<PAGE>

                                                                     EXHIBIT 4.3

Kemper Investors Life Insurance Company                                   [LOGO]
A Stock Life Insurance Company                                            ZURICH
Long Grove, Illinois 60049-001                                            KEMPER


GROUP FLEXIBLE PREMIUM MODIFIED GUARANTEED, FIXED AND VARIABLE DEFERRED
ANNUITY MASTER POLICY

This Master Policy is issued to the Group Annuity Trust II, herein called the
Master Policyholder. It takes effect on the date agreed upon by Us and the
Master Policyholder.

The provisions and conditions on the following pages of this policy are as fully
part of the Master Policy as if they are recorded above the signatures below.
All provisions and conditions of this policy are subject to the laws of the
jurisdiction in which the policy is delivered.


Signed for Kemper Investors Life Insurance Company at its home office, in Long
Grove, Illinois.

       /s/ Debra P. Rezabek                        /s/ Gale K. Caruso
            Secretary                                   President

Policy Form No. L-8696                                    Group Policy No. K1001
<PAGE>

L-8696
                                     INDEX                             Page

ANNUITY OPTION TABLE                                        Follows Page 20

ANNUITY PERIOD PROVISIONS                                           16 - 20

        Election of Annuity Option                                  16 - 17
        Annuity Options                                                  17
        Transfers During the Annuity Period                         19 - 20

APPLICATION                                       Follows Contract Schedule

MASTER POLICY SCHEDULE                                        Follows Index

DEATH BENEFIT PROVISIONS                                            15 - 16

        Amount Payable Upon Death                                        15
        Payment Of Death Benefits                                   15 - 16

DEFINITIONS                                                           5 - 7

ENDORSEMENTS, if any                           Follows Annuity Option Table

FIXED ACCOUNT PROVISIONS                                                 10

        Fixed Account                                                    10
        Fixed Account Certificate Value                                  10

GENERAL PROVISIONS                                                    7 - 8

        The Entire Contract                                               7
        The Certificate                                                   7
        Incontestability                                                  8
        Assignment                                                        8
        Reports                                                           8
        Premium Taxes                                                     8

GUARANTEE PERIOD PROVISIONS                                         10 - 11

        Guarantee Period Value                                      10 - 11

OWNERSHIP PROVISIONS                                                      8

        Owner of Certificate                                              8
        Change of Ownership                                               8
        Beneficiary                                                       8

PURCHASE PAYMENT PROVISIONS                                           8 - 9

        Initial Purchase Payments                                         8
        Purchase Payment Limitations                                  8 - 9

TRANSFER AND WITHDRAWAL PROVISIONS                                  13 - 15

        Transfers During The Accumulation Period                         13
        Withdrawals During The Accumulation Period                       14
        Transfer and Withdrawal Procedures                          14 - 15

VARIABLE ACCOUNT PROVISIONS                                         11 - 13

        Separate Account                                                 11
        Liabilities Of Separate Account                                  11
        Subaccounts                                                      11
        Rights Reserved By The Company                                   12
        Accumulation Unit Value                                          12
<PAGE>

                            MASTER POLICY SCHEDULE


DESCRIPTION OF PLAN:     GROUP FLEXIBLE PREMIUM MODIFIED
                         GUARANTEED, FIXED AND VARIABLE DEFERRED
                         ANNUITY

THE CERTIFICATE OWNER(S), BENEFICIARY(IES) AND ANNUITY DATE ARE AS STATED IN THE
APPLICATION FOR THE CERTIFICATE UNLESS SUBSEQUENTLY CHANGED IN ACCORDANCE WITH
THE CERTIFICATE PROVISIONS.

GUARANTEED PERIODS AVAILABLE ON CONTRACT DATE:
        [ 1 THROUGH 10 ] YEARS

KILICO VARIABLE ANNUITY SEPARATE ACCOUNT
SUBACCOUNTS AVAILABLE ON ISSUE DATE:
[KEMPER MONEY MARKET
KEMPER GOVT. SECURITIES
KEMPER HIGH YIELD
KEMPER TOTAL RETURN
KEMPER GROWTH
KEMPER SMALL CAP GROWTH
KEMPER INVESTMENT GRADE BOND
KEMPER TECHNOLOGY
SCUDDER BOND
SCUDDER CAPITAL GROWTH
SCUDDER INTERNATIONAL
JANUS ASPEN GROWTH
JANUS ASPEN BALANCED
JANUS ASPEN AGGRESSIVE GROWTH
JANUS ASPEN WORLDWIDE GROWTH
FIDELITY VIP 11 INDEX 500
FIDELITY VIP EQUITY-INCOME
FIDELITY VIP GROWTH
FIDELITY VIP II CONTRAFUND
ALGER AMERICAN GROWTH
ALGER AMERICAN SMALL CAP
ALGER MID-CAP
AMERICAN CENTURY INCOME & GROWTH
AMERICAN CENTURY VALUE
J. P. MORGAN SMALL COMPANY
DREYFUS SOCIALLY RESPONSIBLE GROWTH
WARBURG, PINCUS EMERGING MARKETS]

8696                                                                      PAGE 2


<PAGE>

                            MASTER POLICY SCHEDULE

GROUP CONTRACT NUMBER: K1001

OWNER: ANNUITY TRUST II


MAXIMUM ANNUITIZATION AGE: [95]


MINIMUM INITIAL PURCHASE PAYMENT:                              [$10,000
MINIMUM SUBSEQUENT PURCHASE PAYMENT:                            $100
MAXIMUM PURCHASE PAYMENTS PER CERTIFICATE YEAR:                 $1,000,000]

PURCHASE PAYMENT BONUS:
               CERTIFICATE YEARS 1 THROUGH 15             [4%]
               CERTIFICATE YEARS 16 AND LATER             [0%]

SEPARATE ACCOUNT CHARGES:

     DEDUCTED DAILY FROM THE SUBACCOUNTS
     MAXIMUM MORTALITY AND EXPENSE RISK CHARGE:
               CERTIFICATE YEARS 1 THROUGH 15             [1.70% ANNUALLY]
               CERTIFICATE YEARS 16 AND LATER             [1.45% ANNUALLY]


[RECORDS MAINTENANCE CHARGE:
WE WILL ASSESS A RECORDS MAINTENANCE CHARGE ON THE CERTIFICATE AT THE END OF
EACH CALENDAR QUARTER IN WHICH THE CERTIFICATE OWNER PARTICIPATES IN THE
SEPARATE ACCOUNT, UPON A FULL WITHDRAWAL, AND ON THE ANNUITY DATE. THIS CHARGE
WILL NOT BE ASSESSED AFTER THE ANNUITY DATE. THIS CHARGE WILL BE DEDUCTED ON A
PROPORTIONAL BASIS FROM AMOUNTS ALLOCATED TO THE SUBACCOUNTS. TO THE EXTENT
NEEDED, IT WILL BE DEDUCTED FROM THE GUARANTEE PERIODS. WE RESERVE THE RIGHT TO
MAKE THIS DEDUCTION FROM THE FIXED ACCOUNT. THE AMOUNT OF THIS CHARGE WILL
DEPEND ON THE AMOUNT OF THE CERTIFICATE VALUE ON THE DATE THE CHARGE IS MADE:

               AMOUNT OF                                MAXIMUM RECORDS
               CERTIFICATE VALUE                        MAINTENANCE CHARGE
               LESS THAN $25,000                        $7.50
               $25,000 TO $49,999.99                    $3.75
               $50,000 AND OVER                         NONE]

[TRANSFER CHARGE:
WE RESERVE THE RIGHT TO CHARGE $10 FOR EACH TRANSFER IN EXCESS OF 12 IN A
CERTIFICATE YEAR.]

8696                                                                      PAGE 3
<PAGE>

                            MASTER POLICY SCHEDULE

MARKET VALUE ADJUSTMENT FORMULA:

[THIS ADJUSTMENT IS MADE FOR AMOUNTS TRANSFERRED OR WITHDRAWN BEFORE THE END OF
A GUARANTEE PERIOD. THE ADJUSTMENT MAY BE POSITIVE OR NEGATIVE BUT THE DEDUCTION
IS NEVER MORE THAN THE AMOUNT TRANSFERRED OR WITHDRAWN. THE MARKET VALUE
ADJUSTMENT IS SUBTRACTED FROM THE AMOUNT THAT IS TRANSFERRED OR WITHDRAWN FROM
THE GUARANTEE PERIOD.

THE MARKET VALUE ADJUSTMENT IS THE PRODUCT OF (1), (2), (3) AND (4) WHERE:

(1) = .075

(2) = THE NUMBER OF MONTHS REMAINING IN THE GUARANTEE PERIOD

(3) = THE INTEREST RATE BEING GUARANTEED ON NEW ALLOCATIONS TO A GUARANTEE
    PERIOD WITH THE PERIOD EQUAL TO THE GUARANTEE PERIOD LESS THE RATE
    GUARANTEED ON THE MONEY BEING WITHDRAWN OR TRANSFERRED.

(4) = THE AMOUNT WITHDRAWN OR TRANSFERRED.]

8696                                                                      PAGE 4
<PAGE>

                            MASTER POLICY SCHEDULE

FIXED ACCOUNT: INTEREST RATES STATED AS ANNUAL RATES

     THE INITIAL FIXED ACCOUNT INTEREST RATE APPLIES TO THE INITIAL PURCHASE
     PAYMENT AND IS GUARANTEED ON THE INITIAL PURCHASE PAYMENT THROUGH THE
     CALENDAR MONTH IN WHICH THE INITIAL PURCHASE PAYMENT IS RECEIVED AND FOR 12
     CALENDAR MONTHS THEREAFTER.

     SUBSEQUENT FIXED ACCOUNT INTEREST GUARANTEE PERIOD - ONE CALENDAR YEAR

MINIMUM GUARANTEED FIXED ACCOUNT INTEREST RATE:         3%

-------------------------------------------------------------------------------
          CERTIFICATE YEARS ELAPSED SINCE
            PURCHASE PAYMENTS WERE
            RECEIVED BY THE COMPANY                         RATE
-------------------------------------------------------------------------------
                     FIRST                                  8%
-------------------------------------------------------------------------------
                    SECOND                                  8%
-------------------------------------------------------------------------------
                     THIRD                                  7%
-------------------------------------------------------------------------------
                    FOURTH                                  6%
-------------------------------------------------------------------------------
                     FIFTH                                  5%
-------------------------------------------------------------------------------
                     SIXTH                                  4%
-------------------------------------------------------------------------------
                    SEVENTH                                 3%
-------------------------------------------------------------------------------
                     EIGHTH                                 2%
-------------------------------------------------------------------------------
                  NINTH & LATER                             0%
-------------------------------------------------------------------------------
UP TO 10% OF THE CERTIFICATE VALUE LESS DEBT MAY BE WITHDRAWN AS A PARTIAL FREE
WITHDRAWAL EACH CERTIFICATE YEAR. CHARGES ARE APPLIED TO PURCHASE PAYMENTS, ANY
PURCHASE PAYMENT BONUS AND ALL RELATED ACCUMULATIONS FOR ANY WITHDRAWAL IN
EXCESS OF THE 10% PARTIAL FREE WITHDRAWAL. CHARGES START AT 8% IN THE
CERTIFICATE YEAR IN WHICH THE PURCHASE PAYMENT WAS RECEIVED AND THEN FOLLOW THE
SCHEDULE ABOVE.


8696                                                                  PAGE 4.1

<PAGE>

DEFINITIONS         Accumulation Period: The period between the Issue Date and
                    the Annuity Date.

                    Accumulation Unit: An accounting unit of measure used to
                    calculate the value of each Subaccount.

                    Age: The attained age of the Annuitant.

                    Annuitant: The person named in the application during whose
                    lifetime the Annuity is to be paid. When two people are
                    named as Joint Annuitants the term "Annuitant" means the
                    Joint Annuitants or the survivor. Under Qualified Plans,
                    only the spouse may be named as Joint Annuitant. You may not
                    change the person(s) named as the Annuitant.

                    Annuity: A series of payments paid in accordance with the
                    Certificate which begins on the Annuity Date.

                    Annuity Date: The date on which the Certificate matures and
                    Annuity payments begin. It must be at least one year from
                    the Issue Date and no later than the maximum age at
                    annuitization as stated on the Master Policy Schedule,
                    unless otherwise agreed. The Annuity Date can be changed,
                    but not beyond the maximum age.

