Prospectus

497 1 sd-497e.htm SEPTEMBER 2002 SUPPLEMENT Prospectus

SECUREDESIGNS(SM) VARIABLE ANNUITY

INDIVIDUAL FLEXIBLE PURCHASE PAYMENT
DEFERRED VARIABLE ANNUITY CONTRACT

ISSUED BY: MAILING ADDRESS:
SECURITY BENEFIT LIFE SECURITY BENEFIT LIFE
INSURANCE COMPANY INSURANCE COMPANY
ONE SECURITY BENEFIT PLACE P.O. BOX 750497
TOPEKA, KANSAS 66636-0001 TOPEKA, KANSAS 66675-0497
1-800-888-2461
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This Prospectus describes the SecureDesigns Variable Annuity--a flexible
purchase payment deferred variable annuity contract (the "Contract") offered by
Security Benefit Life Insurance Company ("Security Benefit"). The Contract is
available for individuals as a non-tax qualified retirement plan. The Contract
is also available for individuals in connection with a retirement plan qualified
under Section 403(b), 408, or 408A of the Internal Revenue Code. The Contract is
designed to give you flexibility in planning for retirement and other financial
goals.

You may allocate your purchase payments to one or more of the Subaccounts
that comprise a separate account of Security Benefit called the SBL Variable
Annuity Account XIV, or to the Fixed Account. Each Subaccount invests in a
corresponding Series of the SBL Fund. The Subaccounts currently available under
the Contract are:

o Equity (formerly Growth) o Managed Asset Allocation
o Large Cap Value o Equity Income
(formerly Growth-Income) o High Yield
o Money Market o Small Cap Value
o Global (formerly Worldwide Equity) o Social Awareness
o Diversified Income (formerly o Technology
High Grade Income) o Mid Cap Value (formerly Value)
o Large Cap Growth o Main Street Growth and Income®
o Enhanced Index o Small Cap Growth
o International (formerly Small Cap)
o Mid Cap Growth (formerly Mid Cap) o Select 25

Amounts that you allocate to the Subaccounts under a Contract will vary based
on investment performance of the Subaccounts. No minimum amount of Contract
Value is guaranteed.

Amounts allocated to the Fixed Account earn interest at rates that are paid
by Security Benefit as described in "The Fixed Account," page 31. Contract Value
in the Fixed Account is guaranteed by Security Benefit.

When you are ready to receive annuity payments, the Contract provides several
options for annuity payments. See "Annuity Options," page 30.

This Prospectus concisely sets forth information about the Contract and the
Separate Account that you should know before purchasing the Contract. The
"Statement of Additional Information," dated May 1, 2002, which has been filed
with the Securities and Exchange Commission ("SEC") contains certain additional
information. The Statement of Additional Information, as it may be supplemented
from time to time, is incorporated by reference into this Prospectus and is
available at no charge, by writing Security Benefit at One Security Benefit
Place, Topeka, Kansas 66636 or by calling 1-800-888-2461. The table of contents
of the Statement of Additional Information is set forth on page 45 of this
Prospectus.

The SEC maintains a web site (http://www.sec.gov) that contains the Statement
of Additional Information, material incorporated by reference and other
information regarding companies that file electronically with the SEC.

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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS ACCOMPANIED BY THE CURRENT PROSPECTUS FOR THE SBL FUND.
YOU SHOULD READ THE PROSPECTUSES CAREFULLY AND RETAIN THEM FOR FUTURE REFERENCE.

EXPENSES FOR THIS CONTRACT, IF PURCHASED WITH AN EXTRA CREDIT RIDER, MAY BE
HIGHER THAN EXPENSES FOR A CONTRACT WITHOUT AN EXTRA CREDIT RIDER. THE AMOUNT OF
CREDIT ENHANCEMENT MAY BE MORE THAN OFFSET BY ANY ADDITIONAL FEES AND CHARGES.

THE CONTRACT IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR GUARANTEED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THE
VALUE OF YOUR CONTRACT CAN GO UP AND DOWN AND YOU COULD LOSE MONEY.

DATE: MAY 1, 2002 AS SUPPLEMENTED SEPTEMBER 10, 2002

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The variable annuity covered by this Prospectus is the subject of a pending
patent application in the United States Patent and Trademark Office.
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TABLE OF CONTENTS

Page

DEFINITIONS............................................................... 4

SUMMARY................................................................... 5
PURPOSE OF THE CONTRACT................................................ 5
THE SEPARATE ACCOUNT AND SBL FUND...................................... 5
FIXED ACCOUNT.......................................................... 5
PURCHASE PAYMENTS...................................................... 5
CONTRACT BENEFITS...................................................... 5
FREE-LOOK RIGHT........................................................ 5
CHARGES AND DEDUCTIONS................................................. 5
Contingent Deferred Sales Charge..................................... 6
Mortality and Expense Risk Charge.................................... 6
Optional Rider Charges............................................... 6
Administration Charge................................................ 8
Account Administration Charge........................................ 8
Premium Tax Charge................................................... 8
Other Expenses....................................................... 8
CONTACTING SECURITY BENEFIT............................................ 8

EXPENSE TABLE............................................................. 9
CONTRACTUAL EXPENSES................................................... 9
ANNUAL SEPARATE ACCOUNT EXPENSES....................................... 9
OPTIONAL RIDER EXPENSES................................................ 9
ANNUAL SBL FUND EXPENSES............................................... 10
EXAMPLES............................................................... 10

CONDENSED FINANCIAL INFORMATION........................................... 11

INFORMATION ABOUT SECURITY BENEFIT, THE SEPARATE ACCOUNT, AND SBL FUND.... 13
SECURITY BENEFIT LIFE INSURANCE COMPANY................................ 13
PUBLISHED RATINGS...................................................... 13
SEPARATE ACCOUNT....................................................... 13
SBL FUND............................................................... 13
SERIES A (EQUITY SERIES)............................................... 14
SERIES B (LARGE CAP VALUE SERIES)...................................... 14
SERIES C (MONEY MARKET SERIES)......................................... 14
SERIES D (GLOBAL SERIES)............................................... 14
SERIES E ( DIVERSIFIED INCOME SERIES).................................. 14
SERIES G (LARGE CAP GROWTH SERIES)..................................... 14
SERIES H (ENHANCED INDEX SERIES)....................................... 14
SERIES I (INTERNATIONAL SERIES)........................................ 14
SERIES J (MID CAP GROWTH SERIES)....................................... 15
SERIES N (MANAGED ASSET ALLOCATION SERIES)............................. 15
SERIES O (EQUITY INCOME SERIES)........................................ 15
SERIES P (HIGH YIELD SERIES)........................................... 15
SERIES Q (SMALL CAP VALUE SERIES)...................................... 15
SERIES S (SOCIAL AWARENESS SERIES)..................................... 15
SERIES T (TECHNOLOGY SERIES)........................................... 15
SERIES V (MID CAP VALUE SERIES)........................................ 15
SERIES W (MAIN STREET GROWTH AND INCOME® SERIES)....................... 15
SERIES X (SMALL CAP GROWTH SERIES)..................................... 15
SERIES Y (SELECT 25 SERIES)............................................ 15
THE INVESTMENT ADVISER................................................. 15

THE CONTRACT.............................................................. 16
GENERAL................................................................ 16
APPLICATION FOR A CONTRACT............................................. 16
PURCHASE PAYMENTS...................................................... 16
ALLOCATION OF PURCHASE PAYMENTS........................................ 17
DOLLAR COST AVERAGING OPTION........................................... 17
ASSET REALLOCATION OPTION.............................................. 18
TRANSFERS OF CONTRACT VALUE............................................ 18
CONTRACT VALUE......................................................... 19
DETERMINATION OF CONTRACT VALUE........................................ 19
FULL AND PARTIAL WITHDRAWALS........................................... 19
SYSTEMATIC WITHDRAWALS................................................. 20
FREE-LOOK RIGHT........................................................ 21
DEATH BENEFIT.......................................................... 21
DISTRIBUTION REQUIREMENTS.............................................. 22
DEATH OF THE ANNUITANT................................................. 22

CHARGES AND DEDUCTIONS.................................................... 22
CONTINGENT DEFERRED SALES CHARGE....................................... 22
MORTALITY AND EXPENSE RISK CHARGE...................................... 23
ADMINISTRATION CHARGE.................................................. 23
ACCOUNT ADMINISTRATION CHARGE.......................................... 23
PREMIUM TAX CHARGE..................................................... 23
OTHER CHARGES.......................................................... 24
VARIATIONS IN CHARGES.................................................. 24
GUARANTEE OF CERTAIN CHARGES........................................... 24
SBL FUND EXPENSES...................................................... 24

OPTIONAL RIDER CHARGES.................................................... 24
GUARANTEED MINIMUM INCOME BENEFIT...................................... 24
ANNUAL STEPPED UP DEATH BENEFIT........................................ 25
GUARANTEED GROWTH DEATH BENEFIT........................................ 25
COMBINED ANNUAL STEPPED UP AND GUARANTEED GROWTH DEATH BENEFIT......... 26
ENHANCED DEATH BENEFIT................................................. 26
COMBINED ENHANCED AND ANNUAL STEPPED UP DEATH BENEFIT.................. 26
COMBINED ENHANCED AND GUARANTEED GROWTH DEATH BENEFIT.................. 27
COMBINED ENHANCED, ANNUAL STEPPED UP,
AND GUARANTEED GROWTH DEATH BENEFIT.................................. 27
EXTRA CREDIT........................................................... 27
WAIVER OF WITHDRAWAL CHARGE............................................ 28
ALTERNATIVE WITHDRAWAL CHARGE.......................................... 29

ANNUITY PERIOD............................................................ 29
GENERAL................................................................ 29
ANNUITY OPTIONS........................................................ 30
Option 1--Life Income................................................ 30
Option 2--Life Income with Guaranteed
Payments of 5, 10, 15 or 20 Years.................................. 30
Option 3--Life with Installment or Unit Refund Option................ 30
Option 4--Joint and Last Survivor.................................... 30
Option 5--Payments for Specified Period.............................. 30
Option 6--Payments of a Specified Amount............................. 30
Option 7--Period Certain............................................. 30
Option 8--Joint and Contingent Survivor Option....................... 30
Value of Variable Annuity Payments: Assumed Interest Rate............ 30
SELECTION OF AN OPTION................................................. 31

THE FIXED ACCOUNT......................................................... 31
INTEREST............................................................... 32
DEATH BENEFIT.......................................................... 32
CONTRACT CHARGES....................................................... 32
TRANSFERS AND WITHDRAWALS FROM THE FIXED ACCOUNT....................... 32
PAYMENTS FROM THE FIXED ACCOUNT........................................ 33

MORE ABOUT THE CONTRACT................................................... 33
OWNERSHIP.............................................................. 33
Joint Owners......................................................... 33
DESIGNATION AND CHANGE OF BENEFICIARY.................................. 33
DIVIDENDS.............................................................. 34
PAYMENTS FROM THE SEPARATE ACCOUNT..................................... 34
PROOF OF AGE AND SURVIVAL.............................................. 34
MISSTATEMENTS.......................................................... 34
LOANS.................................................................. 34
RESTRICTIONS ON WITHDRAWALS FROM QUALIFIED PLANS....................... 35

FEDERAL TAX MATTERS....................................................... 36
INTRODUCTION........................................................... 36
TAX STATUS OF SECURITY BENEFIT AND THE SEPARATE ACCOUNT................ 36
General.............................................................. 36
Charge for Security Benefit Taxes.................................... 36
Diversification Standards............................................ 36
INCOME TAXATION OF ANNUITIES IN GENERAL--NON-QUALIFIED PLANS........... 37
Surrenders or Withdrawals Prior to the Annuity Start Date............ 37
Surrenders or Withdrawals on or after the Annuity Start Date......... 37
Penalty Tax on Certain Surrenders and Withdrawals.................... 37
ADDITIONAL CONSIDERATIONS.............................................. 38
Distribution-at-Death Rules.......................................... 38
Gift of Annuity Contracts............................................ 38
Contracts Owned by Non-Natural Persons............................... 38
Multiple Contract Rule............................................... 38
Possible Tax Changes................................................. 39
Transfers, Assignments or Exchanges of a Contract.................... 39
QUALIFIED PLANS........................................................ 39
Section 403(b)....................................................... 39
Section 408 and 408A................................................. 40
Rollovers............................................................ 41
Tax Penalties........................................................ 41
Withholding.......................................................... 41

OTHER INFORMATION......................................................... 42
VOTING OF SBL FUND SHARES.............................................. 42
SUBSTITUTION OF INVESTMENTS............................................ 42
CHANGES TO COMPLY WITH LAW AND AMENDMENTS.............................. 43
REPORTS TO OWNERS...................................................... 43
ELECTRONIC TRANSFER PRIVILEGES......................................... 43
LEGAL PROCEEDINGS...................................................... 43
LEGAL MATTERS.......................................................... 43

PERFORMANCE INFORMATION................................................... 43

ADDITIONAL INFORMATION.................................................... 44
REGISTRATION STATEMENT................................................. 44
FINANCIAL STATEMENTS................................................... 45

STATEMENT OF ADDITIONAL INFORMATION....................................... 45

APPENDIX A - IRA Disclosure Statement
APPENDIX B - Roth IRA Disclosure Statement

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YOU MAY NOT BE ABLE TO PURCHASE THE CONTRACT IN YOUR STATE. YOU SHOULD NOT
CONSIDER THIS PROSPECTUS TO BE AN OFFERING IF THE CONTRACT MAY NOT BE LAWFULLY
OFFERED IN YOUR STATE. YOU SHOULD ONLY RELY UPON INFORMATION CONTAINED IN THIS
PROSPECTUS OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT.
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DEFINITIONS

Various terms commonly used in this Prospectus are defined as follows:

ACCUMULATION UNIT -- A unit of measure used to calculate Contract Value.

ANNUITANT -- The person that you designate on whose life annuity payments may
be determined. If you designate Joint Annuitants, "Annuitant" means both
Annuitants unless otherwise stated.

ANNUITY -- A series of periodic income payments made by Security Benefit to
an Annuitant, Joint Annuitant, or Beneficiary during the period specified in the
Annuity Option.

ANNUITY OPTIONS -- Options under the Contract that prescribe the provisions
under which a series of annuity payments are made.

ANNUITY PERIOD -- The period beginning on the Annuity Start Date during which
annuity payments are made.

ANNUITY UNIT -- A unit of measure used to calculate variable annuity payments
under Options 1 through 4, 7 and 8.

ANNUITY START DATE -- The date when annuity payments begin as elected by the
Owner.

AUTOMATIC INVESTMENT PROGRAM -- A program pursuant to which purchase payments
are automatically paid from your bank account on a specified day of each month
or a salary reduction agreement.

CONTRACT DATE -- The date the Contract begins as shown in your Contract.
Annual Contract anniversaries are measured from the Contract Date. It is usually
the date that your initial purchase payment is credited to the Contract.

CONTRACT DEBT -- The unpaid loan balance including loan interest.

CONTRACT VALUE -- The total value of your Contract which includes amounts
allocated to the Subaccounts and the Fixed Account as well as any amount set
aside in the loan account to secure loans as of any Valuation Date.

CONTRACT YEAR -- Each twelve-month period measured from the Contract Date.

CREDIT ENHANCEMENT -- An amount added to Contract Value under the Extra
Credit Rider.

DESIGNATED BENEFICIARY -- The person having the right to the death benefit,
if any, payable upon the death of the Owner or the Joint Owner prior to the
Annuity Start Date. The Designated Beneficiary is the first person on the
following list who is alive on the date of death of the Owner or the Joint
Owner: the Owner; the Joint Owner; the Primary Beneficiary; the Secondary
Beneficiary; the Annuitant; or if none of the above are alive, the Owner's
Estate.

FIXED ACCOUNT -- An account that is part of Security Benefit's General
Account to which you may allocate all or a portion of your Contract Value to be
held for accumulation at fixed rates of interest (which may not be less than 3%)
declared periodically by Security Benefit.

GENERAL ACCOUNT -- All assets of Security Benefit other than those allocated
to the Separate Account or to any other separate account of Security Benefit.

HOME OFFICE-- The Annuity Administration Department of Security Benefit, P.O.
Box 750497, Topeka, Kansas 66675-0497.

OWNER -- The person entitled to the ownership rights under the Contract and
in whose name the Contract is issued.

PARTICIPANT -- A Participant under a Qualified Plan.

PURCHASE PAYMENT -- An amount paid to Security Benefit as consideration for
the Contract.

SBL FUND -- A diversified, open-end management investment company commonly
referred to as a mutual fund.

SEPARATE ACCOUNT -- The Variable Annuity Account XIV, a separate account of
Security Benefit that consists of accounts, referred to as Subaccounts, each of
which invests in a corresponding Series of the SBL Fund.

SUBACCOUNT-- A division of the Separate Account of Security Benefit which
invests in a corresponding series of the SBL Fund. Currently, 19 Subaccounts are
available under the Contract.

VALUATION DATE -- Each date on which the Separate Account is valued, which
currently includes each day that the New York Stock Exchange is open for
trading. The New York Stock Exchange is closed on weekends and on the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.

VALUATION PERIOD -- A period used in measuring the investment experience of
each Subaccount of the Separate Account. The Valuation Period begins at the
close of one Valuation Date and ends at the close of the next succeeding
Valuation Date.

WITHDRAWAL VALUE -- The amount you will receive upon full withdrawal of the
Contract. It is equal to Contract Value less any Contract Debt, any applicable
withdrawal charges, any pro rata account administration charge and any
uncollected premium taxes. If an Extra Credit Rider is in effect, Contract Value
will also be reduced by any Credit Enhancements that have not yet vested.

SUMMARY

This summary provides a brief overview of the more significant aspects of the
Contract. Further detail is provided in this Prospectus, the Statement of
Additional Information, and the Contract. Unless the context indicates
otherwise, the discussion in this summary and the remainder of the Prospectus
relates to the portion of the Contract involving the Separate Account. The Fixed
Account is briefly described under "The Fixed Account," page 31 and in the
Contract.

PURPOSE OF THE CONTRACT -- The flexible purchase payment deferred variable
annuity contract ("the Contract") described in this Prospectus is designed to
give you flexibility in planning for retirement and other financial goals.

You may purchase the Contract as a non-tax qualified retirement plan for an
individual ("Non-Qualified Plan"). You may also purchase the Contract, on an
individual basis, in connection with a retirement plan qualified under Section
403(b), 408, or 408A of the Internal Revenue Code of 1986, as amended
("Qualified Plan").

THE SEPARATE ACCOUNT AND SBL FUND -- The Separate Account is currently divided
into 19 accounts referred to as Subaccounts. See "Separate Account," page 13.
Each Subaccount invests exclusively in shares of a corresponding Series of the
SBL Fund. The Series of SBL Fund, each of which has a different investment
objective or objectives, are as follows: Equity Series, Large Cap Value Series,
Money Market Series, Global Series, Diversified Income Series, Large Cap Growth
Series, Enhanced Index Series, International Series, Mid Cap Growth Series,
Managed Asset Allocation Series, Equity Income Series, High Yield Series, Small
Cap Value Series, Social Awareness Series, Technology Series, Mid Cap Value
Series, Main Street Growth and Income® Series, Small Cap Growth Series and
Select 25 Series. See "SBL Fund," page 13.

You may allocate all or part of your purchase payments to the Subaccounts.
Amounts that you allocate to the Subaccounts will increase or decrease in dollar
value depending on the investment performance of the Series of SBL Fund in which
such Subaccount invests. You bear the investment risk for amounts allocated to a
Subaccount.

FIXED ACCOUNT -- You may allocate all or part of your purchase payments to the
Fixed Account, which is part of Security Benefit's General Account. Amounts that
you allocate to the Fixed Account earn interest at rates determined at the
discretion of Security Benefit and are guaranteed to be at least an effective
annual rate of 3%. See "The Fixed Account," page 31.

PURCHASE PAYMENTS -- Your initial purchase payment must be at least $10,000.
Thereafter, you may choose the amount and frequency of purchase payments, except
that the minimum subsequent purchase payment is $500 ($50 under an Automatic
Investment Program). See "Purchase Payments," page 16.

CONTRACT BENEFITS -- You may transfer Contract Value among the Subaccounts and
to and from the Fixed Account, subject to certain restrictions as described in
"The Contract," page 16 and "The Fixed Account," page 31.

At any time before the Annuity Start Date, you may surrender a Contract for
its Withdrawal Value, and may make partial withdrawals, including systematic
withdrawals, from Contract Value, subject to certain restrictions described in
"The Fixed Account," page 31. See "Full and Partial Withdrawals," page 19 and
"Federal Tax Matters," page 36 for more information about withdrawals, including
the 10% penalty tax that may be imposed upon full and partial withdrawals
(including systematic withdrawals) made prior to the Owner attaining age 59 1/2.

The Contract provides for a death benefit upon the death of the Owner prior
to the Annuity Start Date. See "Death Benefit," page 21 for more information.
The Contract provides for several Annuity Options on either a variable basis, a
fixed basis, or both. Security Benefit guarantees annuity payments under the
fixed Annuity Options. See "Annuity Period," page 29.

FREE-LOOK RIGHT -- You may return the Contract within the Free-Look Period,
which is generally a ten-day period beginning when you receive the Contract. In
this event, Security Benefit will refund to you purchase payments allocated to
the Fixed Account (not including any Credit Enhancements if an Extra Credit
Rider was in effect). Security Benefit will also refund as of the Valuation Date
on which we receive your Contract any Contract Value allocated to the
Subaccounts, plus any charges deducted from such Contract Value, less the
Contract Value attributable to any Credit Enhancements.

Some states' laws require us to refund your purchase payments instead of your
Contract Value. If your Contract is delivered in one of those states and you
return your Contract during the Free-Look Period, Security Benefit will refund
purchase payments allocated to the Subaccounts rather than Contract Value.

CHARGES AND DEDUCTIONS -- Security Benefit does not deduct sales load from
purchase payments before allocating them to your Contract Value. Certain charges
will be deducted in connection with the Contract as described below.

CONTINGENT DEFERRED SALES CHARGE. If you withdraw Contract Value, Security
Benefit may deduct a contingent deferred sales charge (which may also be
referred to as a withdrawal charge). The withdrawal charge will be waived on
withdrawals to the extent that total withdrawals in a Contract Year, including
systematic withdrawals, do not exceed the Free Withdrawal amount defined as
follows.

The Free Withdrawal amount is equal in the first Contract Year, to 10% of
purchase payments, excluding any Credit Enhancements, made during the year and,
in any subsequent Contract Year, to 10% of Contract Value as of the first day of
that Contract Year. The withdrawal charge applies to the portion of any
withdrawal consisting of purchase payments that exceeds the Free Withdrawal
amount. The withdrawal charge does not apply to withdrawals of earnings.

The amount of the charge will depend on how long your purchase payments have
been held under the Contract. Each purchase payment you make is considered to
have a certain "age," depending on the length of time since the purchase payment
was effective. A purchase payment is "age one" in the year beginning on the date
the purchase payment is received by Security Benefit and increases in age each
year thereafter. The withdrawal charge is calculated according to the following
schedule:

--------------------------------------
PURCHASE PAYMENT AGE WITHDRAWAL
(IN YEARS) CHARGE
--------------------------------------
1 7%
2 7%
3 6%
4 5%
5 4%
6 3%
7 2%
8 and over 0%
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The amount of the withdrawal charge assessed against your Contract will never
exceed 7% of purchase payments paid under the Contract. In addition, no
withdrawal charge will be assessed upon: (1) payment of death benefit proceeds,
or (2) annuity options that provide for payments for life, or a period of at
least seven years. See "Contingent Deferred Sales Charge," page 22.

MORTALITY AND EXPENSE RISK CHARGE. Security Benefit deducts a charge for
mortality and expense risks assumed by Security Benefit under the Contract.
Security Benefit deducts a daily minimum charge equal to 0.60%, on an annual
basis, of each Subaccount's average daily net assets. If you are subject to
mortality and expense risk charge above the minimum charge, Security Benefit
deducts it from your Contract Value on a monthly basis. The mortality and
expense risk charge amount is determined each month by reference to the amount
of your Contract Value, as set forth in the table below.

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ANNUAL MORTALITY AND
CONTRACT VALUE EXPENSE RISK CHARGE
------------------------------------------------------------------
Less than $25,000 ............................ 0.85%
At least $25,000 but less than $100,000 ...... 0.70%
$100,000 or more ............................. 0.60%
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During the Annuity Period, the mortality and expense risk charge is 1.25% under
Options 1 through 4, 7 and 8, in lieu of the amounts set forth above. See
"Mortality and Expense Risk Charge," page 23.

