Document:

EXHIBIT 4(a): Form of Variable Annuity Contract

[LOGO] THE
       ACACIA
       GROUP

                   FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
                  Annuity Payments Begin on the Maturity Date.
                Non-participating Specifications Shown on Page 3.

        Acacia Life Insurance Company, a District of Columbia Corporation

Service Center:                                        Home Office:
P.O. Box 82579                                         51 Louisiana Avenue, N.W.
Lincoln, Nebraska 68501-2579                           Washington, D.C. 20001

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   Policy Number:
   Policy Owner:
   Annuitant:
   Policy Date:
   Maturity Date:
   Account Manager:
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WE AGREE TO PAY - The benefits provided in this policy, subject to its terms and
conditions.

   /s/ Robert John H. Sands                          /s/ Robert Clyde

     Robert John H. Sands                              Robert Clyde
          Secretary                                     President

Acacia Life Insurance  Company will pay you, if living,  the annuity payments as
set forth in this Policy  beginning on the Maturity  Date. If you die before the
Maturity  Date and while this Policy is in force,  we will pay the Death Benefit
according to the Policy provisions.

                           READ YOUR POLICY CAREFULLY
               IT INCLUDES THE PROVISIONS ON THE FOLLOWING PAGES.

        THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND ACACIA LIFE
                       INSURANCE COMPANY ("ACACIA LIFE").

The Owner may cancel the Policy within 10 days after the Owner  receives it. The
Owner should mail or deliver the Policy to either Acacia Life or the  Registered
Representative who sold the Policy. If the Policy is canceled within this 10 day
"Free  Look",  the Policy will be deemed void,  and in most states,  Acacia Life
will refund the Policy  Account Value at the end of the Valuation  Period during
which the Policy is  received  by Us.  This may be more or less than the Initial
Premium Payment.

The following  applies only in those states in which Acacia Life,  upon exercise
of the Free Look right is required to refund the greater of Premiums Paid or the
Policy Account Value.  Notwithstanding  the allocations in the  Application,  in
such states,  Acacia Life  reserves  the right to allocate  the initial  Premium
Payment  allocated to Subaccounts of the Variable Account in its entirety to the
Acacia Capital Calvert Money Market Variable Sub-account, (on the Policy Date or
the date the first Premium is received, whichever is later) until the end of the
Free Look  Period  (which is  administratively  assumed  to be 15 days after the
Policy Date for allocation purposes). If We so allocate Payments, We will refund
the greater of the Premium  Payments or the Policy  Account  Value.  A refund of
Premium  paid by check may be delayed  until the check has  cleared  the Owner's
bank.

You may change the Investment  Allocation any time before the Maturity Date. You
must specify Your new  allocation  choices.  Payments  received after We receive
Your Request will be applied based on the new allocation.

THIS IS A FLEXIBLE  PREMIUM  DEFERRED  VARIABLE  ANNUITY  POLICY.  THE  POLICY'S
ACCUMULATION  VALUE IN EACH  SUB-ACCOUNT OF THE VARIABLE ACCOUNT IS BASED ON THE
INVESTMENT  EXPERIENCE IN THAT ACCOUNT AND WILL INCREASE OR DECREASE DAILY.  THE
DOLLAR AMOUNT IS NOT  GUARANTEED.  SEE VARIABLE  ACCOUNT VALUE PROVISION ON PAGE
12. NO DIVIDENDS ARE PAYABLE.

The Policy Account Value in the General  Account will  accumulate  interest at a
minimum  rate of 4.0% a year,  although  additional  interest  in  excess of the
guaranteed rate may be credited at our sole discretion.

ALLOCATOR 2001 ANNUITY FLEXIBLE PREMIUM DEFERRED VARIABLE PRODUCT:
*ANNUITY PAYMENTS BEGIN ON MATURITY DATE *FLEXIBLE PREMIUMS  *NON-PARTICIPATING;
NO DIVIDENDS *SOME BENEFITS REFLECT INVESTMENT RESULTS

   ACACIA LIFE INSURANCE COMPANY, a District of Columbia Corporation
   Service Center:                  Home Office:
   P.O. Box 82579                   51 Louisiana Avenue, NW
   Lincoln, NE  68501-2579          Washington, D.C. 20001
                                                    Toll-Free: 1-888-837- [LOGO]

<PAGE>

PLEASE READ THIS POLICY CAREFULLY. IT IS A LEGAL CONTRACT BETWEEN YOU AND US.
IN THIS POLICY:  YOU OR YOUR MEANS THE OWNER AS SHOWN IN THE  APPLICATION OR THE
LATEST CHANGE FILED WITH US. WE, OUR OR US MEANS ACACIA LIFE INSURANCE COMPANY.
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                                  INTRODUCTION

     This is a  Variable  Annuity  - an  individual  flexible  premium  deferred
variable annuity policy (the "Policy")  offered by Acacia Life Insurance Company
("Acacia  Life").  The Policy presents a dynamic concept in retirement  planning
designed to give Policy Owners  flexibility in attaining  financial  goals.  The
Policy is available  for  individuals  as a non-tax  qualified  retirement  plan
("Non-Qualified  Plan") or in connection  with a retirement plan qualified under
Section 401, 403, or 408 of the Internal Revenue Code ("Qualified Plan").

     During the Accumulation Period, the Policy provides for the accumulation of
a Policy Owner's value on either a variable  basis, a fixed basis,  or both. The
Policy also provides  several options for annuity  payments to begin on a future
date.  Premium payments may be allocated at the Policy Owner's discretion to one
or more of the  Sub-accounts of the Variable Account or to Acacia Life's General
Account ("Fixed Account").  Each Sub-account of the Variable Account will invest
solely  in  a  corresponding   series  ("Portfolio")  of  various  mutual  funds
("Funds").  The  Prospectuses You received for the Funds describe the investment
objectives and the attendant risks of the Portfolios.

     The Policy Account Value in the Fixed Account will accrue interest at rates
that are paid by Acacia Life as described in the "The General Account".

     The Policy  Account Value in the Variable  Account under a Policy will vary
based on investment  performance of the Sub-accounts to which the Policy Account
Value is allocated. No minimum amount of Policy Account Value is guaranteed.

THIS POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK OR  DEPOSITORY  INSTITUTION.  THE  POLICY  IS NOT  FEDERALLY  ISSUED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION,  THE FEDERAL RESERVE BOARD OR ANY AGENCY,
AND INVOLVES  INVESTMENT  RISK,  INCLUDING  POSSIBLE  LOSS OF  PRINCIPAL  AMOUNT
INVESTED.

                                        2
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                           POLICY SPECIFICATIONS PAGE

                       Policy Number:     4109089131
                       Policy Owner:      John A Specimen
                       Annuitant:         John A Specimen
                       Policy Date:       April 25, 2001
                       Maturity Date:     April 25, 2056
                       Account Manager:   KEVIN L PETERSEN

TYPE OF COVERAGE - Flexible Premium Deferred Variable Annuity

Initial Premium:           $25,000.00

Premium Payment Mode:      Single          Planned Periodic Premium:       $0.00

Subsequent Premiums are due at the discretion of the Owner with a $30 minimum.

                                     Page 3
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                           POLICY SPECIFICATIONS PAGE
                                    CONTINUED

                       LIST OF SUBACCOUNTS AND PORTFOLIOS

Each  subaccount of the Acacia Life  Insurance  Company  (Acacia Life)  Separate
Account II invests in a specific portfolio of the following:

<TABLE>
<CAPTION>
                                                                                     INITIAL ALLOCATION
ADVISOR/SUBADVISOR          FUND                         PORTFOLIO                    OF NET PREMIUMS
<S>                         <C>                          <C>                               <C>
Calvert Asset               Calvert Social               Money Market                       0%
Management                                               Balanced                           0%
Company, Inc.                                            Small Cap Growth                   0%
                                                         Mid Cap Growth                     0%
                                                         International Equity              25%
</TABLE>

Net premiums may also be allocated to the Acacia Life Fixed Account.