                    Annuity Period: This is the period that starts on the
                    Annuity Date.

                    Annuity Unit: An accounting unit of measure used to
                    calculate the amount of Variable Annuity payments after the
                    first Annuity payment.

                    Certificate: An individual Certificate which We issue to the
                    Certificate Owner as evidence of the rights and benefits
                    under the Certificate.

                    Certificate Owner: The Party(ies) named as Certificate Owner
                    in the application unless later changed as provided in the
                    Certificate. (See Change of Ownership.) The Certificate
                    Owner is the Annuitant unless a different Certificate Owner
                    is named in the application. Under a Nonqualified Annuity
                    when more than one person is named as Certificate Owner, the
                    term Certificate Owner means Joint Certificate Owners. The
                    Certificate Owner may be changed during the lifetime of the
                    Certificate Owner and Annuitant. The Certificate Owner,
                    prior to the Annuity Date or any distribution of any death
                    benefit, has the exclusive right to exercise every option
                    and right conferred by the Certificate.

                    Certificate Date, Certificate Year: The Certificate Date is
                    stated on the Certificate Schedule. Subsequent Certificate
                    Years shall begin on anniversaries of the Certificate Date.

                    Certificate Value: The sum of the Fixed Account Certificate
                    Value plus the Separate Account Certificate Value plus the
                    Guarantee Period Value.

                    Certificate Year: A one-year period starting on the Issue
                    Date and successive Certificate anniversaries.

                    Fixed Account: Our assets other than those allocated to the
                    Separate Account or any other Separate Account under which
                    We guarantee a fixed rate of return.

                    Fixed Account Certificate Value: The Fixed Account
                    Certificate Value is the value of amounts allocated under
                    the Certificate to the Fixed Account.

                    Fixed Annuity: An Annuity payment that does not vary with
                    investment performance.

                    Fund: An investment company or separate series thereof, in
                    which the Subaccounts of the Separate Account invest.

                    Guarantee Period: A period of time during which an amount is
                    to be credited with a guaranteed interest rate, subject to a
                    Market Value Adjustment prior to the end of the Guarantee
                    Period. The Guarantee Periods initially offered are stated
                    on the Master Policy Schedule.

L-8696                                                                    Page 5
<PAGE>

L-8696                                                                    Page 6

DEFINITIONS (Continued)

                    Guarantee Period Value: The (1) Purchase Payment allocated
                    or the amount transferred to a Guarantee Period; plus (2)
                    interest credited; minus (3) withdrawals and transfers
                    adjusted for (4) any applicable Market Value Adjustment
                    previously made. There is a $5,000 minimum on the sum of
                    Purchase Payments and amounts transferred to any Guarantee
                    Period Value.

                    Issue Date: The Issue Date for each Certificate is stated on
                    the Certificate Schedule. It is the date the Certificate
                    Owner's initial Purchase Payment is available for use and
                    the Certificate Owner's application has been accepted by Us.
                    It is also the date on which the Certificate Owner's
                    Purchase Payment begins to be credited with interest and/or
                    investment experience.

                    Market Adjusted Value: A Guarantee Period Value adjusted by
                    the Market Value Adjustment formula prior to the end of a
                    Guarantee Period.

                    Market Value Adjustment: An adjustment of Guarantee Period
                    Values in accordance with the Market Value Adjustment
                    formula prior to the end of the Guarantee Period. The
                    adjustment reflects the change in the value of the Guarantee
                    Period Value due to changes in interest rates since the date
                    the Guarantee Period commenced. The Market Value Adjustment
                    formula is stated on the Master Policy Schedule.

                    Master Policyholder: The Group Annuity Trust II

                    Mortality and Expense Risk Charge: A charge deducted in the
                    calculation of the Accumulation Unit value and the Annuity
                    Unit value. It is for our assumption of mortality risks and
                    expense guarantees. The maximum charge is shown on the
                    Master Policy Schedule.

                    Nonqualified: The Certificate issued to other than a
                    Qualified Plan.

                    Purchase Payments: The dollar amount we receive in U.S.
                    currency to buy the benefits the Certificate provides.

                    Qualified Plan: The Certificate issued under a retirement
                    plan which qualifies for favorable income tax treatment
                    under Section 401, 403, 408 or 457 of the Internal Revenue
                    Code as amended.

                    If the Certificate is issued under a Qualified Plan
                    additional provisions may apply. The rider or amendment to
                    the Certificate used to qualify it under the applicable
                    section of the Internal Revenue Code will indicate the
                    extent of change in the provisions.

                    Records Maintenance Charge: A charge assessed against the
                    Certificate as specified on the Certificate Schedule. We
                    reserve the right to make this charge against the Fixed
                    Account Certificate Value or the Guarantee Period Value.

                    Received: Received by Kemper Investors Life Insurance
                    Company at its home office.

                    Separate Account: A unit investment trust registered with
                    the Securities and Exchange Commission under the Investment
                    Act of 1940 known as the KILICO Variable Annuity Separate
                    Account.

                    Separate Account Certificate Value: The sum of the
                    Subaccount Values of the Certificate on the Valuation Date.

                    Subaccounts: The Separate Account has Subaccounts. The
                    Subaccounts initially available are stated on the Master
                    Policy Schedule.

                    Subaccount Value: The value of each Subaccount calculated
                    separately according to the formulas stated in the
                    Certificate.
<PAGE>

DEFINITIONS (Continued)

                                Valuation Date: Each business day that
                                applicable law requires that We value the assets
                                of the Separate Account. Currently this is each
                                day that the New York Stock Exchange is open for
                                trading.

                                Valuation Period: The period that starts at the
                                close of a Valuation Date and ends at the close
                                of business the next succeeding Valuation Date.

                                Variable Annuity: An Annuity payment which
                                varies as to dollar amount because of Subaccount
                                investment experience.

                                We, Our, Us: Kemper Investors Life Insurance
                                Company, Long Grove, Illinois.

GENERAL PROVISIONS
The Entire Contract             The Master Policy, the Certificate, any
                                application attached to the Certificate, and any
                                endorsements constitute the entire contract
                                between the parties. All statements made in the
                                applications are deemed representations and not
                                warranties. No statement will void the Master
                                Policy or the Certificate or be used as a
                                defense of a claim unless it is contained in the
                                application.

The Certificate                 Each Certificate Owner will receive a
                                Certificate which summarizes:

                                   a. the benefits provided under the
                                      Certificate; and
                                   b. the rights and duties of the Certificate
                                      Owner.

                                The Certificate Owner will have the right to
                                void the coverage under the Certificate if the
                                Certificate is returned to Us or Our agent
                                within 10 days of receipt. Purchase Payments
                                allocated to the Guarantee Periods plus the
                                Fixed Account plus the Separate Account
                                Certificate Value computed at the end of the
                                valuation period following Our receipt of the
                                Certificate will then be refunded within ten
                                days, after deduction of any applicable Purchase
                                Payment bonus and the interest and investment
                                experience related to any Purchase Payment
                                bonus.

Successor Master Policyholder   The Master Policyholder with Our consent, may at
                                any time appoint a successor Master
                                Policyholder. The successor Master Policyholder
                                has all rights, duties, and obligations of the
                                original Master Policyholder.

Discontinuance of New           By giving thirty days prior written notice to
Participants                    the Master Policyholder, We may limit or
                                discontinue the acceptance of new applications
                                and the issuance of new Certificates under this
                                Master Policy. Such limitation or discontinuance
                                will have no effect on the rights or benefits of
                                any Certificate Owner whose Certificate was
                                issued prior to the effective date of such
                                limitation or discontinuance.

Modification of Certificate     Only Our President, Secretary and Assistant
                                Secretaries have the power to approve a change
                                or waive any provision of the Certificate. Any
                                such modifications must be in writing. No agent
                                or person other than the officers named has the
                                authority to change or waive the provisions of
                                the Certificate.

                                Upon notice to the Certificate Owner or the
                                payees during the Annuity Period, the
                                Certificate may be modified by Us as is
                                necessary to comply with any law or regulation
                                issued by a governmental agency to which We or
                                the Separate Account is subject or as is
                                necessary to assure continued qualification of
                                the Certificate or Master Policy under the
                                Internal Revenue Code or other laws relating to
                                retirement plans or Annuities or as otherwise
                                may be in the best interest of the Master
                                Policyholder and Certificate Owners. In the
                                event of a modification, We may make appropriate
                                endorsement to the Certificate or Master Policy
                                and We will obtain all required regulatory
                                approvals.

L-8696                                                                    Page 7
<PAGE>

L-8696                                                                    Page 8

GENERAL PROVISIONS (Continued)

Incontestability                The Master Policy is incontestable from the
                                Issue Date.

Change of Annuity Date          The Certificate Owner may write to Us prior to
                                distribution of a death benefit or the first
                                Annuity payment date and request a change of the
                                Annuity Date.

Assignment                      No assignment under the Master Policy or the
                                Certificate is binding unless We receive it in
                                writing. We assume no responsibility for the
                                validity or sufficiency of any assignment. Once
                                filed the rights of the Master Policyholder, the
                                Certificate Owner, the Annuitant and the
                                beneficiary are subject to the assignment. Any
                                claim is subject to proof of interest of the
                                assignee.

Due Proof of Death              We must receive proof upon the death of the
                                Certificate Owner or that of the Annuitant
                                before a death benefit is payable. The death
                                benefit will be paid within 2 months after the
                                receipt of such proof.

Reserves, Certificate Values    All reserves are equal to or greater than
and Death Benefits              those required by statute. Any available
                                Certificate Value and death benefit will not be
                                less than the minimum benefit required by the
                                statutes of the state in which the Certificate
                                is delivered.

Non-Participating               The Master Policy and the Certificate do not pay
                                dividends. They do not share in Our surplus
                                earnings.

Reports                         At least once each Certificate Year We will send
                                the Certificate Owner a statement showing
                                Purchase Payments received, interest credited,
                                investment experience, and charges made since
                                the last report, as well as any other
                                information required by statute.

Premium Taxes                   We will make a deduction for state premium taxes
                                in certain situations. On any Certificate
                                subject to premium tax, as provided under
                                applicable law, the tax will be deducted from:
                                a. The Purchase Payments when We receive them;
                                b. the Certificate Value upon total withdrawal;
                                or c. from the total Certificate Value applied
                                to an Annuity option at the time Annuity
                                payments start.

Determination                   The method of determination by Us of the
Of Values                       investment experience factor, the number and
                                value of Accumulation Units, and the number and
                                value of Annuity Units shall be conclusive upon
                                the Certificate Owner, any payee, and any
                                beneficiary.

Governing Law                   The Master Policy and the Certificate will be
                                governed by the laws of the jurisdiction where
                                the Master Policy or the Certificate is
                                delivered and interpreted under the laws of
                                Illinois.

Creditors                       The proceeds of the Certificate and any payment
                                under an Annuity option will be exempt from the
                                claim of creditors and from legal process to the
                                extent permitted by law.
<PAGE>

OWNERSHIP PROVISIONS

Owner of Certificate            The Annuitant is the original Certificate Owner
                                unless otherwise provided in the application.

                                Before the Annuity Date or any distribution of
                                death benefit, the Certificate Owner has the
                                right to cancel or amend the Certificate if We
                                agree. The Certificate Owner may exercise every
                                option and right conferred by the Certificate.
                                Joint Certificate Owners must agree to any
                                change if more than one Certificate Owner is
                                named.

Change of Certificate           The Certificate Owner may change the Certificate
Ownership                       Ownership by written request at any time while
                                the Certificate Owner and Annuitant are alive.
                                The Certificate Owner must furnish information
                                sufficient to clearly identify the new
                                Certificate Owner. The change is subject to any
                                existing assignment of the Certificate. When We
                                record the effective date of the change, it will
                                be the date We received the notice except for
                                action taken by Us prior to receiving the
                                request. Any change is subject to the payment of
                                any proceeds. We may require the Certificate
                                Owner to return the Certificate to Us for
                                endorsement of a change.