OPTIONAL RIDER CHARGES. Security Benefit deducts a monthly charge from
Contract Value for certain Riders that may be elected by the Owner. Security
Benefit makes each Rider, available only at issue, and you may not terminate a
Rider after issue, unless otherwise stated. The amount of the charge is equal to
a percentage, on an annual basis, of your Contract Value. Each Rider and its
charge are listed below. A RIDER MAY NOT BE AVAILABLE IN ALL STATES. You may not
select Riders with a total charge that exceeds 1.00% of Contract Value. As an
example, you may not purchase the Extra Credit Rider at 5% with a cost of 0.75%
and the Guaranteed Minimum Income Benefit Rider at 5% with a cost of 0.30%,
because the total cost of such Riders, 1.05%, would exceed the maximum Rider
charge of 1.00%.

GUARANTEED MINIMUM INCOME BENEFIT. This Rider makes available a minimum
amount for the purchase of a fixed Annuity ("Minimum Income Benefit"). The
Minimum Income Benefit is equal to Purchase Payments, net of any Premium tax,
less an adjustment for Withdrawals, increased at an annual effective rate of
interest of 3% or 5%, as elected in the application. The Minimum Income Benefit
may be applied to purchase a fixed Annuity under Option 2, life income with a
10-year period certain, or Option 4, joint and last survivor with a 10-year
period certain, within 30 days of any Contract Anniversary following the 10th
Contract Anniversary. The charge for this Rider is as follows:

-------------------------------
INTEREST RATE RIDER CHARGE
-------------------------------
3% 0.15%
5% 0.30%
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See "Guaranteed Minimum Income Benefit," page 24.

ANNUAL STEPPED UP DEATH BENEFIT. This Rider makes available an enhanced death
benefit upon the death of the Owner or any Joint Owner prior to the Annuity
Start Date. The death benefit under this Rider will be the greatest of: (1)
purchase payments, less any withdrawals and withdrawal charges; (2) Contract
Value on the date due proof of the Owner's death and instructions regarding
payment are received by Security Benefit; or (3) the Stepped Up Death Benefit.
The Stepped Up Death Benefit is the largest result for the following calculation
as of the date of receipt of instructions regarding payment of the death
benefit:

o The largest Contract Value on any Contract Anniversary that occurs prior to
the oldest Owner attaining age 81, plus

o Any purchase payments received by Security Benefit since the applicable
Contract Anniversary; less

o An adjustment for any withdrawals and withdrawal charges made since the
applicable anniversary.

The charge for this Rider is 0.20%. See "Annual Stepped Up Death Benefit," page
25.

GUARANTEED GROWTH DEATH BENEFIT. This Rider makes available an enhanced death
benefit upon the death of the Owner or any Joint Owner prior to the Annuity
Start Date. The death benefit under this Rider will be the greatest of: (1)
purchase payments, less any withdrawals and withdrawal charges; (2) Contract
Value on the date due proof of the Owner's death and instructions regarding
payment are received by Security Benefit; or (3) the Guaranteed Growth Death
Benefit. The Guaranteed Growth Death Benefit is an amount equal to purchase
payments, net of any premium tax, less an adjustment for any withdrawals,
increased at an annual effective rate of 3%, 5%, 6% or 7%, as elected in the
application. The charge for this Rider is as follows:

-------------------------------
INTEREST RATE RIDER CHARGE
-------------------------------
3% 0.10%
5% 0.20%
6% 0.25%
7% 0.30%
-------------------------------

See "Guaranteed Growth Death Benefit," page 25.

COMBINED ANNUAL STEPPED UP AND GUARANTEED GROWTH DEATH BENEFIT. This rider
makes available an enhanced death benefit upon the death of the Owner or any
Joint Owner prior to the Annuity Start Date. The death benefit under this Rider
will be the greatest of: (1) purchase payments, less any withdrawals and
withdrawal charges; (2) Contract Value on the date due proof of the Owner's
death and instructions regarding payment are received by Security Benefit; (3)
the Annual Stepped Up Death Benefit (as described above); or (4) the Guaranteed
Growth Death Benefit at 5% (as described above). The charge for this Rider is
0.25%. See "Combined Annual Stepped Up and Guaranteed Growth Death Benefit,"
page 26.

ENHANCED DEATH BENEFIT. This Rider makes available an enhanced death benefit
upon the death of the Owner prior to the Annuity Start Date. The death benefit
under this Rider will be the greater of: (1) purchase payments, less any
withdrawals and withdrawal charges; or (2) Contract Value on the date due proof
of the Owner's death and instructions regarding payment are received by Security
Benefit, plus the Enhanced Death Benefit. The Enhanced Death Benefit for a
Contract issued prior to the Owner attaining age 70 is the lesser of: (1) 50% of
Contract gain; or (2) 50% of adjusted purchase payments. For a Contract issued
after the Owner has attained age 70 or older, the Enhanced Death Benefit is the
lesser of: (1) 25% of Contract gain; or (2) 25% of adjusted purchase payments.
Contract gain is equal to Contract Value as of the date due proof of death and
instructions with regard to payment are received less adjusted purchase
payments. Adjusted purchase payments are equal to all purchase payments made to
the Contract adjusted for withdrawals and any applicable premium tax. This Rider
is available only if the age of the Owner at the time the Contract is issued is
age 79 or younger. The charge for this Rider is 0.25%. See "Enhanced Death
Benefit," page 26.

COMBINED ENHANCED AND ANNUAL STEPPED UP DEATH BENEFIT. This Rider makes
available an enhanced death benefit upon the death of the Owner prior to the
Annuity Start Date. The death benefit under this Rider will be the greatest of:
(1) purchase payments, less any withdrawals and withdrawal charges; (2) Contract
Value on the date due proof of the Owner's death and instructions regarding
payment are received by Security Benefit, plus the Enhanced Death Benefit (as
described above); or (3) the Annual Stepped Up Death Benefit (as described
above), plus the Enhanced Death Benefit. The charge for this Rider is 0.35%. See
"Combined Enhanced and Annual Stepped Up Death Benefit," page 26.

COMBINED ENHANCED AND GUARANTEED GROWTH DEATH BENEFIT. This Rider makes
available an enhanced death benefit upon the death of the Owner prior to the
Annuity Start Date. The death benefit under this Rider will be the greatest of:
(1) purchase payments, less any withdrawals and withdrawal charges; (2) Contract
Value on the date due proof of the Owner's death and instructions regarding
payment are received by Security Benefit, plus the Enhanced Death Benefit (as
described above); or (3) the Guaranteed Growth Death Benefit at 5% (as described
above), plus the Enhanced Death Benefit. The charge for this Rider is 0.35%. See
"Combined Enhanced and Guaranteed Growth Death Benefit," page 27.

COMBINED ENHANCED, ANNUAL STEPPED UP, AND GUARANTEED GROWTH DEATH BENEFIT.
This Rider makes available an enhanced death benefit upon the death of the Owner
prior to the Annuity Start Date. The death benefit under this Rider will be the
greatest of: (1) purchase payments, less any withdrawals and withdrawal charges;
(2) Contract Value on the date due proof of the Owner's death and instructions
regarding payment are received by Security Benefit, plus the Enhanced Death
Benefit (as described above); (3) the Annual Stepped Up Death Benefit (as
described above), plus the Enhanced Death Benefit; or (4) the Guaranteed Growth
Death Benefit at 5% (as described above), plus the Enhanced Death Benefit. The
charge for this Rider is 0.40%. See "Combined Enhanced, Annual Stepped Up, and
Guaranteed Growth Death Benefit," page 27.

EXTRA CREDIT. This Rider makes available a Credit Enhancement, which is an
amount added to your Contract Value by Security Benefit. You may purchase this
Rider only at issue. Security Benefit will add a Credit Enhancement equal to 3%,
4% or 5% of purchase payments, as elected in the application, for each purchase
payment made in the first Contract Year.

In the event of a full or partial withdrawal, Security Benefit will recapture
all or part of any Credit Enhancement that has not yet vested to the extent that
total withdrawals in a Contract Year, including systematic withdrawals, exceed
the Free Withdrawal amount. The Free Withdrawal amount is equal in the first
Contract Year, to 10% of purchase payments, excluding any Credit Enhancements,
made during the year and, for any subsequent Contract Year, to 10% of Contract
Value as of the first day of that Contract Year.

Security Benefit will deduct the charge for this Rider during the seven-year
period beginning on the Contract Date and you may not terminate this Rider
during that period. The charge for this Rider varies based upon the Credit
Enhancement rate selected as set forth below:

--------------------------------------------
CREDIT ENHANCEMENT RATE RIDER CHARGE
--------------------------------------------
3% 0.40%
4% 0.55%
5% 0.70%
--------------------------------------------

See "Extra Credit," page 27.

WAIVER OF WITHDRAWAL CHARGE. This Rider makes available a waiver of
withdrawal charge in the event of your confinement to a nursing home, terminal
illness, or total and permanent disability prior to age 65. If you have also
purchased an Extra Credit Rider you will forfeit all or part of any Credit
Enhancements applied during the 12 months preceding any withdrawal pursuant to
this Rider. The charge for this Rider is 0.05%. See "Waiver of Withdrawal
Charge," page 28.

ALTERNATIVE WITHDRAWAL CHARGE. This Rider makes available an alternative
withdrawal charge schedule. You may select one of the following schedules.

-----------------------------------------------------
0-YEAR SCHEDULE 3-YEAR SCHEDULE
------------------------- -------------------------
PURCHASE PURCHASE
PAYMENT AGE WITHDRAWAL PAYMENT AGE WITHDRAWAL
(IN YEARS) CHARGE (IN YEARS) CHARGE
-----------------------------------------------------
0 and over 0% 1 7%
2 6%
3 5%
4 and over 0%
-----------------------------------------------------

The charge for this Rider is 0.50% if you select the 0-year schedule and 0.40%
if you select the 3-year schedule. If you have also purchased an Extra Credit
Rider, you may forfeit all or part of any Credit Enhancement in the event of a
full or partial withdrawal. See "Alternative Withdrawal Charge," page 29.

ADMINISTRATION CHARGE. Security Benefit deducts a daily administration charge
equal to an annual rate of 0.15% of each Subaccount's average daily net assets.
See "Administration Charge," page 23.

ACCOUNT ADMINISTRATION CHARGE. Security Benefit deducts an account charge of
$30.00 at each Contract Anniversary. Security Benefit will waive the charge if
your Contract Value is $50,000 or more on the date the charge is to be deducted.
See "Account Administration Charge," page 23.

PREMIUM TAX CHARGE. Security Benefit assesses a premium tax charge to
reimburse itself for any premium taxes that it incurs with respect to this
Contract. This charge will usually be deducted on the Annuity Start Date or upon
a full or partial withdrawal if a premium tax was incurred by Security Benefit
and is not refundable. Security Benefit reserves the right to deduct such taxes
when due or anytime thereafter. Premium tax rates currently range from 0% to
3.5%. See "Premium Tax Charge," page 23.

OTHER EXPENSES. Security Benefit pays the operating expenses of the Separate
Account. Investment advisory fees and operating expenses of SBL Fund are paid by
the Fund and are reflected in the net asset value of the Fund shares. The Owner
indirectly bears a pro rata portion of such fees and expenses. See the
prospectus for SBL Fund for more information.

CONTACTING SECURITY BENEFIT -- You should direct all written requests, notices,
and forms required by the Contract, and any questions or inquiries to Security
Benefit Life Insurance Company, P.O. Box 750497, Topeka, Kansas 66675-0497 or by
phone by calling (785) 438-3112 or 1-800-888-2461, extension 3112.

EXPENSE TABLE

The purpose of this table is to assist you in understanding the various costs
and expenses that you will bear directly and indirectly if you allocate Contract
Value to the Subaccounts. The table reflects any contractual charges, expenses
of the Separate Account, optional Rider charges, and charges and expenses of SBL
Fund. The table does not reflect premium taxes that may be imposed by various
jurisdictions. See "Premium Tax Charge," page 23. The information contained in
the table is not generally applicable to amounts allocated to the Fixed Account.

For a complete description of a Contract's costs and expenses, see "Charges
and Deductions," page 22. For a more complete description of the SBL Fund's
costs and expenses, see the SBL Fund prospectus, which accompanies this
Prospectus.

================================================================================
CONTRACTUAL EXPENSES
--------------------------------------------------------------------------------
Sales Load on Purchase Payments ..................................... None
Contingent Deferred Sales Charge (as a percentage of
amount withdrawn attributable to Purchase Payments) .............. 7%(1)
Transfer Fee (per transfer) ......................................... None
Annual Account Administration Charge ................................ $30(2)
--------------------------------------------------------------------------------
1. The amount of the contingent deferred sales charge is determined by
reference to how long your purchase payments have been held under the
Contract. A free withdrawal is available in each Contract Year equal to (1)
10% of purchase payments, excluding any Credit Enhancements, in the first
Contract Year, and (2) 10% of Contract Value as of the beginning of the
Contract Year in each subsequent Contract Year. See "Full and Partial
Withdrawals," page 19 and "Contingent Deferred Sales Charge," page 22 for
more information.

2. A pro rata account administration charge is deducted (1) upon full
withdrawal of Contract Value; (2) upon the Annuity Start Date if one of
Annuity Options 1 through 4, 7 or 8 is elected; and (3) upon payment of a
death benefit. The account administration charge will be waived if your
Contract Value is $50,000 or more upon the date it is to be deducted.
================================================================================

================================================================================
ANNUAL SEPARATE ACCOUNT EXPENSES
(as a percentage of each Subaccount's average daily net assets)
--------------------------------------------------------------------------------
Annual Mortality and Expense Risk Charge ............................ 0.85%(1)
Annual Administration Charge ........................................ 0.15%
----
Total Separate Account Annual Expenses .............................. 1.00%
--------------------------------------------------------------------------------
1. The mortality and expense risk charge is reduced for larger Contracts as
follows: Less than $25,000 - 0.85%; At least $25,000 but less than $100,000
- 0.70%; $100,000 or more - 0.60%. The mortality and expense risk charge
during the Annuity Period is 1.25% for Annuity Options 1 through 4, 7 and 8.
================================================================================

================================================================================
OPTIONAL RIDER EXPENSES
(as a percentage of Contract Value)
--------------------------------------------------------------------------------
ANNUAL
INTEREST RIDER
RATE* CHARGE
--------------------------------------------------------------------------------
Guaranteed Minimum 3% 0.15%
Income Benefit Rider 5% 0.30%
--------------------------------------------------------------------------------
Annual Stepped Up Death Benefit Rider --- 0.20%
--------------------------------------------------------------------------------
Guaranteed Growth Death Benefit Rider 3% 0.10%
5% 0.20%
6% 0.25%
7% 0.30%
--------------------------------------------------------------------------------
Combined Annual Stepped Up Death Benefit Rider
and Guaranteed Growth Death Benefit Rider 5% 0.25%
--------------------------------------------------------------------------------
Enhanced Death Benefit Rider --- 0.25%
--------------------------------------------------------------------------------
Combined Enhanced and Annual
Stepped Up Death Benefit Rider --- 0.35%
--------------------------------------------------------------------------------
Combined Enhanced and Guaranteed
Growth Death Benefit Rider 5% 0.35%
--------------------------------------------------------------------------------
Combined Enhanced, Annual Stepped Up, and
Guaranteed Growth Death Benefit Rider 5% 0.40%
--------------------------------------------------------------------------------
Extra Credit Rider 3% 0.40%
4% 0.55%
5% 0.70%
--------------------------------------------------------------------------------
Waiver of Withdrawal Charge Rider --- 0.05%
--------------------------------------------------------------------------------
Alternative Withdrawal Charge Rider 0-Year 0.50%
3-Year 0.40%
--------------------------------------------------------------------------------
*Interest rate, or for the Alternative Withdrawal Charge Rider, the withdrawal
charge schedule.
================================================================================

EXAMPLES -- The examples presented below assume the maximum separate account and
optional rider charges of 2.00%. The examples show the expenses that you would
pay at the end of one, three, five or ten years. The information presented
applies if, at the end of those time periods, the Contract is (1) surrendered,
or (2) annuitized or otherwise not surrendered. The examples show expenses based
upon an allocation of $1,000 to each of the Subaccounts and a hypothetical
return of 5%. For those Contracts that do not elect the maximum amount of
Riders, or with Contract Value in excess of $25,000, the expenses would be
reduced.

YOU SHOULD NOT CONSIDER THE EXAMPLES BELOW A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. THE 5%
RETURN ASSUMED IN THE EXAMPLES IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ACTUAL RETURNS, WHICH MAY BE GREATER OR LESSER
THAN THE ASSUMED AMOUNT.

Example -- You would pay the expenses shown below assuming full withdrawal of
the Contract at the end of the applicable time period:

Example -- You would pay the expenses shown below assuming no withdrawals:

CONDENSED FINANCIAL INFORMATION

The following condensed financial information presents accumulation unit
values for the period January 12, 2001 (date of inception) through December 31,
2001, as well as ending accumulation units outstanding under each Subaccount.

================================================================================
2001
--------------------------------------------------------------------------------
EQUITY
Accumulation unit value:
Beginning of period................................................ $ 8.40
End of period...................................................... $ 7.36
Accumulation units outstanding at the end of period................... 176,676
--------------------------------------------------------------------------------
LARGE CAP VALUE
Accumulation unit value:
Beginning of period................................................ $ 9.77
End of period...................................................... $ 9.00
Accumulation units outstanding at the end of period................... 343,404
--------------------------------------------------------------------------------
MONEY MARKET
Accumulation unit value:
Beginning of period................................................ $10.16
End of period...................................................... $10.13
Accumulation units outstanding at the end of period................... 401,703
--------------------------------------------------------------------------------
GLOBAL
Accumulation unit value:
Beginning of period................................................ $ 9.09
End of period...................................................... $ 7.84
Accumulation units outstanding at the end of period................... 242,048
--------------------------------------------------------------------------------
DIVERSIFIED INCOME
Accumulation unit value:
Beginning of period................................................ $10.64
End of period...................................................... $10.89
Accumulation units outstanding at the end of period................... 416,745
--------------------------------------------------------------------------------
LARGE CAP GROWTH
Accumulation unit value:
Beginning of period................................................ $ 7.39
End of period...................................................... $ 6.33
Accumulation units outstanding at the end of period................... 180,104
--------------------------------------------------------------------------------
ENHANCED INDEX
Accumulation unit value:
Beginning of period................................................ $ 8.47
End of period...................................................... $ 7.31
Accumulation units outstanding at the end of period................... 192,600
--------------------------------------------------------------------------------
INTERNATIONAL
Accumulation unit value:
Beginning of period................................................ $ 8.32
End of period...................................................... $ 6.09
Accumulation units outstanding at the end of period................... 102,552
--------------------------------------------------------------------------------
MID CAP GROWTH
Accumulation unit value:
Beginning of period................................................ $ 9.68
End of period...................................................... $ 8.34
Accumulation units outstanding at the end of period................... 364,122
--------------------------------------------------------------------------------
GLOBAL STRATEGIC INCOME
Accumulation unit value:
Beginning of period................................................ $ 9.99
End of period...................................................... $10.17
Accumulation units outstanding at the end of period................... 53,912
--------------------------------------------------------------------------------
GLOBAL TOTAL RETURN
Accumulation unit value:
Beginning of period................................................ $ 8.99
End of period...................................................... $ 7.62
Accumulation units outstanding at the end of period................... 25,696
--------------------------------------------------------------------------------
MANAGED ASSET ALLOCATION
Accumulation unit value:
Beginning of period................................................ $ 9.47
End of period...................................................... $ 8.74
Accumulation units outstanding at the end of period................... 103,760
--------------------------------------------------------------------------------
EQUITY INCOME
Accumulation unit value:
Beginning of period................................................ $11.09
End of period...................................................... $10.87
Accumulation units outstanding at the end of period................... 287,273
--------------------------------------------------------------------------------
HIGH YIELD
Accumulation unit value:
Beginning of period................................................ $18.37
End of period...................................................... $18.41
Accumulation units outstanding at the end of period................... 47,057
--------------------------------------------------------------------------------
SMALL CAP VALUE
Accumulation unit value:
Beginning of period................................................ $10.29
End of period...................................................... $12.30
Accumulation units outstanding at the end of period................... 164,868
--------------------------------------------------------------------------------
SOCIAL AWARENESS
Accumulation unit value:
Beginning of period................................................ $ 8.02
End of period...................................................... $ 6.92
Accumulation units outstanding at the end of period................... 65,355
--------------------------------------------------------------------------------
TECHNOLOGY
Accumulation unit value:
Beginning of period................................................ $ 5.43
End of period...................................................... $ 4.37
Accumulation units outstanding at the end of period................... 103,185
--------------------------------------------------------------------------------
MID CAP VALUE
Accumulation unit value:
Beginning of period................................................ $11.13
End of period...................................................... $12.16
Accumulation units outstanding at the end of period................... 292,715
--------------------------------------------------------------------------------
MAIN STREET GROWTH AND INCOME®
Accumulation unit value:
Beginning of period................................................ $17.05
End of period...................................................... $15.21
Accumulation units outstanding at the end of period................... 142,304
--------------------------------------------------------------------------------
SMALL CAP GROWTH
Accumulation unit value:
Beginning of period................................................ $ 7.14
End of period...................................................... $ 5.40
Accumulation units outstanding at the end of period................... 234,506
--------------------------------------------------------------------------------
CAPITAL GROWTH
Accumulation unit value:
Beginning of period................................................ $ 7.50
End of period...................................................... $ 6.45
Accumulation units outstanding at the end of period................... 137,498
--------------------------------------------------------------------------------
SELECT 25
Accumulation unit value:
Beginning of period................................................ $ 8.30
End of period...................................................... $ 7.47
Accumulation units outstanding at the end of period................... 133,791
================================================================================

INFORMATION ABOUT SECURITY BENEFIT, THE SEPARATE ACCOUNT, AND SBL FUND

SECURITY BENEFIT LIFE INSURANCE COMPANY -- Security Benefit is a life insurance
company organized under the laws of the State of Kansas. It was organized
originally as a fraternal benefit society and commenced business February 22,
1892. It became a mutual life insurance company under its present name on
January 2, 1950.

On July 31, 1998, Security Benefit converted from a mutual life insurance
company to a stock life insurance company ultimately controlled by Security
Benefit Mutual Holding Company, a Kansas mutual holding company. Membership
interests of persons who were Owners as of July 31, 1998 became membership
interests in Security Benefit Mutual Holding Company as of that date, and
persons who acquire policies from Security Benefit after that date automatically
become members in the mutual holding company.

Security Benefit offers life insurance policies and annuity contracts, as
well as financial and retirement services. It is admitted to do business in the
District of Columbia, and in all states except New York. As of the end of 2001,
Security Benefit had total assets of approximately $7.9 billion. Together with
its subsidiaries, Security Benefit has total funds under management of
approximately $9.8 billion.

The Principal Underwriter for the Contracts is Security Distributors, Inc.
("SDI"), One Security Benefit Place, Topeka, Kansas 66636-0001. SDI is
registered as a broker/dealer with the SEC and is a wholly-owned subsidiary of
Security Benefit Group, Inc., a financial services holding company wholly owned
by Security Benefit.

PUBLISHED RATINGS -- Security Benefit may from time to time publish in
advertisements, sales literature and reports to Owners, the ratings and other
information assigned to it by one or more independent rating organizations such
as A. M. Best Company and Standard & Poor's. The purpose of the ratings is to
reflect the financial strength and/or claims-paying ability of Security Benefit
and should not be considered as bearing on the investment performance of assets
held in the Separate Account. Each year A. M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
Ratings. These ratings reflect their current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, the claims-paying
ability of Security Benefit as measured by Standard & Poor's Insurance Ratings
Services may be referred to in advertisements or sales literature or in reports
to Owners. These ratings are opinions of an operating insurance company's
financial capacity to meet the obligations of its insurance and annuity policies
in accordance with their terms. Such ratings do not reflect the investment
performance of the Separate Account or the degree of risk associated with an
investment in the Separate Account.

SEPARATE ACCOUNT -- Security Benefit established the Separate Account under
Kansas law on June 26, 2000. The Contract provides that the income, gains, or
losses of the Separate Account, whether or not realized, are credited to or
charged against the assets of the Separate Account without regard to other
income, gains, or losses of Security Benefit. Kansas law provides that assets in
a separate account attributable to the reserves and other liabilities under a
contract may not be charged with liabilities arising from any other business
that the insurance company conducts if, and to the extent the contract so
provides. The Contract contains such a provision. Security Benefit owns the
assets in the Separate Account and is required to maintain sufficient assets in
the Separate Account to meet all Separate Account obligations under the
Contract. Security Benefit may transfer to its General Account assets that
exceed anticipated obligations of the Separate Account. All obligations arising
under the Contracts are general corporate obligations of Security Benefit.
Security Benefit may invest its own assets in the Separate Account for other
purposes, but not to support contracts other than variable annuity contracts,
and may accumulate in the Separate Account proceeds from Contract charges and
investment results applicable to those assets.

The Contract currently has available 19 Subaccounts. The Contract provides
that the income, gains and losses, whether or not realized, are credited to, or
charged against, the assets of each Subaccount without regard to the income,
gains or losses in the other Subaccounts. Each Subaccount invests exclusively in
shares of a specific Series of the SBL Fund. Security Benefit may in the future
establish additional Subaccounts of the Separate Account, which may invest in
other Series of the SBL Fund or in other securities, mutual funds, or investment
vehicles.