                                                              INITIAL ALLOCATION
                                                               OF NET PREMIUMS
     Acacia Life Fixed Account                                       0%

                               Page 3 (continued)
<PAGE>

POLICY SPECIFICATIONS PAGE
                                    CONTINUED

                                 POLICY CHARGES

Annual Policy Fee:            $42.00 each policy year will be deducted each year
                              on or before the Policy Anniversary Date, Maturity
                              Date, or upon  Surrender.  Fee waived when account
                              value exceeds $50,000.

Mortality and Expense         Equal on an annual  basis to 1.25% of the  average
Risk Charge:                  daily  net  assets  of the  Separate  Account  and
                              calculated  monthly.  The  Mortality  and  Expense
                              Charge  ("M&E") is  guaranteed to decrease by .05%
                              of the  average  daily net assets of the  Separate
                              Account on an annual basis,  beginning in year 16,
                              until it  reaches  .50% of the  average  daily net
                              assets of the Separate  Account on an annual basis
                              at the end of year 30. (See  Mortality and Expense
                              Calculation Section).

                              Not to exceed .10% of the average daily net assets
                              of  the  Separate  Account  on  annual  basis  and
                              calculated monthly.

Administrative Expense Charge:

                               Page 3 (continued)
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                           POLICY SPECIFICATIONS PAGE
                                    CONTINUED

                          SCHEDULE OF SURRENDER CHARGES

YOU  MAY  WITHDRAW  100%  OF  EARNINGS  (SINCE  THE  LAST  ANNIVERSARY)  IN  ALL
SUB-ACCOUNTS AND THE FIXED ACCOUNT FREE OF SURRENDER CHARGES.  ADDITIONALLY,  UP
TO 10% OF THE POLICY ACCOUNT VALUE (AS OF THE LAST ANNIVERSARY); PLUS 10% OF THE
FOLLOWING

(1)  DEPOSITS SINCE THE LAST ANNIVERSARY; MINUS

(2)  WITHDRAWALS SINCE THE LAST ANNIVERSARY

MAY ALSO BE WITHDRAWN  FREE OF  SURRENDER  CHARGES.  UPON A PARTIAL  WITHDRAWAL,
SURRENDER OR ANNUITIZATION  WE WILL APPLY THE SURRENDER CHARGE  PERCENTAGE SHOWN
BELOW TO THOSE  PREMIUM  PAYMENTS  RECEIVED  WITHIN  FIVE  YEARS OF THE  PARTIAL
WITHDRAWAL  OR  SURRENDER  DATE.  AFTER THE FREE  AMOUNTS  ARE  DETERMINED,  THE
CALCULATION WILL BE BASED ON A FIRST-IN FIRST-OUT BASIS.

       YEARS SINCE                                   PERCENTAGE OF
     PREMIUM PAYMENT                              EACH PREMIUM PAYMENT

       1                                                  8%
       2                                                  8%
       3                                                  8%
       4                                                  6%
       5                                                  4%
       6 AND LATER                                        0%

                                  INTEREST RATE

                  FIXED ACCOUNT MINIMUM GUARANTEED RATE: 4.00%

                     IMPORTANT INFORMATION TO POLICYHOLDERS

In the event you need to  contact  someone  about this  Policy  for any  reason,
please  contact  your  Registered  Representative.  If you have  any  additional
questions you may contact the Acacia Life  Insurance  Company  Service Office at
the following address and telephone number:  P.O. Box 82579,  Lincoln,  Nebraska
68501-2579; toll free number 1-888-837-6791.

If you  are  unable  to  contact  the  Company  or  resolve  a  problem  to your
satisfaction,  you may contact the District of Columbia  Department of Insurance
and Securities Regulation,  810 First Street, N.E., Suite 701, Washington,  D.C.
2002; phone: (202) 727-8000.

                               Page 3 (continued)
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                                TABLE OF CONTENTS

INTRODUCTION...................................................................2

POLICY SPECIFICATIONS..........................................................3

POLICY CHARGES.................................................................3

TABLE OF CONTENTS..............................................................4

DEFINITIONS....................................................................5

GENERAL PROVISIONS.............................................................8

     The Policy................................................................8

     Misstatement of Age or Sex................................................8

     Nonparticipating..........................................................8

     Periodic Reports..........................................................8

     Policy Dates..............................................................8

     Termination...............................................................8

     Owner and Joint Owner.....................................................9

     Beneficiary Change........................................................9

     Assignment................................................................9

PREMIUM PAYMENTS...............................................................9

     Initial Premium...........................................................9

     Additional Premium........................................................9

     Payment Allocation.......................................................10

GENERAL ACCOUNT...............................................................10

     General Description......................................................10

     Transfer Limitation......................................................10

     Fixed Account Value......................................................10

VARIABLE ACCOUNT..............................................................11

     General Description......................................................11

     Sub-accounts.............................................................11

     Investment Allocations...................................................11

     Additions, Deletions, or Substitutions of

     Investments..............................................................11

     Transfers from Sub-accounts..............................................12

     Automatic Rebalancing, Dollar Cost Averaging,

        and Interest Sweep Programs...........................................12

     Variable Account Value...................................................12

     Accumulation Unit Value..................................................13

     Net Investment Factor....................................................13

     Mortality and Expense Risk and

     Administrative Charge Calculation........................................13

POLICY ACCOUNT VALUE..........................................................14

     Description..............................................................14

     Basis of Calculations....................................................14

POLICY CHARGES AND DEDUCTIONS.................................................14

PARTIAL WITHDRAWALS AND SURRENDERS............................................14

     Surrender Policy.........................................................14

     Surrender Value..........................................................14

     Partial Withdrawal.......................................................15

     Payment upon Partial Withdrawal or

     Surrender................................................................15

     Waiver of Surrender Charges..............................................15

     Confinement to a Hospital or Nursing Home................................15

PAYMENT OF BENEFITS...........................................................16

     Description..............................................................16

     Death Benefit............................................................16

     Payment of Policy Benefits...............................................17

     Annuity Payment Options..................................................18

<PAGE>

                                   DEFINITIONS

ACCUMULATION  PERIOD - The  period  before  the  Maturity  Date and  during  the
lifetime of the Annuitant.

ACCUMULATION  UNIT VALUE - An  accounting  unit of measure used to calculate the
value of Your  interest in  Sub-accounts  of the Variable  Account.  The initial
number of Accumulation  Units to be credited to each  Sub-account of this Policy
will be determined by dividing the net premium  allocated to each Sub-account by
the Accumulation Unit Value for that Sub-account for that Valuation Period.

AGE - Age at last birthday.

ACACIA LIFE -Acacia Life Insurance Company.

ANNUITANT - The person or person(s) whose life is used to determine the duration
of Annuity  Payments  involving  life  contingencies.  The  Annuitant  must be a
natural person. The Annuitant may also be the Owner of the Policy.

ANNUITY  PAYMENT  OPTIONS - The options  that are  available  for payment of the
Surrender Value of the Policy commencing upon the Maturity Date.

BENEFICIARY  - The  person(s)  or  legal  entity  listed  by  the  Owner  in the
Application or as changed, and referred to in this Policy as the Beneficiary.

DUE PROOF OF DEATH - A certified copy of a death  certificate,  a certified copy
of a decree of a court of competent  jurisdiction  as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory to
Us.

EARNINGS - The excess of Policy Account Value minus Premiums Paid.

ELIGIBLE  INVESTMENT(S) - Those investments available under the Policy.  Current
Eligible Investments are shown on the Specifications Page.

FIXED  ACCOUNT - The Account  via which  Owners may  allocate  or  transfer  net
Premium Payments to the General Account of Acacia Life. An initial allocation or
transfer  into  the  Fixed  Account  does not  entitle  an Owner to share in the
investment  experience of the General Account.  Instead,  Acacia Life guarantees
that Policy Account Value in the Fixed Account will accrue interest at an annual
rate of at least 4%. Any  excess  interest  rate when  declared  will  remain in
effect at least one year.