Beneficiary Designation and     The application for the Certificate shows the
Change of Beneficiary           original beneficiary. The Certificate Owner may
                                change the beneficiary if the Certificate Owner
                                sends Us a written notice in a form acceptable
                                to Us. Changes are subject to the following
                                conditions:

                                1. The change must be filed while the Annuitant
                                   is alive;

                                2. The Certificate must be in force at the time
                                   the Certificate Owner files a change;

                                3. Such change must not be prohibited by the
                                   terms of an existing assignment, beneficiary
                                   designation or other restriction;

                                4. Such change will take effect when We receive
                                   it;

                                5. After We receive the change, it will take
                                   effect on the date We received the change
                                   form. However, action taken by Us before the
                                   change form was received will remain in
                                   effect; and

                                6. The request for change must provide
                                   information sufficient to identify the new
                                   beneficiary.

                                We may require the Certificate Owner to return
                                the Certificate for endorsement of a change.

Death of Beneficiary            The interest of a beneficiary who dies before
                                the distribution of the death benefit will pass
                                to the other beneficiaries, if any, share and
                                share alike, unless otherwise provided in the
                                beneficiary designation. If no beneficiary
                                survives or is named, the distribution will be
                                made to the Certificate Owner's estate when the
                                Certificate Owner dies, or to the estate of the
                                Annuitant upon the death of the Annuitant if the
                                Certificate Owner is not also the Annuitant. If
                                a beneficiary dies within ten days of the date
                                of death, the death benefit will be paid as if
                                the Certificate Owner had survived the
                                beneficiary. If a beneficiary dies within ten
                                days of the death of the Annuitant and the
                                Certificate Owner is not the Annuitant, We will
                                pay the death benefit as if the Annuitant
                                survived the beneficiary. If the Certificate
                                Owner, the Annuitant, and the beneficiary die
                                simultaneously, We will pay the death benefit as
                                if the Certificate Owner had survived the
                                Annuitant and the beneficiary.

PURCHASE PAYMENT PROVISIONS

Initial Purchase Payment        The minimum initial Purchase Payment is shown on
                                the Master Policy Schedule.

Purchase Payment                The minimum and maximum Purchase Payments that
Limitations                     may be made are shown on the Master Policy
                                Schedule. We reserve the right to waive or
                                modify these limits and to not accept any
                                Purchase Payment.

                                Subsequent Purchase Payments will be allocated
                                according to the Certificate Owner's most recent
                                instructions at the time We receive the
                                Certificate Owner's Purchase Payment.

L-8696                                                                    Page 9
<PAGE>

L-8696                                                                   Page 10

PURCHASE PAYMENT PROVISIONS (Continued)

Place of Payment                All Purchase Payments under this Certificate
                                must be paid to Us at our home office or such
                                other location as We may select. We will notify
                                You and any other interested parties in writing
                                of such other locations. Purchase Payments
                                received by an agent will begin earning interest
                                after We receive it.

Purchase Payment                Subject to the limitations shown below, Purchase
Bonus                           Payments will be increased by the Purchase
                                Payment bonus shown on the Certificate Schedule
                                before being allocated to the various accounts
                                of this Certificate.

                                We reserve the right to not increase a Purchase
                                Payment by the Purchase Payment bonus in the
                                following situations.
                                1. If at the time the Purchase Payment is made
                                the sum of Purchase Payments, partial
                                withdrawals and loans made under the Certificate
                                exceeds the sum of Purchase Payments and loan
                                repayments, or
                                2. The Purchase Payment arises from the transfer
                                of money from any other Life Insurance or
                                Annuity Contract.

FIXED ACCOUNT PROVISIONS

Fixed Account                   The Fixed Account Certificate Value is increased
Certificate Value               by: 1. the Certificate Owner's Payment allocated
                                to the Fixed Account; 2. amounts transferred
                                from a Guarantee Period or Subaccount to the
                                Fixed Account at the Certificate Owner's
                                request; and 3. the interest credited to amounts
                                so allocated or transferred. Transfers, charges
                                and withdrawals from the Fixed Account reduce
                                the Fixed Account Certificate Value.

                                Fixed Account interest rates are credited for
                                certain periods of time referred to as Fixed
                                Account interest rate periods. An initial Fixed
                                Account interest rate period runs from the date
                                We receive each Purchase Payment through the end
                                of the calendar month in which that Purchase
                                Payment is received and for 12 calendar months
                                thereafter. The initial Fixed Account interest
                                rate for the initial Purchase Payment is shown
                                on the Certificate Schedule. We will declare an
                                initial Fixed Account interest rate for each
                                subsequent Purchase Payment when that Purchase
                                Payment is received. For each Purchase Payment,
                                a subsequent Fixed Account interest rate period
                                begins immediately after the Initial Fixed
                                Account interest rate periods ends and runs for
                                12 calendar months. Subsequent Fixed Account
                                interest rate periods are in effect for periods
                                of 12 calendar months immediately following the
                                end of each previous subsequent Fixed Account
                                Interest Rate Period. We will declare an
                                interest rate applicable to each Purchase
                                Payment for each subsequent Fixed Account
                                Interest Rate Period.

                                We reserve the right to declare the Fixed
                                Account current interest rate(s) based upon: the
                                Issue Date; the date we receive a Purchase
                                Payment, or the date of account transfer.

                                We calculate the interest credited to the Fixed
                                Account by compounding daily, at daily interest
                                rates, rates which would produce at the end of a
                                Certificate. Year a result identical to the one
                                produced by applying an annual interest rate.

                                The minimum guaranteed Fixed Account interest
                                rate is 3.00% per year.

GUARANTEE PERIOD PROVISIONS

Guarantee Period                We hold all amounts allocated to a Guarantee
                                Period in a non-unitized Separate Account. The
                                assets of this Separate Account equal to the
                                reserves and other liabilities of this Separate
                                Account will not be charged with liabilities
                                arising out of any other business We may
                                conduct. The initial Guarantee Periods available
                                under the Certificate are shown on the
                                Certificate Schedule.

Guarantee Period Value          On any Valuation Date, the Guarantee Period
                                Value includes:
                                1. the Purchase Payments or transfers allocated
                                   to the Guarantee Period; plus
                                2. interest credited; minus
                                3. withdrawals and transfers; minus
                                4. any applicable portion of the Records
                                   Maintenance Charge and charges for other
                                   benefits; adjusted for
                                5. any applicable Market Value Adjustment
                                   previously made.
<PAGE>

GUARANTEE PERIOD PROVISIONS (Continued)

                                The Guarantee Period(s) initially elected and
                                the interest rate(s) initially credited are
                                shown on the Certificate Schedule. The interest
                                rate credited to subsequent Purchase Payments
                                will be declared at the time the payment is
                                received.

                                At the end of a Guarantee Period, the Guarantee
                                Period Value will be transferred to a money
                                market Subaccount unless the Certificate Owner
                                tells Us to do otherwise.

Accumulated Guarantee           On any Valuation Date, the Accumulated Guarantee
Period Value                    Period Value is the sum of the Guarantee Period
                                Values. At any time during the Accumulation
                                Period, the Accumulated Guarantee Period Value
                                may be allocated to more than one Guarantee
                                Period with Our agreement.

                                We calculate the interest credited to the
                                Guarantee Period Value by compounding daily, at
                                daily interest rates, rates which would produce
                                at the end of a Certificate Year a result
                                identical to the one produced by applying an
                                annual interest rate.

Market Value Adjustment         The Market Value Adjustment formula is stated on
                                the Master Policy Schedule. This formula is
                                applicable for both an upward or downward
                                adjustment to a Guarantee Period Value when,
                                prior to the end of a Guarantee Period, such
                                value is:

                                We calculate the interest credited to the
                                Guarantee Period Value by
                                1. taken as a total or partial withdrawal;
                                2. applied to purchase an Annuity; or
                                3. transferred to another Guarantee Period, the
                                   Fixed Account or a Subaccount.

VARIABLE ACCOUNT PROVISIONS

Separate Account                The variable benefits under the Master Policy
                                and the Certificate are provided through the
                                KILICO Variable Annuity Separate Account. This
                                is called the Separate Account. The Separate
                                Account is registered with the Securities and
                                Exchange Commission as a unit investment trust
                                under the Investment Company Act of 1940. It is
                                a separate investment account maintained by Us
                                into which a portion of the company's assets
                                have been allocated for the Certificate and may
                                be allocated for certain other Certificates.

Liabilities of Separate
Account                         The assets equal to the reserves and other
                                liabilities of the Separate Account will not be
                                charged with liabilities arising out of any
                                other business We may conduct. We will value the
                                assets of the Separate Account on each Valuation
                                Date.

Separate Account                On any Valuation Date the Separate Account
Certificate Value               Certificate Value is the sum of its Subaccount
                                values.

Subaccounts                     The Separate Account consists of Subaccounts.
                                The initial Subaccounts available under this
                                Certificate are shown on the Certificate
                                Schedule. We may, from time to time, combine or
                                remove Subaccounts in the Separate Account and
                                establish additional Subaccounts of the Separate
                                Account. In such event We may permit You to
                                select other Subaccounts under the Certificate.
                                However, the right to select any other
                                Subaccount is limited by the terms and
                                conditions We may impose on such transactions.

Fund                            Each Subaccount of the Separate Account will buy
                                shares of a separate series of a Fund. Each Fund
                                is registered under the investment Company Act
                                of 1940 as an open-end management investment
                                company. Each series of a Fund represents a
                                separate investment portfolio which corresponds
                                to one of the Subaccounts of the Separate
                                Account.

                                If We establish additional Subaccounts each new
                                Subaccount will invest in a new series of a Fund
                                or in shares of another investment company. We
                                may also substitute other investment companies.

L-8696                                                                   Page 11
<PAGE>

L-8696                                                                   Page 12

VARIABLE ACCOUNT PROVISIONS (Continued)

Rights Reserved by the        We reserve the right, subject to compliance with
Company                       the current law or as it may be changed in the
                              future:

                              1.   To operate the Separate Account in any form
                              permitted under the Investment Company Act of 1940
                              or in any other form permitted by law;

                              2.   To take any action necessary to comply with
                              or obtain and continue any exemptions from the
                              Investment Company Act of 1940 or to comply with
                              any other applicable law;

                              3.   To transfer any assets in any Subaccount to
                              another Subaccount or to one or more separate
                              accounts, or the General Account, or to add,
                              combine or remove Subaccounts in the Separate
                              Account;

                              4.   To delete the shares of any of the portfolios
                              of a Fund or any other open-end investment company
                              and to substitute, for the Fund shares held in any
                              Subaccount, the shares of another portfolio of a
                              Fund or the shares of another investment company
                              or any other investment permitted by law; and

                              5.   To change the way We assess charges, but not
                              to increase the aggregate amount above that
                              currently charged to the Separate Account and the
                              Funds in connection with this Certificate.

                              When required by law, We will obtain Your approval
                              of such changes and the approval of any regulatory
                              authority.

Accumulation Unit Value       Each Subaccount has an Accumulation Unit Value.
                              When Purchase Payments or other amounts are
                              allocated to a Subaccount, a number of units are
                              purchased based on the Accumulation Unit Value of
                              the Subaccount at the end of the Valuation Period
                              during which the allocation is made. When amounts
                              are transferred out of or deducted from a .
                              Subaccount, units are redeemed in a similar
                              manner.

                              The value of a Subaccount on any Valuation Date is
                              the number of units held in the Subaccount times
                              the Accumulation Unit Value on that Valuation
                              Date.

                              The Accumulation Unit Value for each subsequent
                              Valuation period is the investment experience
                              factor for that period multiplied by the
                              Accumulation Unit Value for the period immediately
                              preceding. Each Valuation Period has a single
                              Accumulation Unit Value that is applied to each
                              day in the period. The number of Accumulation
                              Units will not change as a result of investment
                              experience.

Investment Experience         Each Subaccount has its own investment experience
Factor                        factor. The investment experience of the Separate
                              Account is calculated by applying the investment
                              experience factor to the value in each Subaccount
                              during a Valuation Period.

                              The investment experience factor of a Subaccount
                              for a Valuation Period is determined by dividing
                              1, by 2, and subtracting 3, from the result,
                              where:

                              1.   is the net result of;

                              a.   the net asset value per share of the
                              investment held in the Subaccount determined at
                              the end of the current Valuation Period; plus

                              b.   the per share amount of any dividend or
                              capital gain distributions made by the investments
                              held in the Subaccount, if the "ex-dividend" date
                              occurs during the current Valuation Period; plus
                              or minus
<PAGE>

VARIABLE ACCOUNT PROVISIONS (Continued)


Investment Experience         c. a charge or credit for taxes reserved for the
(Continued) Factor            current Valuation Period which We determine
                              resulted from the investment operations of the
                              Subaccount.