The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act"). Registration with the
SEC does not involve supervision by the SEC of the administration or investment
practices of the Separate Account or of Security Benefit.

SBL FUND -- SBL Fund is an open-end management investment company of the series
type. It is registered with the SEC under the 1940 Act. Such registration does
not involve supervision by the SEC of the investments or investment policy of
the Fund. SBL Fund currently has 19 separate portfolios ("Series"), each of
which pursues different investment objectives and policies.

Shares of the Fund currently are offered only for purchase by separate
accounts of Security Benefit to serve as an investment medium for variable life
insurance policies and variable annuity contracts issued by Security Benefit.
Thus, SBL Fund serves as an investment medium for both variable life insurance
policies and variable annuity contracts. This is called "mixed funding." Shares
of SBL Fund also may be sold in the future to separate accounts of other
insurance companies, both affiliated and not affiliated with Security Benefit.
This is called "shared funding." Security Benefit currently does not foresee any
disadvantages to Owners arising from either mixed or shared funding; however,
due to differences in tax treatment or other considerations, it is theoretically
possible that the interests of owners of various contracts for which SBL Fund
serves as an investment medium might at some time be in conflict. However,
Security Benefit, the Fund's Board of Directors, and any other insurance
companies that participate in SBL Fund in the future are required to monitor
events in order to identify any material conflicts that arise from the use of
the Fund for mixed and/or shared funding. SBL Fund's Board of Directors is
required to determine what action, if any, should be taken in the event of such
a conflict. If such a conflict were to occur, Security Benefit might be required
to withdraw the investment of one or more of its separate accounts from SBL
Fund. This might force the Fund to sell securities at disadvantageous prices.

A summary of the investment objective of each Series of SBL Fund is set forth
below. We cannot assure that any Series will achieve its objective. More
detailed information is contained in the accompanying prospectus of SBL Fund,
including information on the risks associated with the investments and
investment techniques of each Series.

SBL FUND'S PROSPECTUS ACCOMPANIES THIS PROSPECTUS AND SHOULD BE READ
CAREFULLY BEFORE INVESTING.

SERIES A (EQUITY SERIES) -- Amounts that you allocate to the Equity Subaccount
are invested in Series A. The investment objective of Series A is to seek
long-term capital growth by investing at least 80% of its net assets in a
broadly diversified portfolio of equity securities, which may include ADRs and
convertible securities.

SERIES B (LARGE CAP VALUE SERIES) -- Amounts that you allocate to the Large Cap
Value Subaccount are invested in Series B. Series B seeks long-term growth of
capital by investing at least 80% of its total assets in large-capitalization
value companies. The Series' stock investments may include common stocks,
preferred stocks and convertible securities of both U.S. issuers and U.S.
dollar-denominated foreign issuers. Series B may temporarily invest in cash,
government bonds or money market securities.

SERIES C (MONEY MARKET SERIES) -- Amounts that you allocate to the Money Market
Subaccount are invested in Series C. The investment objective of Series C is to
provide as high a level of current income as is consistent with preserving
capital. It invests in high quality money market instruments with maturities of
not longer than thirteen months.

SERIES D (GLOBAL SERIES) -- Amounts that you allocate to the Global Subaccount
are invested in Series D. The investment objective of Series D is to seek
long-term growth of capital primarily through investment in common stocks and
equivalents of companies domiciled in foreign countries and the United States.

SERIES E (DIVERSIFIED INCOME SERIES) -- Amounts that you allocate to the
Diversified Income Subaccount are invested in Series E. The investment objective
of Series E is to provide current income with security of principal. Series E
seeks to achieve this investment objective by investing primarily in a
diversified portfolio of investment grade debt securities. The debt securities
in which Series E invests will primarily be domestic securities, but may also
include dollar denominated foreign securities.

SERIES G (LARGE CAP GROWTH SERIES) -- Amounts that you allocate to the Large Cap
Growth Subaccount are invested in Series G. The investment objective of Series G
is to seek long-term capital growth by investing at least 80% of its net assets
in common stock and other equity securities of large capitalization companies
(defined as companies whose total market value is at least $5 billion at the
time of purchase).

SERIES H (ENHANCED INDEX SERIES) -- Amounts that you allocate to the Enhanced
Index Subaccount are invested in Series H. The investment objective of Series H
is to seek to outperform the S&P 500 Index through stock selection resulting in
different weightings of common stocks relative to the index.

SERIES I (INTERNATIONAL SERIES) -- Amounts that you allocate to the
International Subaccount are invested in Series I. The investment objective of
Series I is to seek long-term capital appreciation by investing primarily in
non-U.S. equity securities and other securities with equity characteristics.

SERIES J (MID CAP GROWTH SERIES) -- Amounts that you allocate to the Mid Cap
Growth Subaccount are invested in Series J. The investment objective of Series J
is to seek capital appreciation by investing at least 80% of its net assets in a
diversified portfolio of equity securities with market capitalizations of $10
billion or less at the time of investment.

SERIES N (MANAGED ASSET ALLOCATION SERIES) -- Amounts that you allocate to the
Managed Asset Allocation Subaccount are invested in Series N. The investment
objective of Series N is to seek a high level of total return by investing
primarily in a diversified portfolio of debt and equity securities.

SERIES O (EQUITY INCOME SERIES) -- Amounts that you allocate to the Equity
Income Subaccount are invested in Series O. The investment objective of Series O
is to seek to provide substantial dividend income and also capital appreciation
by investing primarily in dividend-paying common stocks of established
companies.

SERIES P (HIGH YIELD SERIES) -- Amounts that you allocate to the High Yield
Subaccount are invested in Series P. The investment objective of Series P is to
seek high current income. Capital appreciation is a secondary objective. Series
P seeks its objectives by investing at least 80% of its net assets in higher
yielding, higher risk debt securities (commonly referred to as "junk bonds").

SERIES Q (SMALL CAP VALUE SERIES) -- Amounts that you allocate to the Small Cap
Value Subaccount are invested in Series Q. The investment objective of Series Q
is to seek capital growth by investing at least 80% of its net assets in
securities of small capitalization companies (defined as companies with a market
capitalization substantially similar to that of companies in the Russell
2500™ Index at the time of investment).

SERIES S (SOCIAL AWARENESS SERIES) -- Amounts that you allocate to the Social
Awareness Subaccount are invested in Series S. The investment objective of
Series S is to seek capital appreciation by investing in a well-diversified
portfolio of equity securities that the Investment Adviser believes have
above-average earnings potential and which meet certain established social
criteria. The Series also may invest in companies that are included in the
Domini 400 Social Index(SM), which companies will be deemed to comply with the
Series' social criteria.

SERIES T (TECHNOLOGY SERIES) -- Amounts that you allocate to the Technology
Subaccount are invested in Series T. The investment objective of Series T is to
seek long-term capital appreciation by investing at least 80% of its net assets
in the equity securities of technology companies.

SERIES V (MID CAP VALUE SERIES) -- Amounts that you allocate to the Mid Cap
Value Subaccount are invested in Series V. The investment objective of Series V
is to seek long-term growth of capital by investing at least 80% of its net
assets in a diversified portfolio of equity securities with market
capitalizations of $10 billion or less at the time of investment. The Series
will invest in stocks that the Investment Adviser believes are undervalued
relative to assets, earnings, growth potential or cash flow.

SERIES W (MAIN STREET GROWTH AND INCOME® SERIES) -- Amounts that you allocate to
the Main Street Growth and Income® Subaccount are invested in Series W. The
investment objective of Series W is to seek high total return (which includes
growth in the value of its shares as well as current income) from equity and
debt securities.

SERIES X (SMALL CAP GROWTH SERIES) -- Amounts that you allocate to the Small Cap
Growth Subaccount are invested in Series X. The investment objective of Series X
is to seek long-term growth of capital by investing at least 80% of its net
assets in equity securities of companies with market capitalizations of $750
million or less at the time of investment.

SERIES Y (SELECT 25 SERIES) -- Amounts that you allocate to the Select 25
Subaccount are invested in Series Y. The investment objective of Series Y is to
seek long-term growth of capital by concentrating its investments in a core
position of 20-30 common stocks of growth companies which have exhibited
consistent above average earnings or revenue growth.

THE INVESTMENT ADVISER -- Security Management Company, LLC, One Security Benefit
Place, Topeka, Kansas 66636, serves as Investment Adviser to each Series of SBL
Fund. The Investment Adviser is registered with the SEC as an investment
adviser. The Investment Adviser formulates and implements continuing programs
for the purchase and sale of securities in compliance with the investment
objectives, policies, and restrictions of each Series, and is responsible for
the day to day decisions to buy and sell securities for the Series except Large
Cap Value, Global, Enhanced Index, International, Managed Asset Allocation,
Equity Income, Small Cap Value, Technology, Main Street Growth and Income®, and
Small Cap Growth Series. See the accompanying SBL Fund prospectus for details.
The Investment Adviser has engaged The Dreyfus Corporation, 200 Park Avenue, New
York, New York 10166, to provide investment advisory services to Large Cap Value
Series; OppenheimerFunds, Inc., 498 Seventh Avenue, New York, New York, 10018,
to provide investment advisory services to Global Series and Main Street Growth
and Income® Series; Deutsche Asset Management, Inc., 280 Park Avenue, New York,
New York 10017, to provide investment advisory services to Enhanced Index
Series; Templeton Investment Counsel, LLC, 500 East Broward Boulevard, Ft.
Lauderdale, Florida 33394 to provide investment advisory services to
International Series; T. Rowe Price Associates, Inc., 100 East Pratt Street,
Baltimore, Maryland 21202, to provide investment advisory services to Managed
Asset Allocation Series and Equity Income Series; Wellington Management Company
LLP, 75 State Street, Boston, MA 02109, to provide investment advisory services
to Technology Series; Strong Capital Management Corporation, 100 Heritage
Reserve, Menomonee, Wisconsin 53051, to provide investment advisory services to
Small Cap Value Series; and RS Investment Management, L.P., 388 Market Street,
San Francisco, California 94111 to provide investment advisory services to Small
Cap Growth Series.

THE CONTRACT

GENERAL -- Security Benefit issues the Contract offered by this Prospectus. It
is a flexible purchase payment deferred variable annuity. To the extent that you
allocate all or a portion of your purchase payments to the Subaccounts, the
Contract is significantly different from a fixed annuity contract in that it is
the Owner under a Contract who assumes the risk of investment gain or loss
rather than Security Benefit. When you are ready to begin receiving annuity
payments, the Contract provides several Annuity Options under which Security
Benefit will pay periodic annuity payments on a variable basis, a fixed basis or
both, beginning on the Annuity Start Date. The amount that will be available for
annuity payments will depend on the investment performance of the Subaccounts to
which you have allocated purchase payments and the amount of interest credited
on Contract Value that you have allocated to the Fixed Account.

The Contract is available for purchase by an individual as a non-tax
qualified retirement plan ("Non-Qualified Plan"). The Contract is also eligible
for purchase in connection with certain tax qualified retirement plans that meet
the requirements of Section 403(b), 408, or 408A of the Internal Revenue Code
("Qualified Plan"). Certain federal tax advantages are currently available to
retirement plans that qualify as (1) annuity purchase plans of public school
systems and certain tax-exempt organizations under Section 403(b), or (2)
traditional and Roth individual retirement accounts or annuities, including
traditional IRA's established by an employer under a simplified employee pension
plan or a SIMPLE IRA plan, under Section 408. Joint Owners are permitted only on
a Contract issued pursuant to a Non-Qualified Plan.

APPLICATION FOR A CONTRACT -- If you wish to purchase a Contract, you may submit
an application and an initial purchase payment to Security Benefit, as well as
any other form or information that Security Benefit may require. Security
Benefit reserves the right to reject an application or purchase payment for any
reason, subject to Security Benefit's underwriting standards and guidelines and
any applicable state or federal law relating to nondiscrimination.

The maximum age of an Owner or Annuitant for which a Contract will be issued
is age 90. If there are Joint Owners or Annuitants, the maximum issue age will
be determined by reference to the older Owner or Annuitant.

PURCHASE PAYMENTS -- The minimum initial purchase payment for the purchase of a
Contract is $10,000. Thereafter, you may choose the amount and frequency of
purchase payments, except that the minimum subsequent purchase payment is $500.
The minimum subsequent purchase payment if you elect an Automatic Investment
Program is $50. Security Benefit may reduce the minimum purchase payment
requirement under certain circumstances. Purchase payments exceeding $1 million
will not be accepted without prior approval of Security Benefit.

Security Benefit will apply the initial purchase payment not later than the
end of the second Valuation Date after the Valuation Date it is received by
Security Benefit; provided that the purchase payment is preceded or accompanied
by an application that contains sufficient information to establish an account
and properly credit such purchase payment. The application form will be provided
by Security Benefit. If Security Benefit does not receive a complete
application, Security Benefit will notify you that it does not have the
necessary information to issue a Contract. If you do not provide the necessary
information to Security Benefit within five Valuation Dates after the Valuation
Date on which Security Benefit first receives the initial purchase payment or if
Security Benefit determines it cannot otherwise issue the Contract, Security
Benefit will return the initial purchase payment to you unless you consent to
Security Benefit retaining the purchase payment until the application is made
complete.

Security Benefit will credit subsequent purchase payments as of the end of
the Valuation Period in which they are received by Security Benefit at its Home
Office. Purchase payments after the initial purchase payment may be made at any
time prior to the Annuity Start Date, so long as the Owner is living. Subsequent
purchase payments under a Qualified Plan may be limited by the terms of the plan
and provisions of the Internal Revenue Code. Subsequent purchase payments may be
paid under an Automatic Investment Program. The initial purchase payment
required must be paid before the Automatic Investment Program will be accepted
by Security Benefit.

ALLOCATION OF PURCHASE PAYMENTS -- In an application for a Contract, you select
the Subaccounts or the Fixed Account to which purchase payments will be
allocated. Purchase payments will be allocated according to your instructions
contained in the application or more recent instructions received, if any,
except that no purchase payment allocation is permitted that would result in
less than $25.00 per payment being allocated to any one Subaccount or the Fixed
Account. The allocations may be a whole dollar amount or a whole percentage.
Available allocation alternatives include the 19 Subaccounts and the Fixed
Account.

You may change the purchase payment allocation instructions by submitting a
proper written request to Security Benefit's Home Office. A proper change in
allocation instructions will be effective upon receipt by Security Benefit at
its Home Office and will continue in effect until you submit a change in
instructions to Security Benefit. You may make changes in your purchase payment
allocation and changes to an existing Dollar Cost Averaging or Asset
Reallocation Option by telephone provided the Electronic Transfer Privilege
section of the application or the proper form is properly completed, signed, and
filed at Security Benefit's Home Office. Changes in the allocation of future
purchase payments have no effect on existing Contract Value. You may, however,
transfer Contract Value among the Subaccounts and the Fixed Account in the
manner described in "Transfers of Contract Value," page 18.

DOLLAR COST AVERAGING OPTION -- Prior to the Annuity Start Date, you may dollar
cost average your Contract Value by authorizing Security Benefit to make
periodic transfers of Contract Value from any one Subaccount to one or more of
the other Subaccounts. Dollar cost averaging is a systematic method of investing
in which securities are purchased at regular intervals in fixed dollar amounts
so that the cost of the securities gets averaged over time and possibly over
various market cycles. The option will result in the transfer of Contract Value
from one Subaccount to one or more of the other Subaccounts. Amounts transferred
under this option will be credited at the price of the Subaccount as of the end
of the Valuation Dates on which the transfers are effected. Since the price of a
Subaccount's Accumulation Units will vary, the amounts transferred to a
Subaccount will result in the crediting of a greater number of units when the
price is low and a lesser number of units when the price is high. Similarly, the
amounts transferred from a Subaccount will result in a debiting of a greater
number of units when the price is low and a lesser number of units when the
price is high. Dollar cost averaging does not guarantee profits, nor does it
assure that you will not have losses.

An Asset Reallocation/Dollar Cost Averaging form is available upon request.
On the form, you must designate whether Contract Value is to be transferred on
the basis of a specific dollar amount, a fixed period or earnings only, the
Subaccount or Subaccounts to and from which the transfers will be made, the
desired frequency of the transfers, which may be on a monthly or quarterly
basis, and the length of time during which the transfers shall continue or the
total amount to be transferred over time.

After Security Benefit has received an Asset Reallocation/Dollar Cost
Averaging request in proper form at its Home Office, Security Benefit will
transfer Contract Value in the amounts you designate from the Subaccount from
which transfers are to be made to the Subaccount or Subaccounts you have chosen.
Security Benefit will effect each transfer on the date you specify or if no date
is specified, on the monthly or quarterly anniversary, whichever corresponds to
the period selected, of the date of receipt at the Home Office of an Asset
Reallocation/Dollar Cost Averaging request in proper form. Transfers will be
made until the total amount elected has been transferred, or until Contract
Value in the Subaccount from which transfers are made has been depleted. Amounts
periodically transferred under this option are not included in the 14 transfers
per Contract Year that are allowed as discussed under "Transfers of Contract
Value," page 18.

You may instruct Security Benefit at any time to terminate the option by
written request to Security Benefit's Home Office. In that event, the Contract
Value in the Subaccount from which transfers were being made that has not been
transferred will remain in that Subaccount unless you instruct us otherwise. If
you wish to continue transferring on a dollar cost averaging basis after the
expiration of the applicable period, the total amount elected has been
transferred, or the Subaccount has been depleted, or after the Dollar Cost
Averaging Option has been canceled, a new Asset Reallocation/ Dollar Cost
Averaging form must be completed and sent to the Home Office. Security Benefit
requires that you wait at least a month (or a quarter if transfers were made on
a quarterly basis) before reinstating Dollar Cost Averaging after it has been
terminated for any reason. Security Benefit may discontinue, modify, or suspend
the Dollar Cost Averaging Option at any time. Security Benefit does not
currently charge a fee for this option.

You may also dollar cost average Contract Value to or from the Fixed Account,
subject to certain restrictions described under "The Fixed Account," page 31.

ASSET REALLOCATION OPTION -- Prior to the Annuity Start Date, you may authorize
Security Benefit to automatically transfer Contract Value on a quarterly,
semiannual or annual basis to maintain a particular percentage allocation among
the Subaccounts. The Contract Value allocated to each Subaccount will grow or
decline in value at different rates during the selected period, and Asset
Reallocation automatically reallocates the Contract Value in the Subaccounts to
the allocation you selected on a quarterly, semiannual or annual basis, as you
select. Asset Reallocation is intended to transfer Contract Value from those
Subaccounts that have increased in value to those Subaccounts that have declined
in value. Over time, this method of investing may help you buy low and sell
high. This investment method does not guarantee profits, nor does it assure that
you will not have losses.

To elect this option an Asset Reallocation/Dollar Cost Averaging request in
proper form must be received by Security Benefit at its Home Office. An Asset
Reallocation/Dollar Cost Averaging form is available upon request. On the form,
you must indicate the applicable Subaccounts, the applicable time period and the
percentage of Contract Value to be allocated to each Subaccount.

Upon receipt of the Asset Reallocation/Dollar Cost Averaging form, Security
Benefit will effect a transfer or, in the case of a new Contract, will allocate
the initial purchase payment, among the Subaccounts based upon the percentages
that you selected. Thereafter, Security Benefit will transfer Contract Value to
maintain that allocation on each quarterly, semiannual or annual anniversary, as
applicable, of the date of Security Benefit's receipt of the Asset
Reallocation/Dollar Cost Averaging request in proper form. The amounts
transferred will be credited at the price of the Subaccount as of the end of the
Valuation Date on which the transfer is effected. Amounts periodically
transferred under this option are not included in the 14 transfers per Contract
Year that are allowed as discussed under "Transfers of Contract Value," page 18.

You may instruct Security Benefit at any time to terminate this option by
written request to Security Benefit's Home Office. In that event, the Contract
Value in the Subaccounts that has not been transferred will remain in those
Subaccounts regardless of the percentage allocation unless you instruct us
otherwise. If you wish to continue Asset Reallocation after it has been
canceled, a new Asset Reallocation/Dollar Cost Averaging form must be completed
and sent to Security Benefit's Home Office. Security Benefit may discontinue,
modify, or suspend, and reserves the right to charge a fee for the Asset
Reallocation Option at any time. Security Benefit does not currently charge a
fee for this option.

Contract Value allocated to the Fixed Account may be included in the Asset
Reallocation option, subject to certain restrictions described in "Transfers and
Withdrawals from the Fixed Account," page 32.

TRANSFERS OF CONTRACT VALUE -- You may transfer Contract Value among the
Subaccounts upon proper written request to Security Benefit's Home Office. You
may make transfers (other than transfers pursuant to the Dollar Cost Averaging
and Asset Reallocation Options) by telephone if the Electronic Transfer
Privilege section of the application or the proper form has been properly
completed, signed and filed at Security Benefit's Home Office. The minimum
transfer amount is $500, or the amount remaining in a given Subaccount. The
minimum transfer amount does not apply to transfers under the Dollar Cost
Averaging or Asset Reallocation Options.

Security Benefit effects transfers between Subaccounts at their respective
accumulation unit values as of the close of the Valuation Period during which
the transfer request is received.

You may also transfer Contract Value to the Fixed Account; however, transfers
from the Fixed Account to the Subaccounts are restricted as described in "The
Fixed Account," page 31.

Security Benefit generally does not limit the frequency of transfers,
although Security Benefit reserves the right to limit the number of transfers to
14 in a Contract Year. Also, the Contract is not designed for professional
"market timing" organizations, or other organizations or individuals engaging in
a market timing strategy, or making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the Underlying Fund.
These kinds of strategies and transfer activities are disruptive to the
Underlying Funds in which the Subaccounts invest. If Security Benefit determines
that your transfer patterns among the Subaccounts are disruptive to the
Underlying Funds, Security Benefit may among other things, restrict the
availability of telephone transfers or other electronic transfers. We may also
refuse to act on transfer instructions of an agent acting under a power of
attorney who is acting on behalf of one or more owners. Also, certain of the
Underlying Funds have in place limits on the number of transfers permitted in a
Contract Year, which limits are more restrictive than 14 per Contract Year.
Security Benefit reserves the right to limit the size and frequency of transfers
and to discontinue telephone and other electronic transfers.

CONTRACT VALUE -- The Contract Value is the sum of the amounts under the
Contract held in each Subaccount and the Fixed Account as well as any amount set
aside in the loan account to secure loans as of any Valuation Date.

On each Valuation Date, the amount of Contract Value allocated to any
particular Subaccount will be adjusted to reflect the investment experience of
that Subaccount. See "Determination of Contract Value," below. No minimum amount
of Contract Value is guaranteed. You bear the entire investment risk relating to
the investment performance of Contract Value allocated to the Subaccounts.

DETERMINATION OF CONTRACT VALUE -- Your Contract Value will vary to a degree
that depends upon several factors, including

o Investment performance of the Subaccounts to which you have allocated
Contract Value,

o Payment of purchase payments,

o The amount of any outstanding Contract Debt,

o Full and partial withdrawals, and

o Charges assessed in connection with the Contract, including charges for any
optional Riders selected.

The amounts allocated to the Subaccounts will be invested in shares of the
corresponding Series of SBL Fund. The investment performance of the Subaccounts
will reflect increases or decreases in the net asset value per share of the
corresponding Series and any dividends or distributions declared by a Series.
Any dividends or distributions from any Series of the Fund will be automatically
reinvested in shares of the same Series, unless Security Benefit, on behalf of
the Separate Account, elects otherwise.

Assets in the Subaccounts are divided into Accumulation Units, which are
accounting units of measure used to calculate the value of an Owner's interest
in a Subaccount. When you allocate purchase payments to a Subaccount, your
Contract is credited with Accumulation Units. The number of Accumulation Units
to be credited is determined by dividing the dollar amount, including any Credit
Enhancements, allocated to the particular Subaccount by the price for the
Subaccount's Accumulation Units as of the end of the Valuation Period in which
the purchase payment is credited.

In addition, other transactions including loans, full or partial withdrawals,
transfers, and assessment of certain charges against the Contract affect the
number of Accumulation Units credited to a Contract. The number of units
credited or debited in connection with any such transaction is determined by
dividing the dollar amount of such transaction by the price of the Accumulation
Unit of the affected Subaccount next determined after receipt of the
transaction. The price of each Subaccount is determined on each Valuation Date
as of the close of the New York Stock Exchange, normally 3:00 p.m. Central time.
Transactions received after that time on any Valuation Date will be effected at
the Accumulation Unit value determined on the following Valuation Date. The
price of each Subaccount may be determined earlier if trading on the New York
Stock Exchange is restricted or as permitted by the SEC.

The number of Accumulation Units credited to a Contract shall not be changed
by any subsequent change in the value of an Accumulation Unit, but the dollar
value of an Accumulation Unit may vary from Valuation Date to Valuation Date
depending upon the investment experience of the Subaccount and charges against
the Subaccount.