FREE  WITHDRAWAL  AMOUNT - That portion of any Partial  Withdrawal  or Surrender
that is not subject to a Surrender Charge under the terms of the Policy.

FUND - A registered,  open-end management  investment company.  Each Sub-account
invests exclusively in shares of a single Portfolio of such investment company.

GUARANTEED  INTEREST RATE - The applicable  effective annual Guaranteed Interest
Rate  established  in good faith by the Company for an Interest  Rate  Guarantee
Period of the General Account at any given time.

GENERAL  ACCOUNT - The assets of Acacia  Life  other than those in the  Variable
Account or any other separate account.

INTEREST RATE GUARANTEE  PERIOD - A specified  period whereby funds allocated to
the Fixed Account accumulate at a Guaranteed  Interest Rate. Interest Rates will
be determined on no less than an annual basis.

INVESTMENT  ALLOCATION  - The  percent  of each  Premium  Payment  You choose to
allocate to the Fixed Account or any of the variable Sub-Accounts We offer.

IRREVOCABLE BENEFICIARY - A Beneficiary whose interest cannot be changed without
his or her consent or as required by law.

JOINT  ANNUITANT - The person other than the  Annuitant who may be designated by
the Owner and whose  life is also used to  determine  the  duration  of  Annuity
Payments involving life contingencies. If one of the Joint Annuitants dies prior
to the Maturity

<PAGE>

Date, the survivor shall become the sole Annuitant.

MATURITY DATE - The date upon which Annuity Payments begin.  Owners may choose a
Maturity  Date  commencing  no later  than the first day of the month  after the
Annuitant's 90th birthday.

NET ASSET VALUE - For each  Portfolio,  the  current  price of one share of that
Portfolio.  The  Net  Asset  Value  is  computed  by  adding  the  value  of the
Portfolio's  investments plus cash and other assets,  deducting  liabilities and
then dividing the result by the number of its shares outstanding.  The Net Asset
Value of each  Portfolio is generally  calculated on each day the New York Stock
Exchange is open as of the close of business.

NET PREMIUM PAYMENT - The Premium less any applicable premium taxes.

OWNER - The person named on the Application as Owner or the persons named on the
Application  as Joint Owners.  Any reference to Owner in the Policy will include
both Owners if joint.  The Owner(s) is entitled to all of the  ownership  rights
under the  Policy.  The Owner has the  legal  right to make all  changes  in the
Policy designations where permitted specifically by the terms of the Policy. The
Owner is as specified in the Application, unless changed.

POLICY ACCOUNT VALUE - The total value held in both the Variable Account and the
General Account.

POLICY DATE - The date set forth in the Policy that is used to determine  Policy
years and months. Policy Anniversaries are measured from the Policy Date.

PORTFOLIO - A separate investment portfolio of an open-end management investment
company (mutual fund) in which the Variable Account assets are invested.

PREMIUM  PAYMENT  - An  amount  paid to  Acacia  Life  in  accordance  with  the
provisions of this Policy.

SERVICE  OFFICE - The office where  Policy  administration  is done,  whether at
Acacia Life or at the offices of a third party  administrator,  as designated by
Acacia Life in writing.

SINGLE  PREMIUM  POLICY - Between  Annuitant ages 75 and 85, we will accept only
Single  Premium  Policies.  The Premium is due on the Policy  Date.  The maximum
Premium that can be paid without the prior approval of Acacia Life is $500,000.

SUB-ACCOUNTS  - The  sub-divisions  of the  Variable  Account  which each invest
exclusively in shares of a specified Portfolio or any other investment portfolio
with a specific  investment  objective that we determine to be suitable for this
Policy's purposes.

SURRENDER  VALUE - The  Policy  Account  Value as of any  Valuation  Date of all
amounts  accumulated in the Fixed Account and in the Variable Account under this
Policy prior to the Maturity Date, reduced by applicable  Surrender Charges, the
Annual Policy Fee and any Premium or other taxes.

SYSTEMATIC  PARTIAL  WITHDRAWALS  - Owners  choosing this option will withdraw a
level  dollar  amount  of  their  Policy  Account  Value  on a  periodic  basis.
Systematic Partial  Withdrawals are subject to the same surrender charges as any
partial withdrawals, as set forth on the Specifications Page.

VALUATION  DATE - Each  regular  business  day that Acacia Life and the New York
Stock Exchange is open for business,  and excluding holidays,  and any other day
in which  there is  insufficient  trading in the Fund  Portfolio  securities  to
materially affect the value of the assets in the Variable Account.

VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the  close of  business  on each  Valuation  Date and  ending at the close of
business for the next succeeding Valuation Date.

VARIABLE  ACCOUNT - Acacia Life Insurance  Company Separate Account II (Variable
Account).  A separate  investment account has been established by Acacia Life to
receive and invest the net Premiums paid under this Policy. The Variable Account
is currently  divided into a number of Sub-accounts.  Each  Sub-account  invests
exclusively in shares of a single portfolio of a management investment company.

<PAGE>

VARIABLE  ACCOUNT VALUE - The sum of the values held in all the  Sub-accounts of
the Variable Account.

                               GENERAL PROVISIONS

                                   THE POLICY

The  Allocator  2001 Annuity is a Flexible  Premium  Deferred  Variable  Annuity
Policy.

     (a)  The  Policy  may  be  purchased  on  a  non-tax   qualified   basis  (
          Non-qualified  Policy).  The Policy may also be purchased  and used in
          connection with  retirement  plans or individual  retirement  accounts
          that qualify for favorable  federal  income tax  treatment  (Qualified
          Policy) as more fully set forth in applicable Riders.

     (b)  Before it will issue a Policy,  Acacia  Life must  receive a completed
          Policy Application. A minimum Premium Payment of $300 during the first
          Policy year is required.

     (c)  The Policy and attached copy of the  Application  (except as otherwise
          may be  required  by law),  and any  applicable  Riders are the entire
          contract.  Only Our Elected  Officers can agree to change or waive any
          provisions of the Policy.  Any change or waiver must be in writing and
          signed by such Officer.

                           MISSTATEMENT OF AGE OR SEX

If the age or sex of the Annuitant has been misstated the benefits payable under
the Policy will be equal to the benefits  which the Premium  Payments would have
provided  for the correct  age or sex.  (If such  distinction  based upon sex is
allowed).

We may  require  proof of the age of the  Annuitant  before  making any  Annuity
Payments provided for by this Policy.

If a misstatement  of age or sex results in monthly income payments that are too
large, the overpayments  will be deducted from future payments.  If We have made
payments that are too small, the underpayment will be added to the next payment.
Adjustments for overpayments or underpayment  will include the compound interest
rate used to determine the Annuity Payments.

                                NONPARTICIPATING

No dividends will be paid.  Neither You nor the  Beneficiary of this Policy will
have the right to share in Our surplus earnings or profits.

                                PERIODIC REPORTS

At least once each Policy Year we will send You a statement  showing Your Policy
Account  Value  as of a date  not  more  than  two  months  prior to the date of
mailing.  We will also send such  statements  as may be required  by  applicable
state and federal laws, rules, and regulations.

                                  POLICY DATES

Policy months,  years and Policy Anniversaries are measured from the Policy Date
shown on the Specifications Page.

                                   TERMINATION

This Policy will remain in force until Surrendered for its full value, a Payment
Option has been elected, or the Death Benefit has been paid.

After  the  first  five  Policy  years,  we may  cancel  this  Policy if for two
subsequent  years You have not made any Premium  Payments and the Policy Account
Value is less than $2,000 or would  provide  for less than $20 monthly  payments
under any Annuity  Payment  Option.  We will then pay You the Surrender Value in
one lump sum.