                              2. is the net asset value per share of the
                              investment held in the Subaccount, determined at
                              the end of the last Valuation Period.

                              3. is the factor representing the sum of the
                              Separate Account charges stated on the Certificate
                              Schedule for the number of days in the Valuation
                              Period.

TRANSFER AND WITHDRAWAL PROVISIONS

Transfers During the          The Certificate Owner may direct the following
Accumulation Period           transfers;

                              1.   All or part of the Separate Account
                              Certificate Value or a Guarantee Period Value may
                              be transferred to the Fixed Account or to another
                              Subaccount or Guarantee Period. We will allow the
                              first transfer at the end of the free look period.

                              2.   During the thirty days that follow a
                              Certificate Year anniversary or the thirty day
                              period that follows the date the Certificate Owner
                              receives an annual report, if later, all or part
                              of the Fixed Account Certificate Value, less debt,
                              may be transferred to one or more Subaccounts or
                              to one or more Guarantee Periods.

                              Transfers will also be subject to the following
                              conditions:

                              1.   The minimum amount which may be transferred
                              is $500 or if smaller, the remaining value in the
                              Fixed Account, Subaccount or a Guarantee Period.

                              2.   No partial transfer will be made if the
                              remaining Certificate Value of the Fixed Account
                              or any Subaccount will be less than $500 or any
                              Guarantee Period less than $5,000 unless the
                              transfer will eliminate the Certificate Owner's
                              interest in such account;

                              3.   No transfer may be made within seven calendar
                              days of the date on which the first annuity
                              payment is due;

                              4.   The Certificate Owner may request an
                              additional transfer from the Fixed Account to one
                              or more Subaccounts or to a Guarantee Period
                              during the thirty day period before the date on
                              which the first annuity payment is due. Such
                              transfer must become effective no later than the
                              seventh calendar day before such due date;

                              5.   When the Certificate Owner requests a
                              transfer from the Fixed Account Certificate Value
                              to a Subaccount or to a Guarantee Period, We will
                              limit the amount that can be transferred to the
                              amount which exceeds 125% of any debt and
                              withdrawal charge, if any, applicable to the total
                              Fixed Account Certificate Value for the
                              Certificate Year during which the total transfer
                              is made.

                              We will transfer amounts bought by Purchase
                              Payments and all related accumulation received in
                              a given Certificate Year, in the chronological
                              order We received them.

                              We reserve the right to charge for transfers as
                              described on the Certificate Schedule.

                              Any transfer request from the Certificate Owner or
                              other authorized person must clearly specify: 1.
                              the amount which is to be transferred; and 2. the
                              names of the accounts which are affected. We will
                              honor a telephone transfer request if a properly
                              executed telephone transfer authorization is on
                              file with Us. Such request for a transfer must
                              comply with the conditions of the authorization.

                              We reserve the right at any time and without
                              notice to any party, to terminate, suspend, or
                              modify these transfer rights.

L-8696                                                                   Page 13
<PAGE>

L-8696                                                                   Page 14

Withdrawals During the        During the Accumulation Period, The Certificate
Accumulation Period           Owner may withdraw all or part of the Certificate
                              Value reduced by any applicable premium taxes and
                              withdrawal charge and adjusted by any applicable
                              Market Value Adjustment. The Market Value
                              Adjustment formula will be applied to the
                              applicable portion of the total value withdrawn.
                              We must receive a written request that indicates
                              the amount of the withdrawal from the Fixed
                              Account and each Subaccount and Guarantee Period.
                              The Certificate Owner must return the Certificate
                              to Us if the Certificate Owner elects a total
                              withdrawal.

                              Withdrawals are subject to these conditions:

                              The Certificate Value less any debt and any
                              applicable withdrawal charge remaining after a
                              withdrawal must be at least $5,000.

                              Withdrawals from the Subaccounts will reduce the
                              amounts in each Subaccount on a proportional
                              basis, unless the Certificate Owner tells Us
                              otherwise.

                              Each withdrawal from a Guarantee Period must be at
                              least $5,000 or the value that remains in the
                              Guarantee Period, if smaller;

                              The maximum the Certificate Owner may withdraw
                              from any account is the value of the respective
                              account less the amount of any withdrawal charge
                              and Market Value Adjustment.

                              Any withdrawal amount the Certificate Owner
                              requests will be increased by any applicable
                              withdrawal charge.

                              A withdrawal from the Fixed Account is limited to
                              an amount equal to the Fixed Account Certificate
                              Value.

                              We reserve the right to restrict partial
                              withdrawals from the Fixed Account in the first
                              Certificate Year.

                              The Certificate Owner will ratably forfeit any
                              Purchase Payment bonus and related positive
                              accumulation on any withdrawal in the first
                              Certificate Year.

Withdrawal Charges            All Purchase Payments in a given Certificate Year
                              and all related accumulations are totaled by
                              account and each total is used separately in
                              computing the withdrawal charge as stated in the
                              Withdrawal Charge Table shown on the Certificate
                              Schedule.

                              All amounts to be withdrawn and any applicable
                              withdrawal charges will be charged first against
                              Purchase Payments and all related accumulations in
                              the chronological order We received such Purchase
                              Payments by Certificate Year.

                              Any amount withdrawn which is not subject to a
                              withdrawal charge will be considered a "partial
                              free withdrawal."

                              In the event of a partial withdrawal, a "partial
                              free withdrawal" is applied against Purchase
                              Payments and all related accumulations in the
                              chronological order We received such Purchase
                              Payments by Certificate Year even though the
                              Purchase Payments and related accumulations are no
                              longer subject to a withdrawal charge.

Transfer and Withdrawal       We will withdraw or transfer from the Fixed
Procedures                    Account or Guarantee Periods as of the Valuation
                              Date that follows the date We receive the
                              Certificate Owner's written or telephone transfer
                              request. Amounts to be withdrawn or transferred
                              from the Fixed Account or Guarantee Periods will
                              be done on a first in - first out basis, unless
                              the Certificate Owner requests otherwise. To
                              process a withdrawal, the request must contain all
                              required information.
<PAGE>

TRANSFER AND WITHDRAWAL PROVISIONS (Continued)

                              We will redeem the necessary number of
                              Accumulation Units to achieve the dollar amount
                              when the withdrawal or transfer is made from a
                              Subaccount. We will reduce the number of
                              Accumulation Units credited in each Subaccount by
                              the number of Accumulation Units redeemed. The
                              reduction in the number of Accumulation Units is
                              determined on the basis of the Accumulation Unit
                              Value at the end of the Valuation Period when We
                              receive the request, provided the request contains
                              all required information. We will pay the amount
                              within seven calendar days after the date We
                              receive the request, except as provided below.

Deferment of Withdrawal or    If the withdrawal or transfer is to be made from a
Transfer                      Subaccount, We may suspend the right of withdrawal
                              or transfer or delay payment more than seven
                              calendar days: 1. during any period when the New
                              York Stock Exchange is closed other than customary
                              weekend and holiday closings; 2. when trading
                              markets normally utilized are restricted, or an
                              emergency exists as determined by the Securities
                              and Exchange Commission, so that disposal of
                              investments or determination of the Accumulation
                              Unit Value is not practical; or 3. for such other
                              periods as the Securities and Exchange Commission
                              by order may permit for protection of Certificate
                              Owners.

                              We may defer the payment of a withdrawal or
                              transfer from the Fixed Account or Guarantee
                              Periods, for the period permitted by law. This can
                              never be more than six months after the
                              Certificate Owner sends Us a written request.
                              During the period of deferral, We will continue to
                              credit interest, at the then current interest
                              rate(s), to the Fixed Account Certificate Value
                              and/or each Guarantee Period Value.

DEATH BENEFIT PROVISIONS

Amount Payable Upon Death     We compute the death benefit at the end of the
                              Valuation Period following Our receipt of due
                              proof of death and the return of the Certificate.

                              If death occurs prior to attaining age 75, We will
                              pay the greater of: a. the Certificate Value; or
                              b. the total amount of Purchase Payments, less the
                              aggregate dollar amount of all previous
                              withdrawals or c. the amount that would have been
                              payable in the event of a full surrender. We will
                              pay the larger of the Certificate Value or the
                              amount that would have been payable in the event
                              of a full surrender if death occurs at age 75 or
                              later.

Payment of Death Benefits     If the Certificate Owner or the last surviving
                              annuitant dies while the Certificate is in effect
                              and before the Annuity Date, We will pay a death
                              benefit. If a Certificate Owner is a non-natural
                              person, the death of an Annuitant will be
                              considered as the death of a Certificate Owner for
                              purposes of this death benefit provision.

                              If an Annuitant dies after the Annuity Date, the
                              death benefit, if any, will depend on the Annuity
                              Option in effect. If the Certificate Owner dies
                              after the Annuity Date, income payments will be
                              made at least as rapidly as under the method of
                              distribution being used as of the date of such
                              death.

                              We will pay the death benefit to the beneficiary
                              when We receive due proof of death. We will then
                              have no further obligation under the Certificate.

                              When the Certificate Owner dies, We will pay the
                              death benefit in a lump sum. The entire interest
                              in the Certificate must be distributed within five
                              years from the date of death unless it is applied
                              under an Annuity Option or the spouse continues
                              the Certificate as described below.

L-8696                                                                   Page 15
<PAGE>

L-8696                                                                   Page 16

DEATH BENEFIT PROVISIONS (Continued)

                              Instead of a lump sum payment the beneficiary may
                              elect to have the death benefit distributed as
                              stated in Option 1 for a period not to exceed the
                              beneficiary's life expectancy; or Options 2 or 3
                              based upon the life expectancy of the beneficiary
                              as prescribed by federal regulations. The
                              beneficiary must make this choice within sixty
                              days of the time. We receive due proof of death
                              and distribution must commence within one year of
                              the date of death.

                              If the beneficiary is not a natural person, the
                              beneficiary must elect that the entire death
                              benefit be distributed within five years of the
                              Certificate Owner's death.

                              Distribution of the death benefit must start
                              within one year after the Certificate Owner's
                              death. It may start later if prescribed by federal
                              regulations.

                              If the primary beneficiary is the surviving spouse
                              when the Certificate Owner dies, the surviving
                              spouse may elect to be the successor Certificate
                              Owner of the Certificate, in lieu of receiving a
                              death benefit. There will be no requirement to
                              start a distribution of death benefits.

ANNUITY PERIOD PROVISIONS

Election of Annuity Option    We must receive an election of Annuity option in
                              writing. The Certificate Owner may make an
                              election before the Annuity Date providing the
                              Annuitant is alive. The Annuitant may make an
                              election on the Annuity Date unless the
                              Certificate Owner has restricted the right to
                              make such an election. The beneficiary may make an
                              election when We pay the death benefit.

                              An election will be revoked by 1. a subsequent
                              change of beneficiary; or 2. an assignment of the
                              Certificate unless the assignment provides
                              otherwise.

                              Subject to the terms of the death benefit
                              provision, the beneficiary may elect to have the
                              death benefit remain with Us under one of the
                              Annuity options.

                              If an Annuity option is not elected, an Annuity
                              will be paid under Option 3 for a guaranteed
                              period of ten years and for as long thereafter as
                              the payee is alive.

                              If the total Certificate Value is applied under
                              one of the Annuity options, the Certificate must
                              be surrendered to Us.

                              An option cannot be changed after the first
                              Annuity payment is made.

                              If, on the seventh calendar day before the first
                              Annuity payment due date, all the Certificate
                              Value is allocated to the Fixed Account or
                              Guarantee Periods, the Annuity will be paid as a
                              Fixed Annuity. The Fixed Annuity is funded in Our
                              General Account, which consists of Our assets
                              other than those allocated to the Separate Account
                              or any other separate account. If all of the
                              Certificate Value on such date is allocated to the
                              Separate Account, the Annuity will be paid as a
                              Variable Annuity. If the Certificate Value on such
                              date is allocated to both the Fixed Account or a
                              Guarantee Period and a Subaccount, then the
                              Annuity will be paid as a combination of a Fixed
                              and a Variable Annuity. A Fixed and Variable
                              Annuity payment will reflect the investment
                              performance of the Subaccounts in accordance with
                              the allocation of the Certificate Values existing
                              on such date. Allocations will not be changed
                              thereafter, except as provided in the Transfers
                              During the Annuity Period provision of the
                              Certificate.
<PAGE>

ANNUITY PERIOD PROVISIONS (Continued)

                              Payments for all options are derived from the
                              applicable tables. Current Annuity rates will be
                              used if they produce greater payments than those
                              quoted in the Certificate. The age in the tables
                              is the age of the payee on the last birthday
                              before the first payment is due. We reserve the
                              right to deduct one year from the age for each 10
                              calendar years that have elapsed since the year
                              2000.

