Guaranteed investment contract deposits................................................. 2,684,676 2,474,728
Annuity deposits........................................................................ 1,511,553 1,331,067
Other policyholders' funds.............................................................. 183,324 142,221
Other liabilities....................................................................... 246,081 117,847
Accrued income taxes.................................................................... 941 1,854
Deferred income taxes................................................................... 49,417 37,722
Indebtedness to related parties......................................................... 28,055 25,014
Liabilities related to separate accounts................................................ 931,465 550,697
----------- ----------
Total liabilities................................................................... 9,356,502 7,387,152
----------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES -- NOTE G
STOCKHOLDER'S EQUITY
Preferred Stock, $1.00 par value, shares authorized and issued: 2,000, liquidation
preference $2,000..................................................................... 2 2
Common Stock, $1.00 par value........................................................... 5,000 5,000
Shares authorized and issued: 5,000,000
Additional paid-in capital.............................................................. 327,992 237,992
Note receivable from PLC Employee Stock Ownership Plan.................................. (5,378) (5,579)
Retained earnings....................................................................... 629,436 532,088
Accumulated other comprehensive income
Net unrealized gains on investments (net of income tax: 1997-$33,238; 1996-$3,601).... 61,727 6,688
----------- ----------
Total stockholder's equity.......................................................... 1,018,779 776,191
----------- ----------
$10,375,281 $8,163,343
----------- ----------
----------- ----------

See notes to consolidated financial statements.

F-20

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE
ADDITIONAL RECEIVABLE NET UNREALIZED TOTAL
PREFERRED COMMON PAID-IN FROM PLC RETAINED GAINS (LOSSES) STOCKHOLDER'S
STOCK STOCK CAPITAL ESOP EARNINGS ON INVESTMENTS EQUITY
------------ ------- ---------- ---------- -------- -------------- -------------

Balance, December 31, 1994.............. $5,000 $126,494 $(5,936) $377,049 $(107,532) $ 395,075
-------------
Net income for 1995................... 77,696 77,696
Increase in net unrealized gains on
investments (net of income tax:
$89,742)............................ 166,663 166,663
Reclassification adjustment for
amounts included in net income (net
of income tax: $(683)).............. (1,268) (1,268)
-------------
Comprehensive income for 1995......... 243,091
-------------
Common dividends ($1.00 per share).... (5,000) (5,000)
Preferred dividends ($50 per share)... (100) (100)
Capital contribution from PLC......... 18,000 18,000
Decrease in note receivable form PLC
ESOP................................ 171 171
--- ------- ---------- ---------- -------- -------------- -------------
Balance, December 31, 1995.............. 5,000 144,494 (5,765) 449,645 57,863 651,237
-------------
Net income for 1996................... 82,543 82,543
Decrease in net unrealized gains on
investments (net of income tax:
$(25,627)........................... (47,593) (47,593)
Reclassification adjustment for
amounts included in net income (net
of income tax: $(1,928))............ (3,582) (3,582)
-------------
Comprehensive income for 1996......... 31,368
-------------
Redemption feature of preferred stock
removed-Note I...................... $ 2 1,998 2,000
Preferred dividends ($50 per share)... (100) (100)
Capital contribution from PLC......... 91,500 91,500
Decrease in note receivable from PLC
ESOP................................ 186 186
--- ------- ---------- ---------- -------- -------------- -------------
Balance, December 31, 1996.............. 2 5,000 237,992 (5,579) 532,088 6,688 776,191
-------------
Net income for 1997................... 97,448 97,448
Increase in net unrealized gains on
investments (net of income tax-
$30,275)............................ 56,225 56,225
Reclassification adjustment for
amounts included in net income (net
of income tax: $(638)).............. (1,186) (1,186)
-------------
Comprehensive income for 1997......... 152,487
-------------
Preferred dividends ($50 per share)... (100) (100)
Capital contribution from PLC......... 90,000 90,000
Decrease in note receivable from PLC
ESOP................................ 201 201
--- ------- ---------- ---------- -------- -------------- -------------
Balance, December 31, 1997.............. $ 2 $5,000 $327,992 $(5,378) $629,436 $ 61,727 $1,018,779
--- ------- ---------- ---------- -------- -------------- -------------
--- ------- ---------- ---------- -------- -------------- -------------

See notes to consolidated financial statements.

F-21

PROTECTIVE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS)

DECEMBER 31
-------------------------------------
1997 1996 1995
----------- ----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income...................................................... $ 97,448 $ 82,543 $ 77,696
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of deferred policy acquisition costs............. 107,175 91,001 84,501
Capitalization of deferred policy acquisition costs........... (135,211) (77,078) (89,266)
Depreciation expense.......................................... 5,124 5,333 4,317
Deferred income taxes......................................... (17,918) (2,442) (6,971)
Accrued income taxes.......................................... (5,558) 893 5,537
Interest credited to universal life and investment products... 299,004 280,377 286,710
Policy fees assessed on universal life and investment
products.................................................... (131,582) (116,401) (100,840)
Change in accrued investment income and other receivables..... (158,798) (70,987) (161,924)
Change in policy liabilities and other policyholder funds of
traditional life and health products........................ 279,522 133,621 201,353
Change in other liabilities................................... 65,393 7,209 (3,270)
Other (net)................................................... (1,133) (4,281) (6,634)
----------- ----------- -----------
Net cash provided by operating activities......................... 403,466 329,788 291,209
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Maturities and principal reduction of investments:
Investments available for sale................................ 6,462,663 1,327,323 2,014,060
Other......................................................... 324,242 168,898 78,568
Sale of investments:
Investment available for sale................................. 1,108,058 1,569,119 1,523,454
Other......................................................... 695,270 568,218 141,184
Cost of investments acquired:
Investments available for sale................................ (8,428,804) (3,798,631) (3,626,877)
Other......................................................... (718,335) (400,322) (540,648)
Acquisitions and bulk reinsurance assumptions................... (169,124) 264,126
Purchase of property and equipment.............................. (6,087) (6,899) (5,629)
Sale of property and equipment.................................. 2,681 288 286
----------- ----------- -----------
Net cash used in investing activities............................. (729,436) (307,880) (415,602)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of credit arrangements and long-term
debt.......................................................... 1,159,538 941,438 1,162,700
Capital contribution from PLC................................... 90,000 91,500 18,000
Principal payments on line of credit arrangements and long-term
debt.......................................................... (1,159,538) (941,438) (1,162,700)
Principal payment on surplus note to PLC........................ (4,693) (10,000) (4,750)
Dividends to stockholder........................................ (100) (100) (5,100)
Investment product deposits and change in universal life
deposits...................................................... 910,659 949,122 908,063
Investment product withdrawals.................................. (745,083) (944,244) (785,622)
----------- ----------- -----------
Net cash provided by financing activities......................... 250,783 86,278 130,591
----------- ----------- -----------
INCREASE (DECREASE) IN CASH....................................... (75,187) 108,186 6,198
CASH AT BEGINNING OF YEAR......................................... 114,384 6,198 0
----------- ----------- -----------
CASH AT END OF YEAR............................................... $ 39,197 $ 114,384 $ 6,198
----------- ----------- -----------
----------- ----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year:
Interest on debt.............................................. $ 4,343 $ 4,633 $ 6,029
Income taxes.................................................. $ 57,215 $ 43,478 $ 41,397
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Reduction of principal on note from ESOP........................ $ 201 $ 186 $ 171
Acquisitions and bulk reinsurance assumptions
Assets acquired............................................... $ 1,114,832 $ 296,935 $ 613
Liabilities assumed........................................... (902,267) (364,862) (21,800)
----------- ----------- -----------
Net........................................................... $ 212,565 $ (67,927) $ (21,187)
----------- ----------- -----------
----------- ----------- -----------

See notes to consolidated financial statements.

F-22

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying consolidated financial statements of Protective Life
Insurance Company and subsidiaries ("Protective") are prepared on the basis of
generally accepted accounting principles. Such accounting principles differ from
statutory reporting practices used by insurance companies in reporting to state
regulatory authorities. (See also Note B.)

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make various estimates
that affect the reported amounts of assets and liabilities, disclosures of
contingent assets and liabilities, as well as the reported amounts of revenues
and expenses.

ENTITIES INCLUDED

The consolidated financial statements include the accounts, after
intercompany eliminations, of Protective Life Insurance Company and its
wholly-owned subsidiaries. Protective is a wholly-owned subsidiary of Protective
Life Corporation ("PLC"), an insurance holding company.

NATURE OF OPERATIONS

Protective produces, distributes, and services a diverse array of life
insurance, specialty insurance and retirement savings and investment products.
Protective markets individual life insurance, dental insurance and managed care
services, credit life and disability insurance, guaranteed investment contracts,
guaranteed funding agreements, and fixed and variable annuities throughout the
United States. Protective also maintains a separate division devoted exclusively
to the acquisition of insurance policies from other companies.

The operating results of companies in the insurance industry have
historically been subject to significant fluctuations due to competition,
economic conditions, interest rates, investment performance, maintenance of
insurance ratings, and other factors.

RECENTLY ISSUED ACCOUNTING STANDARDS

In 1996 Protective adopted Statement of Financial Accounting Standards
("SFAS") No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises
and by Insurance Enterprises for Certain Long-Duration Participating Contracts;"
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of;" and SFAS No. 122, "Accounting for Mortgage
Servicing Rights." In 1997 Protective adopted SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities;"
SFAS No. 130, "Reporting Comprehensive Income;" and SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information."

SFAS No. 130 requires the presentation of comprehensive income and its
components in a financial statement that is displayed with the same prominence
as other financial statements. Protective has reconfigured the Consolidated
Statements of Stockholder's Equity presented herein in accordance with this
Statement. SFAS No. 131 requires additional disclosures with respect to
Protective's operating segments.

The adoption of these accounting standards did not have a material effect on
Protective's financial statements but has resulted in changed disclosure and
financial statement presentation.

F-23

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS

Protective has classified all of its investments in fixed maturities, equity
securities, and short-term investments as "available for sale."

Investments are reported on the following bases less allowances for
uncollectible amounts on investments, if applicable:

- Fixed maturities (bonds, bank loan participations, and redeemable
preferred stocks) -- at current market value.

- Equity securities (common and nonredeemable preferred stocks) -- at
current market value.

- Mortgage loans on real estate -- at unpaid balances, adjusted for loan
origination costs, net of fees, and amortization of premium or discount.

- Investment real estate -- at cost, less allowances for depreciation
computed on the straight-line method. With respect to real estate acquired
through foreclosure, cost is the lesser of the loan balance plus
foreclosure costs or appraised value.

- Policy loans -- at unpaid balances.

- Other long-term investments -- at a variety of methods similar to those
listed above, as deemed appropriate for the specific investment.