The price of each Subaccount's units initially was $10. The price of a
Subaccount on any Valuation Date takes into account the following: (1) the
investment performance of the Subaccount, which is based upon the investment
performance of the corresponding Series of SBL Fund, (2) any dividends or
distributions paid by the corresponding Series, (3) the charges, if any, that
may be assessed by Security Benefit for taxes attributable to the operation of
the Subaccount, (4) the minimum mortality and expense risk charge under the
Contract of 0.60%, and (5) the administration charge under the Contract of
0.15%.

The minimum mortality and expense risk charge of 0.60% and the administration
charge of 0.15% are factored into the accumulation unit value or "price" of each
Subaccount on each Valuation Date. Security Benefit deducts any mortality and
expense risk charge above the minimum charge and the charge for any optional
Riders (the "Excess Charge") on a monthly basis. Each Subaccount declares a
monthly dividend and Security Benefit deducts the Excess Charge from this
monthly dividend upon its reinvestment in the Subaccount. The Excess Charge is a
percentage of your Contract Value allocated to the Subaccount as of the
reinvestment date. The monthly dividend is paid only for the purpose of
collecting the Excess Charge. Assuming that you owe a charge above the minimum
mortality and expense risk charge and the administration charge, your Contract
Value will be reduced in the amount of your Excess Charge upon reinvestment of
the Subaccount's monthly dividend. Security Benefit reserves the right to
compute and deduct the Excess Charge from each Subaccount on each Valuation
Date. See the Statement of Additional Information for a more detailed discussion
of how the Excess Charge is deducted.

FULL AND PARTIAL WITHDRAWALS -- An Owner may make a partial withdrawal of
Contract Value, or surrender the Contract for its Withdrawal Value. A full or
partial withdrawal, including a systematic withdrawal, may be taken from
Contract Value at any time while the Owner is living and before the Annuity
Start Date, subject to limitations under the applicable plan for Qualified Plans
and applicable law. A full or partial withdrawal request will be effective as of
the end of the Valuation Period that a proper Withdrawal Request form is
received by Security Benefit at its Home Office. A proper written request must
include the written consent of any effective assignee or irrevocable
Beneficiary, if applicable.

The proceeds received upon a full withdrawal will be the Contract's
Withdrawal Value. The Withdrawal Value is equal to the Contract Value as of the
end of the Valuation Period during which a proper Withdrawal Request form is
received by Security Benefit at its Home Office, less any outstanding Contract
Debt, any applicable withdrawal charges, any pro rata account charge and any
uncollected premium taxes. If an Extra Credit Rider is in effect, Contract Value
will also be reduced by any Credit Enhancements that have not yet vested. See
the discussion of vesting of Credit Enhancements under "Extra Credit," page 27.

Security Benefit requires the signature of all Owners on any request for
withdrawal, and a guarantee of all such signatures to effect the transfer or
exchange of all or part of the Contract for another investment. The signature
guarantee must be provided by an eligible guarantor, such as a bank, broker,
credit union, national securities exchange or savings association. Security
Benefit further requires that any request to transfer or exchange all or part of
the Contract for another investment be made upon a transfer form provided by
Security Benefit which is available upon request.

A partial withdrawal may be requested for a specified percentage or dollar
amount of Contract Value. Each partial withdrawal must be at least $500 except
systematic withdrawals discussed below. A request for a partial withdrawal will
result in a payment by Security Benefit of the amount specified in the partial
withdrawal request provided there is sufficient Contract Value to meet the
request. Any withdrawal charge will be deducted from remaining Contract Value,
provided there is sufficient Contract Value available. Alternatively, you may
request that any withdrawal charge be deducted from your payment. Upon payment,
your Contract Value will be reduced by an amount equal to the payment, plus any
applicable withdrawal charge, or if you requested that any withdrawal charge be
deducted from your payment, your payment will be reduced by the amount of any
such charge. Contract Value will also be reduced by a percentage of any Credit
Enhancements that have not yet vested. See "Extra Credit," page 27. If a partial
withdrawal is requested after the first Contract Year that would leave the
Withdrawal Value in the Contract less than $2,000, Security Benefit reserves the
right to treat the partial withdrawal as a request for a full withdrawal.

Security Benefit will deduct the amount of a partial withdrawal from the
Contract Value in the Subaccounts and the Fixed Account, according to the
Owner's instructions to Security Benefit. If you do not specify the allocation,
Security Benefit will deduct the withdrawal in the same proportion that Contract
Value is allocated among the Subaccounts and the Fixed Account.

A full or partial withdrawal, including a systematic withdrawal, may be
subject to a withdrawal charge if a withdrawal is made from purchase payments
that have been held in the Contract for less than seven years and may be subject
to a premium tax charge to reimburse Security Benefit for any tax on premiums on
a Contract that may be imposed by various states and municipalities. See
"Contingent Deferred Sales Charge," page 22, and "Premium Tax Charge," page 23.

A full or partial withdrawal, including a systematic withdrawal, may result
in receipt of taxable income to the Owner and, if made prior to the Owner
attaining age 59 1/2, may be subject to a 10% penalty tax. In the case of
Contracts issued in connection with retirement plans that meet the requirements
of Section 403(b) or 408 of the Internal Revenue Code, reference should be made
to the terms of the particular Qualified Plan for any limitations or
restrictions on withdrawals. For more information, see "Restrictions on
Withdrawals from Qualified Plans," page 35. The tax consequences of a withdrawal
under the Contract should be carefully considered. See "Federal Tax Matters,"
page 36.

SYSTEMATIC WITHDRAWALS -- Security Benefit currently offers a feature under
which you may select systematic withdrawals. Under this feature, an Owner may
elect to receive systematic withdrawals while the Owner is living and before the
Annuity Start Date by sending a properly completed Request for Scheduled
Systematic Payments form to Security Benefit at its Home Office. This option may
be elected at any time. An Owner may designate the systematic withdrawal amount
as a percentage of Contract Value allocated to the Subaccounts and/or Fixed
Account, as a fixed period, as level payments, as a specified dollar amount, as
all earnings in the Contract, or based upon the life expectancy of the Owner or
the Owner and a Beneficiary. An Owner also may designate the desired frequency
of the systematic withdrawals, which may be monthly, quarterly, semiannual or
annual. The Owner may stop or modify systematic withdrawals upon proper written
request received by Security Benefit at its Home Office at least 30 days in
advance of the requested date of termination or modification. A proper request
must include the written consent of any effective assignee or irrevocable
Beneficiary, if applicable.

Each systematic withdrawal must be at least $100. Upon payment, your Contract
Value will be reduced by an amount equal to the payment proceeds plus any
applicable withdrawal charge and premium tax. Contract Value will also be
reduced by a percentage of any Credit Enhancements that have not yet vested. See
"Extra Credit," page 27. Any systematic withdrawal that equals or exceeds the
Withdrawal Value will be treated as a full withdrawal. In no event will payment
of a systematic withdrawal exceed the Withdrawal Value. The Contract will
automatically terminate if a systematic withdrawal causes the Contract's
Withdrawal Value to equal zero.

Security Benefit will effect each systematic withdrawal as of the end of the
Valuation Period during which the withdrawal is scheduled. The deduction caused
by the systematic withdrawal, including any applicable withdrawal charge, will
be allocated to your Contract Value in the Subaccounts and the Fixed Account, as
you have directed. If you do not specify the allocation, Security Benefit will
deduct the systematic withdrawal in the same proportion that Contract Value is
allocated among the Subaccounts and the Fixed Account.

Security Benefit may, at any time, discontinue, modify, suspend or charge a
fee for systematic withdrawals. You should consider carefully the tax
consequences of a systematic withdrawal, including the 10% penalty tax which may
be imposed on withdrawals made prior to the Owner attaining age 59 1/2. See
"Federal Tax Matters," page 36.

FREE-LOOK RIGHT -- You may return a Contract within the Free-Look Period, which
is generally a ten-day period beginning when you receive the Contract. In this
event, Security Benefit will then deem void the returned Contract and will
refund to you purchase payments allocated to the Fixed Account (not including
any Credit Enhancements if an Extra Credit Rider was in effect). Security
Benefit will also refund as of the Valuation Date on which we receive your
Contract any Contract Value allocated to the Subaccounts, plus any charges
deducted from such Contract Value, less the Contract Value attributable to any
Credit Enhancements.

DEATH BENEFIT -- If the Owner dies prior to the Annuity Start Date while this
Contract is in force, Security Benefit will pay the death benefit proceeds to
the Designated Beneficiary upon receipt of due proof of the Owner's death and
instructions regarding payment to the Designated Beneficiary. If there are Joint
Owners, the death benefit proceeds will be payable upon receipt of due proof of
death of either Owner and instructions regarding payment.

If the surviving spouse of the deceased Owner is the sole Designated
Beneficiary, such spouse may elect to continue the Contract in force, subject to
certain limitations. See "Distribution Requirements" below. If the Owner is not
a natural person, the death benefit proceeds will be payable upon receipt of due
proof of death of the Annuitant prior to the Annuity Start Date and instructions
regarding payment. If the death of the Owner occurs on or after the Annuity
Start Date, any death benefit will be determined according to the terms of the
Annuity Option. See "Annuity Options," page 30.

The death benefit proceeds will be the death benefit reduced by any
outstanding Contract Debt, any pro rata account charge and any uncollected
premium tax. If the age of each Owner was 80 or younger on the Contract Date and
an Owner dies prior to the Annuity Start Date while this Contract is in force,
the amount of the death benefit will be the greater of:

1. The sum of all purchase payments (not including any Credit Enhancements if
an Extra Credit Rider was in effect), less any reductions caused by previous
withdrawals, including withdrawal charges, or

2. The Contract Value on the date due proof of death and instructions regarding
payment are received by Security Benefit (less any Credit Enhancements
applied during the 12 months prior to the date of the Owner's death).

If any Owner was age 81 or older on the Contract Date, or if due proof of
death and instructions regarding payment are not received by Security Benefit at
its Home Office within six months of the date of the Owner's death, the death
benefit will be as set forth in item 2 above.

If you purchased one or more of the optional Riders that provide an enhanced
death benefit, your death benefit will be determined in accordance with the
terms of the Rider. See the discussion of Annual Stepped Up Death Benefit Rider,
Guaranteed Growth Death Benefit Rider, Combined Annual Stepped Up and Guaranteed
Growth Death Benefit Rider, Enhanced Death Benefit Rider, Combined Enhanced and
Annual Stepped Up Death Benefit Rider, Combined Enhanced and Guaranteed Growth
Death Benefit Rider, and Combined Enhanced, Annual Stepped Up, and Guaranteed
Growth Death Benefit Rider. Your death benefit proceeds under the Rider will be
the death benefit reduced by any outstanding Contract Debt, any pro rata account
charge and any uncollected premium tax.

The death benefit proceeds will be paid to the Designated Beneficiary in a
single sum or under one of the Annuity Options, as elected by the Designated
Beneficiary. If the Designated Beneficiary is to receive annuity payments under
an Annuity Option, there may be limits under applicable law on the amount and
duration of payments that the Beneficiary may receive, and requirements
respecting timing of payments. A tax adviser should be consulted in considering
Annuity Options. See "Federal Tax Matters," page 36 and "Distribution
Requirements," below for a discussion of the tax consequences in the event of
death.

DISTRIBUTION REQUIREMENTS -- For Contracts issued in connection with a
Non-Qualified Plan, if the surviving spouse of the deceased Owner is the sole
Designated Beneficiary, such spouse may elect to continue this Contract in force
until the earliest of the spouse's death or the Annuity Start Date or receive
the death benefit proceeds.

For any Designated Beneficiary other than a surviving spouse, only those
options may be chosen that provide for complete distribution of such Owner's
interest in the Contract within five years of the death of the Owner. If the
Designated Beneficiary is a natural person, that person alternatively can elect
to begin receiving annuity payments within one year of the Owner's death over a
period not extending beyond his or her life or life expectancy. If the Owner of
the Contract is not a natural person, these distribution rules are applicable
upon the death of or a change in the primary Annuitant.

For Contracts issued in connection with a Qualified Plan, the terms of the
particular Qualified Plan and the Internal Revenue Code should be reviewed with
respect to limitations or restrictions on distributions following the death of
the Owner or Annuitant. Because the rules applicable to Qualified Plans are
extremely complex, a competent tax adviser should be consulted.

DEATH OF THE ANNUITANT -- If the Annuitant dies prior to the Annuity Start Date,
and the Owner is a natural person and is not the Annuitant, no death benefit
proceeds will be payable under the Contract. The Owner may name a new Annuitant
within 30 days of the Annuitant's death. If a new Annuitant is not named,
Security Benefit will designate the Owner as Annuitant. On the death of the
Annuitant after the Annuity Start Date, any guaranteed payments remaining unpaid
will continue to be paid to the Designated Beneficiary pursuant to the Annuity
Option in force at the date of death.

CHARGES AND DEDUCTIONS

CONTINGENT DEFERRED SALES CHARGE -- Security Benefit does not deduct sales
charges from purchase payments before allocating them to Contract Value.
However, except as set forth below, Security Benefit may assess a contingent
deferred sales charge (which may also be referred to as a withdrawal charge) on
a full or partial withdrawal, including systematic withdrawals, depending on how
long your purchase payments have been held under the Contract.

Security Benefit will waive the withdrawal charge on withdrawals to the
extent that total withdrawals in a Contract Year, including systematic
withdrawals, do not exceed the Free Withdrawal amount. The Free Withdrawal
amount is equal in the first Contract Year, to 10% of purchase payments,
excluding any Credit Enhancements, made during the year and for any subsequent
Contract Year, to 10% of Contract Value as of the first day of that Contract
Year.

The withdrawal charge applies to the portion of any withdrawal, consisting of
purchase payments, that exceeds the Free Withdrawal amount. For purposes of
determining the withdrawal charge, withdrawals are considered to come first from
purchase payments in the order they were received and then from earnings. The
withdrawal charge does not apply to withdrawals of earnings. Free withdrawal
amounts do not reduce purchase payments for the purpose of determining future
withdrawal charges.

---------------------------------------
PURCHASE PAYMENT AGE WITHDRAWAL
(IN YEARS) CHARGE
---------------------------------------
1 7%
2 7%
3 6%
4 5%
5 4%
6 3%
7 2%
8 and over 0%
---------------------------------------

In no event will the amount of any withdrawal charge, when added to such
charge previously assessed against any amount withdrawn from the Contract,
exceed 7% of purchase payments paid under the Contract. In addition, no
withdrawal charge will be imposed upon: (1) payment of death benefit proceeds;
or (2) annuity options that provide for payments for life, or a period of at
least seven years. Security Benefit will assess the withdrawal charge against
the Subaccounts and the Fixed Account in the same proportion as the withdrawal
proceeds are allocated.

Security Benefit pays sales commissions to broker-dealers and other expenses
associated with the promotion and sales of the Contracts. The withdrawal charge
is designed to reimburse Security Benefit for these costs, although it is
expected that actual expenses will be greater than the amount of the charge. To
the extent that all sales expenses are not recovered from the charge, such
expenses may be recovered from other charges, including amounts derived
indirectly from the charge for mortality and expense risk. Broker-dealers may
receive aggregate commissions of up to 6.5% of aggregate purchase payments.
Security Benefit also may pay override payments, expense allowances, bonuses,
wholesaler fees and training allowances. Registered representatives earn
commissions from the broker-dealers with which they are affiliated and such
arrangements will vary. In addition, registered representatives may be eligible,
under programs adopted by Security Benefit to receive non-cash compensation such
as expense-paid due diligence trips and educational seminars. No compensation
will be offered to the extent it is prohibited by the laws of any state or
self-regulatory agency, such as the NASD.

MORTALITY AND EXPENSE RISK CHARGE -- Security Benefit deducts a charge for
mortality and expense risks assumed by Security Benefit under the Contract.
Security Benefit deducts a daily minimum charge equal to 0.60%, on an annual
basis, of each Subaccount's average daily net assets. If you are subject to
mortality and expense risk charge above the minimum charge, Security Benefit
deducts it from your Contract Value on a monthly basis. The mortality and
expense risk charge amount is determined each month by reference to the amount
of your Contract Value, as set forth in the table below.

-----------------------------------------------------------------
ANNUAL MORTALITY AND
CONTRACT VALUE EXPENSE RISK CHARGE
-----------------------------------------------------------------
Less than $25,000 ........................... 0.85%
At least $25,000 but less than $100,000 ..... 0.70%
$100,000 or more ............................ 0.60%
-----------------------------------------------------------------

During the Annuity Period, the mortality and expense risk charge is 1.25% under
Options 1 through 4, 7 and 8, in lieu of the amounts set forth above. The
mortality and expense risk charge is intended to compensate Security Benefit for
certain mortality and expense risks Security Benefit assumes in offering and
administering the Contracts and in operating the Subaccounts.

The expense risk is the risk that Security Benefit's actual expenses in
issuing and administering the Contracts and operating the Subaccounts will be
more than the charges assessed for such expenses. The mortality risk borne by
Security Benefit is the risk that Annuitants, as a group, will live longer than
Security Benefit's actuarial tables predict. In this event, Security Benefit
guarantees that annuity payments will not be affected by a change in mortality
experience that results in the payment of greater annuity income than assumed
under the Annuity Options in the Contract. Security Benefit also assumes a
mortality risk in connection with the death benefit under the Contract.

Security Benefit may ultimately realize a profit from this charge to the
extent it is not needed to cover mortality and administrative expenses, but
Security Benefit may realize a loss to the extent the charge is not sufficient.
Security Benefit may use any profit derived from this charge for any lawful
purpose, including distribution expenses. See "Determination of Contract Value,"
page 19, for more information about how Security Benefit deducts the mortality
and expense risk charge.

ADMINISTRATION CHARGE -- Security Benefit deducts a daily administration charge
equal to an annual rate of 0.15% of each Subaccount's average daily net assets.
The purpose of this charge is to compensate Security Benefit for the expenses
associated with administration of the Contracts and operation of the
Subaccounts.

ACCOUNT ADMINISTRATION CHARGE -- Security Benefit deducts an account
administration charge of $30.00 from Contract Value at each Contract
Anniversary. Security Benefit will waive the charge if your Contract Value is
$50,000 or more on the date the charge is to be deducted. Security Benefit will
deduct a pro rata account administration charge (1) upon a full withdrawal; (2)
upon the Annuity Start Date if one of the Annuity Options 1 through 4, 7 or 8 is
chosen; and (3) upon payment of a death benefit. This charge is not deducted
during the Annuity Period if one of the Annuity Options 1 through 4, 7 or 8 is
chosen. The purpose of the charge is to compensate Security Benefit for the
expenses associated with administration of the Contracts.

PREMIUM TAX CHARGE -- Various states and municipalities impose a tax on premiums
on annuity contracts received by insurance companies. Whether or not a premium
tax is imposed will depend upon, among other things, the Owner's state of
residence, the Annuitant's state of residence, and the insurance tax laws and
Security Benefit's status in a particular state. Security Benefit assesses a
premium tax charge to reimburse itself for premium taxes that it incurs in
connection with a Contract. Security Benefit deducts this charge when due,
typically upon the Annuity Start Date or payment of a purchase payment. Security
Benefit may deduct premium tax upon a full or partial withdrawal if a premium
tax has been incurred and is not refundable. Security Benefit reserves the right
to deduct premium taxes when due or any time thereafter. Premium tax rates
currently range from 0% to 3.5%, but are subject to change by a governmental
entity.

OTHER CHARGES -- Security Benefit may charge the Separate Account or the
Subaccounts for the federal, state, or local taxes incurred by Security Benefit
that are attributable to the Separate Account or the Subaccounts, or to the
operations of Security Benefit with respect to the Contract, or that are
attributable to payment of premiums or acquisition costs under the Contract. No
such charge is currently assessed. See "Tax Status of Security Benefit and the
Separate Account" and "Charge for Security Benefit Taxes."

VARIATIONS IN CHARGES -- Security Benefit may reduce or waive the amount of the
contingent deferred sales charge and certain other charges for a Contract where
the expenses associated with the sale of the Contract or the administrative and
maintenance costs associated with the Contract are reduced for reasons such as
the amount of the initial purchase payment or projected purchase payments or the
Contract is sold in connection with a group or sponsored arrangement.

GUARANTEE OF CERTAIN CHARGES -- Security Benefit guarantees that: (1) the charge
for mortality and expense risks will not exceed an annual rate of 0.85% (1.25%
during the Annuity Period) of each Subaccount's average daily net assets; (2)
the administration charge will not exceed an annual rate of 0.15% of each
Subaccount's average daily net assets; and (3) the account administration charge
will not exceed $30 per year. Security Benefit also guarantees that the charge
for any Rider will not exceed the annual rate in effect when the Rider is
issued.

SBL FUND EXPENSES -- Each Subaccount of the Separate Account purchases shares at
the net asset value of the corresponding Series of SBL Fund. Each Series' net
asset value reflects the investment advisory fee and other expenses that are
deducted from the assets of the Series. These fees and expenses are not deducted
from the Subaccounts, but are paid from the assets of the corresponding Series.
As a result, the Owner indirectly bears a pro rata portion of such fees and
expenses. The advisory fees and other expenses, if any, which are more fully
described in SBL Fund's prospectus, are not specified or fixed under the terms
of the Contract.

OPTIONAL RIDER CHARGES

In addition to the charges and deductions discussed above, you may purchase
certain optional Riders under the Contract. Security Benefit makes each Rider
available only at issue, and you may not terminate a Rider after issue, unless
otherwise stated. Security Benefit deducts a monthly charge from Contract Value
for any Riders elected by the Owner. The amount of the charge is equal to a
percentage, on an annual basis, of your Contract Value. Each Rider and its
charge are listed below. A RIDER MAY NOT BE AVAILABLE IN ALL STATES. You may not
select Riders with a total charge that exceeds 1.00% of Contract Value. As an
example, you may not purchase the Extra Credit Rider at 5% with a cost of 0.75%
and the Guaranteed Minimum Income Benefit Rider at 5% with a cost of 0.30%,
because the total cost of such Riders, 1.05%, would exceed the maximum Rider
charge of 1.00%.

GUARANTEED MINIMUM INCOME BENEFIT -- This Rider makes available a minimum amount
for the purchase of a fixed Annuity ("Minimum Income Benefit"). The Minimum
Income Benefit is equal to Purchase Payments and any Credit Enhancements, net of
any premium tax, less an adjustment for Withdrawals, increased at an annual
effective rate of interest of 3% or 5%, as elected in the application. (Security
Benefit will credit a maximum rate of 4% for amounts allocated to the Money
Market Subaccount or the Fixed Account.)

In crediting interest, Security Benefit takes into account the timing of when
each purchase payment and withdrawal occurred and accrues such interest until
the earlier of: (1) the Annuity Start Date, or (2) the Contract Anniversary
following the oldest Annuitant's 80th birthday. In the event of a withdrawal,
the Minimum Income Benefit is reduced as of the date of the withdrawal by a
percentage found by dividing the withdrawal amount, including any withdrawal
charges, by Contract Value immediately prior to the withdrawal.

You may apply the Minimum Income Benefit, less any applicable Premium tax and
pro rata account administration charge, to purchase a fixed Annuity within 30
days of any Contract Anniversary following the 10th Contract Anniversary. You
may apply the Minimum Income Benefit to purchase only a fixed Annuity under
Option 2, life income with a 10-year period certain, or Option 4, joint and last
survivor with a 10-year period certain. See the discussion of Options 2 and 4
under "Annuity Options," page 30. The Annuity rates for this Rider are based
upon the 1983(a) mortality table with mortality improvement under projection
scale G and an interest rate of 2 1/2%. The charge for this Rider varies based
upon the interest rate selected as set forth below:

-------------------------------
INTEREST RATE RIDER CHARGE
-------------------------------
3% 0.15%
5% 0.30%
-------------------------------

ANNUAL STEPPED UP DEATH BENEFIT -- This Rider makes available an enhanced death
benefit upon the death of the Owner or any Joint Owner prior to the Annuity
Start Date. The death benefit proceeds will be the death benefit reduced by any
outstanding Contract Debt, any pro rata account administration charge and any
uncollected premium tax. If an Extra Credit Rider was in effect, the death
benefit also will be reduced by any Credit Enhancements applied during the 12
months preceding the Owner's date of death; provided that the death benefit
defined in 1 below will not be so reduced. If an Owner dies prior to the Annuity
Start Date, the amount of the death benefit under this Rider will be the
greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of death and instructions regarding
payment for each Designated Beneficiary are received by Security Benefit; or

3. The Stepped Up Death Benefit.

The Stepped Up Death Benefit is the largest result for the following calculation
as of the date of receipt of instructions regarding payment of the death
benefit:

o The largest Contract Value on any Contract Anniversary that occurs prior to
the oldest Owner attaining age 81, plus

o Any purchase payments received by Security Benefit since the applicable
Contract Anniversary; less

o An adjustment for any withdrawals and withdrawal charges made since the
applicable anniversary. In the event of a withdrawal, the Stepped Up Death
Benefit is reduced as of the date of the withdrawal by a percentage found by
dividing the withdrawal amount, including any withdrawal charges, by Contract
Value immediately prior to the withdrawal.