                              The option selected must result in a payment that
                              is at least equal to Our minimum payment,
                              according to Our rules, at the time the Annuity
                              option is chosen. If at any time the payments are
                              less than the minimum payment, We have the right
                              to increase the period between payment to
                              quarterly, semi-annual or annual so that the
                              payment is at least equal to the minimum payment
                              or to make payment in one lump sum.

OPTION 1

Specified Period              We will make monthly payments for a fixed number
                              of installments. Payments must be made for at
                              least 5 years, but not more than 30 years.

OPTION 2

Life Annuity                  We will make monthly payments while the payee is
                              alive.

OPTION 3

Life Annuity with             We will make monthly payments for a guaranteed
Installments Guaranteed       period and thereafter while the payee is alive.
                              The guaranteed period must be selected at the time
                              the Annuity option is chosen. The guaranteed
                              periods available are 5, 10, 15 and 20 years.
OPTION 4

Joint and Survivor Annuity    We will pay the full monthly income while both
                              payees are alive. Upon the death of either payee,
                              We will continue to pay the surviving payee a
                              percentage of the original monthly payment. The
                              percentage payable to the surviving payee must be
                              selected at the time the Annuity option is chosen.
                              The percentages available are 50%, 66 2/3%, 75%
                              and 100%.

OTHER OPTIONS                 We may make other Annuity options available.
                              Payments are also available on a quarterly, semi-
                              annual or annual basis.

Fixed Annuity                 The Certificate Value allocated to the Fixed
                              Account or the Guarantee Periods on the first day
                              preceding the date on which the first Annuity
                              Payment is due is first reduced by any premium
                              taxes and charges that apply. The value that
                              remains will be used to determine the Fixed
                              Annuity monthly payment in accordance with the
                              Annuity option selected.

L-8696                                                                   Page 17
<PAGE>

L-8696                                                                   Page 18

ANNUITY PERIOD PROVISIONS (Continued)

Variable Annuity              The Separate Account Certificate Value, at the end
                              of the Valuation period preceding the Valuation
                              Period that includes the date on which the first
                              Annuity payment is due, is first reduced by any
                              Records Maintenance Charge, charges for other
                              benefits if any that may be added by a rider to
                              the Certificate and any premium taxes that apply.
                              The value that remains is used to determine the
                              first monthly Annuity payment. The first monthly
                              Annuity payment is based upon the guaranteed
                              Annuity option shown in the Annuity Option Table.
                              The Certificate Owner may elect any option
                              available.

                              The dollar amount of subsequent payments may
                              increase or decrease depending on the investment
                              experience of each Subaccount. The number of
                              Annuity Units per payment will remain fixed for
                              each Subaccount unless a transfer is made. If a
                              transfer is made, the number of Annuity Units per
                              payment will change. Some annuity options provide
                              for a reduction in the income level upon the death
                              of an annuitant, which will reduce the number of
                              Annuity Units.

                              The number of Annuity Units for each Subaccount is
                              calculated by dividing a. by b. where:

                              a. is the amount of the monthly payment that can
                              be attributed to that Subaccount, and

                              b. is the Annuity Unit Value for that Subaccount
                              at the end of the Valuation Period. The Valuation
                              Period includes the date on which the payment is
                              made.

                              Monthly Annuity payments, after the first payment,
                              are calculated by summing up, for each Subaccount,
                              the product of a. times b. where:

                              a. is the number of Annuity Units per payment in
                              each Subaccount; and

                              b. is the Annuity Unit Value for that Subaccount
                              at the end of the Valuation Period. The Valuation
                              Period includes the date on which the payment is
                              made.

                              After the first payment, We guarantee that the
                              dollar amount of each Annuity payment will not be
                              affected adversely by actual expenses or changes
                              in mortality experience from the expense and
                              mortality assumptions on which We based the first
                              payment.

Annuity Unit Value            The value of an Annuity Unit for each Subaccount,
                              at the end of any subsequent Valuation Period is
                              determined by multiplying the result of a. times
                              b. by c. where:

                              a. is the Annuity Unit Value for the immediately
                              preceding Valuation Period; and

                              b. is the net investment factor for the Valuation
                              Period for which the Annuity Unit Value is being
                              calculated; and

                              c. is the interest of factor of .99983235 per
                              calendar day of such subsequent Valuation Period
                              to offset the effect of the assumed rate of 2.50%
                              per year used in the Annuity Option Table. A
                              different interest factor will be used if an
                              assumed rate other than 2.50% is used in the
                              Annuity Option Table. A different factor will be
                              used if an assumed rate other than 2.50% is used
                              in the Annuity Option Table.
<PAGE>

ANNUITY PERIOD PROVISIONS (Continued)

                              The net investment factor for each Subaccount for
                              any Valuation Period is determined by dividing a.
                              by b. where:

                              a. is the value of an Annuity Unit of the
                              applicable Subaccount as of the end of the current
                              Valuation Period plus or minus the per share
                              charge or credit for taxes reserved.

                              b. is the value of an Annuity Unit of the
                              applicable Subaccount as of the end of the
                              immediately preceding Valuation Period, plus or
                              minus the per share charge or credit for taxes
                              reserved.

Transfers During the          During the Annuity Period, the payee(s) may not
Annuity Period                convert Fixed Annuity payments to Variable Annuity
                              payments. However, during the Annuity Period, the
                              payee(s), by sending Us a written notice in a form
                              satisfactory to Us, may convert Variable Annuity
                              payments to Fixed Annuity payments; or have
                              Variable Annuity payments reflect the investment
                              experience of other Subaccounts. A transfer may be
                              made subject to the following:

                              1. Transfers from a Subaccount to the General
                              Account can be effective only on an anniversary of
                              the first Annuity payment date. We must receive
                              notice of such transfer at least thirty days prior
                              to the effective date of the transfer. Unless the
                              Certificate Owner specifies otherwise, transfers
                              to the General Account from the Separate Account
                              will be proportional among the Subaccounts.

                              2. Transfers from one Subaccount to another
                              Subaccount will be effective during the Valuation
                              Period next succeeding the date the notice is
                              received by Us. However, if the notice for the
                              transfer is received within seven days immediately
                              preceding an Annuity payment date, the transfer
                              will be effective during the Valuation Period next
                              succeeding that Annuity payment date.

                              3. We reserve the right to limit the number of
                              transfers between Subaccounts to no less than one
                              each Certificate Year.

                              4. We reserve the right to limit the number of
                              Subaccounts that may be used at one time to no
                              less than 3.

                              5. Requests for transfers must meet Our current
                              rules and be in a form acceptable to Us.

                              The number of Annuity Units per payment
                              attributable to a Subaccount to which transfer is
                              made is equal to, in the case of a transfer
                              between Subaccounts, the number of Annuity Units
                              per payment in the Subaccount from which transfer
                              is being made multiplied by the Annuity Unit Value
                              for that Subaccount divided by the Annuity Unit
                              Value for the Subaccount to which transfer is
                              being made.

L-8696                                                                   Page 19
<PAGE>

L-8696                                                                   Page 20


ANNUITY PERIOD PROVISIONS (Continued)

                              The amount of money allocated to the General
                              Account in the event of a transfer from a
                              Subaccount equals the annuity reserve for the
                              payee's interest in such Subaccount. The annuity
                              reserve is the product of a. multiplied by b.
                              multiplied by c. where: a. is the number of
                              Annuity Units representing the payee's interest in
                              such Subaccount per Annuity payment; b. is the
                              Annuity Unit Value for such Subaccount; and c. is
                              the present value of $1.00 per payment period
                              using the attained age(s) of the payee(s) and any
                              remaining guaranteed payment that may be due at
                              the time of the transfer. The fixed monthly
                              payments resulting from the transfer will not be
                              less than the amount purchased using the
                              guarantees under the Certificate. Money allocated
                              to the General Account upon such transfer will be
                              applied under the same Annuity option as
                              originally elected. Any Guaranteed Period payments
                              will be adjusted to reflect the number of
                              guaranteed payments that have already been made.
                              If all guaranteed payments have already been made,
                              no further payments will be guaranteed.

                              All amounts and Annuity Unit Values are determined
                              as of the end of the Valuation Period which
                              precedes the effective date of the transfer.

                              We reserve the right at any time and without
                              notice to any party to terminate, suspend or
                              modify the transfer privileges.

Supplementary Agreement       A supplementary agreement will be issued to
                              reflect payments that will be made under a
                              settlement option. If payment is made as a death
                              benefit distribution, the effective date will be
                              the date of death. Otherwise the effective date
                              will be the date chosen by the Certificate Owner.

Date of First Payment         Interest, under an option, will start to accrue on
                              the effective date of the supplementary agreement.
                              The supplementary agreement will provide details
                              on the payments to be made.

Evidence of Age, Sex          We may require satisfactory evidence of the age,
and Survival                  sex and the continued survival of any person on
                              whose life the income is based.

Misstatement of Age or Sex    If the age or sex of the payee has been misstated,
                              the amount payable under the Certificate will be
                              such as the Purchase Payments sent to Us would
                              have purchased at the correct age or sex. Interest
                              not to exceed 6% compounded each year will be
                              charged to any overpayment or credited to any
                              underpayment against future payments We make under
                              the Certificate.

Basis of Annuity Options      The guaranteed monthly payments are based on an
                              interest rate of 2.50% per year and where
                              mortality is involved, the A2000 Table developed
                              by the Society of Actuaries. We may also make
                              available Variable Annuity payment options based
                              on assumed investment rates other than 2.50% but
                              not greater than 5%.

Disbursement of Funds         When the payee dies, the value of any unpaid
Upon Death of Payee:          installments will be paid in one sum, to the
Under Options 1 or 3          estate of the payee unless otherwise provided in
                              the agreement. The commuted value for fixed
                              installments based upon a minimum interest rate of
                              not less than 2.50% will be paid. The commuted
                              value of any variable installments will be
                              determined by applying the Annuity Unit Value next
                              determined following Our receipt of due proof of
                              death and will be based on the Assumed Investment
                              Return.

Protection of Benefits        Unless otherwise provided in the supplementary
                              agreement, the payee may not commute, anticipate,
                              assign, alienate or otherwise hinder the receipt
                              of any payment.
<PAGE>

                             ANNUITY OPTION TABLE

          AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF VALUE APPLIED

Option One - Specified Period

<TABLE>
<CAPTION>
 Number                     Number                     Number                   Number
of years        Monthly    of years      Monthly      of years     Monthly     of years     Monthly
selected        Payment    selected      Payment      selected     Payment     selected     Payment
-----------------------------------------------------------------------------------------------------
<S>             <C>        <C>           <C>          <C>          <C>         <C>          <C>
    5            17.69        12           8.01          19          5.48         26          4.33
    6            14.92        13           7.48          20          5.27         27          4.22
    7            12.94        14           7.03          21          5.08         28          4.11
    8            11.46        15           6.64          22          4.90         29          4.02
    9            10.31        16           6.29          23          4.74         30          3.92
   10             9.39        17           5.99          24          4.59
   11             8.64        18           5.72          25          4.46
-----------------------------------------------------------------------------------------------------
</TABLE>

Options Two and Three - Life Annuity With Installments Guaranteed

<TABLE>
<CAPTION>
Age of           Monthly Payments Guaranteed            Age of          Monthly Payments Guaranteed
Male                                                    Female
Payee                                                   Payee