- Short-term investments -- at cost, which approximates current market
value.

Substantially all short-term investments have maturities of three months or
less at the time of acquisition and include approximately $3.1 million in bank
deposits voluntarily restricted as to withdrawal.

As prescribed by SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," certain investments are recorded at their market values
with the resulting unrealized gains and losses reduced by a related adjustment
to deferred policy acquisition costs, net of income tax reported as a component
of stockholder's equity. The market values of fixed maturities increase or
decrease as interest rates fall or rise. Therefore, although the adoption of
SFAS No. 115 does not affect Protective's operations, its reported stockholder's
equity will fluctuate significantly as interest rates change.

Protective's balance sheets at December 31, prepared on the basis of
reporting investments at amortized cost rather than at market values, are as
follows:

1997 1996
-------------- -------------

Total investments.............................................. $ 7,876,952 $ 6,495,259
Deferred policy acquisition costs.............................. 654,043 495,965
All other assets............................................... 1,749,321 1,161,830
-------------- -------------
$ 10,280,316 $ 8,153,054
-------------- -------------
-------------- -------------
Deferred income taxes.......................................... $ 16,179 $ 34,121
All other liabilities.......................................... 9,307,085 7,349,430
-------------- -------------
9,323,264 7,383,551
Stockholder's equity........................................... 957,052 769,503
-------------- -------------
$ 10,280,316 $ 8,153,054
-------------- -------------
-------------- -------------

F-24

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Realized gains and losses on sales of investments are recognized in net
income using the specific identification basis.

DERIVATIVE FINANCIAL INSTRUMENTS

Protective does not use derivative financial instruments for trading
purposes. Combinations of futures contracts and options on treasury notes are
currently being used as hedges for asset/liability management of certain
investments, primarily mortgage loans on real estate, mortgage-backed
securities, and liabilities arising from interest-sensitive products such as
guaranteed investment contracts and individual annuities. Realized investment
gains and losses on such contracts are deferred and amortized over the life of
the hedged asset. Net realized gains of $1.5 million and net realized losses of
$0.2 million were deferred in 1997 and 1996 respectively. At December 31, 1997
and 1996, options and open futures contracts with notional amounts of $925.0
million and $805.0 million, respectively, had net unrealized losses of $0.4
million and $1.9 million respectively.

Protective uses interest rate swap contracts to convert certain investments
from a variable to a fixed rate of interest. At December 31, 1997, related open
interest rate swap contracts with a notional amount of $95.3 million were in a
$0.1 million net unrealized loss position. At December 31, 1996, related open
interest rate swap contracts with a notional amount of $150.3 million were in a
$0.7 million net unrealized loss position.

In connection with a commercial mortgage loan securitization, Protective
entered into interest rate swap contracts converting a fixed rate of interest to
a floating rate of interest and converting a floating rate of interest to a
fixed rate of interest with notional amounts at December 31, 1997, of $332.4
million and $200.0 million, respectively. In the aggregate, there were no net
unrealized gains or losses associated with these swap contracts at December 31,
1997.

CASH

Cash includes all demand deposits reduced by the amount of outstanding
checks and drafts.

PROPERTY AND EQUIPMENT

Property and equipment are reported at cost. Protective primarily uses the
straight-line method of depreciation based upon the estimated useful lives of
the assets. Major repairs or improvements are capitalized and depreciated over
the estimated useful lives of the assets. Other repairs are expensed as
incurred. The cost and related accumulated depreciation of property and
equipment sold or retired are removed from the accounts, and resulting gains or
losses are included in income.

F-25

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and equipment consisted of the following at December 31:

1997 1996
--------- ---------

Home office building................................................... $ 37,459 $ 36,586
Other, principally furniture and equipment............................. 46,937 35,401
--------- ---------
84,396 71,987
Accumulated depreciation............................................... 47,989 36,498
--------- ---------
$ 36,407 $ 35,489
--------- ---------
--------- ---------

SEPARATE ACCOUNTS

Protective operates separate accounts, some in which Protective bears the
investment risk and others in which the investments risk rests with the
contractholder. The assets and liabilities related to separate accounts in which
Protective does not bear the investment risk are valued at market and reported
separately as assets and liabilities related to separate accounts in the
accompanying consolidated financial statements.

REVENUES, BENEFITS, CLAIMS, AND EXPENSES

Traditional Life and Health Insurance Products -- Traditional life insurance
products consist principally of those products with fixed and guaranteed
premiums and benefits and include whole life insurance policies, term life
insurance policies, limited-payment life insurance policies, and certain
annuities with life contingencies. Life insurance and immediate annuity premiums
are recognized as revenue when due. Health insurance premiums are recognized as
revenue over the terms of the policies. Benefits and expenses are associated
with earned premiums so that profits are recognized over the life of the
contracts. This is accomplished by means of the provision for liabilities for
future policy benefits and the amortization of deferred policy acquisition
costs.

Liabilities for future policy benefits on traditional life insurance
products have been computed using a net level method including assumptions as to
investment yields, mortality, persistency, and other assumptions based on
Protective's experience modified as necessary to reflect anticipated trends and
to include provisions for possible adverse deviation. Reserve investment yield
assumptions are graded and range from 2.5% to 7.0%. The liability for future
policy benefits and claims on traditional life and health insurance products
includes estimated unpaid claims that have been reported to Protective and
claims incurred but not yet reported. Policy claims are charged to expense in
the period that the claims are incurred.

F-26

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Activity in the liability for unpaid claims is summarized as follows:

1997 1996 1995
----------- ----------- -----------

Balance beginning of year.............................. $ 108,159 $ 73,642 $ 79,462
Less reinsurance..................................... 6,423 3,330 5,024
----------- ----------- -----------
Net balance beginning of year.......................... 101,736 70,312 74,438
----------- ----------- -----------
Incurred related to:
Current year........................................... 258,322 275,524 216,839
Prior year............................................. (14,540) (2,417) (4,038)
----------- ----------- -----------
Total incurred....................................... 243,782 273,107 212,801
----------- ----------- -----------
Paid related to:
Current year........................................... 203,381 197,163 164,321
Prior year............................................. 58,104 57,812 48,834
----------- ----------- -----------
Total paid........................................... 261,485 254,975 213,155
----------- ----------- -----------
Other changes:
Acquisitions and reserve transfers................... 3,415 13,292 (3,772)
----------- ----------- -----------
Net balance end of year................................ 87,448 101,736 70,312
Plus reinsurance..................................... 18,673 6,423 3,330
----------- ----------- -----------
Balance end of year.................................... $ 106,121 $ 108,159 $ 73,642
----------- ----------- -----------
----------- ----------- -----------

- Universal Life and Investment Products -- Universal life and investment
products include universal life insurance, guaranteed investment
contracts, deferred annuities, and annuities without life contingencies.
Revenues for universal life and investment products consist of policy fees
that have been assessed against policy account balances for the costs of
insurance, policy administration, and surrenders. That is, universal life
and investment product deposits are not considered revenues in accordance
with generally accepted accounting principles. Benefit reserves for
universal life and investment products represent policy account balances
before applicable surrender charges plus certain deferred policy
initiation fees that are recognized in income over the term of the
policies. Policy benefits and claims that are charged to expense include
benefit claims incurred in the period in excess of related policy account
balances and interest credited to policy account balances. Interest credit
rates for universal life and investment products ranged from 3.0% to 9.4%
in 1997.

At December 31, 1997, Protective estimates the fair value of its
guaranteed investment contracts to be $2,687.3 million using discounted
cash flows. The surrender value of Protective's annuities which
approximates fair value was $1,494.6 million.

- Policy Acquisition Costs -- Commissions and other costs of acquiring
traditional life and health insurance, universal life insurance, and
investment products that vary with and are primarily related to the
production of new business have been deferred. Traditional life and health
insurance acquisition costs are amortized over the premium-payment period
of the related policies in proportion to the ratio of annual premium
income to total anticipated premium income. Acquisition costs for
universal life and investment products are being amortized over

F-27

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the lives of the policies in relation to the present value of estimated
gross profits from surrender charges and investment, mortality, and
expense margins. Under SFAS No. 97, "Accounting and Reporting by Insurance
Enterprises for Certain Long-Duration Contracts and for Realized Gains and
Losses from the Sale of Investments," Protective makes certain assumptions
regarding the mortality, persistency, expenses, and interest rates it
expects to experience in future periods. These assumptions are to be best
estimates and are to be periodically updated whenever actual experience
and/or expectations for the future change from initial assumptions.
Additionally, relating to SFAS No. 115, these costs have been adjusted by
an amount equal to the amortization that would have been recorded if
unrealized gains or losses on investments associated with Protective's
universal life and investment products had been realized.

The cost to acquire blocks of insurance representing the present value of
future profits from such blocks of insurance is also included in deferred policy
acquisition costs. For acquisitions occurring after 1988, Protective amortizes
the present value of future profits over the premium payment period including
accrued interest at 8%. The unamortized present value of future profits for such
acquisitions was approximately $261.9 million and $149.9 million at December 31,
1997 and 1996, respectively. During 1996 $69.2 million of present value of
future profits on acquisitions made during the year was capitalized and $21.8
million was amortized. During 1997 $136.2 million of present value of future
profits on acquisitions made during the year was capitalized, and $24.2 million
was amortized. The unamortized present value of future profits for all
acquisitions was $274.9 million at December 31, 1997 and $167.6 million at
December 31, 1996.

PARTICIPATING POLICIES

Participating business comprises approximately 1% of the individual life
insurance in force and 2% of the individual life insurance premium income.
Policyholder dividends totaled $4.6 million in 1997, $4.1 million in 1996, and
$2.6 million in 1995.

INCOME TAXES

Protective uses the asset and liability method of accounting for income
taxes. Income tax provisions are generally based on income reported for
financial statement purposes. Deferred federal income taxes arise from the
recognition of temporary differences between the bases of assets and liabilities
determined for financial reporting purposes and the bases determined for income
tax purposes. Such temporary differences are principally related to the deferral
of policy acquisition costs and the provision for future policy benefits and
expenses.