If an Owner dies prior to the Annuity Start Date, but due proof of death and
instructions regarding payment are not received by Security Benefit at its Home
Office within six months of the date of the Owner's death, the death benefit
will be as set forth in item 2 above.

The charge for this Rider is 0.20%. See the discussion under "Death Benefit,"
page 21.

GUARANTEED GROWTH DEATH BENEFIT -- This Rider makes available an enhanced death
benefit upon the death of the Owner or any Joint Owner prior to the Annuity
Start Date. The death benefit proceeds will be the death benefit reduced by any
outstanding Contract Debt, any pro rata account administration charge and any
uncollected premium tax. If an Extra Credit Rider was in effect, the death
benefit also will be reduced by any Credit Enhancements applied during the 12
months preceding the Owner's date of death; provided that the death benefit
defined in 1 below will not be so reduced. If an Owner dies prior to the Annuity
Start Date, the amount of the death benefit under this Rider will be the
greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of death and instructions regarding
payment for each Designated Beneficiary are received by Security Benefit; or

3. The Guaranteed Growth Death Benefit.

The Guaranteed Growth Death Benefit is an amount equal to purchase payments and
any Credit Enhancements, net of any Premium tax, less an adjustment for
withdrawals, increased at an annual effective rate of interest of 3%, 5%, 6% or
7%, as elected in the application. (Security Benefit will credit a maximum rate
of 4% for amounts allocated to the Money Market Subaccount or the Fixed
Account.) In crediting interest, Security Benefit takes into account the timing
of when each purchase payment and withdrawal occurred. Security Benefit accrues
such interest until the earliest of: (1) the Annuity Start Date; (2) the
Contract Anniversary following the oldest Owner's 80th birthday; (3) the date
due proof of the Owner's death and instructions regarding payment are received;
or (4) the six-month anniversary of the Owner's date of death. In the event of a
withdrawal, the Guaranteed Growth Death Benefit is reduced as of the date of the
withdrawal by a percentage found by dividing the withdrawal amount, including
any withdrawal charges, by Contract Value immediately prior to the withdrawal.

The amount of the Guaranteed Growth Death Benefit shall not exceed an amount
equal to 200% of purchase payments (not including any Credit Enhancements), net
of premium tax and any withdrawals, including withdrawal charges.

The charge for this Rider varies based upon the interest rate selected as set
forth below:

-------------------------------
INTEREST RATE RIDER CHARGE
-------------------------------
3% 0.10%
5% 0.20%
6% 0.25%
7% 0.30%
-------------------------------

See the discussion under "Death Benefit," page 21.

COMBINED ANNUAL STEPPED UP AND GUARANTEED GROWTH DEATH BENEFIT -- This Rider
makes available an enhanced death benefit upon the death of the Owner or any
Joint Owner prior to the Annuity Start Date. If an Owner dies prior to the
Annuity Start Date, the amount of the death benefit under this Rider will be the
greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of death and instructions regarding
payment for each Designated Beneficiary are received by Security Benefit;

3. The Annual Stepped Up Death Benefit (as described above); or

4. The Guaranteed Growth Death Benefit at 5% (as described above).

The charge for this Rider is 0.25%. See the discussion under "Death Benefit,"
page 21.

ENHANCED DEATH BENEFIT -- This Rider makes available an enhanced death benefit
upon the death of the Owner prior to the Annuity Start Date. The death benefit
proceeds will be the death benefit reduced by any pro rata account
administration charge and any uncollected premium tax. If an Extra Credit Rider
was in effect, the death benefit also will be reduced by any Credit Enhancements
applied during the 12 months preceding the Owner's date of death; provided that
the death benefit defined in 1 below will not be so reduced. If an Owner dies
prior to the Annuity Start Date, the amount of the death benefit under this
Rider will be the greater of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges; or

2. The Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit, plus the
Enhanced Death Benefit.

The Enhanced Death Benefit for a Contract issued prior to the Owner attaining
age 70 is the lesser of: (1) 50% of Contract gain; or (2) 50% of adjusted
purchase payments. For a Contract issued after the Owner has attained age 70 or
older, the Enhanced Death Benefit is the lesser of: (1) 25% of Contract gain; or
(2) 25% of adjusted purchase payments.

o "Contract gain" is equal to Contract Value as of the date due proof of death
and instructions with regard to payment are received less adjusted purchase
payments.

o "Adjusted purchase payments" are equal to all purchase payments made to the
Contract adjusted for withdrawals and any applicable premium tax. In the
event of a withdrawal, purchase payments are reduced as of the date of the
withdrawal by a percentage found by dividing the withdrawal amount, including
any withdrawal charges, by Contract Value immediately prior to the
withdrawal.

If the Owner dies prior to the Annuity Start Date, but due proof of death and
instructions regarding payment are not received by Security Benefit at its Home
Office within six months of the date of the Owner's death, the death benefit
will be the Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit.

This Rider is available only if the age of the Owner at the time the Contract
is issued is age 79 or younger. The charge for this Rider is 0.25%. See the
discussion under "Death Benefit," page 21.

COMBINED ENHANCED AND ANNUAL STEPPED UP DEATH BENEFIT -- This Rider makes
available an enhanced death benefit upon the death of the Owner prior to the
Annuity Start Date. If the Owner dies prior to the Annuity Start Date, the
amount of the death benefit under this Rider will be the greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit, plus the
Enhanced Death Benefit (as described above); or

3. The Annual Stepped Up Death Benefit (as described above), plus the Enhanced
Death Benefit (as described above).

This Rider is available only if the age of the Owner at the time the Rider is
issued is age 79 or younger. The charge for this Rider is 0.35%. See the
discussion under "Death Benefit," page 21.

COMBINED ENHANCED AND GUARANTEED GROWTH DEATH BENEFIT -- This Rider makes
available an enhanced death benefit upon the death of the Owner prior to the
Annuity Start Date. If the Owner dies prior to the Annuity Start Date, the
amount of the death benefit under this Rider will be the greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit, plus the
Enhanced Death Benefit (as described above); or

3. The Guaranteed Growth Death Benefit at 5% (as described above), plus the
Enhanced Death Benefit (as described above).

If the Owner dies prior to the Annuity Start Date, but due proof of death and
instructions regarding payment are not received by Security Benefit at its Home
Office within six months of the date of the Owner's death, the death benefit
will the Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit.

This Rider is available only if the age of the Owner at the time the Rider is
issued is age 79 or younger. The charge for this Rider is 0.35%. See the
discussion under "Death Benefit," page 21.

COMBINED ENHANCED, ANNUAL STEPPED UP, AND GUARANTEED GROWTH DEATH BENEFIT --
This Rider makes available an enhanced death benefit upon the death of the Owner
prior to the Annuity Start Date. If the Owner dies prior to the Annuity Start
Date, the amount of the death benefit under this Rider will be the greatest of:

1. The sum of all purchase payments (not including any Credit Enhancements),
less any withdrawals and withdrawal charges;

2. The Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit, plus the
Enhanced Death Benefit (as described above); or

3. The Annual Stepped Up Death Benefit (as described above), plus the Enhanced
Death Benefit (as described above); or

4. The Guaranteed Growth Death Benefit at 5% (as described above), plus the
Enhanced Death Benefit (as described above).

If the Owner dies prior to the Annuity Start Date, but due proof of death and
instructions regarding payment are not received by Security Benefit at its Home
Office within six months of the date of the Owner's death, the death benefit
will the Contract Value on the date due proof of the Owner's death and
instructions regarding payment are received by Security Benefit.

This Rider is available only if the age of the Owner at the time the Rider is
issued is age 79 or younger. The charge for this Rider is 0.40%. See the
discussion under "Death Benefit," page 21.

EXTRA CREDIT -- This Rider makes available a Credit Enhancement, which is an
amount added to your Contract Value by Security Benefit. You may purchase this
Rider only at issue. A Credit Enhancement of 3%, 4% or 5% of purchase payments,
as elected in the application, will be added to Contract Value for each purchase
payment made in the first Contract Year. Any Credit Enhancement will be
allocated among the Subaccounts in the same proportion as your purchase payment.
This Rider is available only if the age of the Owner on the Contract Date is age
80 or younger.

In the event of a full or partial withdrawal, Security Benefit will recapture
all or part of any Credit Enhancement that has not yet vested. An amount equal
to 1/7 of the Credit Enhancement will vest as of each anniversary of the Rider's
date of issue and the Credit Enhancement will be fully vested at the end of
seven years from that date. The amount to be forfeited in the event of a
withdrawal is equal to a percentage of the Credit Enhancement that has not yet
vested. The percentage is determined for each withdrawal as of the date of the
withdrawal by dividing:

1. The amount of the withdrawal, including any withdrawal charges, by

2. Contract Value immediately prior to the withdrawal.

Security Benefit will recapture Credit Enhancements on withdrawals only to
the extent that total withdrawals in a Contract Year, including systematic
withdrawals, exceed the Free Withdrawal amount. The Free Withdrawal amount is
equal in the first Contract Year, to 10% of purchase payments, excluding any
Credit Enhancements, made during the year and, for any subsequent Contract Year,
to 10% of Contract Value as of the first day of that Contract Year.

The charge for this Rider will be deducted for a period of seven years from
the Contract Date. The charge varies based upon the Credit Enhancement rate
selected as set forth below:

--------------------------------------------
CREDIT ENHANCEMENT RATE RIDER CHARGE
--------------------------------------------
3% 0.40%
4% 0.55%
5% 0.70%
--------------------------------------------

You may not have more than one Extra Credit Rider in effect on your Contract.
You may not select an Annuity Start Date that is prior to seven years from the
effective date of the Rider.

Security Benefit may recapture Credit Enhancements in the event of a full or
partial withdrawal as discussed above. If you exercise your right to return the
Contract during the Free-Look period, your Contract Value will be reduced by the
value of any Credit Enhancements applied. See "Free-Look Right," page 21. In the
event of a withdrawal under the terms of the Waiver of Withdrawal Charge Rider,
you will forfeit all or part of any Credit Enhancements applied during the 12
months preceding such a withdrawal. See "Waiver of Withdrawal Charge," below.
Death benefit proceeds may exclude all or part of any Credit Enhancements. See
"Death Benefit," page 21 and the discussions of the death benefit riders.

Security Benefit expects to make a profit from the charge for this Rider and
funds payment of the Credit Enhancements through the Rider charge and the
vesting schedule. The Extra Credit Rider would make sense for you only if you
expect your average annual return (net of expenses of the Contract and
underlying Series) to exceed the applicable amount set forth in the table below.
The returns below represent the amount that must be earned EACH year during the
seven-year period beginning on the Contract Date to break even on the Rider. If
your actual returns are greater than this amount, you will profit from the
purchase of the Rider. If your actual returns are less, for example, in a down
market, you will be worse off than if you had not purchased the Rider. Please
note that the returns below are net of Contract and underlying Series expenses
so that you would need to earn the amount in the table plus the amount of
applicable expenses to break even on the Rider.

--------------------------------------------------
RATE OF RETURN
CREDIT ENHANCEMENT RATE (NET OF EXPENSES)
--------------------------------------------------
3% -5.00%
4% -1.50%
5% 0.80%
--------------------------------------------------

WAIVER OF WITHDRAWAL CHARGE -- This Rider makes available a waiver of withdrawal
charge in the event of your confinement to a nursing home, terminal illness, or
total and permanent disability prior to age 65.

The Rider defines confinement to a hospital or nursing facility, as follows:
(1) you have been confined to a "hospital" or "qualified skilled nursing
facility" for at least 90 consecutive days prior to the date of the withdrawal;
and (2) you are so confined when Security Benefit receives the waiver request
and became so confined after the Contract Date.

Security Benefit defines terminal illness as follows: (1) the Owner has been
diagnosed by a licensed physician with a "terminal illness"; and (2) such
illness was first diagnosed after the Contract was issued.

Security Benefit defines disability as follows: (1) the Owner is unable,
because of physical or mental impairment, to perform the material and
substantial duties of any occupation for which the Owner is suited by means of
education, training or experience; (2) the impairment has been in existence for
more than 180 days and began before the Owner attained age 65 and after the
Contract Date; and (3) the impairment is expected to result in death or be
long-standing and indefinite.

Prior to making a withdrawal pursuant to this Rider, you must submit to
Security Benefit a properly completed claim form and a written physician's
statement acceptable to SBL. SBL will also accept as proof of disability a
certified Social Security finding of disability.

Security Benefit reserves the right to have a physician of its choice examine
the Owner to determine if the Owner is eligible for a waiver. The charge for
this Rider is 0.05%.

If you have also purchased an Extra Credit Rider, you will forfeit all or
part of any Credit Enhancements applied during the 12 months preceding any
withdrawal pursuant to this Rider. The amount of Credit Enhancements to be
forfeited is a percentage determined by dividing the amount of the withdrawal by
the total purchase payments made in the 12 months preceding the withdrawal. The
maximum percentage that may be forfeited is 100% of Credit Enhancements earned
during the 12 months preceding the withdrawal.

ALTERNATIVE WITHDRAWAL CHARGE -- This Rider makes available an alternative
withdrawal charge schedule. You may select one of the following schedules at the
time of purchase of the Rider, which is available only at issue.

--------------------------------------------------------
0-YEAR SCHEDULE 3-YEAR SCHEDULE
------------------------- -------------------------
PURCHASE PURCHASE
PAYMENT AGE WITHDRAWAL PAYMENT AGE WITHDRAWAL
(IN YEARS) CHARGE (IN YEARS) CHARGE
--------------------------------------------------------
0 and over 0% 1 7%
2 6%
3 5%
4 and over 0%
--------------------------------------------------------

The charge for this Rider is 0.50% if you select the 0-year schedule and 0.40%
if you select the 3-year schedule. If you purchase this Rider, the withdrawal
charge selected under the Rider will apply in lieu of the 7-year withdrawal
charge schedule described under "Contingent Deferred Sales Charge," page 22. If
you have also purchased an Extra Credit Rider, you may forfeit all or part of
any Credit Enhancement in the event of a full or partial withdrawal. See "Extra
Credit," page 27.

ANNUITY PERIOD

GENERAL -- You select the Annuity Start Date at the time of application. The
Annuity Start Date may not be prior to the third annual Contract anniversary and
may not be deferred beyond the Annuitant's 95th birthday, although the terms of
a Qualified Plan and the laws of certain states may require that you start
annuity payments at an earlier age. If you do not select an Annuity Start Date,
the Annuity Start Date will be the later of the Annuitant's 70th birthday or the
tenth annual Contract Anniversary. If you do not select an Annuity Option,
annuity payments will not begin until you make a selection, which may be after
the Annuity Start Date. See "Selection of an Option," page 31. If there are
Joint Annuitants, the birthdate of the older Annuitant will be used to determine
the latest Annuity Start Date.

On the Annuity Start Date, the proceeds under the Contract will be applied to
provide an Annuity under one of the options described below. Each option is
available in two forms--either as a variable Annuity for use with the
Subaccounts or as a fixed Annuity for use with the Fixed Account. A combination
variable and fixed Annuity is also available. Variable annuity payments will
fluctuate with the investment performance of the applicable Subaccounts while
fixed annuity payments will not. Unless you direct otherwise, proceeds derived
from Contract Value allocated to the Subaccounts will be applied to purchase a
variable Annuity and proceeds derived from Contract Value allocated to the Fixed
Account will be applied to purchase a fixed Annuity. The proceeds under the
Contract will be equal to your Contract Value in the Subaccounts and the Fixed
Account as of the Annuity Start Date, reduced by any applicable premium taxes,
any outstanding Contract Debt and, for Options 1 through 4, 7 and 8, a pro rata
account administration charge, if applicable.

The Contract provides for eight Annuity Options. Security Benefit may make
other Annuity Options available upon request. Annuity payments under Annuity
Options 1 through 4, 7 and 8 are based upon annuity rates that vary with the
Annuity Option selected. In the case of Options 1 through 4 and 8, the annuity
rates will vary based on the age and sex of the Annuitant, except that unisex
rates are available where required by law. The annuity rates reflect your life
expectancy based upon your age as of the Annuity Start Date and your gender,
unless unisex rates apply. The annuity rates are based upon the 1983(a)
mortality table with mortality improvement under projection scale G and are
adjusted to reflect an assumed interest rate of 3.5%, compounded annually. In
the case of Options 5 and 6 as described below, annuity payments are based upon
Contract Value without regard to annuity rates.

Annuity Options 1 through 4 and 8 provide for payments to be made during the
lifetime of the Annuitant. Annuity payments under such options cease in the
event of the Annuitant's death, unless the option provides for a guaranteed
minimum number of payments, for example a life income with guaranteed payments
of 5, 10, 15 or 20 years. The level of annuity payments will be greater for
shorter guaranteed periods and less for longer guaranteed periods. Similarly,
payments will be greater for life annuities than for joint and survivor
annuities, because payments for life annuities are expected to be made for a
shorter period.

You may elect to receive annuity payments on a monthly, quarterly,
semiannual, or annual basis, although no payments will be made for less than
$100. If the frequency of payments selected would result in payments of less
than $100, Security Benefit reserves the right to change the frequency.

You may designate or change an Annuity Start Date, Annuity Option, or
Annuitant, provided proper written notice is received by Security Benefit at its
Home Office at least 30 days prior to the Annuity Start Date set forth in the
Contract. The date selected as the new Annuity Start Date must be at least 30
days after the date written notice requesting a change of Annuity Start Date is
received at Security Benefit's Home Office.

Once annuity payments have commenced under Annuity Options 1 through 4 and 8,
an Annuitant or Owner cannot change the Annuity Option and cannot surrender his
or her annuity and receive a lump-sum settlement in lieu thereof. Under Annuity
Options 5 through 7, full or partial withdrawals may be made after the Annuity
Start Date, subject to any applicable withdrawal charge. The Contract specifies
annuity tables for Annuity Options 1 through 4, 7 and 8, described below. The
tables contain the guaranteed minimum dollar amount (per $1,000 applied) of the
FIRST annuity payment for a variable Annuity and each annuity payment for a
fixed Annuity.

ANNUITY OPTIONS--

OPTION 1 -- LIFE INCOME. Periodic annuity payments will be made during the
lifetime of the Annuitant. It is possible under this Option for any Annuitant to
receive only one annuity payment if the Annuitant's death occurred prior to the
due date of the second annuity payment, two if death occurred prior to the due
date of the third annuity payment, etc. THERE IS NO MINIMUM NUMBER OF PAYMENTS
GUARANTEED UNDER THIS OPTION. PAYMENTS WILL CEASE UPON THE DEATH OF THE
ANNUITANT REGARDLESS OF THE NUMBER OF PAYMENTS RECEIVED.

OPTION 2 -- LIFE INCOME WITH GUARANTEED PAYMENTS OF 5, 10, 15 OR 20 YEARS.
Periodic annuity payments will be made during the lifetime of the Annuitant with
the promise that if, at the death of the Annuitant, payments have been made for
less than a stated period, which may be five, ten, fifteen or twenty years, as
elected by the Owner, annuity payments will be continued during the remainder of
such period to the Designated Beneficiary. Upon the Annuitant's death after the
period certain, no further annuity payments will be made.

OPTION 3 -- LIFE WITH INSTALLMENT OR UNIT REFUND OPTION. Periodic annuity
payments will be made during the lifetime of the Annuitant with the promise
that, if at the death of the Annuitant, the number of payments that has been
made is less than the number determined by dividing the amount applied under
this Option by the amount of the first payment, annuity payments will be
continued to the Designated Beneficiary until that number of payments has been
made.

OPTION 4 -- JOINT AND LAST SURVIVOR. Annuity payments will be made as long as
either Annuitant is living. Upon the death of one Annuitant, Annuity Payments
continue to the surviving Annuitant at the same or a reduced level of 75%, 66
2/3% or 50% of Annuity Payments as elected by the Owner at the time the Annuity
Option is selected. With respect to fixed annuity payments, the amount of the
annuity payment, and with respect to variable annuity payments, the number of
Annuity Units used to determine the annuity payment, is reduced as of the first
annuity payment following the Annuitant's death. It is possible under this
Option for only one annuity payment to be made if both Annuitants died prior to
the second annuity payment due date, two if both died prior to the third annuity
payment due date, etc. AS IN THE CASE OF OPTION 1, THERE IS NO MINIMUM NUMBER OF
PAYMENTS GUARANTEED UNDER THIS OPTION. PAYMENTS CEASE UPON THE DEATH OF THE LAST
SURVIVING ANNUITANT, REGARDLESS OF THE NUMBER OF PAYMENTS RECEIVED.

OPTION 5 -- PAYMENTS FOR SPECIFIED PERIOD. Periodic annuity payments will be
made for a fixed period, which may be from 5 to 20 years, as elected by the
Owner. The amount of each annuity payment is determined by dividing Contract
Value by the number of annuity payments remaining in the period. If, at the
death of all Annuitants, payments have been made for less than the selected
fixed period, the remaining unpaid payments will be paid to the Designated
Beneficiary.

OPTION 6 -- PAYMENTS OF A SPECIFIED AMOUNT. Periodic annuity payments of the
amount elected by the Owner will be made until Contract Value is exhausted, with
the guarantee that, if, at the death of all Annuitants, all guaranteed payments
have not yet been made, the remaining unpaid payments will be paid to the
Designated Beneficiary.

OPTION 7 -- PERIOD CERTAIN. Periodic annuity payments will be made for a
stated period, which may be 5, 10, 15 or 20 years, as elected by the Owner. This
option differs from Option 5 in that annuity payments are calculated on the
basis of Annuity Units rather than as a percentage of Contract Value. If the
Annuitant dies prior to the end of the period, the remaining payments will be
made to the Designated Beneficiary.

OPTION 8 -- JOINT AND CONTINGENT SURVIVOR OPTION. Periodic annuity payments
will be made during the life of the primary Annuitant. Upon the death of the
primary Annuitant, payments will be made to the contingent Annuitant during his
or her life. If the contingent Annuitant is not living upon the death of the
primary Annuitant, no payments will be made to the contingent Annuitant. It is
possible under this Option for only one annuity payment to be made if both
Annuitants died prior to the second annuity payment due date, two if both died
prior to the third annuity payment due date, etc. AS IN THE CASE OF OPTIONS 1
AND 4, THERE IS NO MINIMUM NUMBER OF PAYMENTS GUARANTEED UNDER THIS OPTION.
PAYMENTS CEASE UPON THE DEATH OF THE LAST SURVIVING ANNUITANT, REGARDLESS OF THE
NUMBER OF PAYMENTS RECEIVED.

VALUE OF VARIABLE ANNUITY PAYMENTS: ASSUMED INTEREST RATE. The annuity tables
in the Contract which are used to calculate variable annuity payments for
Annuity Options 1 through 4, 7 and 8 are based on an "assumed interest rate" of
3 1/2%, compounded annually. Variable annuity payments generally increase or
decrease from one annuity payment date to the next based upon the performance of
the applicable Subaccounts during the interim period adjusted for the assumed
interest rate. If the performance of the Subaccount selected is equal to the
assumed interest rate, the annuity payments will remain constant. If the
performance of the Subaccounts is greater than the assumed interest rate, the
annuity payments will increase and if it is less than the assumed interest rate,
the annuity payments will decline. A higher assumed interest rate would mean a
higher initial annuity payment but the amount of the annuity payment would
increase more slowly in a rising market (or the amount of the annuity payment
would decline more rapidly in a declining market). A lower assumption would have
the opposite effect.

Security Benefit calculates variable annuity payments under Options 1 through
4, 7 and 8 using Annuity Units. The value of an Annuity Unit for each Subaccount
is determined as of each Valuation Date and was initially $1.00. The Annuity
Unit value of a Subaccount as of any subsequent Valuation Date is determined by
adjusting the Annuity Unit value on the previous Valuation Date for (1) the
interim performance of the corresponding Series; (2) any dividends or
distributions paid by the corresponding Series; (3) the mortality and expense
risk and administration charges; (4) the charges, if any, that may be assessed
by the Company for taxes attributable to the operation of the Subaccount; and
(5) the assumed interest rate.

Security Benefit determines the number of Annuity Units used to calculate
each variable annuity payment as of the Annuity Start Date. As discussed above,
the Contract specifies annuity rates for Options 1 through 4, 7 and 8 for each
$1,000 applied to an Annuity Option. The proceeds under the Contract as of the
Annuity Start Date, are divided by $1,000 and the result is multiplied by the
rate per $1,000 specified in the annuity tables to determine the initial annuity
payment for a variable annuity and the guaranteed monthly annuity payment for a
fixed annuity.