            None     60     120     180     240                      None     60     120     180     240
<S>         <C>     <C>     <C>     <C>     <C>         <C>          <C>     <C>     <C>     <C>     <C>
 55         4.17    4.16    4.13    4.06    3.96         55          3.87    3.86    3.84    3.81    3.75
 56         4.27    4.25    4.21    4.14    4.03         56          3.95    3.94    3.92    3.88    3.82
 57         4.36    4.35    4.30    4.22    4.09         57          4.03    4.02    4.00    3.95    3.88
 58         4.46    4.45    4.40    4.30    4.16         58          4.11    4.11    4.08    4.03    3.95
 59         4.57    4.55    4.50    4.39    4.22         59          4.21    4.20    4.17    4.11    4.01
 60         4.69    4.67    4.60    4.48    4.29         60          4.30    4.29    4.26    4.19    4.08
 61         4.81    4.79    4.71    4.57    4.36         61          4.41    4.40    4.35    4.28    4.15
 62         4.94    4.92    4.83    4.66    4.43         62          4.52    4.50    4.46    4.37    4.23
 63         5.09    5.05    4.95    4.76    4.49         63          4.64    4.62    4.56    4.46    4.30
 64         5.24    5.20    5.08    4.86    4.56         64          4.76    4.74    4.68    4.56    4.37
 65         5.40    5.35    5.21    4.96    4.62         65          4.90    4.87    4.80    4.66    4.45
 66         5.57    5.52    5.35    5.06    4.69         66          5.04    5.01    4.93    4.77    4.52
 67         5.75    5.69    5.49    5.17    4.75         67          5.19    5.16    5.06    4.87    4.59
 68         5.95    5.87    5.64    5.27    4.81         68          5.36    5.32    5.20    4.98    4.66
 69         6.15    6.07    5.80    5.37    4.86         69          5.53    5.49    5.35    5.10    4.73
 70         6.38    6.27    5.96    5.48    4.91         70          5.72    5.68    5.51    5.21    4.80
 71         6.61    6.49    8.12    5.58    4.96         71          5.93    5.87    5.67    5.33    4.86
 72         6.86    6.72    6.29    5.68    5.00         72          6.15    6.08    5.85    5.44    4.92
 73         7.13    6.96    6.47    5.77    5.04         73          6.39    6.31    6.03    5.56    4.97
 74         7.42    7.21    6.64    5.86    5.08         74          6.65    6.55    6.21    5.67    5.02
 75         7.72    7.48    6.82    5.95    5.11         75          6.93    6.81    6.41    5.78    5.06
 76         8.05    7.76    7.00    6.03    5.14         76          7.24    7.08    6.60    5.88    5.10
 77         8.40    8.06    7.18    6.11    5.17         77          7.57    7.38    6.80    5.98    5.13
 78         8.77    8.37    7.35    6.18    5.19         78          7.92    7.69    7.01    6.07    5.16
 79         9.18    8.69    7.53    6.25    5.20         79          8.31    8.02    7.21    6.15    5.18
 80         9.60    9.03    7.70    6.31    5.22         80          8.72    8.37    7.41    6.23    5.20
 81        10.06    9.38    7.86    6.36    5.23         81          9.17    8.74    7.61    6.30    5.22
 82        10.55    9.74    8.02    6.41    5.24         82          9.66    9.13    7.80    6.35    5.23
 83        11.07   10.12    8.17    6.45    5.25         83         10.20    9.54    7.98    6.41    5.24
 84        11.63   10.50    8.32    6.49    5.26         84         10.77    9.96    8.15    6.45    5.25
 85        12.22   10.89    8.45    6.52    5.26         85         11.39   10.40    8.31    6.49    5.26
-----------------------------------------------------------------------------------------------------
</TABLE>

Option Four - Joint and 100% Survivor Annuity

Age of                   Age of Female Payee
 Male
Payee    55      60      65      70      75      80      85
 55     3.49    3.66    3.81    3.93    4.02    4.08    4.12
 60     3.61    3.83    4.05    4.24    4.40    4.52    4.59
 65     3.69    3.97    4.28    4.57    4.84    5.05    5.20
 70     3.76    4.09    4.47    4.89    5.31    5.67    5.95
 75     3.80    4.17    4.63    5.16    5.75    6.34    6.83
 80     3.83    4.23    4.73    5.37    6.14    6.99    7.80
 85     3.84    4.26    4.80    5.51    6.44    7.55    8.75

Rates for ages not shown here will be provided upon request.

L-8696                                                                   Page 21
<PAGE>

NURSING CARE PROVISION

                         The following provision is added to the Certificate
                         Owner's Certificate:

                         Withdrawal charges will not be assessed when a total or
                         partial withdrawal is requested in a form satisfactory
                         to Us:

                         1.   after the Certificate Owner has been confined in a
                         Hospital or Skilled Health Care Facility for at least
                         thirty consecutive days and the Certificate Owner
                         remains confined in the Hospital or Skilled Health Care
                         Facility when the request is made; or

                         2.   within thirty days following the Certificate
                         Owner's discharge from a Hospital or Skilled Health
                         Care Facility after a confinement of at least thirty
                         days.

                         Confinement must begin after the effective date of the
                         Certificate Owner's Certificate.

                         Withdrawal charges will not be waived when confinement
                         is due to substance abuse, mental or personality
                         disorders without a demonstrable organic disease. A
                         degenerative brain disease such as Alzheimer's Disease
                         is considered an organic disease.

                         For purposes of this provision:

                         "Hospital" means a place which is licensed by the State
                         as a Hospital and is operating within the scope of its
                         license.

                         "Skilled Health Care Facility" means a place which:

                         (a)  is licensed by the state;

                         (b)  provides skilled nursing care under the
                         supervision of a physician;

                         (c)  has twenty-four hour a day nursing services by or
                         under the supervision of a registered nurse (RN); and

                         (d)  keeps a daily medical record of each patient.

457 DEFERRED COMPENSATION PROVISION

                         When a Certificate is issued as an Annuity which is
                         Qualified under IRC Section 457. (IRC means the
                         Internal Revenue Code of 1986, as amended from time to
                         time), the following shall apply regardless of any
                         provisions to the contrary in this Master Policy:

SECTION 1.               The Annuitant is the participant in a 457 plan. The
OWNERSHIP                owner is the employer that maintains the plan. Prior to
                         the distribution of the Annuitants interest, all
                         property and rights will remain those of the employer,
                         except if the next section applies.

SECTION 2.               This section applies if the Certificate is held by: a
EXCLUSIVE BENEFIT        State; or a political subdivision of a State. In that
                         case, in accordance with 457(g), all assets and income
                         under the Certificate are held for the exclusive
                         benefit of: the Annuitant(s); and the beneficiary(s) of
                         the Annuitant(s).

L-8696                                                                   Page 22
<PAGE>

L-8696                                                                   Page 23

QUALIFIED PLAN PROVISION

                         When a Certificate is issued as a Qualified Annuity,
                         the following provision shall apply regardless of any
                         provisions to the contrary in this Master Policy.

                         The Certificate Owner's Certificate is amended as
                         follows:

                         The applicable sections of this provision apply and
                         take precedence over contrary provisions if the
                         Certificate: a. is issued as a Code Section 403(b) Tax
                         Sheltered Annuity ("Tax Sheltered Annuity") to an
                         individual; or b. is issued under a plan described in
                         Section 401(a) or 403(b) of the Code if subject to
                         the requirements of the Employee Retirement Income
                         Security Act of 1974 ("ERISA Plans").

SECTION 1.               A.   The Certificate Owner is the Annuitant.
TAX SHELTERED ANNUITY
                         B.   The rights of the Annuitant under the Certificate
                              are nonforfeitable.

                         C.   The Certificate is not transferable and cannot be
                              sold; assigned; discounted; or pledged as
                              collateral for a loan or as security for the
                              performance of an obligation or for any person
                              other than Us.

                         D.   The amount that may be contributed to the
                              Certificate will be governed by the provisions of
                              Sections 403(b), 415, and 402(g) of the Code.

                         E.   In the case of benefits that accrued under the
                              Certificate after December 31, 1986, distribution
                              must be: a. made in accordance with the minimum
                              distribution requirements of Section 403(b)(10) of
                              the Code; and b. the regulations thereunder.

                         F.   Distributions attributable to salary reduction
                              contributions received or earnings credited after
                              December 31, 1988 may be paid only when: a. the
                              employee attains age 59 1/2; b. separates from
                              service; or c. dies or is disabled.
                              Notwithstanding the foregoing, contributions, but
                              not earnings thereon, may be distributed in the
                              case of hardship within the meaning of Code
                              Section 403(b)(11)(B).

                         G.   If the Annuitant receives an eligible rollover
                              distribution and elects to have the distribution
                              paid directly to an eligible retirement plan (as
                              defined in Section 402(c) of the Code) and
                              specifies the eligible retirement plan in a direct
                              rollover.

                         H.   We will not be responsible for the timing, purpose
                              or propriety of any distribution. We will not
                              incur any liability or responsibility of any tax
                              imposed on account of any such distribution. We
                              are not obligated to make any distribution absent
                              a specific written direction in accordance with
                              the provision of the Certificate.

SECTION 2.               At any time prior to the Annuity Date, an ERISA loan
ERISA PLANS              may be requested. One-half of the Certificate will be
                         assigned as security for such a loan. The maximum ERISA
                         loan amount available is the lesser of: a. $50,000
                         (reduced by the excess of the highest outstanding loan
                         balance of all loans during the prior 12 month period
                         ending on the day before the loan is made over any loan
                         amount outstanding on the date the loan is made); or b.
                         fifty percent of the Certificate Value less Debt. The
                         minimum ERISA loan amount available is $1,000. We may
                         defer the granting of an ERISA loan for six months from
                         the date of our receipt of a written loan request.
<PAGE>

QUALIFIED PLAN PROVISION (continued)

SECTION 3.                              A.   Definitions:
LOANS
                                             Certificate Value is the sum of the
                                             Fixed Account Certificate Value,
                                             the Loan Value, the Separate
                                             Account Certificate Value, and the
                                             Guarantee Period Value.

                                             Debt is the principal of any
                                             outstanding loan plus interest due
                                             or accrued.

                                             Loan Value is the outstanding loan
                                             amount plus interest credited.

                                        B.   When a loan is taken, an amount
                                             equal to the loan will be
                                             transferred from the Fixed Account
                                             Certificate Value, the Separate
                                             Account Certificate Value and the
                                             Guarantee Period Value to the loan
                                             account. Unless the Certificate
                                             Owner tells Us otherwise, the loan
                                             will proportionately reduce the
                                             amount allocated to the Fixed
                                             Account, the Separate Account, and
                                             the Guarantee Periods.

                                        C.   The amount of Debt will reduce the
                                             amount payable upon death or
                                             surrender or the amount that may be
                                             applied under an Annuity Option.

                                        D.   While a loan is outstanding, the
                                             Loan Value will be credited with
                                             interest at a rate equal to the
                                             rate charged on Debt less a
                                             deduction not to exceed 2.5%.

                                        E.   A loan may be repaid in full or in
                                             part at any time prior to the
                                             Annuity Date.

                                        F.   Should the Debt equal or exceed the
                                             Certificate Value, the Certificate
                                             will terminate thirty-one days
                                             after We mail a notice of
                                             termination to the Certificate
                                             Owner's last known address. The
                                             Debt will be treated as a
                                             withdrawal. Notice of termination
                                             may be sent upon occurrence of an
                                             event outlined in Section 1(F).

                                        G.   The Certificate Owner must sign a
                                             loan agreement in the form
                                             prescribed by Us to be eligible for
                                             a loan. The interest rate and any
                                             service fees charged on a loan will
                                             be as stated in the loan agreement.
                                             The loan will also be subject to
                                             the terms of the agreement to the
                                             extent not inconsistent with this
                                             provision.

                                        H.   All Debt must be repaid prior to
                                             the transfer of any amounts to
                                             another Certificate.

                                        I.   Failure to make timely repayment of
                                             Debt will result in a taxable
                                             distribution and possible tax
                                             penalties.


INDIVIDUAL RETIREMENT ANNUITY PROVISION

                                        When a Certificate is Issued as an
                                        Individual Retirement Annuity ("IRA")
                                        under Section 408(b) of the Internal
                                        Revenue Code ("Code"), the following
                                        provisions will apply regardless of any
                                        provision to the contrary in this Master
                                        Policy.

                                        The Certificate Owner's Certificate is
                                        amended as follows:

SECTION 1.                              The Annuitant will be the Certificate
OWNERSHIP-EXCLUSIVE BENEFIT-            Owner of the IRA. This IRA is
TRANSFERABILITY-NON FORFEITURE.         established for the exclusive benefit of
NON ASSIGNABLE                          the Certificate Owner and the
                                        Certificate Owner's beneficiary(s). The
                                        Certificate Owner's interest in this IRA
                                        can not be: transferred, forfeited;
                                        assigned; discounted; borrowed against;
                                        or pledged as security for any purpose.