<PAGE>

                              OWNER AND JOINT OWNER

The Policy Owner is the  individual  named as such in the  Application or in any
later change shown in Acacia Life's records. There may be Joint Owners. Prior to
the Maturity Date and during any  Annuitant's  lifetime,  only the Owner has the
right to receive all benefits and may exercise the rights under this Policy.  If
there are Joint  Owners,  the  signatures  of both Owners are needed to exercise
rights under the Policy.

If the  Annuitant  is not an Owner and the  Annuitant  dies before the  Maturity
Date,  the Owner  may name a new  Annuitant.  If the  Owner  does not name a new
Annuitant,  the Owner or Joint Owners will become the  Annuitant.  If one of the
Joint  Annuitants  die prior to the Maturity Date, the survivor shall become the
sole Annuitant.

                               BENEFICIARY CHANGE

You may change  the named  Beneficiary  by  sending a written  request in a form
acceptable to Us at Our Service Office unless the Beneficiary is irrevocable. If
the named Beneficiary is irrevocable,  You may change the named Beneficiary only
by joint written request from You and such named Beneficiary.

You need not  send Us the  Policy  unless  We  request  it.  When  recorded  and
acknowledged  by Us, the change will be  effective as of the date You signed the
request. The change will not apply to any payments made or other action taken by
Us before the change has been recorded and acknowledged by Us.

ASSIGNMENT

You may assign this Policy as collateral,  unless  prohibited  elsewhere in this
Policy or applicable  Rider. We will not be bound by the Assignment until a copy
is filed  with Us.  We assume  no  responsibility  for  determining  whether  an
Assignment is valid or the extent of the assignees interest.

No  Beneficiary  may assign any benefits under the Policy until the benefits are
due. To the extent  permitted  by law,  payments are not subject to the debts of
any  Beneficiary  nor to any judicial  process for payment of the  Beneficiary's
debts.

                                PREMIUM PAYMENTS

INITIAL PREMIUM

If the  Application  can be accepted in the form  received,  We will credit Your
initial Net Premium Payment to the Policy Account Value within two business days
after receipt of the initial Premium Payment. The amount credited to Your Policy
Account Value will be the Premium Payment less any applicable taxes.

If the initial  Premium  Payment cannot be credited  because the  Application or
other issuing  requirements  are  incomplete,  the  Applicant  will be contacted
within five business days and given an  explanation  for the delay.  The initial
Premium  Payment will be returned at that time unless the Applicant  consents to
the retention of the initial  Premium  Payment by Acacia Life,  which would,  in
that case credit it, as soon as the necessary  requirements  are  fulfilled.  At
least $300 must be paid during the first policy year.

ADDITIONAL PREMIUM

Additional  Premium  Payments  are  payable at Our Service  Office.  The minimum
additional  Premium  Payment is $30.  Additional  Net Premium  Payments  will be
credited to the Policy and added to the Policy Account Value as of the Valuation
Date when they are received at Our Service Office.

While the Annuitant is living and prior to the Maturity Date, the Owner may make
additional  Premium  Payments  at  any  time,  and in any  frequency  until  the
Annuitant  reaches age 75. We will not accept any  additional  Premium  Payments
beginning on the Policy Anniversary next following the Annuitants 75th birthday.
Only Single Premium Policies will be written between ages 75 and 85.

PAYMENT ALLOCATION

We will  allocate  Your net  Premium  Payments  among the Fixed  Account and the
Sub-accounts based on the Investment  Allocation You specify.  These allocations
are subject to a minimum 5% designated  percentage  proportion per account. Your
initial Investment Allocation is shown on the Specifications Page.

<PAGE>

You may change the Investment  Allocation any time before the Maturity Date. You
must specify Your new  allocation  choices.  Payments  received after We receive
Your Request will be applied based on the new allocation.

                                 GENERAL ACCOUNT

GENERAL DESCRIPTION

The General Account consists of all assets owned by Acacia Life other than those
in the Variable Account and other separate accounts.  Subject to applicable law,
Acacia Life has sole discretion over the investment of the assets in the General
Account.

The Acacia  General  Account is supported by assets of the Company that are held
in the General  Account.  Premiums  applied and any amounts  transferred  to the
General  Account  are  credited  with a fixed rate of  interest  for a specified
period. This is the account known as the "Fixed Account".

The allocation of Premium  Payments  and/or  transfer of Policy Account Value to
the  Fixed  Account  does not  entitle  an  Owner  to  share  in the  investment
experience of the General Account. Instead, the guaranteed interest rate used in
the  calculation  of the  Fixed  Account  Value  is  the  amount  stated  on the
Specifications Page,  compounded annually. A higher amount of interest in excess
of the guaranteed rate may be used in the calculation of the Fixed Account Value
at such times and in such a manner as We may  determine.  Interest rates will be
determined on no less than an annual basis.

Prior to the Maturity  Date an Owner may elect to allocate net Premium  Payments
to the Fixed  Account or to transfer  Policy  Account Value to or from the Fixed
Account (subject to certain  restrictions upon transfers from the Fixed Account,
as discussed, below).

TRANSFER LIMITATION

The maximum amount  allowed to be transferred  during one policy year is 100% of
Fixed Account interest accrued since the last Anniversary; plus 10% of

(1)  Account Value of the Fixed Account as of the last Anniversary; plus

(2)  Deposits  and  transfers  made  into  the  Fixed  Account  as of  the  last
     Anniversary; minus

(3)  All partial withdrawals from the Fixed Account since the last Anniversary.

You may also elect to systematically  reallocate all interest generated from the
Fixed Account into the  Sub-accounts on an interest only basis according to Your
allocation election. (See, Interest Sweep Program).

FIXED ACCOUNT VALUE

We will credit  Premium  Payments  allocated to the Fixed  Account to Your Fixed
Account Value. The Fixed Account Value at any time equals:

(1)  The net Premium Payments allocated to the Fixed Account; plus

(2)  The total of all amounts transferred to the Fixed Account from the Variable
     Account; minus

(3)  The total of all amounts transferred from the Fixed Account to the Variable
     Account; minus

(4)  The total of all Policy Fees attributable to the Fixed Account; minus

(5)  The total of all Partial  Withdrawals from the Fixed Account (including any
     Surrender charges); plus

(6)  Interest.

<PAGE>

                                VARIABLE ACCOUNT

GENERAL DESCRIPTION

The variable  benefits  under Your Policy are provided  through  investments  in
Acacia Life Insurance  Company  Separate Account II which is referred to in this
Policy as the Variable  Account.  The Variable Account is kept separate from Our
General Account.  We established the Variable  Account as a separate  investment
account to support variable annuity contracts.

We own the assets of the  Variable  Account.  Assets  equal to the  reserves and
other  liabilities of the Variable  Account will not be charged with liabilities
that arise from any other  business We conduct.  We may  transfer to our General
Account  assets which exceed the reserves and other  liabilities of the Variable
Account.

The Variable  Account is registered with the Securities and Exchange  Commission
as a unit investment trust under the Investment  Company Act of 1940. It is also
governed by the laws of the District of Columbia.

SUB-ACCOUNTS

The  Variable  Account has a number of  Sub-accounts.  Each series  represents a
separate investment portfolio of various registered investment companies. Shares
of a portfolio are  purchased and redeemed for a Sub-account  at their Net Asset
Value.  All  available  Sub-accounts  of the  Variable  Account are shown on the
Policy Specifications Page. You determine the percentage of net Premium Payments
which will be allocated to each Sub-account.

Income  and  realized  and  unrealized  gains or losses  from the assets of each
Sub-account  of the  Variable  Account are  credited to or charged  against that
Sub-account without regard to income,  gains or losses in the other Sub-accounts
of the Variable Account, the General Account or any other separate accounts.

INVESTMENT ALLOCATIONS

An Owner may elect to allocate net Premium  Payments to the General  Account via
the Fixed Account,  to Sub-accounts of the Variable Account,  or both. The Owner
may also transfer value from the Sub-accounts to the Fixed Account,  or from the
Fixed Account to the Sub-accounts subject to the limitation on transfer from the
Fixed  Account.  (See,  Fixed  Account  -  Transfer  Limitation).  You may  make
unlimited  transfers from the  Sub-accounts  to the General  Account and between
such  Sub-accounts.  We will value the assets of each  Sub-account at the end of
each Valuation Period.