RECLASSIFICATIONS

Certain reclassifications have been made in the previously reported
financial statements and accompanying notes to make the prior year amounts
comparable to those of the current year. Such reclassifications had no effect on
net income, total assets, or stockholder's equity.
NOTE B -- RECONCILIATION WITH STATUTORY REPORTING PRACTICES

Financial statements prepared in conformity with generally accepted
accounting principals ("GAAP") differ in some respects from the statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. The most significant differences are: (a) acquisition costs of

F-28

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE B -- RECONCILIATION WITH STATUTORY REPORTING PRACTICES (CONTINUED)
obtaining new business are deferred and amortized over the approximate life of
the policies rather than charged to operations as incurred, (b) benefit
liabilities are computed using a net level method and are based on realistic
estimates of expected mortality, interest, and withdrawals as adjusted to
provide for possible unfavorable deviation from such assumptions, (c) deferred
income taxes are provided for temporary differences between financial and
taxable earnings, (d) the Asset Valuation Reserve and Interest Maintenance
Reserve are restored to stockholder's equity, (e) furniture and equipment,
agents' debit balances, and prepaid expenses are reported as assets rather than
being charged directly to surplus (referred to as nonadmitted items), (f)
certain items of interest income, principally accrual of mortgage and bond
discounts are amortized differently, and (g) bonds are stated at market instead
of amortized cost.

The reconciliations of net income and stockholder's equity prepared in
conformity with statutory reporting practices to that reported in the
accompanying consolidated financial statements are as follows:

NET INCOME STOCKHOLDER'S EQUITY
------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- --------- ---------- --------- ---------

In conformity with statutory
reporting practices: (1)....... $ 134,417 $ 102,337 $ 115,259 $ 579,111 $ 456,320 $ 324,416
Additions (deductions) by
adjustment:
Deferred policy acquisition
costs, net of amortization... 10,310 (2,830) (765) 632,605 488,201 410,183
Deferred income tax............ 13,981 2,142 6,972 (49,417) (37,722) (67,420)
Asset Valuation Reserve........ 67,369 64,233 105,769
Interest Maintenance Reserve... (1,434) (2,142) (1,235) 9,809 17,682 14,412
Nonadmitted items.............. 30,500 21,610 20,603
Other timing and valuation
adjustments.................. (54,494) (11,210) (45,028) (215,448) (197,227) (108,495)
Noninsurance affiliates........ 17,530 11,104 (22) (4) 4 (9)
Consolidation elimination...... (22,862) (16,858) 2,515 (35,746) (36,910) (46,222)
--------- --------- --------- ---------- --------- ---------
In conformity with generally
accepted accounting
principles..................... $ 97,448 $ 82,543 $ 77,696 $1,018,779 $ 776,191 $ 653,237
--------- --------- --------- ---------- --------- ---------
--------- --------- --------- ---------- --------- ---------

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

(1) Consolidated

F-29

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE C -- INVESTMENT OPERATIONS

Major categories of net investment income for the years ended December 31
are summarized as follows:

1997 1996 1995
----------- ----------- -----------

Fixed maturities....................................... $ 396,255 $ 310,353 $ 272,942
Equity securities...................................... 1,186 2,124 1,338
Mortgage loans on real estate.......................... 161,604 153,463 162,135
Investment real estate................................. 2,004 1,875 1,855
Policy loans........................................... 11,370 10,378 8,958
Other, principally short-term investments.............. 21,876 51,637 40,348
----------- ----------- -----------
594,295 529,830 487,576
Investment expenses.................................... 36,807 31,049 29,143
----------- ----------- -----------
$ 557,488 $ 498,781 $ 458,433
----------- ----------- -----------
----------- ----------- -----------

Realized investment gains (losses) for the years ended December 31 are
summarized as follows:

Fixed maturities............................ $ (8,355) $ (7,101) $ 6,118
Equity securities........................... 5,975 1,733 44
Mortgage loans and other investments........ 4,204 10,878 (4,211)
--------- --------- ---------
$ 1,824 $ 5,510 $ 1,951
--------- --------- ---------
--------- --------- ---------

Protective has established an allowance for uncollectible amounts on
investments. The allowance totaled $23.0 million at December 31, 1997 and $30.9
million at December 31, 1996. Additions and reductions to the allowance are
included in realized investment gains (losses). Without such additions/
reductions, Protective had net realized investment losses of $6.1 million in
1997, net realized investment gains of $3.7 million in 1996, and net realized
investment losses of $0.5 million in 1995.

In 1997, gross gains on the sale of investments available for sale (fixed
maturities, equity securities and short-term investments) were $21.3 million and
gross losses were $23.5 million. In 1996, gross gains were $6.9 million and
gross losses were $11.8 million. In 1995, gross gains were $18.0 million and
gross losses were $11.8 million.

F-30

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE C -- INVESTMENT OPERATIONS (CONTINUED)

The amortized cost and estimated market values of Protective's investments
classified as available for sale at December 31 are as follows:

GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
1997 COST GAINS LOSSES VALUES
- ---------------------------------------------------------- ------------- ----------- ----------- -------------

Fixed maturities:
Bonds:
Mortgage-backed....................................... $ 2,982,266 $ 54,103 $ 16,577 $ 3,019,792
United States Government and authorities.............. 160,484 1,366 0 161,850
States, municipalities, and political subdivisions.... 31,621 532 0 32,153
Public utilities...................................... 481,679 7,241 0 488,920
Convertibles and bonds with warrants.................. 694 0 168 526
All other corporate bonds............................. 2,559,186 80,903 1,019 2,639,070
Redeemable preferred stocks............................. 5,941 0 0 5,941
------------- ----------- ----------- -------------
6,221,871 144,145 17,764 6,348,252
Equity securities......................................... 24,983 300 10,277 15,006
Short-term investments.................................... 54,337 0 0 54,337
------------- ----------- ----------- -------------
$ 6,301,190 $ 144,445 $ 28,041 $ 6,417,595
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------

GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
1996 COST GAINS LOSSES VALUES
- ---------------------------------------------------------- ------------- ----------- ----------- -------------

Fixed maturities:
Bonds:
Mortgage-backed....................................... $ 2,192,978 $ 29,925 $ 20,810 $ 2,202,093
United States Government and authorities.............. 348,318 661 1,377 347,602
States, municipalities, and political subdivisions.... 5,515 47 9 5,553
Public utilities...................................... 364,692 2,205 337 366,560
Convertibles and bonds with warrants.................. 679 0 158 521
All other corporate bonds............................. 1,679,276 33,879 29,388 1,683,767
Bank loan participations................................ 49,829 0 0 49,829
Redeemable preferred stocks............................. 7,238 60 226 7,072
------------- ----------- ----------- -------------
4,648,525 66,777 52,305 4,662,997
Equity securities......................................... 31,669 9,570 5,989 35,250
Short-term investments.................................... 101,215 0 0 101,215
------------- ----------- ----------- -------------
$ 4,781,409 $ 76,347 $ 58,294 $ 4,799,462
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------

F-31

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE C -- INVESTMENT OPERATIONS (CONTINUED)
The amortized cost and estimated market values of fixed maturities at
December 31, by expected maturity, are shown below. Expected maturities are
derived from rates of prepayment that may differ from actual rates of
prepayment.

ESTIMATED
AMORTIZED MARKET
1997 COST VALUES
- ---------------------------------------------------------------- ------------- -------------

Due in one year or less......................................... $ 456,248 $ 460,994
Due after one year through five years........................... 2,774,769 2,815,553
Due after five years through ten years.......................... 2,377,989 2,440,193
Due after ten years............................................. 612,865 631,512
------------- -------------
$ 6,221,871 $ 6,348,252
------------- -------------
------------- -------------

ESTIMATED
AMORTIZED MARKET
1996 COST VALUES
- ---------------------------------------------------------------- ------------- -------------

Due in one year or less......................................... $ 417,463 $ 420,774
Due after one year through five years........................... 1,547,805 1,546,278
Due after five years through ten years.......................... 2,090,149 2,095,781
Due after ten years............................................. 593,108 600,164
------------- -------------
$ 4,648,525 $ 4,662,997
------------- -------------
------------- -------------

The approximate percentage distribution of Protective's fixed maturity
investments by quality rating at December 31 is as follows:

RATING 1997 1996
- -------------------------------------------------------------------------- --------- ---------

AAA....................................................................... 41.1% 48.3%
AA........................................................................ 4.8 4.4
A......................................................................... 29.1 22.6
BBB
Bonds................................................................... 21.9 21.1
Bank loan participations................................................ 0.1
BB or Less
Bonds................................................................... 3.0 2.5
Bank loan participations................................................ 0.9
Redeemable preferred stocks............................................... 0.1 0.1
--------- ---------
100.0% 100.0%
--------- ---------
--------- ---------

At December 31, 1997 and 1996, Protective had bonds which were rated less than
investment grade of $195.2 million and $117.5 million, respectively, having an
amortized cost of $193.6 million and $137.0 million, respectively. At December
31, 1997, approximately $89.6 million of the bonds rates less than investment
grade were securities issued in company-sponsored commercial mortgage loan
securitizations. Additionally, Protective had bank loan participations at
December 31, 1996 which were rated less than investment grade of $43.6 million
having an amortized cost of $43.6 million.

F-32

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE C -- INVESTMENT OPERATIONS (CONTINUED)
The change in unrealized gains (losses), net of income tax on fixed maturity
and equity securities for the years ended December 31 is summarized as follows:

1997 1996 1995
---------- ----------- ------------

Fixed maturities...................................... $ 72,741 $ (56,898) $ 199,024
Equity securities..................................... $ (8,813) $ 207 $ 2,740

At December 31, 1997, all of Protective's mortgage loans were commercial
loans of which 75% were retail, 9% were apartments, 7% were office buildings,
and 7% were warehouses. Protective specializes in making mortgage loans on
either credit-oriented or credit-anchored commercial properties, most of which
are strip shopping centers in smaller towns and cities. No single tenant's
leased space represents more than 5% of mortgage loans. Approximately 84% of the
mortgage loans are on properties located in the following states listed in
decreasing order of significance: Florida, Georgia, Texas, North Carolina,
Alabama, Virginia, South Carolina, Tennessee, Kentucky, California, Maryland,
Mississippi, Ohio, Michigan, and Indiana.

Many of the mortgage loans have call provisions after five to seven years.
Assuming the loans are called at their next call dates, approximately $76.7
million would become due in 1998, $434.4 million in 1999 to 2002, and $129.7
million in 2003 to 2007.

At December 31, 1997, the average mortgage loan was $1.6 million, and the
weighted average interest rate was 8.8%. The largest single mortgage loan was
$12.8 million. While Protective's mortgage loans do not have quoted market
values, at December 31, 1997 and 1996, Protective estimates the market value of
its mortgage loans to be $1,405.5 million and $1,581.7 million, respectively,
using discounted cash flows from the next call date.

At December 31, 1997 and 1996, Protective's problem mortgage loans and
foreclosed properties totaled $17.7 million and $23.7 million, respectively.
Protective's mortgage loans are collateralized by real estate, any assessment of
impairment is based upon the estimated fair value of the real estate. Based on
Protective's evaluation of its mortgage loan portfolio, Protective does not
expect any material losses on its mortgage loans.

Certain investments, principally real estate, with a carrying value of $6.7
million were nonincome producing for the twelve months ended December 31, 1997.