L-8696                                                                   Page 24
<PAGE>

L-8696                                                                   Page 25

INDIVIDUAL RETIREMENT ANNUITY PROVISION (continued)

SECTION 2.               We will only accept cash contributions. Except in the
PREMIUM PAYMENTS-        case of a rollover contribution allowed by Sections
LIMITATIONS              402(c), 403(a)(4), 403(b)(3), of the Code or a
                         contribution to a Simplified Employee Pension Program
                         ("SEP") described in Section 408(k), we will not
                         accept contributions of more than a $2,000 for any tax
                         year. In the case of a spousal IRA, payments to all
                         IRAs for any tax year can not be more than $2,250. No
                         more than $2,000 of this amount can be credited to the
                         IRA of either spouse. If the Certificate is an
                         Immediate Annuity Certificate, no further contributions
                         will be allowed.

                         Any refund of premiums will be applied, before the
                         close of the calendar year that follows the year of the
                         refund, toward; a. the payment of future contributions;
                         of b. the purchase of increased benefits. This does not
                         apply to premiums that can be attributed to excess
                         contributions.

SECTION 3.
TIME AND MANNER OF       Notwithstanding any provision herein to the contrary,
DISTRIBUTION             distribution of the Certificate Owner's interest under
                         this Section and Section 4 will be made in accordance
                         with the minimum distribution rules of Section
                         401(a)(9), 408(a)(6) and 408(b)(3) of the code and the
                         regulations thereunder. This includes the incidental
                         death benefit provisions of Section 1.401(a)(9)-2 of
                         the proposed regulations. All of these are herein
                         incorporated by reference.

                         Distribution of the Certificate Owner's interest must
                         start by the first day of April after the calendar year
                         in which the Certificate owner attains age 70 1/2. The
                         election of one of the payout options must be made at
                         least 60 days prior to the date it is to begin. For
                         each succeeding year, distribution must be made on or
                         before December 31. The pay out option elected must
                         result in distribution of equal or substantially equal
                         payments which conform with one of the following: a.
                         over the Certificate Owner's life; b. over the
                         Certificate Owner's life and the life of the
                         Certificate Owner's designated beneficiary; c. over a
                         specified period that may not be longer than the
                         Certificate Owner's life expectancy; d. over a
                         specified period that may not be longer than the joint
                         life and last survivor expectancy of the Certificate
                         Owner and the Certificate Owner's designated
                         beneficiary. A single sum payment may also be elected.

                         If payments under a chosen option are guaranteed, the
                         period of guarantee may not exceed the Certificate
                         Owner's expected life, or the expected lives of the
                         joint and last survivor of the Certificate Owner and
                         the secondary Annuitant. This limit also applies to
                         Option 1 under the Certificate.

SECTION 4.               a.   Immediate Annuity Contracts
DISTRIBUTION
UPON DEATH               If the Certificate is an Immediate Annuity Certificate
                         and the Certificate Owner dies, distribution will
                         continue to be made, if due, as provided in the
                         Certificate:

                         b.   Other Annuity Certificates

                         If the Certificate is not an Immediate Annuity
                         Certificate, the rules that follow will apply.

                         If the Certificate Owner dies after distribution has
                         begun, the unpaid portion of the Certificate Owner's
                         interest that remains will continue to be paid under
                         the pay out option in effect.

                         If the Certificate Owner dies before a pay out option
                         has begun, the entire interest that remains must be
                         distributed in accordance with one of the provisions
                         that follow:

                         1.   The Certificate Owner's entire interest will be
                         paid to the beneficiary(s) by December 31 of the year
                         containing the fifth anniversary of the Certificate
                         Owner's death.
<PAGE>

INDIVIDUAL RETIREMENT ANNUITY PROVISION (continued)

                         2.   the Certificate Owner's interest is payable to a
                         beneficiary(s) who is not the Certificate Owner's
                         surviving spouse, and the Certificate Owner has not
                         elected b. 1. of this section, then the entire interest
                         will be distributed under Option 3 of the Certificate
                         starting no later than December 31, of the year that
                         follows the year of the Certificate Owner's death. The
                         period of guarantee will be the lesser of: a. ten
                         years; or b. the expected life of the beneficiary(s).

                         3.   If the beneficiary is the surviving spouse, the
                         spouse may receive pay out under Option 2 or 3 of the
                         Certificate or b. 1. of this section; or the spouse may
                         treat the Certificate as his or own IRA. This election
                         will be deemed to have been made if such surviving
                         spouse: makes a regular IRA contribution to the
                         Certificate; makes a rollover contribution to or from
                         the Certificate; or fails to elect any other option
                         provided. Payments under Option 2 or 3 must start prior
                         to December 31st of the year in which the Certificate
                         Owner would have attained age 70 1/2. The surviving
                         spouse must elect this option within 300 days after the
                         Certificate Owner's death. If not, we will pay out the
                         method of b. 2 of this section.

                         4.   The entire interest will be paid in a lump sum to
                         the Certificate Owner's estate if: a. the Certificate
                         Owner has not designated a beneficiary(s) prior to the
                         Certificate Owner's death; or b. the beneficiary(s)
                         does not survive.

SECTION 5.               We will send the Certificate Owner an annual report on
REPORTS                  the IRA.

SECTION 6.               We will send the Certificate Owner a copy of any
AMENDMENTS               amendment needed to maintain the Certificate on a tax-
                         qualified basis in a timely manner. It will be deemed
                         accepted by the Certificate Owner unless the
                         Certificate Owner returns it to us within ten days of
                         the time the Certificate Owner receives it.

SECTION 7.               The term Immediate Annuity Certificate means an Annuity
OTHER ITEMS              Certificate which at issue provides that a pay out of
                         benefits is scheduled to start within eleven months of
                         it's effective date. Unless otherwise provided, the
                         Certificate Owner must make an election at least 60
                         days before a pay out is to start. The election is made
                         by sending Us a request in writing. An election takes
                         effect only if we receive it while the Certificate
                         Owner is alive.

                         An individual may satisfy the minimum distribution
                         requirements under Sections 408(a)(6) and 408(b)(3) of
                         the Code by receiving a distribution from one IRA that
                         is equal to the amount required to satisfy the minimum
                         distribution requirements for two or more IRAs. For
                         this purpose, the Owner of two or more IRAs may use the
                         "alternative method" described in Notice 88-38, 1988-1
                         C.B. 524, to satisfy the minimum distribution
                         requirements.

                         Life expectancy and joint and last survivor expectancy
                         are computed by use of the return multiples contained
                         in Table V and VI of Section 1.72-9 of the Income
                         Regulations. Life Expectations will be calculated using
                         the Certificate Owner's or the Certificate Owner's
                         beneficiary(s) attained age at the time distribution is
                         required to begin.

SIMPLE INDIVIDUAL RETIREMENT ANNUITY PROVISION

SECTION 1.               The Annuitant will be the Certificate Owner of the IRA.
OWNERSHIP-EXCLUSIVE      This IRA is established for the exclusive benefit of
BENEFIT TRANSFERABILITY  the Certificate Owner and the Certificate Owner's
-NON FORFEITURE          beneficiary(s). The Certificate Owner's interest in
NON ASSIGNABLE           this IRA can not be: transferred, forfeited; assigned;
                         discounted; borrowed against; or pledged as security
                         for any purpose.

L-8696                                                                   Page 26

<PAGE>

L-8696                                                                   Page 27

SIMPLE INDIVIDUAL RETIREMENT ANNUITY PROVISION (continued)

SECTION 2.                    We will only accept cash contributions. Except in
PREMIUM PAYMENTS -            the case of a rollover contribution allowed by
LIMITATIONS                   Sections 402(c), 403(a)(4), 403(b)(3), of the Code
                              or a contribution to a Simplified Employee Pension
                              Program ("SEP") described in Section 408(k), we
                              will not accept contributions of more than a
                              $2,000 for any tax year. In the case of a spousal
                              IRA, payments to all IRAs for any tax year can not
                              be more than $2,250. No more than $2,000 of this
                              amount can be credited to the IRA of either
                              spouse. If the Certificate is an Immediate Annuity
                              Certificate, no further contributions will be
                              allowed.

                              Any refund of premiums will be applied, before the
                              close of the calendar year that follows the year
                              of the refund, toward; a. the payment of future
                              contributions; of b. the purchase of increased
                              benefits. This does not apply to premiums that can
                              be attributed to excess contributions.

SECTION 3.
TIME AND MANNER OF            Notwithstanding any provision herein to the
DISTRIBUTION                  contrary, distribution of the Certificate Owner's
                              interest under this Section and Section 4 will be
                              made in accordance with the minimum distribution
                              rules of Section 401(a)(9), 408(a)(6) and
                              408(b)(3) of the code and the regulations
                              thereunder. This includes the incidental death
                              benefit provisions of Section 1.401(a)(9)-2 of the
                              proposed regulations. All of these are herein
                              incorporated by reference.

                              Distribution of the Certificate Owner's interest
                              must start by the first day of April after the
                              calendar year in which the Certificate owner
                              attains age 70 1/2. The election of one of the
                              pay out options must be made at least 60 days
                              prior to the date it is to begin. For each
                              succeeding year, distribution must be made on or
                              before December 31. The pay out option elected
                              must result in distribution of equal or
                              substantially equal payments which conform with
                              one of the following: a. over the Certificate
                              Owner's life; b. over the Certificate Owner's life
                              and the life of the Certificate Owner's designated
                              beneficiary; c. over a specified period that may
                              not be longer than the Certificate Owner's life
                              expectancy; d. over a specified period that may
                              not be longer than the joint life and last
                              survivor expectancy of the Certificate Owner and
                              the Certificate Owner's designated beneficiary. A
                              single sum payment may also be elected.

                              If payments under a chosen option are guaranteed,
                              the period of guarantee may not exceed the
                              Certificate Owner's expected life, or the expected
                              lives of the joint and last survivor of the
                              Certificate Owner and the secondary Annuitant.
                              This limit also applies to Option 1 under the
                              Certificate.

SECTION 4.                    a. Immediate Annuity Contracts
DISTRIBUTION
UPON DEATH                    If the Certificate is an Immediate Annuity
                              Certificate and the Certificate Owner dies,
                              distribution will continue to be made, if due, as
                              provided in the Certificate:

                              b. Other Annuity Certificates

                              If the Certificate is not an Immediate Annuity
                              Certificate, the rules that follow will apply.

                              If the Certificate Owner dies after distribution
                              has begun, the unpaid portion of the Certificate
                              Owner's interest that remains will continue to be
                              paid under the pay out option in effect.

                              If the Certificate Owner dies before a pay out
                              option has begun, the entire interest that remains
                              must be distributed in accordance with one of the
                              provisions that follow:

                              1. The Certificate Owner's entire interest will be
                              paid to the beneficiary(s) by December 31 of the
                              year containing the fifth anniversary of the
                              Certificate Owner's death.
<PAGE>

SIMPLE INDIVIDUAL RETIREMENT ANNUITY PROVISION (continued)

                              2. the Certificate Owner's interest is payable to
                              a beneficiary(s) who is not the Certificate
                              Owner's surviving spouse, and the Certificate
                              Owner has not elected b. 1. of this section, then
                              the entire interest will be distributed under
                              Option 3 of the Certificate starting no later than
                              December 31, of the year that follows the year of
                              the Certificate Owner's death. The period of
                              guarantee will be the lesser of: a. ten years;
                              or b. the expected life of the beneficiary(s).

                              3. If the beneficiary is the surviving spouse, the
                              spouse may receive pay out under Option 2 or 3 of
                              the Certificate or b. 1. of this section; or the
                              spouse may treat the Certificate as his or own
                              IRA. This election will be deemed to have been
                              made if such surviving spouse: makes a regular IRA
                              contribution to the Certificate; makes a rollover
                              contribution to or from the Certificate; or fails
                              to elect any other option provided. Payments under
                              Option 2 or 3 must start prior to December 31st of
                              the year in which the Certificate Owner would have
                              attained age 70 1/2. The surviving spouse must
                              elect this option within 300 days after the
                              Certificate Owner's death. If not, we will pay out
                              the method of b. 2 of this section.

                              4. The entire interest will be paid in a lump sum
                              to the Certificate Owner's estate if: a. the
                              Certificate Owner has not designated a
                              beneficiary(s) prior to the Certificate Owner's
                              death; or b. the beneficiary(s) does not survive.