ADDITIONS, DELETIONS, OR SUBSTITUTION OF INVESTMENTS

We  reserve  the right to  transfer  assets  of a  Sub-account  or the  Variable
Account, which We determine to be associated with the class of policies to which
the Policy belongs,  to another Subaccount or Variable Account.  If this type of
transfer is made, the Sub-account or Variable  Account  specified in this Policy
shall then refer to the Sub-account or Variable Account to which the assets were
transferred.

When permitted by law, We also reserve the right:

     1.   to create additional  Variable Accounts;  to create Sub-accounts from,
          or combine or remove  Sub-accounts  from the Variable  Account;  or to
          combine any two or more Variable Accounts;

     2.   to  operate  any  one or  more  of the  Sub-accounts  as a  management
          investment  company under the 1940 Act or in any other form  permitted
          by law;

     3.   to deregister the unit investment trusts under the 1940 Act;

     4.   to modify the  provisions  of this  Policy to comply  with  applicable
          laws;

     5.   to  restrict  or  eliminate  any  voting  rights of any Owner or other
          persons who have voting rights as to the Sub-accounts.

If you object to a material change in the investment  Policy of a Sub-account in
which You have at such time a portion  of Your  Policy  Account  Value,  You may
transfer such portion of Your Policy Account Value,  upon written request,  from
that Sub-account, without charge, to another Subaccount or to the Fixed Account.
You may then change your Premium allocation  percentages.  The investment policy
of a  Sub-account  shall not be changed  without the  approval of the  Insurance
Supervisory Official from the District of Columbia. A statement of such approval
process is on file with the District of Columbia.

<PAGE>

TRANSFERS FROM SUB-ACCOUNTS

Any time prior to the Maturity  Date,  the Owner may ask Acacia Life to transfer
all or part of the amount in one of the  Sub-accounts to another  Sub-account or
to the Fixed Account. The minimum for such transfer is $50. The transfer will be
made as of the date Acacia  Life  receives  the  written  request at Our Service
Office.

AUTOMATIC REBALANCING, DOLLAR COST AVERAGING, AND INTEREST SWEEP PROGRAMS

The Owner may also elect from the Automatic Rebalancing Program, the Dollar Cost
Averaging   Program  or  the  Interest   Sweep   Program  by  filing  a  written
authorization with Acacia Life. Acacia Life reserves the right to alter,  assess
a charge,  or  terminate  these  administrative  programs  upon 30 days  advance
written notice.

Under the Automatic  Rebalancing Program, the Owner may have automatic transfers
on either a  monthly,  quarterly,  semi-annual  or annual  basis,  to adjust the
values  among  the  Sub-accounts  and the  Fixed  Account  to meet  the  Owner's
designated  percentage  account  value  proportions  the  Owner has on file with
Acacia Life. The allocations are subject to a 5% minimum.

Acacia Life also  offers an option  under  which  Policy  Owners may dollar cost
average  their   allocations  to  the  Variable  Account  under  the  Policy  by
authorizing  Acacia Life to make periodic  transfers of specific  dollar amounts
from  the  Money  Market  Sub-account  to one or  more of the  other  designated
Sub-accounts, on either a monthly, quarterly,  semi-annual or annual basis. Each
transfer is subject to a $50  minimum  transfer  amount  pursuant to the Owner's
Allocation election.

Dollar cost  averaging  does not guarantee  profits,  nor does it assure that an
Owner will not lose principal.  If a periodic transfer would reduce the value in
the Money  Market  Sub-account  below the  minimum  dollar  amount,  Acacia Life
reserves the right to transfer the entire  remaining Policy Account Value in the
Money  Market  Sub-account.  Acacia Life also  reserves the right to establish a
minimum  Money  Market  Sub-account  balance  before  We allow  You to elect the
program.

The Interest Sweep Program allows Owners to systematically  reallocate  interest
earnings  from  the  Fixed  Account  to one or more of the  Sub-accounts  of the
Variable  Account  on a  monthly,  quarterly,  semi-annual,  or annual  basis as
designated by the Owner.

Transfers and  adjustments  pursuant to these Programs will occur on the monthly
Policy  Anniversary  Date in the month in which the transaction is to take place
or the next succeeding business day if the monthly Policy Anniversary Date falls
on a day other than a Valuation Date.

VARIABLE ACCOUNT VALUE

The Variable Account Value will be the sum total of each Sub-account's value. At
any Valuation Date each  Sub-account's  value is equal to the Accumulation Units
multiplied by the  Accumulation  Unit Value.  The initial number of Accumulation
Units to be credited to this Policy for each  Subaccount  is  determined  at the
time of initial Premium Payment by dividing the net Premium  Payments  allocated
to each Sub-account by the Accumulation  Unit Value for that Sub-account for the
Valuation  Period  during  which the  Application  is accepted.  For  additional
Premium  Payments the number of units of each  Sub-account  credited  under this
Policy is  determined  by dividing  the net Premium  Payments  allocated to that
Sub-account  by the unit value for that  Sub-account at the end of the Valuation
Period during which We receive the Premium Payment at Our Service Office.

On each  monthly  Policy  Anniversary  Date We will  make a  deduction  from the
Variable   Account  Value  for  both  the  Mortality  and  Expense   Charge  and
Administrative  Charge  equal to, on an annual  basis,  the amount  shown on the
Specifications Page.

ACCUMULATION UNIT VALUE

Each Sub-account's  Accumulation Unit Value for any subsequent  Valuation Period
is determined by multiplying  the  Accumulation  Unit Value for the  immediately
preceding  Valuation  Period by the "net  investment  factor" for the  Valuation
Period  for  which  the  value  is being  determined.  The  value of a  Variable
Accumulation  Unit may  increase or decrease  from one  Valuation  Period to the
next, since the net investment factor may be greater or less than one.

NET INVESTMENT FACTOR

The net investment  factor is an index that measures the investment  performance
of a Sub-account from one Valuation Period to

<PAGE>

the next.  The net  investment  factor for each  Sub-account  for any  Valuation
Period is determined by dividing (a) by (b), where:

(a)  is the net result of:

     (1)  the Net  Asset  Value per share of the  portfolio  shares  held in the
          Sub-account  determined as of the end of the current Valuation Period,
          plus

     (2)  the per share  amount of any  dividend or capital  gain  distributions
          made  by the  portfolio  on  shares  held  in the  Sub-account  if the
          "ex-dividend" date occurs during the current Valuation Period, plus or
          minus

     (3)  a per unit charge or credit for any taxes  incurred by or reserved for
          in the  Sub-account,  which is  determined  by Acacia to have resulted
          from the maintenance of the Sub-account; and

(b)  is the net result of:

     (1)  the Net  Asset  Value per share of the  portfolio  shares  held in the
          Sub-account  determined  as of the  end of the  immediately  preceding
          Valuation Period, plus or minus

     (2)  the  per  unit  charge  or  credit  for  any  taxes  reserved  for the
          immediately preceding Valuation Period.

MORTALITY AND EXPENSE RISK AND ADMINISTRATIVE CHARGE CALCULATION

The Mortality and Expense charge as discussed on the Policy  Specifications Page
is calculated on a monthly basis. This monthly  deduction  consists of a monthly
charge not to exceed  .000036740  for each  Valuation  Date  (1.35% on an annual
basis) for assets held in each Subaccount of the Variable Account.  This monthly
charge will be reduced as follows:

                                       ANNUAL M&E          MONTHLY CHARGE NOT TO
                                   WITH ADMINISTRATIVE        EXCEED FOR EACH
POLICY YEAR       ANNUAL M&E         EXPENSE CHARGE           VALUATION DATE

  1 to 15           0.0125               0.0135                0.000036740
    16              0.012                0.013                 0.000035388
    17              0.0115               0.0125                0.000034035
    18              0.011                0.012                 0.000032682
    19              0.0105               0.0115                0.000031328
    20              0.01                 0.011                 0.000029973
    21              0.0095               0.0105                0.000028618
    22              0.009                0.01                  0.000027262
    23              0.0085               0.0095                0.000025905
    24              0.008                0.009                 0.000024548
    25              0.0075               0.0085                0.000023190
    26              0.007                0.008                 0.000021831
    27              0.0065               0.0075                0.000020471
    28              0.006                0.007                 0.000019111
    29              0.0055               0.0065                0.000017751
    30+             0.005                0.006                 0.000016389

                              POLICY ACCOUNT VALUE

DESCRIPTION

The Policy  Account Value is the total amount of value held in both the Variable
Account and the General Account.