On the Annuity Start Date, Security Benefit divides the initial variable
annuity payment by the value as of that date of the Annuity Unit for the
applicable Subaccount to determine the number of Annuity Units to be used in
calculating subsequent annuity payments. If variable annuity payments are
allocated to more than one Subaccount, the number of Annuity Units will be
determined by dividing the portion of the initial variable annuity payment
allocated to a Subaccount by the value of that Subaccount's Annuity Unit as of
the Annuity Start Date. The initial variable annuity payment is allocated to the
Subaccounts in the same proportion as the Contract Value is allocated as of the
Annuity Start Date. The number of Annuity Units will remain constant for
subsequent annuity payments, unless the Owner exchanges Annuity Units among
Subaccounts or makes a withdrawal under Option 7.

Subsequent variable annuity payments are calculated by multiplying the number
of Annuity Units allocated to a Subaccount by the value of the Annuity Unit as
of the date of the annuity payment. If the annuity payment is allocated to more
than one Subaccount, the annuity payment is equal to the sum of the payment
amount determined for each Subaccount.

SELECTION OF AN OPTION -- You should carefully review the Annuity Options with
your financial or tax adviser. For Contracts used in connection with a Qualified
Plan, reference should be made to the terms of the particular plan and the
requirements of the Internal Revenue Code for pertinent limitations respecting
annuity payments and other matters. For instance, Qualified Plans generally
require that annuity payments begin no later than April 1 of the calendar year
following the year in which the Annuitant reaches age 70 1/2. In addition, under
a Qualified Plan, the period elected for receipt of annuity payments under
Annuity Options (other than Life Income) generally may be no longer than the
joint life expectancy of the Annuitant and beneficiary in the year that the
Annuitant reaches age 70 1/2, and must be shorter than such joint life
expectancy if the beneficiary is not the Annuitant's spouse and is more than ten
years younger than the Annuitant. For a Non-Qualified Plan, SBL does not allow
annuity payments to be deferred beyond the Annuitant's 95th birthday.

THE FIXED ACCOUNT

You may allocate all or a portion of your purchase payments and transfer
Contract Value to the Fixed Account. Amounts allocated to the Fixed Account
become part of Security Benefit's General Account, which supports Security
Benefit's insurance and annuity obligations. The General Account is subject to
regulation and supervision by the Kansas Department of Insurance and is also
subject to the insurance laws and regulations of other jurisdictions in which
the Contract is distributed. In reliance on certain exemptive and exclusionary
provisions, interests in the Fixed Account have not been registered as
securities under the Securities Act of 1933 (the "1933 Act") and the Fixed
Account has not been registered as an investment company under the Investment
Company Act of 1940 (the "1940 Act"). Accordingly, neither the Fixed Account nor
any interests therein are generally subject to the provisions of the 1933 Act or
the 1940 Act. This disclosure, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in the Prospectus. This Prospectus is
generally intended to serve as a disclosure document only for aspects of a
Contract involving the Separate Account and contains only selected information
regarding the Fixed Account. For more information regarding the Fixed Account,
see "The Contract," page 16.

Amounts allocated to the Fixed Account become part of the General Account of
Security Benefit, which consists of all assets owned by Security Benefit other
than those in the Separate Account and other separate accounts of Security
Benefit. Subject to applicable law, Security Benefit has sole discretion over
investment of the assets of its General Account.

INTEREST -- Contract Value allocated to the Fixed Account earns interest at a
fixed rate or rates that are paid by Security Benefit. The Contract Value in the
Fixed Account earns interest at an interest rate that is guaranteed to be at
least an annual effective rate of 3% which will accrue daily ("Guaranteed
Rate"). Such interest will be paid regardless of the actual investment
experience of the Fixed Account. In addition, Security Benefit may in its
discretion pay interest at a rate ("Current Rate") that exceeds the Guaranteed
Rate. Security Benefit will determine the Current Rate, if any, from time to
time.

Contract Value allocated or transferred to the Fixed Account will earn
interest at the Current Rate, if any, in effect on the date such portion of
Contract Value is allocated or transferred to the Fixed Account. The Current
Rate paid on any such portion of Contract Value allocated or transferred to the
Fixed Account will be guaranteed for rolling periods of one or more years (each
a "Guarantee Period"). Security Benefit currently offers only Guarantee Periods
of one year. Upon expiration of any Guarantee Period, a new Guarantee Period of
the same duration begins with respect to that portion of Contract Value which
will earn interest at the Current Rate, if any, declared on the first day of the
new Guarantee Period.

Contract Value allocated or transferred to the Fixed Account at one point in
time may be credited with a different Current Rate than amounts allocated or
transferred to the Fixed Account at another point in time. For example, amounts
allocated to the Fixed Account in June may be credited with a different current
rate than amounts allocated to the Fixed Account in July. In addition, if
Guarantee Periods of different durations are offered, Contract Value allocated
or transferred to the Fixed Account for a Guarantee Period of one duration may
be credited with a different Current Rate than amounts allocated or transferred
to the Fixed Account for a Guarantee Period of a different duration. Therefore,
at any time, various portions of your Contract Value in the Fixed Account may be
earning interest at different Current Rates depending upon the point in time
such portions were allocated or transferred to the Fixed Account and the
duration of the Guarantee Period. Security Benefit bears the investment risk for
the Contract Value allocated to the Fixed Account and for paying interest at the
Guaranteed Rate on amounts allocated to the Fixed Account.

For purposes of determining the interest rates to be credited on Contract
Value in the Fixed Account, transfers from the Fixed Account pursuant to the
Dollar Cost Averaging or Asset Reallocation Options will be deemed to be taken
in the following order: (1) from any portion of Contract Value allocated to the
Fixed Account for which the Guarantee Period expires during the calendar month
in which the withdrawal, loan, or transfer is effected; (2) then in the order
beginning with that portion of such Contract Value which has the longest amount
of time remaining before the end of its Guarantee Period and (3) ending with
that portion which has the least amount of time remaining before the end of its
Guarantee Period. For more information about transfers and withdrawals from the
Fixed Account, see "Transfers and Withdrawals From the Fixed Account," below.

DEATH BENEFIT -- The death benefit under the Contract will be determined in the
same fashion for a Contract that has Contract Value in the Fixed Account as for
a Contract that has Contract Value allocated to the Subaccounts. See "Death
Benefit," page 21.

CONTRACT CHARGES -- Premium taxes and the account administration, optional Rider
and withdrawal charges will be the same for Owners who allocate purchase
payments or transfer Contract Value to the Fixed Account as for those who
allocate purchase payments or transfer Contract Value to the Subaccounts.
Optional Rider charges are deducted from Current Interest. The charges for
mortality and expense risks and the administration charge will not be assessed
against the Fixed Account, and any amounts that Security Benefit pays for income
taxes allocable to the Subaccounts will not be charged against the Fixed
Account. In addition, you will not pay directly or indirectly the investment
advisory fees and operating expenses of the SBL Fund to the extent Contract
Value is allocated to the Fixed Account; however, you also will not participate
in the investment experience of the Subaccounts.

TRANSFERS AND WITHDRAWALS FROM THE FIXED ACCOUNT -- You may transfer amounts
from the Subaccounts to the Fixed Account and from the Fixed Account to the
Subaccounts, subject to the following limitations. Transfers from the Fixed
Account are allowed only (1) during the calendar month in which the applicable
Guarantee Period expires, (2) pursuant to the Dollar Cost Averaging Option,
provided that such transfers are scheduled to be made over a period of not less
than one year, and (3) pursuant to the Asset Reallocation Option, provided that,
upon receipt of the Asset Reallocation Request, Contract Value is allocated
among the Fixed Account and the Subaccounts in the percentages selected by the
Owner without violating the restrictions on transfers from the Fixed Account set
forth in (1) above. Accordingly, if you desire to implement the Asset
Reallocation Option, you should do so at a time when Contract Value may be
transferred from the Fixed Account to the Subaccounts without violating the
restrictions on transfers from the Fixed Account. Once you implement an Asset
Reallocation Option, the restrictions on transfers will not apply to transfers
made pursuant to the Option.

The minimum amount that you may transfer from the Fixed Account to the
Subaccounts is the lesser of (i) $500 or (ii) the amount of Contract Value for
which the Guarantee Period expires in the calendar month that the transfer is
effected. Transfers of Contract Value pursuant to the Dollar Cost Averaging and
Asset Reallocation Options are not currently subject to any minimums. The
Company reserves the right to limit the number of transfers permitted each
Contract Year to 14 transfers, to suspend transfers and to limit the amount that
may be subject to transfers.

If purchase payments are allocated (except purchase payments made pursuant to
an Automatic Investment Program), or Contract Value is transferred, to the Fixed
Account, any transfers from the Fixed Account in connection with the Dollar Cost
Averaging or Asset Reallocation Options will automatically terminate as of the
date of such purchase payment or transfer. You may reestablish Dollar Cost
Averaging or Asset Reallocation by submitting a written request to Security
Benefit. However, if for any reason a Dollar Cost Averaging Option is canceled,
you may only reestablish the option after the expiration of the next monthly or
quarterly anniversary that corresponds to the period selected in establishing
the option.

You may also make full or partial withdrawals to the same extent as if you
had allocated Contract Value to the Subaccounts. However, no partial withdrawal
request will be processed which would result in the withdrawal of Contract Value
from the Loan Account. See "Full and Partial Withdrawals," page 19 and
"Systematic Withdrawals," page 20. In addition, to the same extent as Owners
with Contract Value in the Subaccounts, the Owner of a Contract used in
connection with a Qualified Plan may obtain a loan if so permitted under the
terms of the Qualified Plan. See "Loans," page 34.

PAYMENTS FROM THE FIXED ACCOUNT -- Full and partial withdrawals, loans, and
transfers from the Fixed Account may be delayed for up to six months after a
written request in proper form is received by Security Benefit at its Home
Office. During the period of deferral, interest at the applicable interest rate
or rates will continue to be credited to the amounts allocated to the Fixed
Account.

MORE ABOUT THE CONTRACT

OWNERSHIP -- The Owner is the person named as such in the application or in any
later change shown in Security Benefit's records. While living, the Owner alone
has the right to receive all benefits and exercise all rights that the Contract
grants or Security Benefit allows. The Owner may be an entity that is not a
living person such as a trust or corporation referred to herein as "Non-natural
Persons." See "Federal Tax Matters," page 36.

JOINT OWNERS. The Joint Owners will be joint tenants with rights of
survivorship and upon the death of an Owner, the surviving Owner shall be the
sole Owner. Any Contract transaction requires the signature of all persons named
jointly.

DESIGNATION AND CHANGE OF BENEFICIARY -- The Designated Beneficiary is the
person having the right to the death benefit, if any, payable upon the death of
the Owner or Joint Owner prior to the Annuity Start Date. The Designated
Beneficiary is the first person on the following list who is alive on the date
of death of the Owner or the Joint Owner: the Owner; the Joint Owner; the
Primary Beneficiary; the Secondary Beneficiary; the Annuitant; or if none of the
above are alive, the Owner's estate. The Primary Beneficiary is the individual
named as such in the application or any later change shown in Security Benefit's
records. The Primary Beneficiary will receive the death benefit of the Contract
only if he or she is alive on the date of death of both the Owner and any Joint
Owner prior to the Annuity Start Date. Because the death benefit of the Contract
goes to the first person on the above list who is alive on the date of death of
any Owner, careful consideration should be given to the manner in which the
Contract is registered, as well as the designation of the Primary Beneficiary.
The Owner may change the Primary Beneficiary at any time while the Contract is
in force by written request on forms provided by Security Benefit and received
by Security Benefit at its Home Office. The change will not be binding on
Security Benefit until it is received and recorded at its Home Office. The
change will be effective as of the date this form is signed subject to any
payments made or other actions taken by Security Benefit before the change is
received and recorded. A Secondary Beneficiary may be designated. The Owner may
designate a permanent Beneficiary whose rights under the Contract cannot be
changed without his or her consent.

Reference should be made to the terms of a particular Qualified Plan and any
applicable law for any restrictions or limitations on the designation of a
Beneficiary. Some qualified plans do not allow the designation of any primary
beneficiary other than a spouse unless the spouse consents to such designation
and the consent is witnessed by a plan representative or a notary public.

DIVIDENDS -- The Contract does not share in the surplus earnings of Security
Benefit, and no dividends will be paid.

PAYMENTS FROM THE SEPARATE ACCOUNT -- Security Benefit will pay any full or
partial withdrawal benefit or death benefit proceeds from Contract Value
allocated to the Subaccounts, and will effect a transfer between Subaccounts or
from a Subaccount to the Fixed Account on the Valuation Date a proper request is
received at Security Benefit's Home Office. However, Security Benefit can
postpone the calculation or payment of such a payment or transfer of amounts
from the Subaccounts to the extent permitted under applicable law, which is
currently permissible only for any period:

o During which the New York Stock Exchange is closed other than customary
weekend and holiday closings,

o During which trading on the New York Stock Exchange is restricted as
determined by the SEC,

o During which an emergency, as determined by the SEC, exists as a result of
which (i) disposal of securities held by the Separate Account is not
reasonably practicable, or (ii) it is not reasonably practicable to determine
the value of the assets of the Separate Account, or

o For such other periods as the SEC may by order permit for the protection of
investors.

PROOF OF AGE AND SURVIVAL -- Security Benefit may require proof of age or
survival of any person on whose life annuity payments depend.

MISSTATEMENTS -- If you misstate the age or sex of an Annuitant or age of an
Owner, the correct amount paid or payable by Security Benefit under the Contract
shall be such as the Contract Value would have provided for the correct age or
sex (unless unisex rates apply).

LOANS -- If you own a Contract issued in connection with a retirement plan that
is qualified under Section 403(b) of the Internal Revenue Code, you may borrow
money under your Contract. You may obtain a loan by submitting a proper written
request to Security Benefit. A loan must be taken and repaid prior to the
Annuity Start Date. The minimum loan that may be taken is $1,000. The maximum
amount of all loans on all contracts combined is generally equal to the lesser
of: (1) $50,000 reduced by the excess of: (a) the highest outstanding loan
balance within the preceding 12-month period ending on the day before the date
the loan is made; over (b) the outstanding loan balance on the date the loan is
made; or (2) 50% of the Contract Values or $10,000, whichever is greater. For
loans issued under plans that are subject to ERISA, the maximum amount of all
loans is the lesser of: (1) $50,000 reduced by the excess of: (a) the highest
outstanding loan balance within the preceding 12-month period ending on the day
before the date the loan is made; over (b) the outstanding loan balance on the
date the loan is made; or (2) 50% of your Contract Value. In any case, the
maximum loan balance outstanding at any time may not exceed 80% of Contract
Value, and Security Benefit reserves the right to limit to one the number of
loans outstanding at any time. The Internal Revenue Code requires aggregation of
all loans made to an individual employee under a single employer plan. However,
since Security Benefit has no information concerning outstanding loans with
other providers, we will only use information available under annuity contracts
issued by us, and you will be responsible for determining your loan limits
considering loans from other providers. Reference should be made to the terms of
your particular Qualified Plan for any additional loan restrictions.

When an eligible Owner takes a loan, Contract Value in an amount equal to the
loan amount is transferred from the Subaccounts and/or the Fixed Account into an
account called the "Loan Account," which is an account within the Fixed Account.
Amounts allocated to the Loan Account earn 3%, the minimum rate of interest
guaranteed under the Fixed Account.

Interest will be charged for the loan and will accrue on the loan balance
from the effective date of any loan. The loan interest rate will be as declared
from time to time by Security Benefit. Because the Contract Value maintained in
the Loan Account (which will earn 3%) will always be equal in amount to the
outstanding loan balance, the net cost of a loan is the interest rate charged by
Security Benefit less 3%.

Loans must be repaid within five years, unless the loan is used to acquire
your principal residence, in which case the loan must be repaid within 30 years.
You must make loan repayments on at least a quarterly basis, and you may prepay
your loan at any time. You must label each loan payment as such. If not labeled
as a loan payment, amounts received by Security Benefit will be treated as
purchase payments. Upon receipt of a loan payment, Security Benefit will
transfer Contract Value from the Loan Account to the Fixed Account and/or the
Subaccounts according to your current instructions with respect to purchase
payments in an amount equal to the amount by which the payment reduces the
amount of the loan outstanding.

If you do not make any required loan payment by the end of the calendar
quarter following the calendar quarter in which the missed payment was due, the
TOTAL OUTSTANDING LOAN BALANCE will be deemed to be in default. The total
outstanding loan balance, which includes accrued interest, will be reported to
the Internal Revenue Service ("IRS") on form 1099-R for the year in which the
default occurred. This deemed distribution may be subject to a 10% penalty tax,
which is imposed upon distributions prior to the Owner attaining age 59 1/2.
Once a loan has defaulted, regularly scheduled loan payments will not be
accepted by SBL. No new loans will be allowed while a loan is in default.
Interest will continue to accrue on a loan in default. Contract Value equal to
the amount of the accrued interest may be transferred to the Loan Account. If a
loan continues to be in default, when you attain age 59 1/2, the total
outstanding loan balance, which includes accrued interest, will be deducted from
your Contract Value. The Contract will terminate automatically if the
outstanding loan balance of a loan in default equals or exceeds the Withdrawal
Value. Contract Value will be used to repay the loan and any applicable
withdrawal charges. Because of the adverse tax consequences associated with
defaulting on a loan, you should carefully consider your ability to repay the
loan and should consult with a tax advisor before requesting a loan.

While the amount to secure the loan is held in the Loan Account, you forego
the investment experience of the Subaccounts and the Current Rate of interest on
the Fixed Account. Outstanding Contract Debt will reduce the amount of proceeds
paid upon full withdrawal, upon payment of the death benefit, and upon
annuitization. In addition, no partial withdrawal will be processed which would
result in the withdrawal of Contract Value from the Loan Account. If a
Guaranteed Growth Death Benefit Rider or Guaranteed Minimum Income Benefit Rider
is in effect, amounts allocated to the Loan Account will earn the minimum rate
of interest guaranteed under the Fixed Account for the purpose of calculating
the benefit under any such Rider. Until the loan is repaid, SBL reserves the
right to restrict any transfer of the Contract which would otherwise qualify as
a transfer permitted in the Code.

In the event that you elect to exchange your Contract for a contract of
another company, you will need to either pay off your loan prior to the exchange
or incur tax consequences in that you will be deemed to have received a taxable
distribution in the amount of the outstanding loan balance.

You should consult with your tax adviser on the effect of a loan.

Loans are not available in certain states pending department of insurance
approval. If loans are later approved by the insurance department of a state,
Security Benefit intends to make loans available to all Owners of 403(b)
contracts in that state at that time, but there can be no assurance that loans
will be approved. Prospective Owners should contact their agent concerning
availability of loans in their state.

RESTRICTIONS ON WITHDRAWALS FROM QUALIFIED PLANS -- Generally, a Qualified Plan
may not provide for the distribution or withdrawal of amounts accumulated under
the Plan until after a fixed number of years, the attainment of a stated age or
upon the occurrence of a specific event such as hardship, disability,
retirement, death or termination of employment. Therefore, if you own a Contract
purchased in connection with a Qualified Plan, you may not be entitled to make a
full or partial withdrawal, as described in this Prospectus, unless one of the
above-described conditions has been satisfied. For this reason, you should refer
to the terms of your particular Qualified Plan, the Internal Revenue Code and
other applicable law for any limitation or restriction on distributions and
withdrawals, including the 10% penalty tax that may be imposed in the event of a
distribution from a Qualified Plan before the participant reaches age 59 1/2.
See the discussion under "Tax Penalties," page 41.

Section 403(b) imposes restrictions on certain distributions from
tax-sheltered annuity contracts meeting the requirements of Section 403(b). The
restrictions apply to tax years beginning on or after January 1, 1989. Section
403(b) requires that distributions from Section 403(b) tax-sheltered annuities
that are attributable to employee contributions made after December 31, 1988
under a salary reduction agreement begin only after the employee (i) reaches age
59 1/2, (ii) separates from service, (iii) dies, (iv) becomes disabled, or (v)
incurs a hardship. Furthermore, distributions of gains attributable to such
contributions accrued after December 31, 1988 may not be made on account of
hardship. Hardship, for this purpose, is generally defined as an immediate and
heavy financial need, such as paying for medical expenses, the purchase of a
residence, paying certain tuition expenses, or paying amounts needed to avoid
eviction or foreclosure that may ONLY be met by the distribution. You should
also be aware that Internal Revenue Service regulations do not allow you to make
any contributions to your 403(b) annuity contract for a period of six months
after a hardship withdrawal.

If you own a Contract purchased as a tax-sheltered Section 403(b) annuity
contract, you will not, therefore, be entitled to make a full or partial
withdrawal, as described in this Prospectus, in order to receive proceeds from
the Contract attributable to contributions under a salary reduction agreement or
any gains credited to such Contract after December 31, 1988 unless one of the
above-described conditions has been satisfied. In the case of transfers of
amounts accumulated in a different Section 403(b) contract to this Contract
under a Section 403(b) program, the withdrawal constraints described above would
not apply to the amount transferred to the Contract designated as attributable
to the Owner's December 31, 1988 account balance under the old contract,
provided the amounts transferred between contracts qualified as a tax-free
exchange under the Internal Revenue Code. An Owner of a Contract may be able to
transfer the Contract's Withdrawal Value to certain other investment
alternatives meeting the requirements of Section 403(b) that are available under
an employer's Section 403(b) arrangement.

The distribution or withdrawal of amounts under a Contract purchased in
connection with a Qualified Plan may result in the receipt of taxable income to
the Owner or Annuitant and in some instances may also result in a penalty tax.
Therefore, you should carefully consider the tax consequences of a distribution
or withdrawal under a Contract and you should consult a competent tax adviser.
See "Federal Tax Matters," below.

FEDERAL TAX MATTERS

INTRODUCTION -- The Contract described in this Prospectus is designed for use by
individuals in retirement plans which may or may not be Qualified Plans under
the provisions of the Internal Revenue Code ("Code"). The ultimate effect of
federal income taxes on the amounts held under a Contract, on annuity payments,
and on the economic benefits to the Owner, the Annuitant, and the Beneficiary or
other payee will depend upon the type of retirement plan, if any, for which the
Contract is purchased, the tax and employment status of the individuals involved
and a number of other factors. The discussion contained herein and in the
Statement of Additional Information is general in nature and is not intended to
be an exhaustive discussion of all questions that might arise in connection with
a Contract. It is based upon Security Benefit's understanding of the present
federal income tax laws as currently interpreted by the Internal Revenue Service
("IRS"), and is not intended as tax advice. No representation is made regarding
the likelihood of continuation of the present federal income tax laws or of the
current interpretations by the IRS or the courts. Future legislation may affect
annuity contracts adversely. Moreover, no attempt has been made to consider any
applicable state or other laws. Because of the inherent complexity of the tax
laws and the fact that tax results will vary according to the particular
circumstances of the individual involved and, if applicable, the Qualified Plan,
a person should consult with a qualified tax adviser regarding the purchase of a
Contract, the selection of an Annuity Option under a Contract, the receipt of
annuity payments under a Contract or any other transaction involving a Contract.
SECURITY BENEFIT DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF, OR TAX
CONSEQUENCES ARISING FROM, ANY CONTRACT OR ANY TRANSACTION INVOLVING THE
CONTRACT.

TAX STATUS OF SECURITY BENEFIT AND THE SEPARATE ACCOUNT --

GENERAL. Security Benefit intends to be taxed as a life insurance company
under Part I, Subchapter L of the Code. Because the operations of the Separate
Account form a part of Security Benefit, Security Benefit will be responsible
for any federal income taxes that become payable with respect to the income of
the Separate Account and its Subaccounts.

CHARGE FOR SECURITY BENEFIT TAXES. A charge may be made for any federal taxes
incurred by Security Benefit that are attributable to the Separate Account, the
Subaccounts or to the operations of Security Benefit with respect to the
Contracts or attributable to payments, premiums, or acquisition costs under the
Contracts. Security Benefit will review the question of a charge to the Separate
Account, the Subaccounts or the Contracts for Security Benefit's federal taxes
periodically. Charges may become necessary if, among other reasons, the tax
treatment of Security Benefit or of income and expenses under the Contracts is
ultimately determined to be other than what Security Benefit currently believes
it to be, if there are changes made in the federal income tax treatment of
variable annuities at the insurance company level, or if there is a change in
Security Benefit's tax status.

Under current laws, Security Benefit may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant. If there is a material change in applicable state or local tax
laws, Security Benefit reserves the right to charge the Separate Account or the
Subaccounts for such taxes, if any, attributable to the Separate Account or
Subaccounts.

DIVERSIFICATION STANDARDS. Each Series of the SBL Fund will be required to
adhere to regulations adopted by the Treasury Department pursuant to Section
817(h) of the Code prescribing asset diversification requirements for investment
companies whose shares are sold to insurance company separate accounts funding
variable contracts. Pursuant to these regulations, on the last day of each
calendar quarter (or on any day within 30 days thereafter), no more than 55% of
the total assets of a Series may be represented by any one investment, no more
than 70% may be represented by any two investments, no more than 80% may be
represented by any three investments, and no more than 90% may be represented by
any four investments. For purposes of Section 817(h), securities of a single
issuer generally are treated as one investment but obligations of the U.S.
Treasury and each U.S. Governmental agency or instrumentality generally are
treated as securities of separate issuers. The Separate Account, through the
Series, intends to comply with the diversification requirements of Section
817(h).