Protective believes it is not practicable to determine the fair value of its
policy loans since there is no stated maturity, and policy loans are often
repaid by reductions to policy benefits. Policy loan interest rates generally
range from 4.5% to 8.0%. The fair values of Protective's other long-term
investments approximate cost.

F-33

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE D -- FEDERAL INCOME TAXES

Protective's effective income tax rate varied from the maximum federal
income tax rate as follows:

1997 1996 1995
----- ----- -----

Statutory federal income tax rate applied to pretax
income.................................................... 35.0% 35.0% 35.0%
Dividends received deduction and tax-exempt interest........ (0.2) (0.4) (0.5)
Low-income housing credit................................... (0.6) (0.6) (0.7)
Tax benefits arising from prior acquisitions and other
adjustments............................................... 0.7 0.1 0.2
----- ----- -----
Effective income tax rate................................... 34.9% 34.1% 34.0%
----- ----- -----
----- ----- -----

The provision for federal income tax differs from amounts currently payable
due to certain items reported for financial statement purposes in periods which
differ from those in which they are reported for income tax purposes.

Details of the deferred income tax provision for the years ended December 31
are as follows:

1997 1996 1995
---------- ---------- ----------

Deferred policy acquisition costs........................................... $ 7,054 $ 15,542 $ (11,606)
Benefit and other policy liability changes.................................. (23,564) (16,321) 52,496
Temporary differences of investment income.................................. 2,516 (1,163) (34,175)
Other items................................................................. 13 (200) (13,687)
---------- ---------- ----------
$ (13,981) $ (2,142) $ (6,972)
---------- ---------- ----------
---------- ---------- ----------

The components of Protective's net deferred income tax liability as of
December 31 were as follows:

1997 1996
----------- -----------

Deferred income tax assets:
Policy and policyholder liability reserves............................................ $ 138,701 $ 80,151
Other................................................................................. 1,029 2,503
----------- -----------
139,730 82,654
----------- -----------
----------- -----------
Deferred income tax liabilities:
Deferred policy acquisition costs..................................................... 150,895 117,696
Unrealized gain on investments........................................................ 38,252 2,680
----------- -----------
189,147 120,376
----------- -----------
Net deferred income tax liability..................................................... $ 49,417 $ 37,722
----------- -----------
----------- -----------

Under pre-1984 life insurance company income tax laws, a portion of
Protective's gain from operations which was not subject to current income
taxation was accumulated for income tax purposes in a memorandum account
designated as Policyholders' Surplus. The aggregate accumulation in this account
at December 31, 1997 was approximately $73 million. Should the accumulation in
the Policyholders' Surplus account exceed certain stated maximums, or should
distributions including cash dividends be made to PLC in excess of approximately
$727 million, such excess would be subject

F-34

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE D -- FEDERAL INCOME TAXES (CONTINUED)
to federal income taxes at rates then effective. Deferred income taxes have not
been provided on amounts designated as Policyholders' Surplus. Protective does
not anticipate involuntarily paying income tax on amounts in the Policyholders'
Surplus accounts.

Protective's income tax returns are included in the consolidated income tax
returns of PLC. The allocation of income tax liabilities among affiliates is
based upon separate income tax return calculations.

NOTE E -- DEBT

At December 31, 1997, PLC had no borrowings outstanding under a term note
that contains, among other provisions, requirements for maintaining certain
financial ratios, and restrictions on indebtedness incurred by PLC's
subsidiaries including Protective. Additionally, PLC, on a consolidated basis,
cannot incur debt in excess of 50% of its total capital.

Protective has arranged sources of credit to temporarily fund scheduled
investment commitments. Protective expects that the rate received on its
investments will equal or exceed its borrowing rate. Protective had no such
temporary borrowings outstanding at December 31, 1997 and 1996.

Included in indebtedness to related parties is a surplus debenture issued by
Protective to PLC. At December 31, 1997, the balance of the surplus debenture
was $20.0 million. The debenture matures in 2003.

Indebtedness to related parties also consists of payables to affiliates
under control of PLC in the amount of $8.1 million at December 31, 1997.
Protective routinely receives from or pays to affiliates under the control of
PLC reimbursements for expenses incurred on one another's behalf. Receivables
and payables among affiliates are generally settled monthly.

Interest expense on borrowed money totaled $4.3 million, $4.6 million, and
$6.0 million, in 1997, 1996, and 1995, respectively.

NOTE F -- RECENT ACQUISITIONS

In January 1996 Protective acquired through coinsurance a block of life
insurance policies. In June 1996 Protective acquired through coinsurance a block
of credit life insurance policies. In December 1996 Protective acquired a small
life insurance company and acquired through coinsurance a block of life
insurance policies.

In June 1997, Protective acquired West Coast Life Insurance Company ("West
Coast"). In September 1997, Protective acquired the Western Diversified Group.
In October 1997, Protective coinsured a block of credit policies.

These transactions have been accounted for as purchases, and the results of
the transactions have been included in the accompanying financial statements
since the effective dates of the agreements.

Summarized below are the consolidated results of operations of 1997 and
1996, on an unaudited pro forma basis, as if the West Coast and Western
Diversified Group acquisitions had occurred as of January 1, 1996. The pro forma
information is based on Protective's consolidated results of operations for 1997
and 1996 and on data provided by the respective companies, after giving effect
to certain pro forma adjustments. The pro forma financial information does not
purport to be indicative of results of

F-35

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE F -- RECENT ACQUISITIONS (CONTINUED)
operations that would have occurred had the transaction occurred on the basis
assumed above nor are they indicative of results of the future operations of the
combined enterprises.

1997 1996
------------- -------------

Total revenues.................................................................... $ 1,133,962 $ 1,126,096
Net income........................................................................ $ 100,621 $ 88,774

NOTE G -- COMMITMENTS AND CONTINGENT LIABILITIES

Under insurance guaranty fund laws, in most states, insurance companies
doing business therein can be assessed up to prescribed limits for policyholder
losses incurred by insolvent companies. Protective does not believe such
assessments will be materially different from amounts already provided for in
the financial statements. Most of these laws do provide, however, that an
assessment may be excused or deferred if it would threaten an insurer's own
financial strength.

A number of civil jury verdicts have been returned against life and health
insurers in the jurisdictions in which Protective does business involving the
insurers' sales practices, alleged agent misconduct, failure to properly
supervise agents, and other matters. Increasingly these lawsuits have resulted
in the award of substantial judgments against the insurer that are
disproportionate to the actual damages, including material amounts of punitive
damages. In addition, in some class action and other lawsuits involving
insurers' sales practices, insurers have made material settlement payments. In
some states (including Alabama), juries have substantial discretion in awarding
punitive damages which creates the potential for unpredictable material adverse
judgments in any given punitive damage suit. Protective and its subsidiaries,
like other life and health insurers, in the ordinary course of business, are
involved in such litigation. Although the outcome of any litigation cannot be
predicted with certainty, Protective believes that at the present time there are
no pending or threatened lawsuits that are reasonably likely to have a material
adverse effect on the financial position, results of operations, or liquidity of
Protective.

NOTE H -- STOCKHOLDER'S EQUITY AND RESTRICTIONS

At December 31, 1997, approximately $483 million of consolidated
stockholder's equity excluding net unrealized gains and losses represented net
assets of Protective that cannot be transferred in the form of dividends, loans,
or advances to PLC. In general, dividends up to specified levels are considered
ordinary and may be paid thirty days after written notice to the insurance
commissioner of the state of domicile unless such commissioner objects to the
dividend prior to the expiration of such period. Dividends in larger amounts are
considered extraordinary and are subject to affirmative prior approval by such
commissioner. The maximum amount that would qualify as ordinary dividends to PLC
by Protective in 1998 is estimated to be $154 million.

NOTE I -- PREFERRED STOCK

PLC owns all of the 2,000 shares of preferred stock issued by Protective's
subsidiary, American Foundation. During 1996, American Foundation's articles of
incorporation were amended such that the preferred stock is redeemable solely at
the discretion of American Foundation. The stock pays, when and if declared,
annual minimum cumulative dividends of $50 per share, and noncumulative
participating dividends to the extent American Foundation's statutory earnings
for the immediately

F-36

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE I -- PREFERRED STOCK (CONTINUED)
preceding fiscal year exceed $1 million. Dividends of $0.1 million were paid to
PLC in 1997, 1996, and 1995.

NOTE J -- RELATED PARTY MATTERS

On August 6, 1990, PLC announced that its Board of Directors approved the
formation of an Employee Stock Ownership Plan ("ESOP"). On December 1, 1990,
Protective transferred to the ESOP 520,000 shares of PLC's common stock held by
it in exchange for a note. The outstanding balance of the note, $5.4 million at
December 31, 1997, is accounted for as a reduction to stockholder's equity. The
stock will be used to match employee contributions to PLC's existing 401(k)
Plan. The ESOP shares are dividend paying. Dividends on the shares are used to
pay the ESOP's note to Protective.

Protective leases furnished office space and computers to affiliates. Lease
revenues were $3.1 million in 1997, $3.7 million in 1996, and $3.1 million in
1995. Protective purchases data processing, legal, investment and management
services from affiliates. The costs of such services were $51.6 million, $50.4
million, and $38.1 million, in 1997, 1996, and 1995, respectively. Commissions
paid to affiliated marketing organizations of $5.2 million, $7.4 million, and
$10.9 million, in 1997, 1996, and 1995, respectively, were included in deferred
policy acquisition costs.

Certain corporations with which PLC's directors were affiliated paid
Protective premiums and policy fees for various types of group insurance. Such
premiums and policy fees amounted to $21.4 million, $31.2 million, and $21.2
million, in 1997, 1996, and 1995, respectively. Protective and/or PLC paid
commissions, interest, and service fees to these same corporations totaling $5.4
million, $5.0 million, and $5.3 million, in 1997, 1996, and 1995, respectively.

For a discussion of indebtedness to related parties, see Note E.

NOTE K -- OPERATING SEGMENTS

Protective operates seven divisions whose principal strategic focuses can be
grouped into three general categories: Life Insurance, Specialty Insurance
Products, and Retirement Savings and Investment Products. Each division has a
senior officer of Protective responsible for its operations. A division is
generally distinguished by products and/or channels of distribution. A brief
description of each division follows.

LIFE INSURANCE

ACQUISITIONS DIVISION. The Acquisitions Division focuses solely on
acquiring, converting, and servicing business acquired from other companies.
These acquisitions may be accomplished through acquisitions of companies or
through the assumption or reinsurance of life insurance and related policies.