BASIS OF CALCULATIONS

All values are at least equal to those required by the law of the state in which
the Policy is  delivered.  We have  filed with that state a detailed  settlement
method of calculating values for the Policy. With regard to amounts allocated to
the Fixed Account,  the Accumulation  Value,  Surrender Value, Death Benefit and
paid-up  Annuity  Benefit are not less than those required by the state in which
this Policy is delivered.

<PAGE>

                          POLICY CHARGES AND DEDUCTIONS

(a)  ANNUAL POLICY FEE - An annual  charge,  shown on the Policy  Specifications
     Page, is deducted on each Policy Anniversary on or before the Maturity Date
     or at  once  upon  a  Surrender.  The  Policy  fee  is  deducted  from  the
     Sub-accounts on a pro rata basis by canceling Accumulation Units.

(b)  ADMINISTRATIVE  EXPENSE CHARGE - A charge equal, on an annual basis, to the
     amount shown on the Specifications Page. The Administrative  Expense Charge
     is deducted monthly by canceling  accumulation units and compensates Us for
     some of the costs associated with the administration of this Policy and the
     Separate Account.

(c)  MORTALITY AND EXPENSE RISK CHARGE - A charge equal,  on an annual basis, to
     the amount shown on the Specifications Page. The Mortality and Expense Risk
     Charge is deducted monthly by canceling  accumulation units and compensates
     Us for assuming the mortality and expense risks under this Policy.

(d)  OTHER -  Depending  on Fund  choices,  other  charges  may  apply,  such as
     management fees or other expenses.

(e)  SURRENDER CHARGES - upon a Partial Withdrawal, Annuitization, or Surrender,
     we will apply the Surrender Charge  percentage shown on the  Specifications
     Page.

(f)  TAXES - Various states impose a tax on Annuity Premium Payments. Such taxes
     will be deducted as applicable.

                       PARTIAL WITHDRAWALS AND SURRENDERS

SURRENDER POLICY

Prior to the earlier of the Maturity Date or the Date of the Death of the Owner,
You may withdraw  all or a portion of the current  Surrender  Value,  on written
request to Our Service Office. If there are Joint Owners, both must agree to the
withdrawal.

SURRENDER VALUE

The Surrender  Value is equal to the Policy  Account  Value less any  applicable
Surrender Charges, the Annual Policy Fee, and any Premium or other Taxes.

The appropriate  surrender charge percentage of each Premium Payment used in the
Surrender  Charge  calculation  is  determined  by the number of years since the
Premium Payment was deposited.

To  determine  the  Surrender  Charge  for a  particular  Premium  Payment,  the
Surrender  Charge  percentage  is  multiplied  by the Premium  Payment  less any
withdrawals  previously  allocated to the Premium  Payment.  The total Surrender
Charge is then  determined  by summing  the  previous  result  over all  Premium
Payments  used in the  calculation.  The  Surrender  Charge will be based on the
excess of the Surrender amount over the Free Withdrawal  Amount.  This excess is
distributed  over the  Premium  Payments on a  first-in,  first-out  basis until
exhausted.

PARTIAL WITHDRAWAL

You may  request to make a Partial  Withdrawal.  You may tell Us how to allocate
the withdrawal  amount among the Fixed Account and the  Sub-accounts.  If You do
not specify how to allocate the  withdrawal  amount among the Fixed  Account and
the  Sub-accounts,  We will prorate the amount among Your percentage  allocation
elections to the Fixed Account and the Sub-accounts  based on the Policy Account
Value of each account.

We will  impose  Surrender  Charges as more fully set out on the  Specifications
Page. One hundred percent (100%) of earnings (since the last Anniversary) in all
Sub-accounts  and the Fixed Account may be withdrawn free of Surrender  Charges.
Additionally,   up  to  10%  of  the  Policy  Account  Value  (as  of  the  last
Anniversary); plus 10% of

     (1)  deposits since the last Anniversary; minus
     (2)  withdrawals  since the last  Anniversary may also be withdrawn free of
          Surrender Charges.

<PAGE>

PAYMENT UPON PARTIAL WITHDRAWAL OR SURRENDER

We will normally pay any Partial  Withdrawal or Surrender from the  Sub-accounts
to You, or to any other Payee that you designate, within seven (7) Business Days
after We  receive  Your  written  request  in a form  satisfactory  to us at our
Service  Office,  unless you  choose a  different  date.  We can  postpone  such
payments or any  transfers  of amounts  between  Sub-accounts  or into the Fixed
Account if:

     (a)  the New York Stock Exchange is closed for other than customary weekend
          and holiday closings;

     (b)  trading on the New York Stock Exchange is restricted;

     (c)  an  emergency  exists as  determined  by the  Securities  and Exchange
          Commission,  as a result of which it is not  reasonably  practical  to
          determine the value of the net assets of the Separate Account;

     (d)  the  Securities  and  Exchange   Commission   permits  delay  for  the
          protection of security holders.

The applicable rules of the Securities and Exchange Commission will govern as to
whether the conditions in (c) or (d) exist.

We may also defer  payment  of  Partial  Withdrawals  or  Surrenders  of General
Account  Value from the Fixed  Account  for up to six months  from the date Your
written request is received at Our Service  Office.  We will pay interest on any
amount  deferred for (30) days or more.  The interest  rate will be at least the
Minimum Guaranteed Interest Rate stated in the Specifications Page.

WAIVER OF SURRENDER CHARGES

We will  waive  any  applicable  Surrender  Charges  if you  request  a  Partial
Withdrawal or Surrender  under the following  conditions,  provided that You are
eligible as described below.

CONFINEMENT TO A HOSPITAL OR NURSING HOME - Surrender  Charges will be waived if
any  Owner is  confined  at the  recommendation  of a  physician  for  medically
necessary reasons for at least 30 consecutive days to:

     (a)  a hospital  licensed or recognized  as general  hospital by the proper
          authority of the state in which it is located; or

     (b)  a hospital recognized as a general hospital by the Joint Commission on
          the Accreditation of Hospitals; or

     (c)  a place certified as a hospital by Medicare; or

     (d)  a nursing  home - defined as a facility  licensed  and  operated  as a
          Skilled  Nursing   Facility,   an  Intermediate  Care  Facility  or  a
          Residential  Care Facility by the jurisdiction in which it is located.
          Skilled and  Intermediate  Care Facilities must provide  continuous 24
          hours a day  nursing  care  and  maintain  daily  medical  records.  A
          Residential   Care  Facility  must  provide  nursing  care  under  the
          supervision of a R.N. by having a registered  nurse on duty 24 hours a
          day; or

     (e)  a place certified by Medicare as a Long Term Care Facility.

You must provide  proof of  confinement  and request the Partial  Withdrawal  or
Surrender no later than 91 days after the last day of confinement.

We will not accept any  additional  Premium  Payments  after you  exercise  this
Waiver.

You are not  eligible  for this  Waiver if any Owner was  confined  to a nursing
home, hospital, or Long Term Care Facility on the Policy Date.

