INSURED MUNICIPAL INCOME FUND INC.

                SUPPLEMENT TO PROSPECTUS DATED AUGUST 1, 1996

                                                             November 12, 1996

Dear Investor,

        This is a supplement to the Prospectus of Insured Municipal Income Fund
Inc., dated August 1, 1996. The purpose of this supplement is to revise certain
information contained in the Prospectus under Management of the Fund.

        Effective October 1, 1996 Elbridge (Ebby) T. Gerry III and Richard S.
Murphy are co-portfolio managers of the Fund. Mr. Gerry, a senior vice president
and a portfolio manager of Mitchell Hutchins, has been responsible for the
day-to-day management of the Fund's portfolio since January 1996. Mr. Gerry has
portfolio management responsibility for over $4.2 billion in municipal assets
at Mitchell Hutchins, including municipal bond and money funds and private
accounts. Prior to joining Mitchell Hutchins in January 1996, he had been
associated with J.P. Morgan Private Banking since 1981 where he was responsible
for managing municipal assets, including several municipal bond funds. Mr.
Murphy is a senior vice president and portfolio manager of Mitchell Hutchins.
Prior to joining Mitchell Hutchins in March 1994, Mr. Murphy was a vice
president at American International Group. Other members of Mitchell Hutchins'
tax-exempt investment group provide input on market outlook, interest rate
forecasts, and other considerations pertaining to tax-exempt investments.

        If you have any questions regarding Insured Municipal Income Fund Inc.,
please call your Investment Executive at PaineWebber or one of its correspondent
firms.