INDIVIDUAL LIFE DIVISION. The Individual Life Division markets universal
life and other life insurance products on a national basis through a network of
independent insurance agents. The Division primarily utilizes a distribution
system based on experienced independent producing general agents who are
recruited by regional sales managers. In addition, the Division distributes
insurance products in the life insurance brokerage market.

F-37

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE K -- OPERATING SEGMENTS (CONTINUED)
WEST COAST DIVISION. The West Coast Division sells universal and
traditional ordinary life products in the life insurance brokerage market and in
the "bank owned life insurance" market. The Division primarily utilizes a
distribution system comprised of brokerage general agencies with a network of
independent life agents.

SPECIALTY INSURANCE PRODUCTS

DENTAL AND CONSUMER BENEFITS DIVISION. The Division (formerly known as the
Group Division) recently exited from the traditional group major medical
business, fulfilling the Division's strategy to focus primarily on dental and
related products. Accordingly, the Division was renamed the Dental and Consumer
Benefits Division. The Division's primary focus is on indemnity dental products.
The Division also markets group life and disability coverages, and administers
an essentially closed block of individual cancer insurance policies.

FINANCIAL INSTITUTIONS DIVISION. The Financial Institutions Division
specializes in marketing credit life and disability insurance products through
banks, consumer finance companies and automobile dealers. The Division markets
through employee field representatives, independent brokers, and an affiliate.
The Division also includes a small property casualty insurer that sells
automobile extended warranty coverages.

RETIREMENT SAVINGS AND INVESTMENT PRODUCTS

GUARANTEED INVESTMENT CONTRACTS DIVISION. The Guaranteed Investment
Contracts ("GIC") Division markets GICs to 401(k) and other qualified retirement
savings plans. The Division also offers related products, including guaranteed
funding agreements offered to the trustees of municipal bond proceeds, floating
rate contracts offered to trust departments, and long-term annuity contracts
offered to fund certain state obligations.

INVESTMENT PRODUCTS DIVISION. The Investment Products Division
manufactures, sells, and supports fixed and variable annuity products. These
products are primarily sold through stockbrokers, but are also sold through
financial institutions and the Individual Life Division's agency sales force.

CORPORATE AND OTHER

Protective has an additional business segment herein referred to as
Corporate and Other. The Corporate and Other segment primarily consists of net
investment income and expenses not attributable to the Divisions above
(including net investment income on capital and interest on substantially all
debt).

Protective uses the same accounting policies and procedures to measure
operating segment income and assets as it uses to measure its consolidated net
income and assets. Operating segment income is generally income before income
tax. Premiums and policy fees, other income, benefits and settlement expenses,
and amortization of deferred policy acquisition costs are attributed directly to
each operating segment. Net investment income is allocated based on directly
related assets required for transacting the business of that segment. Realized
investment gains (losses) and other operating expenses are allocated to the
segments in a manner which most appropriately reflects the operations of that
segment. Unallocated realized investment gains (losses) are deemed not to be
associated with any specific segment.

F-38

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE K -- OPERATING SEGMENTS (CONTINUED)
Assets are allocated based on policy liabilities and deferred policy
acquisition costs directly attributable to each segment.

There are no significant intersegment transactions.

Operating segment income and assets for the years ended December 31 are as
follows:

F-39

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE K -- OPERATING SEGMENTS (CONTINUED)

LIFE INSURANCE
-----------------------------------------
INDIVIDUAL
OPERATING SEGMENT INCOME ACQUISITIONS LIFE WEST COAST
- ------------------------- ------------- ----------- -----------

1997
Premiums and policy
fees................... $ 102,635 $ 127,480 $ 14,122
Net investment income.... 110,155 54,593 30,194
Realized investment gains
(losses)...............
Other income............. 10 617
------------- ----------- -----------
Total revenues....... 212,800 182,690 44,316
------------- ----------- -----------
Benefits and settlement
expenses............... 116,506 114,678 28,304
Amortization of deferred
policy acquisition
costs.................. 16,606 27,354 961
Other operating
expenses............... 23,016 18,178 6,849
------------- ----------- -----------
Total benefits and
expenses............ 156,128 160,210 36,114
------------- ----------- -----------
Income before income
tax.................... 56,672 22,480 8,202
Income tax expense.......
------------- ----------- -----------
Net income...............
------------- ----------- -----------
1996
Premiums and policy
fees................... $ 106,543 $ 116,710
Net investment income.... 106,015 48,442
Realized investment gains
(losses)............... 3,098
Other income............. 641 1,056
------------- ----------- -----------
Total revenues....... 213,199 169,306
------------- ----------- -----------
Benefits and settlement
expenses............... 118,181 96,404
Amortization of deferred
policy acquisition
costs.................. 17,162 28,393
Other operating
expenses............... 24,292 28,611
------------- ----------- -----------
Total benefits and
expenses............ 159,635 153,408
------------- ----------- -----------
Income before income
tax.................... 53,564 15,898
Income tax expense.......
------------- ----------- -----------
Net income...............
------------- ----------- -----------
1995
Premiums and policy
fees................... $ 98,501 $ 99,018
Net investment income.... 95,018 40,237
Realized investment gains
(losses)...............
Other income............. 25 169
------------- ----------- -----------
Total revenues....... 193,544 139,424
------------- ----------- -----------
Benefits and settlement
expenses............... 100,016 80,067
Amortization of deferred
policy acquisition
costs.................. 20,601 20,403
Other operating
expenses............... 22,551 22,748
------------- ----------- -----------
Total benefits and
expenses............ 143,168 123,218
------------- ----------- -----------
Income before income
tax.................... 50,376 16,206
Income tax expense.......
------------- ----------- -----------
Net income...............
------------- ----------- -----------
OPERATING SEGMENT ASSETS
- -------------------------
1997
Investments and other
assets................. $1,401,294 $ 960,316 $ 910,030
Deferred policy
acquisition costs...... 138,052 252,321 108,126
------------- ----------- -----------
Total assets............. $1,539,346 $ 1,212,637 $ 1,018,156
------------- ----------- -----------
1996
Investments and other
assets................. $1,423,081 $ 814,728
Deferred policy
acquisition costs...... 156,172 220,232
------------- ----------- -----------
Total assets............. $1,579,253 $ 1,034,960
------------- ----------- -----------
1995
Investments and other
assets................. $1,131,653 $ 701,431
Deferred policy
acquisition costs...... 123,889 186,496
------------- ----------- -----------
Total assets............. $1,255,542 $ 887,927
------------- ----------- -----------

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

(1) Adjustments represent the inclusion of unallocated realized investment
gains (losses) and the recognition of income tax expense. There are no
asset adjustments.

F-40

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE K -- OPERATING SEGMENTS (CONTINUED)

SPECIALTY INSURANCE RETIREMENT SAVINGS AND
PRODUCTS INVESTMENT PRODUCTS
--------------------------- ---------------------------
DENTAL AND GUARANTEED CORPORATE
CONSUMER FINANCIAL INVESTMENT INVESTMENT AND TOTAL
BENEFITS INSTITUTIONS CONTRACTS PRODUCTS OTHER ADJUSTMENTS(1) CONSOLIDATED
----------- ------------- ------------ ------------ ---------- --------------- -------------

1997
Premiums and policy
fees................... $151,110 $ 72,263 $ 12,367 $ 229 $ 480,206
Net investment income.... 23,810 16,341 $ 211,915 105,196 5,284 557,488
Realized investment gains
(losses)............... (3,180) 589 $4,415 1,824
Other income............. 1,278 3,033 (192) 1,403 6,149
----------- ------------- ------------ ------------ ---------- ------- -------------
Total revenues....... 176,198 91,637 208,735 117,960 6,916 1,045,667
----------- ------------- ------------ ------------ ---------- ------- -------------
Benefits and settlement
expenses............... 110,148 27,643 179,235 82,019 339 658,872
Amortization of deferred
policy acquisition
costs.................. 15,711 30,812 618 15,110 3 107,175
Other operating
expenses............... 38,572 20,165 3,945 12,312 6,833 129,870
----------- ------------- ------------ ------------ ---------- ------- -------------
Total benefits and
expenses............ 164,431 78,620 183,798 109,441 7,175 895,917
----------- ------------- ------------ ------------ ---------- ------- -------------
Income before income
tax.................... 11,767 13,017 24,937 8,519 (259) 149,750
Income tax expense....... 52,302 52,302
----------- ------------- ------------ ------------ ---------- ------- -------------
Net income............... $ 97,448
----------- ------------- ------------ ------------ ---------- ------- -------------
1996
Premiums and policy
fees................... $156,530 $ 73,422 $ 8,189 $ 656 $ 462,050
Net investment income.... 16,249 13,898 $ 214,369 98,719 1,089 498,781
Realized investment gains
(losses)............... (7,963) 3,858 $6,517 5,510
Other income............. 2,193 56 1,064 5,010
----------- ------------- ------------ ------------ ---------- ------- -------------
Total revenues....... 174,972 87,320 206,406 110,822 2,809 971,351
----------- ------------- ------------ ------------ ---------- ------- -------------
Benefits and settlement
expenses............... 125,797 42,781 169,927 73,093 710 626,893
Amortization of deferred
policy acquisition
costs.................. 5,326 24,900 509 14,710 1 91,001
Other operating
expenses............... 43,028 10,673 3,840 13,196 4,508 128,148
----------- ------------- ------------ ------------ ---------- ------- -------------
Total benefits and
expenses............ 174,151 78,354 174,276 100,999 5,219 846,042
----------- ------------- ------------ ------------ ---------- ------- -------------
Income before income
tax.................... 821 8,966 32,130 9,823 (2,410) 125,309
Income tax expense....... 42,766 42,766
----------- ------------- ------------ ------------ ---------- ------- -------------
Net income............... $ 82,543
----------- ------------- ------------ ------------ ---------- ------- -------------
1995
Premiums and policy
fees................... $142,483 $ 65,669 $ 4,566 $ 1,445 $ 411,682
Net investment income.... 14,329 9,276 $ 203,376 95,661 536 458,433
Realized investment gains
(losses)............... (3,908) 4,938 $ 921 1,951
Other income............. 2,451 (2,187) (181) 1,078 1,355
----------- ------------- ------------ ------------ ---------- ------- -------------
Total revenues....... 159,263 72,758 199,468 104,984 3,059 873,421
----------- ------------- ------------ ------------ ---------- ------- -------------
Benefits and settlement
expenses............... 109,447 24,020 165,963 72,111 1,476 553,100
Amortization of deferred
policy acquisition
costs.................. 3,052 26,809 386 11,446 3 82,700
Other operating
expenses............... 37,657 14,228 4,140 10,494 8,070 119,888
----------- ------------- ------------ ------------ ---------- ------- -------------
Total benefits and
expenses............ 150,156 65,057 170,489 94,051 9,549 755,688
----------- ------------- ------------ ------------ ---------- ------- -------------
Income before income
tax.................... 9,107 7,701 28,979 10,933 (6,490) 117,733
Income tax expense....... 40,037 40,037
----------- ------------- ------------ ------------ ---------- ------- -------------
Net income............... $ 77,696
----------- ------------- ------------ ------------ ---------- ------- -------------
OPERATING SEGMENT ASSETS
- -------------------------
1997
Investments and other
assets................. $208,071 $536,058 $2,887,732 $ 2,313,279 $525,896 $ 9,742,676
Deferred policy
acquisition costs...... 22,459 52,836 1,785 56,074 952 632,605
----------- ------------- ------------ ------------ ---------- ------- -------------
Total assets............. $230,530 $588,894 $2,889,517 $ 2,369,353 $526,848 $10,375,281
----------- ------------- ------------ ------------ ---------- ------- -------------
1996
Investments and other
assets................. $205,696 $312,826 $2,606,873 $ 1,821,250 $490,688 $ 7,675,142
Deferred policy
acquisition costs...... 27,944 32,040 1,164 50,637 12 488,201
----------- ------------- ------------ ------------ ---------- ------- -------------
Total assets............. $233,640 $344,866 $2,608,037 $ 1,871,887 $490,700 $ 8,163,343
----------- ------------- ------------ ------------ ---------- ------- -------------
1995
Investments and other
assets................. $215,248 $228,849 $2,535,946 $ 1,541,255 $414,128 $ 6,768,510
Deferred policy
acquisition costs...... 24,974 36,283 993 37,534 14 410,183
----------- ------------- ------------ ------------ ---------- ------- -------------
Total assets............. $240,222 $265,132 $2,536,939 $ 1,578,789 $414,142 $ 7,178,693
----------- ------------- ------------ ------------ ---------- ------- -------------