<PAGE>

                               PAYMENT OF BENEFITS

DESCRIPTION

You may decide how the benefits  will be paid.  During the Owner's  lifetime You
may arrange for the Death Benefits to be paid in a single lump sum or subject to
any limitation under any state or federal law, rule, or regulation, under one of
the Annuity Payment Options,  unless a settlement  agreement is effective at the
date of death.  If no election is made within 60 days of the date that due proof
of death is received at Our Service  Office We will pay the Death  Benefits in a
single lump sum. We will also pay Benefits in a single lump sum if the Surrender
Value is less than $2,000 or would  provide  for less than $20 monthly  payments
under any Annuity Payment Option. These choices are also available if You decide
to  Surrender  the Policy or at its  Maturity  Date.  Similarly,  if you make no
election, we will pay the Surrender Value in a single lump sum.

If any  Owner  or  Joint  Owner  dies  prior to the  Maturity  Date,  and if the
designated Beneficiary does not elect to receive the Death Benefit in a lump sum
at that time,  then we will increase the Policy  Account Value so that it equals
the Death  Benefit  amount,  if that  amount is higher  than the Policy  Account
Value. This would occur if the Owner's  designated  Beneficiary  elects to delay
receipt of the proceeds for up to five years, or is the deceased  Owner's spouse
and elects to continue the Policy,  or elects to receive the proceeds as Annuity
Payments.  (See, Death Benefit,  below). Any such increase in the Policy Account
Value would be paid by us, and  allocated to the  Sub-accounts  in proportion to
the pre-existing Policy Account Value unless we are instructed otherwise.

DEATH BENEFIT

If any Owner or Joint Owner dies before the Maturity  Date,  the Policy will end
and the Death Benefit will be paid to the Beneficiary, unless the Beneficiary is
the surviving  spouse.  A spouse who is the  Beneficiary  may either receive the
Death  Benefit and the Policy will end, or the spouse may elect to continue  the
Policy in force.

If there are Joint Owners,  the designated  Beneficiary  is the surviving  Joint
Owner. If both Joint Owners die  simultaneously,  the Death Benefit will be paid
to the named Beneficiary.

If an Owner of this Policy is a corporation or other legal person, the Annuitant
will be treated as an Owner of this  Policy  for  purposes  of the timing or the
amount of the payout under this Policy.

If any Owner or joint  Owner  dies on or after  the  Annuity  starting  date and
before all the proceeds have been paid,  any remaining  proceeds will be paid at
least as  rapidly  as under  the  payment  option  in effect at the time of such
Owner's death.

If the Owner or Joint  Owner  dies  before  the  Maturity  Date,  then any Death
Benefit  will be paid  within  five  years  after the date of death  unless  the
Beneficiary  is a  surviving  spouse who elects to continue  the  Policy.  (See,
below). The five-year rule does not apply to that portion of the proceeds which:

     a.   is payable to or for the benefit of an individual  named  Beneficiary;
          and

     b.   will be paid over the  lifetime or the life  expectancy  of that named
          Beneficiary

as long as payments begin not later than one year after the date of the deceased
Owner or Joint Owner's death.

If any Owner or Joint Owner dies before the Maturity Date,  Acacia Life will pay
the Death Benefit  proceeds to the Beneficiary  upon receipt of due proof of the
Owner's death and instructions regarding payment to the Beneficiary,  unless the
Beneficiary is the surviving  spouse. A spouse who is the Beneficiary may either
receive  the Death  Benefit  and the Policy will end, or the spouse may elect to
continue the Policy in force.  If there is no named  Beneficiary,  living on the
date of death of the Owner,  Acacia Life will pay the Death Benefit  proceeds to
the Owner's estate. For this purpose the death benefit will be:

If any Owner  (including  an Owner that is also the  Annuitant)  dies during the
first five years of the Policy,  the Death  Benefit will be equal to the greater
of the Policy Account Value or cumulative Premiums less cumulative  withdrawals.
On the fifth Policy Anniversary a Minimum Guaranteed Death Benefit is calculated
as the greater of these values. Every five years thereafter through the Maturity
Date, a new Minimum Guaranteed Death Benefit is calculated as the greater of the
current Minimum Guaranteed Death Benefit or the Policy Account Value.

<PAGE>

For Owners up to issue age 75, the Minimum  Guaranteed Death Benefit  (increased
for Premiums Paid and decreased for cumulative withdrawals from the current five
year  period  until the date of death) is  compared to the greater of the Policy
Account Value or the cumulative Premiums Paid less cumulative  withdrawals.  The
Death Benefit will be the highest of:

     1.   Minimum Guaranteed Death Benefit;

     2.   Policy Account Value at the date of payment;

     3.   Cumulative  Premiums  Paid  less  cumulative   withdrawals  (including
          surrender charges).

For Owners over issue age 75, the Death Benefit is the greater of either:

     1.   Policy Account Value at the date of payment; or

     2.   Cumulative  Premiums  Paid  less  cumulative   withdrawals  (including
          surrender charges).

If the  Annuitant  is not an Owner and the  Annuitant  dies before the  Maturity
Date,  the Owner  may name a new  Annuitant.  If the  Owner  does not name a new
Annuitant, the Owner will become the Annuitant.

PAYMENT OF POLICY BENEFITS

We will pay interest from the Maturity  Date shown on the Policy  Specifications
Page to the Date of Payment. The interest rate will be at least the minimum rate
shown on the  Specifications  Page.  We will make  these  payments  to the Payee
according to the Annuity Payment Option  elected.  We will make payments only if
the Annuitant is living and this Policy is in force on that date.

You may request to change the Maturity Date shown on the Specifications Page. We
must receive  Your Request not later than thirty days before the Maturity  Date.
Any Irrevocable Beneficiary must consent in writing.

Before the Maturity Date, You may choose or change any Annuity  Payment  Option.
You must send Us Your  written  request  not later than  thirty  days before the
Maturity  Date.  You may not change the Option You  elected  after the  Maturity
Date.  If no election is made We will pay the  Surrender  Value in a single lump
sum.

When Payments become payable to a Beneficiary  under a selected  Annuity Payment
Option and the  Beneficiary  has the right to withdraw  the entire  amount,  the
Beneficiary may name and change contingent beneficiaries.

We  guarantee  that the dollar  amount of each Annuity  Payment  after the first
Payment will not be affected by variations in mortality experience.

<PAGE>

ANNUITY PAYMENT OPTIONS

The amount and duration of Annuity  Payments will depend on the Annuity  Payment
Option  that You  select.  Once an  Annuity  Payment  Option  is  selected,  the
Surrender  Value for the  Valuation  Period  which ends  immediately  before the
Maturity Date will be  transferred to the Acacia Life General  Account,  and the
Annuity  Payments will be fixed in amount by the Annuity Payment Option selected
and the age and sex (if sex distinction is allowed) of the Annuitant.

1)   OPTION A - INTEREST FOR LIFE

We will pay interest on the amount  retained for the lifetime of the  Annuitant.
At the Annuitant's death, We will pay the principal amount to the Beneficiary or
as otherwise agreed.

2)   OPTION B - INTEREST FOR A FIXED PERIOD

We will pay interest on the retained  amount for a fixed period of not more than
30 years. At the end of the period,  We will pay the principal  amount to You or
as otherwise agreed.

3)   PAYMENTS FOR A FIXED PERIOD - OPTION C

We will pay the amount retained, with interest, in equal monthly payments, for a
period of not more than 30 years.  The amount of each  payment  will be based on
Our payment  schedule as of the date payments start.  These payments will not be
less than those shown below.

--------------------------------------------------------------------------------
                          MONTHLY INSTALLMENTS FOR EACH
                            $1,000 OF AMOUNT RETAINED
--------------------------------------------------------------------------------
YRS.   AMT.   YRS.  AMT.   YRS.   AMT.   YRS.   AMT.   YRS.   AMT.   YRS.   AMT.
--------------------------------------------------------------------------------
 1    84.84    6   15.56    11    9.31    16    7.00    21    5.81    26    5.10
 2    43.25    7   13.59    12    8.69    17    6.71    22    5.65    27    5.00
 3    29.40    8   12.12    13    8.17    18    6.44    23    5.49    28    4.90
 4    22.47    9   10.97    14    7.72    19    6.21    24    5.35    29    4.80
 5    18.32   10   10.06    15    7.34    20    6.00    25    5.22    30    4.72
--------------------------------------------------------------------------------

4)   PAYMENTS OF A FIXED AMOUNT - OPTION D

We will pay the amount retained, with interest, in equal payments until the fund
has been paid in full. The total payments in any year must be at least 5% of the
amount retained.