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances, income
and gains from the separate account assets would be includable in the variable
contractowner's gross income. The IRS has stated in published rulings that a
variable contractowner will be considered the owner of separate account assets
if the contractowner possesses incidents of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department also announced, in connection with the issuance of regulations
concerning diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control of the investments of a
segregated asset account may cause the investor (i.e., the contract owner),
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 subaccounts 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 Contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policyowners were not owners of separate account assets. For
example, the Owner has additional flexibility in allocating purchase payments
and Contract Values. These differences could result in an Owner being treated as
the owner of a pro rata portion of the assets of the Separate Account. In
addition, Security Benefit does not know what standards will be set forth, if
any, in the regulations or rulings which the Treasury Department has stated it
expects to issue. Security Benefit therefore reserves the right to modify the
Contract, as it deems appropriate, to attempt to prevent an Owner from being
considered the owner of a pro rata share of the assets of the Separate Account.
Moreover, in the event that regulations or rulings are adopted, there can be no
assurance that the Series will be able to operate as currently described in the
Prospectus, or that the SBL Fund will not have to change any Series' investment
objective or investment policies.

INCOME TAXATION OF ANNUITIES IN GENERAL--NON-QUALIFIED PLANS -- Section 72 of
the Code governs the taxation of annuities. In general, a contract owner is not
taxed on increases in value under an annuity contract until some form of
distribution is made under the contract. However, the increase in value may be
subject to tax currently under certain circumstances. See "Contracts Owned by
Non-Natural Persons" on page 38 and "Diversification Standards" above.
Withholding of federal income taxes on all distributions may be required unless
a recipient who is eligible elects not to have any amounts withheld and properly
notifies Security Benefit of that election.

SURRENDERS OR WITHDRAWALS PRIOR TO THE ANNUITY START DATE. Code Section 72
provides that amounts received upon a total or partial withdrawal (including
systematic withdrawals) from a Contract prior to the Annuity Start Date
generally will be treated as gross income to the extent that the cash value of
the Contract immediately before the withdrawal (determined without regard to any
surrender charge in the case of a partial withdrawal) exceeds the "investment in
the contract." The "investment in the contract" is that portion, if any, of
purchase payments paid under a Contract less any distributions received
previously under the Contract that are excluded from the recipient's gross
income. The taxable portion is taxed at ordinary income tax rates. For purposes
of this rule, a pledge or assignment of a contract is treated as a payment
received on account of a partial withdrawal of a Contract.

SURRENDERS OR WITHDRAWALS ON OR AFTER THE ANNUITY START DATE. Upon a complete
surrender, the receipt is taxable to the extent that the cash value of the
Contract exceeds the investment in the Contract. The taxable portion of such
payments will be taxed at ordinary income tax rates.

For fixed annuity payments, the taxable portion of each payment generally is
determined by using a formula known as the "exclusion ratio," which establishes
the ratio that the investment in the Contract bears to the total expected amount
of annuity payments for the term of the Contract. That ratio is then applied to
each payment to determine the non-taxable portion of the payment. The remaining
portion of each payment is taxed at ordinary income rates. For variable annuity
payments, the taxable portion of each payment is determined by using a formula
known as the "excludable amount," which establishes the non-taxable portion of
each payment. The non-taxable portion is a fixed dollar amount for each payment,
determined by dividing the investment in the Contract by the number of payments
to be made. The remainder of each variable annuity payment is taxable. Once the
excludable portion of annuity payments to date equals the investment in the
Contract, the balance of the annuity payments will be fully taxable.

PENALTY TAX ON CERTAIN SURRENDERS AND WITHDRAWALS. With respect to amounts
withdrawn or distributed before the taxpayer reaches age 59 1/2, a penalty tax
is imposed equal to 10% of the portion of such amount which is includable in
gross income. However, the penalty tax is not applicable to withdrawals: (i)
made on or after the death of the owner (or where the owner is not an
individual, the death of the "primary annuitant," who is defined as the
individual the events in whose life are of primary importance in affecting the
timing and amount of the payout under the Contract); (ii) attributable to the
taxpayer's becoming totally disabled within the meaning of Code Section
72(m)(7); (iii) which are part of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the taxpayer, or the joint lives (or joint life expectancies) of
the taxpayer and his or her beneficiary; (iv) from certain qualified plans; (v)
under a so-called qualified funding asset (as defined in Code Section 130(d));
(vi) under an immediate annuity contract; or (vii) which are purchased by an
employer on termination of certain types of qualified plans and which are held
by the employer until the employee separates from service.

If the penalty tax does not apply to a surrender or withdrawal as a result of
the application of item (iii) above, and the series of payments are subsequently
modified (other than by reason of death or disability), the tax for the first
year in which the modification occurs will be increased by an amount (determined
by the regulations) equal to the tax that would have been imposed but for item
(iii) above, plus interest for the deferral period, if the modification takes
place (a) before the close of the period which is five years from the date of
the first payment and after the taxpayer attains age 59 1/2, or (b) before the
taxpayer reaches age 59 1/2.

ADDITIONAL CONSIDERATIONS--

DISTRIBUTION-AT-DEATH RULES. In order to be treated as an annuity contract, a
contract must provide the following two distribution rules: (a) if any owner
dies on or after the Annuity Start Date, and before the entire interest in the
Contract has been distributed, the remainder of the owner's interest will be
distributed at least as quickly as the method in effect on the owner's death;
and (b) if any owner dies before the Annuity Start Date, the entire interest in
the Contract must generally be distributed within five years after the date of
death, or, if payable to a designated beneficiary, must be annuitized over the
life of that designated beneficiary or over a period not extending beyond the
life expectancy of that beneficiary, commencing within one year after the date
of death of the owner. If the sole designated beneficiary is the spouse of the
deceased owner, the Contract (together with the deferral of tax on the accrued
and future income thereunder) may be continued in the name of the spouse as
owner.

Generally, for purposes of determining when distributions must begin under
the foregoing rules, where an owner is not an individual, the primary annuitant
is considered the owner. In that case, a change in the primary annuitant will be
treated as the death of the owner. Finally, in the case of joint owners, the
distribution-at-death rules will be applied by treating the death of the first
owner as the one to be taken into account in determining generally when
distributions must commence, unless the sole Designated Beneficiary is the
deceased owner's spouse.

GIFT OF ANNUITY CONTRACTS. Generally, gifts of non-tax qualified Contracts
prior to the Annuity Start Date will trigger tax on the gain on the Contract,
with the donee getting a stepped-up basis for the amount included in the donor's
income. The 10% penalty tax and gift tax also may be applicable. This provision
does not apply to transfers between spouses or incident to a divorce.

CONTRACTS OWNED BY NON-NATURAL PERSONS. If the Contract is held by a
non-natural person (for example, a corporation) the income on that Contract
(generally the increase in net surrender value less the purchase payments) is
includable in taxable income each year. The rule does not apply where the
Contract is acquired by the estate of a decedent, where the Contract is held by
certain types of retirement plans, where the Contract is a qualified funding
asset for structured settlements, where the Contract is purchased on behalf of
an employee upon termination of a qualified plan, and in the case of an
immediate annuity. An annuity contract held by a trust or other entity as agent
for a natural person is considered held by a natural person.

MULTIPLE CONTRACT RULE. For purposes of determining the amount of any
distribution under Code Section 72(e) (amounts not received as annuities) that
is includable in gross income, all Non-Qualified annuity contracts issued by the
same insurer to the same contract owner during any calendar year are to be
aggregated and treated as one contract. Thus, any amount received under any such
contract prior to the contract's Annuity Start Date, such as a partial
surrender, dividend, or loan, will be taxable (and possibly subject to the 10%
penalty tax) to the extent of the combined income in all such contracts.

In addition, the Treasury Department has broad regulatory authority in
applying this provision to prevent avoidance of the purposes of this rule. It is
possible that, under this authority, the Treasury Department may apply this rule
to amounts that are paid as annuities (on and after the Annuity Start Date)
under annuity contracts issued by the same company to the same owner during any
calendar year. In this case, annuity payments could be fully taxable (and
possibly subject to the 10% penalty tax) to the extent of the combined income in
all such contracts and regardless of whether any amount would otherwise have
been excluded from income because of the "exclusion ratio" under the contract.

POSSIBLE TAX CHANGES. In recent years, legislation has been proposed that
would have adversely modified the federal taxation of certain annuities. There
is always the possibility that the tax treatment of annuities could change by
legislation or other means (such as IRS regulations, revenue rulings, and
judicial decisions). Moreover, although unlikely, it is also possible that any
legislative change could be retroactive (that is, effective prior to the date of
such change).

TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A CONTRACT. A transfer of ownership of
a Contract, the designation of an Annuitant, Payee or other Beneficiary who is
not also the Owner, the selection of certain Annuity Start Dates or the exchange
of a Contract may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such transfer, assignment,
selection or exchange should contact a competent tax adviser with respect to the
potential effects of such a transaction.

QUALIFIED PLANS -- The Contract may be used with Qualified Plans that meet the
requirements of Section 403(b), 408 or 408A of the Code. If you are purchasing
the Contract as an investment vehicle for one of these Qualified Plans, you
should consider that the Contract does not provide any additional tax advantage
to that already available through the Qualified Plan. However, the Contract does
offer features and benefits in addition to providing tax deferral that other
investments may not offer, including death benefit protection for your
beneficiaries and annuity options which guarantee income for life. You should
consult with your financial professional as to whether the overall benefits and
costs of the Contract are appropriate considering your circumstances.

The tax rules applicable to participants in such Qualified Plans vary
according to the type of plan and the terms and conditions of the plan itself.
No attempt is made herein to provide more than general information about the use
of the Contract with the various types of Qualified Plans. These Qualified Plans
may permit the purchase of the Contracts to accumulate retirement savings under
the plans. Adverse tax or other legal consequences to the plan, to the
participant or to both may result if this Contract is assigned or transferred to
any individual as a means to provide benefit payments, unless the plan complies
with all legal requirements applicable to such benefits prior to transfer of the
Contract. Owners, Annuitants, and Beneficiaries, are cautioned that the rights
of any person to any benefits under such Qualified Plans may be subject to the
terms and conditions of the plans themselves or limited by applicable law,
regardless of the terms and conditions of the Contract issued in connection
therewith. For example, Security Benefit may accept beneficiary designations and
payment instructions under the terms of the Contract without regard to any
spousal consents that may be required under the plan or the Employee Retirement
Income Security Act of 1974 (ERISA). Consequently, an Owner's Beneficiary
designation or elected payment option may not be enforceable.

The amounts that may be contributed to Qualified Plans are subject to
limitations that vary depending on the type of Plan. In addition, early
distributions from most Qualified Plans may be subject to penalty taxes, or, for
certain plans, could cause the Plan to be disqualified. Furthermore,
distributions from most Qualified Plans are subject to certain minimum
distribution rules. Failure to comply with these rules could result in
disqualification of the Plan or subject the Owner or Annuitant to penalty taxes.
As a result, the minimum distribution rules may limit the availability of
certain Annuity Options to certain Annuitants and their beneficiaries. These
requirements may not be incorporated into Security Benefit's Contract
administration procedures. Owners, participants and beneficiaries are
responsible for determining that contributions, distributions and other
transactions with respect to the Contracts comply with applicable law.

The following are brief descriptions of the various types of Qualified Plans
and the use of the Contract therewith:

SECTION 403(B). Code Section 403(b) permits public school employees and
employees of certain types of charitable, educational and scientific
organizations specified in Section 501(c)(3) of the Code to purchase annuity
contracts, and, subject to certain limitations, to exclude the amount of
purchase payments from gross income for tax purposes. The Contract may be
purchased in connection with a Section 403(b) annuity program.

Section 403(b) annuities must generally be provided under a plan which meets
certain minimum participation, coverage, and nondiscrimination requirements.
Each employee's interest in a retirement plan qualified under Code Section
403(b) must generally be distributed or begin to be distributed not later than
April 1 of the calendar year following the later of the calendar year in which
the employee reaches age 70 1/2 or retires ("required beginning date"). Periodic
distributions must not extend beyond the life of the employee or the lives of
the employee and a designated beneficiary (or over a period extending beyond the
life expectancy of the employee or the joint life expectancy of the employee and
a designated beneficiary).

If an employee dies before reaching his or her required beginning date, the
employee's entire interest in the plan must generally be distributed beginning
before the close of the calendar year following the year of the employee's death
to a designated beneficiary over the life of the beneficiary (or over a period
not extending beyond the life expectancy of the beneficiary). If the designated
beneficiary is the employee's surviving spouse, distributions may be delayed
until the employee would have reached age 70 1/2. If there is no designated
beneficiary or if distributions are not timely commenced, the entire interest
must be distributed by the end of the fifth calendar year following the year of
death.

If an employee dies after reaching his or her required beginning date, the
employee's interest in the plan must generally be distributed at least as
rapidly as under the method of distribution in effect at the time of the
employee's death.

A Section 403(b) annuity contract may be purchased with employer
contributions, employee contributions or a combination of both. An employee's
rights under a Section 403(b) contract must be nonforfeitable. Prior to 2002,
numerous limitations applied to the amount of contributions that could be made
to a Section 403(b) annuity contract. These limitations were referred to as the
"maximum exclusion allowance." Beginning in 2002, the "maximum exclusion
allowance" limitation on Section 403(b) annuity contributions is repealed. The
new applicable limit is similar to the limits on contributions to qualified
retirement plans and depends upon, among other things, whether the annuity
contract is purchased with employer or employee contributions.

Amounts used to purchase Section 403(b) annuities generally are excludable
from the taxable income of the employee. As a result, all distributions from
such annuities are normally taxable in full as ordinary income to the employee.

A Section 403(b) annuity contract must prohibit the distribution of employee
contributions (including earnings thereon) until the employee: (i) attains age
59 1/2, (ii) terminates employment; (iii) dies; (iv) becomes disabled; or (v)
incurs a financial hardship (earnings may not be distributed in the event of
hardship).

Distributions from a Section 403(b) annuity contract may be eligible for a
tax-free rollover to another eligible retirement plan, including an individual
retirement account or annuity (IRA). See "Rollovers" page 41.

SECTIONS 408 AND 408A. INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the
Code permits eligible individuals to establish individual retirement programs
through the purchase of Individual Retirement Annuities ("traditional IRAs").
The Contract may be purchased as an IRA. The IRAs described in this paragraph
are called "traditional IRAs" to distinguish them from the new "Roth IRAs" which
became available in 1998. (Roth IRAs are described below.)

IRAs are subject to limitations on the amount that may be contributed, the
persons who may be eligible and on the time when distributions must commence.
Depending upon the circumstances of the individual, contributions to a
traditional IRA may be made on a deductible or non-deductible basis. IRAs may
not be transferred, sold, assigned, discounted or pledged as collateral for a
loan or other obligation. The annual premium for an IRA may not be fixed and may
not exceed (except in the case of a rollover contribution) the lesser of 100% of
the individual's taxable compensation or the applicable dollar amount as shown
in the table below:

----------------------------------
TAX YEAR AMOUNT
----------------------------------
2002-2004 $3,000
2005-2007 $4,000
2008 and thereafter $5,000
----------------------------------

Any refund of premium must be applied to the payment of future premiums or the
purchase of additional benefits. If an individual is age 50 or over, the
individual may make an additional catch-up contribution to a traditional IRA of
$500 during the tax years of 2002-2005, or $1,000 for the 2006 tax year or any
tax year thereafter. However, if the individual is covered by an employer
retirement plan, the amount of the contribution to a traditional IRA which may
be deducted will be reduced or eliminated if the individual's modified adjusted
gross income exceeds certain amounts ($54,000 for a married couple filing a
joint return and $34,000 for a single taxpayer in 2002, $60,000 for a married
couple filing a joint return and $40,000 for a single taxpayer in 2003). If the
individual's spouse is covered by an employer retirement plan but the individual
is not, the individual may be able to deduct those contributions to a
traditional IRA; however, the deduction will be reduced or eliminated if the
adjusted gross income on a joint return exceeds $150,000.

Sale of the Contract for use with IRAs may be subject to special requirements
imposed by the Internal Revenue Service. Purchasers of the Contract for such
purposes will be provided with such supplementary information as may be required
by the Internal Revenue Service or other appropriate agency, and will have the
right to revoke the Contract under certain circumstances. See the IRA Disclosure
Statement that accompanies this Prospectus.

In general, traditional IRAs are subject to minimum distribution requirements
similar to those applicable to retirement plans qualified under Section 403(b)
of the Code; however, the required beginning date for traditional IRAs is
generally the date that the contract owner reaches age 70 1/2--the contract
owner's retirement date, if any, will not affect his or her required beginning
date. See "Section 403(b)," page 39. Distributions from IRAs are generally taxed
under Code Section 72. Under these rules, a portion of each distribution may be
excludable from income. The amount excludable from the individual's income is
the amount of the distribution that bears the same ratio as the individual's
nondeductible contributions bears to the expected return under the IRA.

Distributions of deductible, pre-tax contributions and earnings from a
traditional IRA may be eligible for a tax-free rollover to an eligible
retirement plan, including another traditional IRA. In certain cases, a
distribution of non-deductible contributions or other after-tax amounts from a
traditional IRA may be eligible to be rolled over to another traditional IRA.
See "Rollovers" on page 41.

ROTH IRAS. Section 408A of the Code permits eligible individuals to establish
a Roth IRA. The Contract may be purchased as a Roth IRA. Contributions to a Roth
IRA are not deductible, but withdrawals that meet certain requirements are not
subject to federal income tax on either the original contributions or any
earnings. Sale of the Contract for use with Roth IRAs may be subject to special
requirements imposed by the Internal Revenue Service. Purchasers of the Contract
for such purposes will be provided with such supplementary information as may be
required by the Internal Revenue Service or other appropriate agency, and will
have the right to revoke the Contract under certain requirements. Unlike a
traditional IRA, Roth IRAs are not subject to minimum required distribution
rules during the contract owner's lifetime. Generally, however, the amount
remaining in a Roth IRA after the contract owner's death must begin to be
distributed by the end of the first calendar year after death, and made over a
beneficiary's life expectancy. If there is no beneficiary, or if distributions
are delayed, the amount must be distributed by the end of the fifth full
calendar year after death of the contract owner.

The Internal Revenue Service has not reviewed the Contract for qualification
as a Roth IRA and has not addressed in a ruling of general applicability whether
a death benefit provision such as the provision in the Contract comports with
Roth IRA qualification requirements.

ROLLOVERS. A "rollover" is the tax-free transfer of a distribution from one
"eligible retirement plan" to another. Distributions which are rolled over are
not included in the employee's gross income until some future time.

If any portion of the balance to the credit of an employee in a Section
403(b) plan is paid to the employee in an "eligible rollover distribution" and
the employee transfers any portion of the amount received to an "eligible
retirement plan," then the amount so transferred is not includable in income.
Also, pre-tax distributions from an IRA may be rolled over to another eligible
retirement plan. An "eligible rollover distribution" generally means any
distribution that is not one of a series of periodic payments made for the life
of the distributee or for a specified period of at least ten years. In addition,
a required minimum distribution and certain corrective distributions, will not
qualify as an eligible rollover distribution. A rollover must be made directly
between plans within 60 days after receipt of the distribution.

An "eligible retirement plan" will be another Section 403(b) plan, a
traditional individual retirement account or annuity described in Code Section
408.

A Section 403(b) plan must generally provide a participant receiving an
eligible rollover distribution, the option to have the distribution transferred
directly to another eligible retirement plan.

TAX PENALTIES. PREMATURE DISTRIBUTION TAX. Distributions from a Qualified
Plan before the participant reaches age 59 1/2 are generally subject to an
additional tax equal to 10% of the taxable portion of the distribution. The 10%
penalty tax does not apply to distributions: (i) made on or after the death of
the employee; (ii) attributable to the employee's disability; (iii) which are
part of a series of substantially equal periodic payments made (at least
annually) for the life (or life expectancy) of the employee or the joint lives
(or joint life expectancies) of the employee and a designated beneficiary and
(except for IRAs) which begin after the employee terminates employment; (iv)
made to an employee after termination of employment after reaching age 55; (v)
made to pay for certain medical expenses; (vi) that are exempt withdrawals of an
excess contribution; (vii) that is rolled over or transferred in accordance with
Code requirements; or (viii) that is transferred pursuant to a decree of divorce
or separate maintenance or written instrument incident to such a decree.

The exception to the 10% penalty tax described in item (iv) above is not
applicable to IRAs. However, distributions from an IRA to unemployed individuals
can be made without application of the 10% penalty tax to pay health insurance
premiums in certain cases. There are two additional exceptions to the 10%
penalty tax on withdrawals from IRAs before age 59 1/2: withdrawals made to pay
"qualified" higher education expenses and withdrawals made to pay certain
"eligible first-time home buyer expenses."

MINIMUM DISTRIBUTION TAX. If the amount distributed from a Qualified Plan is
less than the minimum required distribution for the year, the participant is
subject to a 50% tax on the amount that was not properly distributed.

WITHHOLDING. Periodic distributions (e.g., annuities and installment
payments) from a Qualified Plan that will last for a period of ten or more years
are generally subject to voluntary income tax withholding. The amount withheld
on such periodic distributions is determined at the rate applicable to wages.
The recipient of a periodic distribution may generally elect not to have
withholding apply.

Nonperiodic distributions (e.g., lump sums and annuities or installment
payments of less than ten years) from a Qualified Plan (other than IRAs) are
generally subject to mandatory 20% income tax withholding. However, no
withholding is imposed if the distribution is transferred directly to another
eligible Qualified Plan. Nonperiodic distributions from an IRA are subject to
income tax withholding at a flat 10% rate. The recipient of such a distribution
may elect not to have withholding apply.

The above description of the federal income tax consequences of the different
types of Qualified Plans which may be funded by the Contract offered by this
Prospectus is only a brief summary and is not intended as tax advice. The rules
governing the provisions of Qualified Plans are extremely complex and often
difficult to comprehend. Anything less than full compliance with the applicable
rules, all of which are subject to change, may have adverse tax consequences. A
prospective Owner considering adoption of a Qualified Plan and purchase of a
Contract in connection therewith should first consult a qualified and competent
tax adviser, with regard to the suitability of the Contract as an investment
vehicle for the Qualified Plan.

OTHER INFORMATION

VOTING OF SBL FUND SHARES -- Security Benefit is the legal owner of the shares
of SBL Fund held by the Subaccounts. Security Benefit will exercise voting
rights attributable to the shares of each Series of the Fund held in the
Subaccounts at any regular and special meetings of the shareholders of the Fund
on matters requiring shareholder voting under the 1940 Act. In accordance with
its view of presently applicable law, Security Benefit will exercise its voting
rights based on instructions received from persons having the voting interest in
corresponding Subaccounts. However, if the 1940 Act or any regulations
thereunder should be amended, or if the present interpretation thereof should
change, and as a result Security Benefit determines that it is permitted to vote
the shares of the SBL Fund in its own right, it may elect to do so.

The person having the voting interest under a Contract is the Owner. Unless
otherwise required by applicable law, the number of shares of a particular
Series as to which voting instructions may be given to Security Benefit is
determined by dividing your Contract Value in the corresponding Subaccount on a
particular date by the net asset value per share of the Series as of the same
date. Fractional votes will be counted. The number of votes as to which voting
instructions may be given will be determined as of the same date established by
SBL Fund for determining shareholders eligible to vote at the meeting of the
Fund. If required by the SEC, Security Benefit reserves the right to determine
in a different fashion the voting rights attributable to the shares of SBL Fund.
Voting instructions may be cast in person or by proxy.

Voting rights attributable to your Contract Value in a Subaccount for which
no timely voting instructions are received will be voted by Security Benefit in
the same proportion as the voting instructions that are received in a timely
manner for all Contracts participating in that Subaccount. Security Benefit will
also exercise the voting rights from assets in each Subaccount that are not
otherwise attributable to Owners, if any, in the same proportion as the voting
instructions that are received in a timely manner for all Contracts
participating in that Subaccount.

SUBSTITUTION OF INVESTMENTS -- Security Benefit reserves the right, subject to
compliance with the law as then in effect, to make additions to, deletions from,
substitutions for, or combinations of the securities that are held by the
Separate Account or any Subaccount or that the Separate Account or any
Subaccount may purchase. If shares of any or all of the Series of SBL Fund
should no longer be available for investment, or if Security Benefit management
believes further investment in shares of any or all of the Series of SBL Fund
should become inappropriate in view of the purposes of the Contract, Security
Benefit may substitute shares of another Series of SBL Fund or of a different
fund for shares already purchased, or to be purchased in the future under the
Contract. Security Benefit may also purchase, through the Subaccount, other
securities for other classes or contracts, or permit a conversion between
classes of contracts on the basis of requests made by Owners.