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

F-41

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE L -- EMPLOYEE BENEFIT PLANS

PLC has a defined benefit pension plan covering substantially all of its
employees. The plan is not separable by affiliates participating in the plan.
However, approximately 81% of the participants in the plan are employees of
Protective. The benefits are based on years of service and the employee's
highest thirty-six consecutive months of compensation. PLC's funding policy is
to contribute amounts to the plan sufficient to meet the minimum finding
requirements of ERISA plus such additional amounts as PLC may determine to be
appropriate from time to time. Contributions are intended to provide not only
for benefits attributed to service to date but also for those expected to be
earned in the future.

The actuarial present value of benefit obligations and the funded status of
the plan taken as a whole at December 31 are as follows:

1997 1996
--------- ---------

Accumulated benefit obligation, including vested benefits of $18,216 in 1997 and $14,720 in
1996..................................................................................... $ 19,351 $ 15,475
--------- ---------
Projected benefit obligation for service rendered to date.................................. $ 30,612 $ 25,196
Plan assets at fair value (group annuity contract with Protective)......................... 21,763 19,779
--------- ---------
Plan assets less than the projected benefit obligation..................................... (8,849) (5,417)
Unrecognized net loss from past experience different from that assumed..................... 6,997 3,559
Unrecognized prior service cost............................................................ 605 705
Unrecognized net transition asset.......................................................... (51) (67)
--------- ---------
Net pension liability recognized in balance sheet.......................................... $ (1,298) $ (1,220)
--------- ---------
--------- ---------

Net pension cost includes the following components for the years ended
December 31:

1997 1996 1995
--------- --------- ---------

Service cost -- benefits earned during the year................................. $ 2,112 $ 1,908 $ 1,540
Interest cost on projected benefit obligation................................... 2,036 1,793 1,636
Actual return on plan assets.................................................... (1,624) (1,674) (1,358)
Net amortization and deferral................................................... 66 374 114
--------- --------- ---------
Net pension cost................................................................ $ 2,590 $ 2,401 $ 1,932
--------- --------- ---------
--------- --------- ---------

Protective's share of the net pension cost was $1.8 million, $1.5 million,
and $1.2 million, in 1997, 1996, and 1995, respectively.

Assumptions used to determine the benefit obligations as of December 31 were
as follows:

1997 1996 1995
--------- --------- ---------

Weighted average discount rate....................................................... 7.25% 7.75% 7.25%
Rates of increase in compensation level.............................................. 5.25% 5.75% 5.25%
Expected long-term rate of return on assets.......................................... 8.50% 8.50% 8.50%

Assets of the pension plan are included in the general assets of Protective.
Upon retirement, the amount of pension plan assets vested in the retiree is used
to purchase a single premium annuity from

F-42

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

Protective in the retiree's name. Therefore, amounts presented above as plan
assets exclude assets relating to retirees.

PLC also sponsors an unfunded Excess Benefits Plan, which is a nonqualified
plan that provides defined pension benefits in excess of limits imposed by
federal income tax law. At December 31, 1997 and 1996, the projected benefit
obligation of this plan totaled $10.0 million and $7.2 million, respectively.

In addition to pension benefits, PLC provides limited healthcare benefits to
eligible retired employees until age 65. The postretirement benefit is provided
by an unfunded plan. At December 31, 1997 and 1996, the liability for such
benefits totaled $1.3 million and $1.4 million, respectively. The expense
recorded by PLC was $0.1 million in 1997 and 1996 and $0.2 million in 1995.
PLC's obligation is not materially affected by a 1% change in the healthcare
cost trend assumptions used in the calculation of the obligation.

Life insurance benefits for retirees are provided through the purchase of
life insurance policies upon retirement equal to the employees' annual
compensation. This plan is partially funded at a maximum of $50,000 face amount
of insurance.

PLC sponsors a defined contribution plan which covers substantially all
employees. Employee contributions are made on a before-tax basis as provided by
Section 401(k) of the Internal Revenue Code. In 1990, PLC established an
Employee Stock Ownership Plan to match employee contributions to PLC's 401(k)
Plan. In 1994, a stock bonus was added to the 401(k) Plan for employees who are
not otherwise under a bonus plan. Expense related to the ESOP consists of the
cost of the shares allocated to participating employees plus the interest
expense on the ESOP's note payable to Protective less dividends on shares held
by the ESOP. At December 31, 1997, PLC had committed 47,523 shares to be
released to fund employee benefits. The expense recorded by PLC for these
employee benefits was less than $0.1 million, $1.0 million, and $0.7 million, in
1997, 1996, and 1995, respectively.

NOTE M -- STOCK BASED COMPENSATION

Certain Protective employees participate in PLC's Performance Share Plan and
receive stock appreciation rights (SARs) from PLC.

Since 1973 PLC has had a Performance Share Plan to motivate senior
management to focus on PLC's long-range earnings performance. The criterion for
payment of performance share awards is based upon a comparison of PLC's average
return on average equity over a four year award period (earlier upon the death,
disability or retirement of the executive, or in certain circumstances, of a
change in control of PLC) to that of a comparison group of publicly held life
insurance companies, multiline insurers, and insurance holding companies. If
PLC's results are below the median of the comparison group, no portion of the
award is earned. If PLC's results are at or above the 90th percentile, the award
maximum is earned. Under the plan approved by stockholders in 1992, up to
3,200,000 shares may be issued in payment of awards. The number of shares
granted in 1997, 1996, and 1995 were 49,390, 52,290, and 72,610 shares,
respectively, having an approximate market value on the grant date of $2.0
million, $1.8 million, and $1.6 million, respectively. At December 31, 1997,
outstanding awards measured at target and maximum payouts were 261,318 and
353,385 shares, respectively. The expense recorded by PLC for the Performance
Share Plan was $2.7 million, $3.0 million, and $2.9 million in 1997, 1996, and
1995, respectively.

During 1996, stock appreciation rights (SARs) were granted to certain
executives of PLC to provide long-term incentive compensation based on the
performance of PLC's Common Stock. Under

F-43

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE M -- STOCK BASED COMPENSATION (CONTINUED)
this arrangement PLC will pay (in shares of PLC Common Stock) an amount equal to
the difference between the specified base price of PLC's Common Stock and the
market value at the exercise date. The SARs are exercisable after five years
(earlier upon the death, disability or retirement of the executive, or in
certain circumstances, of a change in control of PLC) and expire in 2006 or upon
termination of employment. The number of SARs granted during 1996 and
outstanding at December 31, 1997 was 337,500. The SARs have a base price of
$34.875 per share of PLC Common Stock (the market price on the grant date was
$35.00 per share). The estimated fair value of the SARs on the grant date was
$3.0 million. This estimate was derived using the Roll-Geske variation of the
Black-Sholes option pricing model. Assumptions used in the pricing model are as
follows: expected volatility rate of 15% (approximately equal to that of the S &
P Life Insurance Index), a risk free interest rate of 6.35%, a dividend yield
rate of 1.97%, and an expected exercise date of August 15, 2002. The expense
recorded by PLC for the SARs was $0.6 million in 1997 and $0.2 million in 1996.

NOTE N -- REINSURANCE

Protective assumes risks from and reinsures certain parts of its risks with
other insurers under yearly renewable term, coinsurance, and modified
coinsurance agreements. Yearly renewable term and coinsurance agreements are
accounted for by passing a portion of the risk to the reinsurer. Generally, the
reinsurer receives a proportionate part of the premiums less commissions and is
liable for a corresponding part of all benefit payments. Modified coinsurance is
accounted for similarly to coinsurance except that the liability for future
policy benefits is held by the original company, and settlements are made on a
net basis between the companies. While the amount retained on an individual life
will vary based upon age and mortality prospects of the risk Protective,
generally, will not carry more than $500,000 individual life insurance on a
single risk. In many cases, the retention is less.

Protective has reinsured approximately $34.1 billion, $18.8 billion, and
$17.5 billion in face amount of life insurance risks with other insurers
representing $147.2 million, $113.5 million, and $116.1 million of premium
income for 1997, 1996, and 1995, respectively. Protective has also reinsured
accident and health risks representing $187.7 million, $194.7 million, and
$217.1 million of premium income for 1997, 1996, and 1995, respectively. In 1997
and 1996, policy and claim reserves relating to insurance ceded of $485.8
million and $325.9 million respectively are included in reinsurance receivables.
Should any of the reinsurers be unable to meet its obligation at the time of the
claim, obligation to pay such claim would remain with Protective. At December
31, 1997 and 1996, Protective had paid $25.6 million and $6.7 million,
respectively, of ceded benefits which are recoverable from reinsurers. In
addition, at December 31, 1997, Protective had receivables of $80.3 million
related to insurance assumed.

A substantial portion of Protective's new credit insurance sales are being
reinsured. Included in the preceding paragraph are credit life and credit
accident and health insurance premiums of $96.7 million, $103.0 million, and
$125.8 million for 1997, 1996 and 1995, respectively, and reserves which were
ceded of $238.8 million and $135.8 million during 1997 and 1996, respectively.