SECTION 5.                    We will send the Certificate Owner an annual
REPORTS                       report on the IRA.

SECTION 6.                    We will send the Certificate Owner a copy of any
AMENDMENTS                    amendment needed to maintain the Certificate on a
                              tax-qualified basis in a timely manner. It will be
                              deemed accepted by the Certificate Owner unless
                              the Certificate Owner returns it to us within ten
                              days of the time the Certificate Owner receives
                              it.

SECTION 7.                    The term Immediate Annuity Certificate means an
OTHER ITEMS                   Annuity Certificate which at issue provides that a
                              pay out of benefits is scheduled to start within
                              eleven months of it's effective date. Unless
                              otherwise provided, the Certificate Owner must
                              make an election at least 60 days before a pay out
                              is to start. The election is made by sending Us a
                              request in writing. An election takes effect only
                              if we receive it while the Certificate Owner is
                              alive.

                              An individual may satisfy the minimum distribution
                              requirements under Sections 408(a)(6) and
                              408(b)(3) of the Code by receiving a distribution
                              from one IRA that is equal to the amount required
                              to satisfy the minimum distribution requirements
                              for two or more IRAs. For this purpose, the Owner
                              of two or more IRAs may use the "alternative
                              method" described in Notice 88-38, 1988-1 C.B.
                              524, to satisfy the minimum distribution
                              requirements

                              Life expectancy and joint and last survivor
                              expectancy are computed by use of the return
                              multiples contained in Table V and VI of Section
                              1.72-9 of the Income Regulations. Life
                              Expectations will be calculated using the
                              Certificate Owner's or the Certificate Owner's
                              beneficiary(s) attained age at the time
                              distribution is required to begin.

L-8696                                                                   Page 28
<PAGE>

L-8696                                                                   Page 29

ROTH INDIVIDUAL RETIREMENT ANNUITY ("ROTH IRA") PROVISION

                              The following provision applies in lieu of any
                              provisions to the contrary in this Master Policy
                              if an Annuitant establishes a Roth Individual
                              Retirement Annuity ("Roth IRA") under Section 408A
                              of the Internal Revenue Code of 1986, as amended
                              ("Code"). The Certificate is amended to restrict
                              the Certificate Owner's rights and any
                              beneficiary(s) rights, and to limit the
                              contributions as follows:

                              1. The Certificate Owner may not transfer
                                 Ownership of the Certificate, or assign or
                                 pledge the Certificate as collateral for a loan
                                 or as security for the performance of an
                                 obligation or for any other purpose, to any
                                 person other than to Us or the Certificate
                                 Owner's former spouse under a written
                                 instrument incident to that divorce.

                              2. The Certificate Owner is established for the
                                 exclusive benefit of the Certificate Owner
                                 and the Certificate Owner's beneficiary(s).

                              3. The Certificate Owner's interest in the
                                 Certificate is nonforfeitable.

                              4. Dividends, if applicable, will not be paid in
                                 cash but will be applied as contributions to
                                 the Certificate.

                              5. At least once each calendar year, we shall
                                 furnish the Certificate Owner a report
                                 concerning the status of the Certificate.

                              6. The Certificate will accept contributions only
                                 as follows:

                                 A. Contributions to the Certificate must be
                                    paid in cash and, except in the case of a
                                    trustee-to-trustee transfer from another
                                    Roth IRA, or in the case of a qualified
                                    rollover contribution, may not exceed the
                                    excess of the Certificate Owner's
                                    contribution limit for the taxable year over
                                    the aggregate contributions made during the
                                    taxable year to all other Roth

                                    IRA's and IRA's held by the Certificate
                                    Owner. Contributions may made without
                                    respect to the Certificate Owner's age.

                                    The contribution limit for the taxable year
                                    is either: (1) the lesser of $2,000 or 100%
                                    of the Certificate Owner's compensation for
                                    the taxable year; or (2) where the
                                    Certificate Owner files a joint and receives
                                    less compensation for the taxable year than
                                    the Certificate Owner's spouse, the lesser
                                    of $2,000 or 100% of the Certificate Owner's
                                    compensation and the Certificate Owner's
                                    spouse's compensation for the taxable year
                                    less the Certificate Owner's spouse's
                                    contribution to a Roth IRA or IRA (if any)
                                    for the same taxable year.

                                    When the Certificate Owner's adjusted gross
                                    income (AGI) exceeds the applicable dollar
                                    limit (ADL; see description below), the
                                    annual contribution limit is reduced by the
                                    following amount:

<TABLE>
                                    <S>                 <C>
                                    Annual
                                    Contribution    X   The Certificate Owner's AGI - ADL
                                                        ----------------------------------------------------
                                    Limit               $15,000 ($10,000 if the Certificate Owner is married
</TABLE>

                                    For purposes of this Section: AGI does not
                                    include any amount included in gross income
                                    as a result of a rollover of an IRA to a
                                    Roth IRA; and AGI is reduced by any
                                    deduction under Section 219 of the Code.

                                    The ADL is $15,000 for the Certificate Owner
                                    filing a joint return; or $95,000 for the
                                    Certificate Owner filing a single return; or
                                    $-0 for the Certificate Owner as married
                                    filing a separate return.
<PAGE>

ROTH INDIVIDUAL RETIREMENT ANNUITY ("ROTH IRA") PROVISION (continued)

                                 B.      A qualified rollover contribution
                                         described in Section 408A(e) can be
                                         made only from: (1) another Roth IRA;
                                         or (2) another IRA, which is not a Roth
                                         IRA, and can be made from in IRA other
                                         than Roth IRA only if the Certificate
                                         Owner's AGI for the taxable year does
                                         not exceed $100,000.

                                 C.      For purposes of this Section,
                                         compensation means: wages, salaries,
                                         professional fees, or other amounts
                                         derived from or received for personal
                                         service actually rendered (including
                                         but not limited to commissions paid to
                                         salespersons, compensation for services
                                         on the basis of a percentage of
                                         profits, commissions on insurance
                                         premiums, tips, and bonuses); and
                                         includes earned income, as defined in
                                         Section 401(c)(2) (reduced by the
                                         deduction the self-employed individual
                                         takes for contributions made to a self-
                                         employed retirement plan). For purposes
                                         of this definition, Section 401(c)(2)
                                         shall be applied as if the term or
                                         business for purposes of Section 1402
                                         included service in subsection (c)(6).
                                         Compensation does not include amounts
                                         derived from or received as earnings or
                                         profits from property (including, but
                                         not limited to interest and dividends)
                                         or amounts not includible in gross
                                         income. Compensation also does not
                                         include any amount received as a
                                         pension or Annuity includible in the
                                         Certificate Owner's gross income under
                                         Section 71 with respect to a divorce or
                                         separation instrument described in
                                         subparagraph (A) of section 71(b)(2).

                              7. The Certificate Owner's entire interest will be
                                 distributed in accordance with one of the
                                 following provisions, as elected:

                                 A. (1)  The Certificate Owner's entire interest
                                         will be paid by December 31 following
                                         the fifth anniversary of the
                                         Certificate Owner's death.

                                    (2)  If any portion of the Certificate
                                         Owner's interest is payable to a
                                         designated beneficiary(s) and such
                                         beneficiary(s) has not elected 7.A(1)
                                         above, then the entire interest which
                                         is payable to the beneficiary(s) will
                                         be distributed in substantially equal
                                         installments over a period of

                                    (3)  In applying the requirements of 7.A(2)
                                         above to any portion of the Certificate
                                         Owner's interest which is payable to
                                         the Certificate Owner's surviving
                                         spouse, the date on which payments must
                                         commence is the later of: (a) December
                                         31 following the date the Certificate
                                         Owner would have attained age 70 1/2;
                                         or (b) December 31 following the first
                                         anniversary the Certificate Owner's
                                         death.

                                    (4)  If the Certificate Owner's designated
                                         beneficiary(s) is the surviving spouse,
                                         the spouse may treat the Certificate as
                                         their own Roth IRA makes a rollover or
                                         other contribution into this
                                         Certificate; or if the This election
                                         will be deemed to have been made: if
                                         the surviving spouse surviving spouse
                                         has failed to satisfy one or more
                                         requirements described in 7.A(1) of
                                         7.A(2) above. If the surviving spouse
                                         will be treated as having elected to
                                         make the Roth IRA his or her own Roth
                                         IRA.

                                 B.      For purposes of this Section, life
                                         expectancy will be computed by use of
                                         the return multiples specified in
                                         Tables V or VI of Section 1.72-9 of the
                                         Income Tax Regulations based on the
                                         attained age of such beneficiary(s)
                                         during the calendar year in which
                                         distributions are required to commence
                                         pursuant to this Section. Payments for
                                         any subsequent calendar year will be
                                         based on the life expectancy reduced by
                                         one for each calendar year which has
                                         elapsed since the calendar year life
                                         expectancy was first calculated. The
                                         Certificate Owner's designated
                                         beneficiary(s) who is the surviving
                                         spouse may elect, prior to the time
                                         that payments have begun to him or her,
                                         to redetermine life expectancy each
                                         year based on the beneficiary(s)
                                         attained age in each such year.

                              8. The Certificate shall be amended from time to
                                 time, if required, to reflect any changes in
                                 the Code, related regulations, or other
                                 federal tax requirements.

L-8696                                                                   Page 30
<PAGE>

L-8696                                                                   Page 31

UNISEX PROVISION         The following provision replaces the respective
                         provisions found in the individual Sections for those
                         Owner's Certificate issued as part of an employer-
                         sponsored retirement plan or in those state that
                         require unisex rates.

                         All references throughout the Certificate to the sex of
                         a person used in the calculation of benefits are
                         deleted.

                         The tables for Annuity Options 2, 3, and 4 are replaced
                         by the following.

Options Two and Three - Life Annuity With Installments Guaranteed

                          Monthly Payments Guaranteed

      Age         NONE         60         120         180         240

      55           4.02        4.01       3.99        3.94        3.86
      56           4.11        4.10       4.07        4.01        3.92
      57           4.20        4.19       4.15        4.09        3.99
      58           4.29        4.28       4.24        4.17        4.05
      59           4.39        4.38       4.33        4.25        4.12
      60           4.50        4.48       4.43        4.34        4.19
      61           4.61        4.59       4.53        4.43        4.26
      62           4:73        4.71       4.64        4.52        4.33
      63           4.86        4.84       4.76        4.61        4.40
      64           5.00        4.97       4.88        4.71        4.47
      65           5.15        5.11       5.01        4.81        4.54
      66           5.30        5.26       5.14        4.92        4.61
      67           5.47        5.43       5.28        5.02        4.68
      68           5.65        5.60       5.43        5.13        4.74
      69           5.84        5.78       5.58        5.24        4.80
      70           6.05        5.97       5.74        5.35        4.86
      71           6.27        6.18       5.90        5.46        4.91
      72           6.50        6.40       6.07        5.56        4.96
      73           6.76        6.63       6.25        5.67        5.01
      74           7.03        6.88       6.43        5.77        5.05
      75           7.32        7.14       6.62        5.87        5.09
      76           7.64        7.42       6.80        5.96        5.12
      77           7.98        7.72       6.99        6.05        5.15
      78           8.34        8.03       7.18        6.13        5.17
      79           8.73        8.36       7.37        6.20        5.19
      80           9.16        8.70       7.56        6.27        5.21
      81           9.61        9.06       7.74        6.33        5.23
      82          10.10        9.44       7.91        6.38        5.24
      83          10.63        9.83       8.08        6.43        5.25
      84          11.19       10.23       8.24        6.47        5.25
      85          11.80       10.64       8.38        6.50        5.26

Options Four - Joint and 100% Survivor Annuity

Age of                           Age of secondary Payee
Primary
Payee         55       60        65        70        75        80        85

   55        3.51     3.64      3.76      3.85      3.92      3.96      3.99
   60        3.64     3.84      4.02      4.18      4.29      4.38      4.43
   65        3.76     4.02      4.29      4.54      4.75      4.90      5.00
   70        3.85     4.18      4.54      4.91      5.25      5.53      5.74
   75        3.92     4.29      4.75      5.25      5.77      6.26      6.64
   80        3.96     4.38      4.90      5.53      6.26      7.00      7.69
   85        3.99     4.43      5.00      5.74      6.64      7.69      8.76