In connection with a substitution of any shares attributable to an Owner's
interest in a Subaccount or the Separate Account, Security Benefit will, to the
extent required under applicable law, provide notice, seek Owner approval, seek
prior approval of the SEC, and comply with the filing or other procedures
established by applicable state insurance regulators.

Security Benefit also reserves the right to establish additional Subaccounts
of the Separate Account that would invest in a new Series of SBL Fund or in
shares of another investment company, a series thereof, or other suitable
investment vehicle. Security Benefit may establish new Subaccounts in its sole
discretion, and will determine whether to make any new Subaccount available to
existing Owners. Security Benefit may also eliminate or combine one or more
Subaccounts if, in its sole discretion, marketing, tax, or investment conditions
so warrant.

Subject to compliance with applicable law, Security Benefit may transfer
assets to the General Account. Security Benefit also reserves the right, subject
to any required regulatory approvals, to transfer assets of any Subaccount to
another separate account or Subaccount.

In the event of any such substitution or change, Security Benefit may, by
appropriate endorsement, make such changes in these and other contracts as may
be necessary or appropriate to reflect such substitution or change. If Security
Benefit believes it to be in the best interests of persons having voting rights
under the Contracts, the Separate Account may be operated as a management
investment company under the 1940 Act or any other form permitted by law. The
Separate Account may be deregistered under that Act in the event such
registration is no longer required, or it may be combined with other separate
accounts of Security Benefit or an affiliate thereof. Subject to compliance with
applicable law, Security Benefit also may combine one or more Subaccounts and
may establish a committee, board, or other group to manage one or more aspects
of the operation of the Separate Account.

CHANGES TO COMPLY WITH LAW AND AMENDMENTS -- Security Benefit reserves the
right, without the consent of Owners, to suspend sales of the Contract as
presently offered and to make any change to the provisions of the Contracts to
comply with, or give Owners the benefit of, any federal or state statute, rule,
or regulation, including but not limited to requirements for annuity contracts
and retirement plans under the Internal Revenue Code and regulations thereunder
or any state statute or regulation.

REPORTS TO OWNERS -- Security Benefit will send you annually a statement setting
forth a summary of the transactions that occurred during the year, and
indicating the Contract Value as of the end of each year. In addition, the
statement will indicate the allocation of Contract Value among the Fixed Account
and the Subaccounts and any other information required by law. Security Benefit
will also send confirmations upon purchase payments, transfers, loans, loan
repayments, and full and partial withdrawals. Security Benefit may confirm
certain transactions on a quarterly basis. These transactions include purchases
under an Automatic Investment Program, transfers under the Dollar Cost Averaging
and Asset Reallocation Options, systematic withdrawals and annuity payments.

You will also receive an annual and semiannual report containing financial
statements for SBL Fund, which will include a list of the portfolio securities
of each Series, as required by the 1940 Act, and/or such other reports as may be
required by federal securities laws.

ELECTRONIC TRANSFER PRIVILEGES -- You may request a transfer of Contract Value
and may make changes to an existing Dollar Cost Averaging or Asset Reallocation
option by telephone if the Electronic Transfer Privilege section of the
application or the proper form has been properly completed, signed, and filed at
Security Benefit's Home Office. Security Benefit has established procedures to
confirm that instructions communicated by telephone are genuine and will not be
liable for any losses due to fraudulent or unauthorized instructions provided it
complies with its procedures. Security Benefit's procedures require that any
person requesting a transfer by telephone provide the account number and the
Owner's tax identification number and such instructions must be received on a
recorded line. Security Benefit reserves the right to deny any telephone
transfer request. If all telephone lines are busy (which might occur, for
example, during periods of substantial market fluctuations), you may not be able
to request transfers by telephone and would have to submit written requests.

By authorizing telephone transfers, you authorize Security Benefit to accept
and act upon telephonic instructions for transfers involving your Contract. You
agree that neither Security Benefit, any of its affiliates, nor SBL Fund, will
be liable for any loss, damages, cost, or expense (including attorneys' fees)
arising out of any telephone requests; provided that Security Benefit effects
such request in accordance with its procedures. As a result of this policy on
telephone requests, you bear the risk of loss arising from the telephone
transfer privilege. Security Benefit may discontinue, modify, or suspend the
telephone transfer privilege at any time.

LEGAL PROCEEDINGS -- There are no legal proceedings pending to which the
Separate Account is a party, or which would materially affect the Separate
Account.

LEGAL MATTERS -- Amy J. Lee, Esq., Associate General Counsel, Security Benefit,
has passed upon legal matters in connection with the issue and sale of the
Contracts described in this Prospectus, Security Benefit's authority to issue
the Contracts under Kansas law, and the validity of the forms of the Contracts
under Kansas law.

PERFORMANCE INFORMATION

Performance information for the Subaccounts, including the yield and
effective yield of the Money Market Subaccount, the yield of the remaining
Subaccounts, and the total return of all Subaccounts may appear in
advertisements, reports, and promotional literature to current or prospective
Owners.

Current yield for the Money Market Subaccount will be based on income
received by a hypothetical investment over a given 7-day period (less expenses
accrued during the period), and then "annualized" (i.e., assuming that the 7-day
yield would be received for 52 weeks, stated in terms of an annual percentage
return on the investment). "Effective yield" for the Money Market Subaccount is
calculated in a manner similar to that used to calculate yield, but reflects the
compounding effect of earnings.

For the remaining Subaccounts, quotations of yield will be based on all
investment income per Accumulation Unit earned during a given 30-day period,
less expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of an Accumulation Unit
on the last day of the period. Quotations of average annual total return for any
Subaccount will be expressed in terms of the average annual compounded rate of
return on a hypothetical investment in a Contract over a period of one, five,
and ten years (or, if less, up to the life of the Subaccount), and will reflect
the deduction of the account administration charge, administration charge,
mortality and expense risk charge and contingent deferred sales charge and may
simultaneously be shown for other periods.

Quotations of yield and effective yield do not reflect deduction of the
contingent deferred sales charge, and total return figures may be quoted that do
not reflect deduction of the charge. If reflected, the performance figures
quoted would be lower. Such performance information will be accompanied by total
return figures that reflect deduction of the contingent deferred sales charge
that would be imposed if Contract Value were withdrawn at the end of the period
for which total return is quoted.

Although the Contract was not available for purchase until December 4, 2000,
the underlying investment vehicle of the Separate Account, SBL Fund, has been in
existence since May 26, 1977. Performance information for the Subaccounts may
also include quotations of total return for periods beginning prior to the
availability of the Contracts that incorporate the performance of SBL Fund.

Performance information for a Subaccount may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index ("S&P
500"), Dow Jones Industrial Average ("DJIA"), Donaghue Money Market
Institutional Averages, the Lehman Brothers Government Corporate Index, the
Morgan Stanley Capital International's EAFE Index or other indices measuring
performance of a pertinent group of securities so that investors may compare a
Subaccount's results with those of a group of securities widely regarded by
investors as representative of the securities markets in general or
representative of a particular type of security: (ii) other variable annuity
separate accounts or other investment products tracked by Lipper Analytical
Services, a widely used independent research firm which ranks mutual funds and
other investment companies by overall performance, investment objectives, and
assets, or tracked by other ratings services, companies, publications, or
persons who rank separate accounts or other investment products on overall
performance or other criteria; and (iii) the Consumer Price Index (measure for
inflation) to assess the real rate of return from an investment in the Contract.
Unmanaged indices may assume the reinvestment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.

Performance information for any Subaccount reflects only the performance of a
hypothetical Contract under which Contract Value is allocated to a Subaccount
during a particular time period on which the calculations are based. Performance
information should be considered in light of the investment objectives and
policies, characteristics, and quality of the Series in which the Subaccount
invests, and the market conditions during the given time period, and should not
be considered as a representation of what may be achieved in the future. For a
description of the methods used to determine yield and total return for the
Subaccounts, see the Statement of Additional Information.

Reports and promotional literature may also contain other information
including (i) the ranking of any Subaccount derived from rankings of variable
annuity separate accounts or other investment products tracked by Lipper
Analytical Services or by other rating services, companies, publications, or
other persons who rank separate accounts or other investment products on overall
performance or other criteria, (ii) the effect of tax-deferred compounding on a
Subaccount's investment returns, or returns in general, which may be illustrated
by graphs, charts, or otherwise, and which may include a comparison, at various
points in time, of the return from an investment in a Contract (or returns in
general) on a tax-deferred basis (assuming one or more tax rates) with the
return on a taxable basis, and (iii) Security Benefit's rating or a rating of
Security Benefit's claim-paying ability as determined by firms that analyze and
rate insurance companies and by nationally recognized statistical rating
organizations.

ADDITIONAL INFORMATION

REGISTRATION STATEMENT -- A Registration Statement under the 1933 Act has been
filed with the SEC relating to the offering described in this Prospectus. This
Prospectus does not include all the information included in the Registration
Statement, certain portions of which, including the Statement of Additional
Information, have been omitted pursuant to the rules and regulations of the SEC.
The omitted information may be obtained at the SEC's principal office in
Washington, DC, upon payment of the SEC's prescribed fees and may also be
obtained from the SEC's web site (http://www.sec.gov).

FINANCIAL STATEMENTS -- The consolidated financial statements of Security
Benefit Life Insurance Company and Subsidiaries at December 31, 2001 and 2000,
and for each of the three years in the period ended December 31, 2001, and the
financial statements of SBL Variable Annuity Account XIV (SecureDesigns) at
December 31, 2001 and for the period January 2, 2001 (inception date) to
December 31, 2001, are included in the Statement of Additional Information.

STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information contains more specific information
and financial statements relating to Security Benefit Life Insurance Company and
Subsidiaries. The Table of Contents of the Statement of Additional Information
is set forth below:

TABLE OF CONTENTS--

Page

GENERAL INFORMATION AND HISTORY............................................ 3
Safekeeping of Assets................................................... 3
DISTRIBUTION OF THE CONTRACT............................................... 3
METHOD OF DEDUCTING THE EXCESS CHARGE...................................... 3
LIMITS ON PURCHASE PAYMENTS PAID UNDER TAX-QUALIFIED RETIREMENT PLANS...... 4
Section 403(b).......................................................... 4
Sections 408 and 408A................................................... 4
PERFORMANCE INFORMATION.................................................... 5
PERMISSIBLE ADVERTISING INFORMATION........................................ 7
EXPERTS.................................................................... 8
FINANCIAL STATEMENTS....................................................... 8

VARIABLE ANNUITY

INDIVIDUAL FLEXIBLE PURCHASE PAYMENT
DEFERRED VARIABLE ANNUITY CONTRACT

ISSUED BY: MAILING ADDRESS:
SECURITY BENEFIT LIFE SECURITY BENEFIT LIFE
INSURANCE COMPANY INSURANCE COMPANY
ONE SECURITY BENEFIT PLACE P.O. BOX 750497
TOPEKA, KANSAS 66636-0001 TOPEKA, KANSAS 66675-0497
1-800-NEA-VALU
--------------------------------------------------------------------------------

This Prospectus describes a flexible purchase payment deferred variable
annuity contract (the "Contract") offered by Security Benefit Life Insurance
Company ("Security Benefit"). The Contract is available for individuals in
connection with a retirement plan qualified under Section 403(b) or 408 of the
Internal Revenue Code. The Contract is designed to give you flexibility in
planning for retirement and other financial goals.

You may allocate your purchase payments to one or more of the Subaccounts
that comprise a separate account of Security Benefit called the SBL Variable
Annuity Account XIV, or to the Fixed Account. Each Subaccount invests in a
corresponding mutual fund (the "Underlying Fund"). The Subaccounts currently
available under the Contract are:

o AIM Basic Value
o AIM Mid Cap Core Equity (formerly AIM Mid Cap Equity)
o AIM Small Cap Growth
o AIM Blue Chip
o American Century Heritage
o American Century Select
o American Century Equity Income
o American Century International Growth
o Ariel Fund
o Ariel Premier Bond
o Calamos Growth*
o Calamos Convertible Growth and Income
o Dreyfus Appreciation
o Dreyfus Premier Strategic Value
o Dreyfus Midcap Value
o Dreyfus General Money Market
o Fidelity Advisor Value Strategies
o Fidelity Advisor Dividend Growth
o Fidelity Advisor Mid Cap
o Fidelity Advisor International Capital Appreciation*
o INVESCO Dynamics
o INVESCO Technology
o PIMCO High Yield
o Security Diversified Income
o Security Global*
o Security Equity
o Security Large Cap Value (formerly Security Growth and Income)
o Security Large Cap Growth*
o Security Capital Preservation
o Security Mid Cap Growth (formerly Security Ultra)
o Security Mid Cap Value
o Security Small Cap Growth*
o Security Social Awareness
o Strong Growth and Income
o Strong Growth 20*
o Strong Advisor Small Cap Value*
o Strong Opportunity*
o Van Kampen Equity and Income
o Van Kampen Comstock
o Van Kampen Aggressive Growth

*These Subaccounts are not available to members of the Teacher Retirement System
of Texas who are employees of school districts or open-enrollment charter
schools purchasing a tax-sheltered annuity through a salary reduction
arrangement.

Amounts that you allocate to the Subaccounts under a Contract will vary based
on investment performance of the Subaccounts. No minimum amount of Contract
Value is guaranteed.

Amounts allocated to the Fixed Account earn interest at rates that are paid
by Security Benefit as described in "The Fixed Account," page 35. Contract Value
in the Fixed Account is guaranteed by Security Benefit.

When you are ready to receive annuity payments, the Contract provides several
options for annuity payments. See "Annuity Options," page 34.

This Prospectus concisely sets forth information about the Contract and the
Separate Account that you should know before purchasing the Contract. The
"Statement of Additional Information," dated May 1, 2002, which has been filed
with the Securities and Exchange Commission ("SEC") contains certain additional
information. The Statement of Additional Information, as it may be supplemented
from time to time, is incorporated by reference into this Prospectus and is
available at no charge. You may obtain a Statement of Additional Information or
a prospectus for any of the Underlying Funds by writing Security Benefit at One
Security Benefit Place, Topeka, Kansas 66636 or by calling 1-800-NEA-VALU. The
table of contents of the Statement of Additional Information is set forth on
page 46 of this Prospectus.

DATE: MAY 1, 2002, AS SUPPLEMENTED SEPTEMBER 3, 2002
--------------------------------------------------------------------------------
The variable annuity covered by this Prospectus is the subject of a
pending patent application in the United States Patent and Trademark Office.
--------------------------------------------------------------------------------

TABLE OF CONTENTS

Page

DEFINITIONS............................................................... 5
SUMMARY................................................................... 6
PURPOSE OF THE CONTRACT................................................ 6
THE SEPARATE ACCOUNT AND THE FUNDS..................................... 6
FIXED ACCOUNT.......................................................... 6
PURCHASE PAYMENTS...................................................... 6
CONTRACT BENEFITS...................................................... 6
FREE-LOOK RIGHT........................................................ 6
CHARGES AND DEDUCTIONS................................................. 6
Contingent Deferred Sales Charge..................................... 6
Mortality and Expense Risk Charge.................................... 7
Optional Rider Charges............................................... 7
Administration Charge................................................ 10
Account Administration Charge........................................ 10
Premium Tax Charge................................................... 10
Other Expenses....................................................... 10
CONTACTING SECURITY BENEFIT............................................ 10
EXPENSE TABLE............................................................. 10
CONTRACTUAL EXPENSES................................................... 10
ANNUAL SEPARATE ACCOUNT EXPENSES....................................... 10
OPTIONAL RIDER EXPENSES................................................ 11
ANNUAL UNDERLYING FUND EXPENSES........................................ 12
EXAMPLES............................................................... 14
CONDENSED FINANCIAL INFORMATION........................................... 15
INFORMATION ABOUT SECURITY BENEFIT, THE SEPARATE ACCOUNT, AND THE FUNDS... 17
SECURITY BENEFIT LIFE INSURANCE COMPANY................................ 17
PUBLISHED RATINGS...................................................... 17
SEPARATE ACCOUNT....................................................... 18
UNDERLYING FUNDS....................................................... 18
THE CONTRACT.............................................................. 19
GENERAL................................................................ 19
APPLICATION FOR A CONTRACT............................................. 19
PURCHASE PAYMENTS...................................................... 19
ALLOCATION OF PURCHASE PAYMENTS........................................ 19
DOLLAR COST AVERAGING OPTION........................................... 20
ASSET REALLOCATION OPTION.............................................. 20
TRANSFERS OF CONTRACT VALUE............................................ 21
CONTRACT VALUE......................................................... 21
DETERMINATION OF CONTRACT VALUE........................................ 21
FULL AND PARTIAL WITHDRAWALS........................................... 22
SYSTEMATIC WITHDRAWALS................................................. 23
FREE-LOOK RIGHT........................................................ 24
DEATH BENEFIT.......................................................... 24
DISTRIBUTION REQUIREMENTS.............................................. 24
DEATH OF THE ANNUITANT................................................. 24
CHARGES AND DEDUCTIONS.................................................... 25
CONTINGENT DEFERRED SALES CHARGE....................................... 25
MORTALITY AND EXPENSE RISK CHARGE...................................... 25
ADMINISTRATION CHARGE.................................................. 26
ACCOUNT ADMINISTRATION CHARGE.......................................... 26
PREMIUM TAX CHARGE..................................................... 26
OTHER CHARGES.......................................................... 26
VARIATIONS IN CHARGES.................................................. 26
GUARANTEE OF CERTAIN CHARGES........................................... 26
UNDERLYING FUND EXPENSES............................................... 27
OPTIONAL RIDER CHARGES.................................................... 27
TEACHER RETIREMENT SYSTEM OF TEXAS - LIMITS ON OPTIONAL RIDERS......... 27
GUARANTEED MINIMUM INCOME BENEFIT...................................... 27
ANNUAL STEPPED UP DEATH BENEFIT........................................ 27
GUARANTEED GROWTH DEATH BENEFIT........................................ 28
COMBINED ANNUAL STEPPED UP AND GUARANTEED GROWTH DEATH BENEFIT......... 29
ENHANCED DEATH BENEFIT................................................. 29
COMBINED ENHANCED AND ANNUAL STEPPED UP DEATH BENEFIT.................. 29
COMBINED ENHANCED AND GUARANTEED GROWTH DEATH BENEFIT.................. 30
COMBINED ENHANCED, ANNUAL STEPPED UP,
AND GUARANTEED GROWTH DEATH BENEFIT.................................. 30
EXTRA CREDIT........................................................... 30
WAIVER OF WITHDRAWAL CHARGE............................................ 31
ALTERNATIVE WITHDRAWAL CHARGE.......................................... 31
WAIVER OF WITHDRAWAL CHARGE--15 YEARS OR DISABILITY.................... 32
WAIVER OF WITHDRAWAL CHARGE--10 YEARS OR DISABILITY.................... 32
WAIVER OF WITHDRAWAL CHARGE--HARDSHIP.................................. 32
WAIVER OF WITHDRAWAL CHARGE--5 YEARS AND AGE 59 1/2.................... 33
ANNUITY PERIOD............................................................ 33
GENERAL................................................................ 33
ANNUITY OPTIONS........................................................ 34
Option 1--Life Income................................................ 34
Option 2--Life Income with Guaranteed
Payments of 5, 10, 15 or 20 Years.................................. 34
Option 3--Life with Installment or Unit Refund Option................ 34
Option 4--Joint and Last Survivor.................................... 34
Option 5--Payments for Specified Period.............................. 34
Option 6--Payments of a Specified Amount............................. 34
Option 7--Period Certain............................................. 34
Option 8--Joint and Contingent Survivor Option....................... 34
Value of Variable Annuity Payments: Assumed Interest Rate............ 34
SELECTION OF AN OPTION................................................. 35
THE FIXED ACCOUNT......................................................... 35
INTEREST............................................................... 36
DEATH BENEFIT.......................................................... 36
CONTRACT CHARGES....................................................... 36
TRANSFERS AND WITHDRAWALS FROM THE FIXED ACCOUNT....................... 36
PAYMENTS FROM THE FIXED ACCOUNT........................................ 37
MORE ABOUT THE CONTRACT................................................... 37
OWNERSHIP.............................................................. 37
DESIGNATION AND CHANGE OF BENEFICIARY.................................. 37
DIVIDENDS.............................................................. 38
PAYMENTS FROM THE SEPARATE ACCOUNT..................................... 38
PROOF OF AGE AND SURVIVAL.............................................. 38
MISSTATEMENTS.......................................................... 38
LOANS.................................................................. 38
RESTRICTIONS ON WITHDRAWALS FROM QUALIFIED PLANS....................... 39
FEDERAL TAX MATTERS....................................................... 40
INTRODUCTION........................................................... 40
TAX STATUS OF SECURITY BENEFIT AND THE SEPARATE ACCOUNT................ 40
General.............................................................. 40
Charge for Security Benefit Taxes.................................... 40
QUALIFIED PLANS........................................................ 40
Section 403(b)....................................................... 41
Section 408.......................................................... 42
Rollovers............................................................ 42
Tax Penalties........................................................ 42
Withholding.......................................................... 43
OTHER INFORMATION......................................................... 43
VOTING OF UNDERLYING FUND SHARES....................................... 43
SUBSTITUTION OF INVESTMENTS............................................ 43
CHANGES TO COMPLY WITH LAW AND AMENDMENTS.............................. 44
REPORTS TO OWNERS...................................................... 44
ELECTRONIC TRANSFER PRIVILEGES......................................... 44
LEGAL PROCEEDINGS...................................................... 45
LEGAL MATTERS.......................................................... 45
PERFORMANCE INFORMATION................................................... 45
ADDITIONAL INFORMATION.................................................... 46
REGISTRATION STATEMENT................................................. 46
FINANCIAL STATEMENTS................................................... 46
STATEMENT OF ADDITIONAL INFORMATION....................................... 46
OBJECTIVES AND STRATEGIES FOR UNDERLYING FUNDS............................ 47
AIM GROWTH SERIES...................................................... 47
AIM Basic Value Fund................................................. 47
AIM Mid Cap Core Equity Fund......................................... 47
AIM Small Cap Growth Fund............................................ 47
AIM EQUITY FUNDS....................................................... 47
AIM Blue Chip Fund................................................... 48
AMERICAN CENTURY INVESTMENTS, INC...................................... 48
American Century Heritage Fund....................................... 48
American Century Select Fund......................................... 48
American Century Equity Income Fund.................................. 49
American Century International Growth Fund........................... 49
ARIEL MUTUAL FUNDS..................................................... 49
Ariel Fund........................................................... 49
Ariel Premier Bond Fund.............................................. 49
CALAMOS INVESTMENT TRUST............................................... 50
Calamos Growth Fund.................................................. 50
Calamos Convertible Growth and Income Fund........................... 50
THE DREYFUS CORPORATION................................................ 50
Dreyfus Appreciation Fund, Inc....................................... 50
DREYFUS GROWTH AND VALUE FUNDS, INC.................................... 50
Dreyfus Premier Strategic Value Fund................................. 50
Dreyfus Midcap Value Fund............................................ 51
Dreyfus General Money Market Fund.................................... 51
FIDELITY ADVISOR SERIES I.............................................. 51
Fidelity Advisor Value Strategies Fund............................... 51
Fidelity Advisor Dividend Growth Fund................................ 52
Fidelity Advisor Mid Cap Fund........................................ 52
Fidelity Advisor International Capital Appreciation Fund............. 52
INVESCO STOCK FUNDS, INC............................................... 52
INVESCO Dynamics Fund................................................ 52
INVESCO SECTOR FUNDS, INC.............................................. 53
INVESCO Technology Fund.............................................. 53
PIMCO FUNDS............................................................ 53
PIMCO High Yield Fund................................................ 53
SECURITY INCOME FUND®.................................................. 53
Security Capital Preservation Fund................................... 53
Security Diversified Income Fund..................................... 54
SECURITY EQUITY FUND®.................................................. 54
Security Global Series............................................... 54
Security Equity Series............................................... 54
Security Large Cap Growth Series..................................... 54
Security Mid Cap Value Series........................................ 55
Security Small Cap Growth Series..................................... 55
Security Social Awareness Series..................................... 55
SECURITY LARGE CAP VALUE FUND.......................................... 56
SECURITY MID CAP GROWTH FUND........................................... 56
STRONG CONSERVATIVE EQUITY FUNDS, INC.................................. 56
Strong Growth and Income Fund........................................ 56
STRONG EQUITY FUNDS, INC............................................... 56
Strong Growth 20 Fund................................................ 56
Strong Advisor Small Cap Value Fund.................................. 57
Strong Opportunity Fund.............................................. 57
VAN KAMPEN EQUITY AND INCOME FUND...................................... 57
VAN KAMPEN COMSTOCK FUND............................................... 57
VAN KAMPEN AGGRESSIVE GROWTH FUND...................................... 57
APPENDIX A - IRA Disclosure Statement