F-44

PROTECTIVE LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS)

NOTE O -- ESTIMATED MARKET VALUES OF FINANCIAL INSTRUMENTS

The carrying amount and estimated market values of Protective's financial
instruments at December 31 are as follows:

1997 1996
---------------------- ----------------------
ESTIMATED ESTIMATED
CARRYING MARKET CARRYING MARKET
AMOUNT VALUES AMOUNT VALUES
---------- ---------- ---------- ----------

Assets (see Notes A and C):
Investments:
Fixed maturities......................... $6,348,252 $6,348,252 $4,662,997 $4,662,997
Equity securities........................ 15,006 15,006 35,250 35,250
Mortgage loans on real estate............ 1,313,478 1,405,474 1,503,781 1,581,694
Short-term investments................... 54,337 54,337 101,215 101,215
Cash....................................... 39,197 39,197 114,384 114,384
Liabilities (see Notes A and E):
Guaranteed investment contract
deposits............................... 2,684,676 2,687,331 2,474,728 2,462,036
Annuity deposits......................... 1,511,553 1,494,600 1,331,067 1,322,304
Other (see Note A):
Futures contracts........................ (1,708)
Interest rate swaps...................... (145) (679)
Options.................................. 234

F-45

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION

PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H
- ------------------------------------------------------------------------------------------------------------------------------
GIC AND
ANNUITY
DEFERRED FUTURE DEPOSITS AND PREMIUMS REALIZED BENEFITS
POLICY POLICY OTHER AND NET INVESTMENT AND
ACQUISITION BENEFITS UNEARNED POLICYHOLDERS' POLICY INVESTMENT GAINS SETTLEMENT
SEGMENT COSTS AND COSTS PREMIUMS FUNDS FEES INCOME (1) (LOSSES) EXPENSES
- ------------------------ ----------- ---------- -------- -------------- --------- ---------- ---------- ----------

Year Ended December 31,
1997:
Life Insurance
Acquisitions.......... $138,052 $1,025,340 $ 1,437 $ 311,150 $102,635 $110,155 $ 0 $116,506
Individual Life....... 252,321 920,924 356 16,334 127,480 54,593 0 114,678
West Coast............ 108,126 739,463 0 95,495 14,122 30,194 0 28,304
Specialty Insurance
Products
Dental and Consumer
Benefits............ 22,459 120,925 2,536 80,654 151,110 23,810 0 110,148
Financial
Institutions........ 52,836 159,422 391,085 6,791 72,263 16,341 0 27,643
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 1,785 180,690 0 2,684,676 0 211,915 (3,180) 179,235
Investment Products... 56,074 177,150 0 1,184,268 12,367 105,196 589 82,019
Corporate and Other..... 952 380 1,282 185 229 5,284 0 339
Unallocated Realized
Investment Gains
(Losses).............. 0 0 0 0 0 0 4,415 0
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
TOTAL............... $632,605 $3,324,294 $396,696 $4,379,553 $480,206 $557,488 $ 1,824 $658,872
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
Year Ended December 31,
1996:
Life Insurance
Acquisitions.......... $156,172 $1,117,159 $ 1,087 $ 251,450 $106,543 $106,015 $ 0 $118,181
Individual Life....... 220,232 793,370 685 15,577 116,710 48,442 3,098 96,404
Specialty Insurance
Products
Dental and Consumer
Benefits............ 27,944 119,010 2,572 83,632 156,530 16,249 0 125,797
Financial
Institutions........ 32,040 119,242 253,154 1,880 73,422 13,898 0 42,781
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 1,164 149,755 0 2,474,728 0 214,369 (7,963) 169,927
Investment Products... 50,637 149,743 0 1,120,557 8,189 98,719 3,858 73,093
Corporate and Other..... 12 170 55 192 656 1,089 0 710
Unallocated Realized
Investment Gains
(Losses).............. 0 0 0 0 0 0 6,517 0
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
TOTAL............... $488,201 $2,448,449 $257,553 $3,948,016 $462,050 $498,781 $ 5,510 $626,893
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
Year Ended December 31,
1995:
Life Insurance
Acquisitions.......... $123,889 $ 851,994 $ 590 $ 250,550 $ 98,501 $ 95,018 $ 0 $100,016
Individual Life....... 186,496 672,569 336 14,709 99,018 40,237 0 80,067
Specialty Insurance
Products
Dental and Consumer
Benefits............ 24,974 123,279 2,806 85,925 142,483 14,329 0 109,447
Financial
Institutions........ 36,283 84,162 189,973 1,495 65,669 9,276 0 24,020
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 993 68,704 0 2,451,693 0 203,376 (3,908) 165,963
Investment Products... 37,534 127,104 0 1,061,507 4,566 95,661 4,938 72,111
Corporate and Other..... 14 342 62 263 1,445 536 0 1,476
Unallocated Realized
Investment Gains
(Losses).............. 0 0 0 0 0 0 921 0
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
TOTAL............... $410,183 $1,928,154 $193,767 $3,866,142 $411,682 $458,433 $ 1,951 $553,100
----------- ---------- -------- -------------- --------- ---------- ---------- ----------
----------- ---------- -------- -------------- --------- ---------- ---------- ----------

- ------------------------
COL. A COL. I COL. J
- ------------------------

AMORTIZATION
OF DEFERRED
POLICY OTHER
ACQUISITION OPERATING
SEGMENT COSTS EXPENSES (1)
- ------------------------ ------------ ------------

Year Ended December 31,
1997:
Life Insurance
Acquisitions.......... $16,606 $ 23,016
Individual Life....... 27,354 18,178
West Coast............ 961 6,849
Specialty Insurance
Products
Dental and Consumer
Benefits............ 15,711 38,572
Financial
Institutions........ 30,812 20,165
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 618 3,945
Investment Products... 15,110 12,312
Corporate and Other..... 3 6,833
Unallocated Realized
Investment Gains
(Losses).............. 0 0
------------ ------------
TOTAL............... $107,175 $129,870
------------ ------------
------------ ------------
Year Ended December 31,
1996:
Life Insurance
Acquisitions.......... $17,162 $ 24,292
Individual Life....... 28,393 28,611
Specialty Insurance
Products
Dental and Consumer
Benefits............ 5,326 43,027
Financial
Institutions........ 24,900 10,673
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 509 3,840
Investment Products... 14,710 13,197
Corporate and Other..... 1 4,508
Unallocated Realized
Investment Gains
(Losses).............. 0 0
------------ ------------
TOTAL............... $91,001 $128,148
------------ ------------
------------ ------------
Year Ended December 31,
1995:
Life Insurance
Acquisitions.......... $20,601 $ 22,551
Individual Life....... 20,403 22,748
Specialty Insurance
Products
Dental and Consumer
Benefits............ 3,052 37,657
Financial
Institutions........ 26,809 14,229
Retirement Savings and
Investment Products
Guaranteed Investment
Contracts........... 386 4,140
Investment Products... 11,446 10,494
Corporate and Other..... 3 8,069
Unallocated Realized
Investment Gains
(Losses).............. 0 0
------------ ------------
TOTAL............... $82,700 $119,888
------------ ------------
------------ ------------

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

(1) Allocations of Net Investment Income and Other Operating Expenses are based
on a number of assumptions and estimates and results would change if
different methods were applied.

S-1

SCHEDULE IV -- REINSURANCE

PROTECTIVE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(DOLLARS IN THOUSANDS)

- ---------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E COL. F
- ---------------------------------------------------------------------------------------------------------
PERCENTAGE
CEDED TO ASSUMED OF AMOUNT
GROSS OTHER FROM OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
----------- ----------- ----------- ----------- -----------

Year Ended December 31, 1997:
Life insurance in force............... $78,240,282 $34,139,554 $11,013,202 $55,113,930 20.0%
----------- ----------- ----------- ----------- -----
----------- ----------- ----------- ----------- -----
Premiums and policy fees:
Life insurance........................ $ 387,108 $ 147,184 $ 74,738 $ 314,662 23.8%
Accident and health insurance......... 336,575 187,715 10,656 159,546 6.7%
Property and liability insurance...... 6,139 176 35 5,998 0.6%
----------- ----------- ----------- -----------
TOTAL................................. $ 729,822 $ 335,075 $ 85,459 $ 480,206
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Year Ended December 31, 1996:
Life insurance in force............... $53,052,020 $18,840,221 $16,275,386 $50,487,185 32.2%
----------- ----------- ----------- ----------- -----
----------- ----------- ----------- ----------- -----
Premiums and policy fees:
Life insurance........................ $ 272,331 $ 113,487 $ 129,717 $ 288,561 45.0%
Accident and health insurance......... 338,709 194,687 29,467 173,489 17.0%
----------- ----------- ----------- -----------
TOTAL................................. $ 611,040 $ 308,174 $ 159,184 $ 462,050
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Year Ended December 31, 1995:
Life insurance in force............... $50,346,719 $17,524,366 $11,537,144 $44,359,497 26.0%
----------- ----------- ----------- ----------- -----
----------- ----------- ----------- ----------- -----
Premiums and policy fees:
Life insurance........................ $ 308,422 $ 116,091 $ 66,565 $ 258,896 25.7%
Accident and health insurance......... 356,285 217,082 13,583 152,786 8.9%
----------- ----------- ----------- -----------
TOTAL................................. $ 664,707 $ 333,173 $ 80,148 $ 411,682
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

S-2

APPENDIX A

EXAMPLES OF DEATH BENEFIT COMPUTATIONS UNDER OPTIONS 1 AND 2

OPTION 1 EXAMPLE. For purposes of this example, assume that the Insured's
Attained Age is between 0 and 40 and that there is no outstanding Policy Debt.
Under Option 1, a Policy with a $100,000 Face Amount will generally pay $100,000
in Death Benefits. However, because the Death Benefit must be equal to or be
greater than 250% of the Policy Value, any time that the Policy Value exceeds
$40,000, the Death Benefit will exceed the $100,000 Face Amount. Each additional
dollar added to Policy Value above $40,000 will increase the Death Benefit by
$2.50. A Policy with a $100,000 Face Amount and a Policy Value of $50,000 will
provide Death Benefit of $125,000 ($50,000 x 250%); a Policy Value of $60,000
will provide a Death Benefit of $150,000 ($60,000 x 250%); a Policy Value of
$70,000 will provide a Death Benefit of $175,000 ($70,000 x 250%).

Similarly, so long as Policy Value exceeds $40,000, each dollar taken out of
Policy Value will reduce the Death Benefit by $2.50. If, for example, the Policy
Value is reduced from $45,000 to $40,000 because of partial surrenders, charges,
or negative investment performance, the Death Benefit will be reduced from
$112,500 to $100,000. If at any time, however, the Policy Value multiplied by
the Face Amount percentage is less than the Face Amount, the Death Benefit will
equal the current Face Amount of the Policy.

The Face Amount percentage becomes lower as the Insured's Attained Age
increases. If the Attained Age of the Insured in the example above were, for
example, 50 (rather than between 0 and 40), the specified amount factor would be
185%. The Death Benefit would not exceed the $100,000 Face Amount unless the
Policy Value exceeded approximately $54,055 (rather than $40,000), and each
dollar then added to or taken from the Policy Value would change the life
insurance proceeds by $1.85 (rather than $2.50).

OPTION 2 EXAMPLE. For purposes of this example, assume that the Insured's
Attained Age is between 0 and 40 and that there is no outstanding Policy Debt.
Under Option 2, a Policy with a Face Amount of $100,000 will generally provide a
Death Benefit of $100,000 plus Policy Value. Thus, for example, a Policy with a
Policy Value of $10,000 will have a Death Benefit of $110,000 ($100,000 +
$10,000); a Policy Value of $20,000 will provide a Death Benefit of $120,000
($100,000 + $20,000). The Death Benefit, however, must be at least 250% of the
Policy Value. As a result, if the Policy Value exceeds $66,666, the Death
Benefit will be greater than the Face Amount plus Policy Value. Each additional
dollar of Policy Value above $66,666 will increase the Death Benefit by $2.50. A
Policy with a Face Amount of $100,000 and a Policy Value of $70,000 will provide
a Death Benefit of $175,000 ($70,000 x 250%); a Policy Value of $80,000 will
provide a Death Benefit of $200,000 ($80,000 x 250%).

Similarly, any time Policy Value exceeds $66,666, each dollar taken out of
Policy Value will reduce the Death Benefit by $2.50. If, for example, the Policy
Value is reduced from $80,000 to $75,000 because of partial surrenders, charges,
or negative investment performance, the Death Benefit will be reduced from
$200,000 to $187,500. If at any time, however, Policy Value multiplied by the
Face Amount percentage is less than the Face Amount plus the Policy Value, then
the Death Benefit will be the current Face Amount plus Policy Value of the
Policy.

The Face Amount percentage becomes lower as the Insured's Attained Age
increases. If the Attained Age of the Insured in the example above were, for
example, 50 (rather than under 40), the Face Amount factor would be 185%. The
amount of the Death Benefit would be the sum of the Policy Value plus $100,000
unless the Policy Value exceeded $117,647 (rather than $66,666), and each dollar
then added to or taken from the Policy Value would change the Death Benefit by
$1.85 (rather than $2.50).

A-1

TABLE OF FACE AMOUNT PERCENTAGES

ATTAINED ATTAINED
AGE PERCENTAGE ATTAINED AGE PERCENTAGE ATTAINED AGE PERCENTAGE AGE PERCENTAGE

- --------------------------------------------------------------------------------------------------------
0-40 250% 50 185% 60 130% 70 115%
41 243% 51 178% 61 128% 71 113%
42 236% 52 171% 62 126% 72 111%
43 229% 53 164% 63 124% 73 109%
44 222% 54 157% 64 122% 74 107%
45 215% 55 150% 65 120% 75-90 105%
46 209% 56 146% 66 119% 91 104%
47 203% 57 142% 67 118% 92 103%
48 197% 58 138% 68 117% 93 102%
49 191% 59 134% 69 116% 94 101%
95+ 100%

A-2

PART II -- OTHER INFORMATION
UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

RULE 484 UNDERTAKING

Article XI of the By-laws of Protective Life provides, in substance, that
any of Protective Life's directors and officers, who is a party or is threatened
to be made a party to any action, suit or proceeding, other than an action by or
in the right of Protective Life, by reason of the fact that he is or was an
officer or director, shall be indemnified by Protective Life against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such claim,
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of Protective
Life and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. If the claim, action or suit is or
was by or in the right of Protective Life to procure a judgment in its favor,
such person shall be indemnified by Protective Life against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
Protective Life, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to Protective
Life unless and only to the extent that the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper. To the extent that a director or officer has been successful on the
merits or otherwise in defense of any such action, suit or proceeding, or in
defense of any claim, issue or matter therein, he shall be indemnified by
Protective Life against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith, not withstanding that he has
not been successful on any other claim issue or matter in any such action, suit
or proceeding. Unless ordered by a court, indemnification shall be made by
Protective Life only as authorized in the specific case upon a determination
that indemnification of the officer or director is proper in the circumstances
because he has met the applicable standard of conduct. Such determination shall
be made (a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to, or who have been successful on the merits
or otherwise with respect to, such claim action, suit or proceeding, or (b) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion or (c) by the shareholders.

In addition, the executive officers and directors are insured by PLC's
Directors' and Officers' Liability Insurance Policy including Company
Reimbursement and are indemnified by a written contract with PLC which
supplements such coverage.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification may be against public policy as expressed in the Act and
may be, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than 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

II-1

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.

REPRESENTATIONS PURSUANT TO RULE Section 26(e) of the Investment Company Act of
1940

Protective Life hereby represents that the fees and charges deducted under
the variable life insurance policies described herein are, in the aggregate,
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by it under such policies.

II-2

CONTENTS OF REGISTRATION STATEMENT

This registration statement consists of the following papers and documents:

The facing sheet.

A reconciliation and tie of the information shown in the prospectus with the
items of Form N-8B-2.

The prospectus consisting of 55 pages.

The undertaking to file reports.

The Rule 484 undertaking.

Representations pursuant to Section 26(e) of the Investment Company Act of
1940.

The signatures.

Written consents of the following persons:
Nancy Kane, Esq.
Stephen Peeples, F.S.A., M.A.A.A.
Sutherland, Asbill & Brennan, L.L.P.
Coopers & Lybrand L.L.P.

The following exhibits:

1.A. (1) Certified resolutions of the board of directors of Protective Life Insurance Company establishing
Protective Variable Life Separate Account.*
(2) None.
(3)(a) Form of Underwriting Agreement among Protective Life Insurance Company, Investment Distributors,
Inc. and Protective Variable Life Separate Account.**
(b) Form of Distribution Agreement between Investment Distributors, Inc. and selling broker-dealers.**
(4) None.
(5)(a) Form of Contract.
(b) Children's term life rider.*
(c) Accidental death benefit rider.*
(d) Disability benefit rider.*
(e) Guaranteed insurability rider.*
(f) Protected insurability benefit rider.*
(g) Term Rider for Covered Insured.
(h) Policy Value Credit Endorsement.
(6)(a) Charter of Protective Life Insurance Company.*
(b) By-Laws of Protective Life Insurance Company.*
(7) None
(8) None
(9)(a) Participation/Distribution Agreement.**
(b) Participation Agreement (Oppenheimer Variable Account Funds).***
(c) Participation Agreement (MFS Variable Insurance Trust).***
(d) Participation Agreement (Acacia Capital Corporation).***
(10) Contract Application.

- ------------------------
*Incorporated herein by reference to the initial filing of the Form S-6
Registration Statement, (File No. 33-61599) as filed with the Commission on
August 4, 1995.
**Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Form S-6 Registration Statement, (File No. 33-61599) as filed with the
Commission on December 22, 1995.
***Incorporated herein by reference to Post-Effective Amendment No. 5 to the
Form N-4 Registration Statement (File No. 33-70984) as filed with the
Commission on April 30, 1997.
****To be filed by amendment.

II-3

2. Opinion and consent of Nancy Kane, Esq.****
3. Not applicable.
4. Not applicable.
5. See Exhibit 27.
6. Notice of Withdrawal Right. (Not Applicable)
7. Opinion and consent of Stephen Peeples.****
8. Consent of Sutherland, Asbill & Brennan, L.L.P.****
9. Consent of Coopers & Lybrand L.L.P.
10. Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) describing issue, transfer and redemption
procedures.
11. Powers of Attorney.
27. Financial Data Schedules.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, Protective Variable Life
Separate Account, certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Registration Statement and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Birmingham, State of Alabama on May 5,
1998.

PROTECTIVE VARIABLE LIFE SEPARATE ACCOUNT
(Registrant)

By: /s/ JOHN D. JOHNS

------------------------------------------
John D. Johns, President
PROTECTIVE LIFE INSURANCE COMPANY

PROTECTIVE LIFE INSURANCE COMPANY
(Depositor)

By: /s/ JOHN D. JOHNS

------------------------------------------
John D. Johns, President
PROTECTIVE LIFE INSURANCE COMPANY

As required by the Securities Act of 1933, this Registration Statement on
Form S-6 has been signed by the following persons in the capacities and on the
dates indicated.

SIGNATURE TITLE DATE
- --------------------------------------------- --------------- ---------------

Chairman of the
Board and
/s/ DRAYTON NABERS, JR. Director
------------------------------------------- (Principal May 5, 1998
Drayton Nabers, Jr. Executive
Officer)

President and
/s/ JOHN D. JOHNS Director
------------------------------------------- (Principal May 5, 1998
John D. Johns Financial
Officer)

Vice President,
Controller and
Chief
/s/ JERRY W. DEFOOR Accounting
------------------------------------------- Officer May 5, 1998
Jerry W. DeFoor (Principal
Accounting
Officer)

*
------------------------------------------- Director May 5, 1998
R. Stephen Briggs

/s/ JIM E. MASSENGALE
------------------------------------------- Director May 5, 1998
Jim E. Massengale

/s/ A.S. WILLIAMS III
------------------------------------------- Director May 5, 1998
A.S. Williams III

SIGNATURE TITLE DATE
- --------------------------------------------- --------------- ---------------

/s/ DANNY L. BENTLEY
------------------------------------------- Director May 5, 1998
Danny L. Bentley

/s/ RICHARD J. BIELEN
------------------------------------------- Director May 5, 1998
Richard J. Bielen

*
------------------------------------------- Director May 5, 1998
Carolyn King

*
------------------------------------------- Director May 5, 1998
Deborah J. Long

*
------------------------------------------- Director May 5, 1998
Steven A. Schultz

/s/ WAYNE E. STUENKEL
------------------------------------------- Director May 5, 1998
Wayne E. Stuenkel

*By: /s/ NANCY KANE
--------------------------------------
Nancy Kane
Attorney-in-Fact May 5, 1998

EXHIBIT INDEX

1.A. (5)(a) Form of Contract.
(g) Term Rider for Covered Insured.
(h) Policy Value Credit Endorsement.
(10) Contract Application.
5. See Exhibit 27.
9. Consent of Coopers & Lybrand L.L.P.
10. Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) describing issue, transfer and redemption
procedures.
11. Powers of Attorney.
27. Financial Data Schedules.