5)   LIFE INCOME-OPTION E

We will pay the amount  retained,  in  monthly  installments  adjusted  based on
current credited interest, in monthly installments, as shown in the table on the
following  page, for the guaranteed  period elected and continue them during the
lifetime  of the person  upon  whose life the option is based.  You may elect to
have no guaranteed  period or a guaranteed  period of 5, 10, or 15 years, or the
period in which the total payments will equal the amount  retained  (Installment
Refund).

<PAGE>

--------------------------------------------------------------------------------
                          MONTHLY LIFE INCOME PAYMENTS
                       FOR EACH $1,000 OF AMOUNT RETAINED
--------------------------------------------------------------------------------
                                   GUARANTEED PERIODS
--------------------------------------------------------------------------------
                       MALE                                 FEMALE
AGE    -------------------------------------------------------------------------
                                  PAYMENT                               PAYMENT
          10 YRS.     20 YRS.      REFUND       10 YRS.     20 YRS.      REFUND
--------------------------------------------------------------------------------
 45        4.58        4.47         4.48         4.29        4.25         4.24
 46        4.64        4.52         4.53         4.34        4.29         4.28
 47        4.71        4.57         4.58         4.39        4.33         4.33
 48        4.77        4.63         4.64         4.45        4.38         4.38
 49        4.84        4.68         4.70         4.50        4.43         4.43

 50        4.91        4.73         4.77         4.56        4.48         4.48
 51        4.99        4.79         4.83         4.63        4.53         4.54
 52        5.07        4.85         4.90         4.69        4.58         4.59
 53        5.15        4.91         4.97         4.76        4.64         4.65
 54        5.24        4.97         5.05         4.83        4.70         4.72

 55        5.33        5.03         5.13         4.91        4.76         4.79
 56        5.43        5.09         5.21         4.99        4.82         4.86
 57        5.54        5.15         5.30         5.08        4.88         4.93
 58        5.65        5.21         5.39         5.17        4.95         5.01
 59        5.76        5.27         5.49         5.27        5.01         5.10

 60        5.88        5.34         5.59         5.37        5.08         5.19
 61        6.01        5.40         5.70         5.48        5.15         5.28
 62        6.14        5.45         5.82         5.59        5.22         5.38
 63        6.28        5.51         5.94         5.71        5.29         5.48
 64        6.43        5.57         6.06         5.84        5.35         5.59

 65        6.58        5.62         6.19         5.97        5.42         5.71
 66        6.73        5.67         6.33         6.12        5.48         5.83
 67        6.89        5.71         6.48         6.26        5.55         5.96
 68        7.06        5.75         6.63         6.42        5.61         6.10
 69        7.22        5.79         6.79         6.58        5.66         6.24

 70        7.39        5.82         6.95         6.76        5.71         6.40
 71        7.57        5.85         7.13         6.94        5.76         6.56
 72        7.74        5.88         7.31         7.12        5.80         6.73
 73        7.91        5.90         7.50         7.31        5.84         6.91
 74        8.08        5.92         7.70         7.50        5.87         7.10

 75        8.25        5.94         7.91         7.70        5.90         7.31
 76        8.42        5.95         8.13         7.90        5.92         7.52
 77        8.58        5.97         8.36         8.10        5.94         7.75
 78        8.73        5.97         8.59         8.29        5.96         7.98
 79        8.88        5.98         8.84         8.48        5.97         8.23

 80        9.02        5.99         9.09         8.66        5.98         8.49

--------------------------------------------------------------------------------EXHIBIT 4(B): Form of Policy Riders

[INCLUDE LISTING OF POLICY RIDERS AND NUMBER WITHIN THE DOCUMENT]

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                            IRA DISCLOSURE STATEMENT

This  Disclosure  Statement is being  furnished to You as required by law and is
designed  to help You  understand  your  Individual  Retirement  Annuity and the
applicable  provisions  of the tax laws which govern  annuities in general.  The
terms and  conditions of Your Annuity Policy will be controlling in the event of
any  variance  between the terms of this  statement  and the  provisions  of the
Annuity.

                             10-DAY RIGHT TO REVOKE

You may revoke your Individual  Retirement  Annuity,  for any reason,  within 10
days after its  establishment.  Any written notice of revocation  will be deemed
mailed on the date of postmark,  or if sent by certified or registered mail, the
date of certification or registration. If You choose to revoke, You will receive
full refund of all amounts paid,  without penalty or cost to You, other than the
loss of  interest  on the  Premium  contributed.  If You have  been  provided  a
Disclosure  Statement on or before (1) the earlier of the purchase  date, or (2)
the last day on which You are  permitted  to revoke this  Annuity and there is a
material change in the information set forth in this Disclosure Statement or the
Annuity  Policy,  Acacia Life  Insurance  Company will forward a new  Disclosure
Statement  and/or Annuity Policy  informing You of such change.  If You have any
questions or wish to revoke this Annuity,  contact Acacia Life Insurance Company
Service Office. The address is:

                          ACACIA LIFE INSURANCE COMPANY
                                 SERVICE CENTER
                                 P.O. BOX 82579
                             LINCOLN, NEBRASKA 68501

In General Your  Individual  Retirement  Annuity is an Annuity  Policy issued by
Acacia Life Insurance Company ("Acacia Life") for Your exclusive benefit or that
of your beneficiaries and is designed to qualify for the favorable tax treatment
afforded by  applicable  provisions  of the  Internal  Revenue  Code,  regarding
Individual Retirement  Annuities.  Your rights are governed by the provisions of
Your Annuity Policy.

                             STATUTORY REQUIREMENTS

The  following  features  of  your  Individual  Retirement  Annuity  policy  are
prescribed by the Internal Revenue Code.

     a.   Your Annuity Policy is nontransferable. You are not permitted to sell,
          assign,  discount  or  pledge  as  collateral  Your  interest  in Your
          Annuity.  If You pledge  Your  Annuity as  security  for a loan,  Your
          Annuity  Policy  will no longer  qualify as an  Individual  Retirement
          Annuity  and you  will be  taxed  on the  fair  market  value  of your
          Annuity.
     b.   Except for amounts transferred from another IRA or a qualified pension
          plan  (rollovers)  or  employer   contributions  to  a  SEP-IRA,  Your
          contributions  is  limited  to $2,000  for each  year.  In the case of
          contributions   to  a  SEP-IRA,   the  maximum  amount  which  may  be
          contributed is $30,000. These maximum amounts may be changed from time
          to time by the Internal  Revenue  Service.  All  contributions  to the
          Annuity must in cash.
     c.   You have a nonforfeitable interest in Your Annuity.
     d.   Any  refund  of  premiums  will be  applied  before  the  close of the
          calendar  year  following the year of the refund toward the payment of
          future premiums,  unless directed otherwise. The amount of Your annual
          Premium Payments is not fixed.
     e.   Your entire  interest must be  distributed  commencing  not later than
          April 1st of the calendar  year  following  the calendar year in which
          You attain age 70 1/2.  The entire  interest  must be  distributed  in
          accordance  with the  regulations  over Your life or over the lives of
          You and a  designated  Beneficiary  (or  over a period  not  extending
          beyond Your life  expectancy or the joint life expectancy of You and a
          designated Beneficiary).
     f.   If you  die  before  distributions  have  started,  then  Your  entire
          interest must be distributed within 5 years after death.  However,  if
          any portion of Your  interest is payable to a designated  Beneficiary,
          then it may be distributed over the life of the designated Beneficiary
          (or over a period  not  extending  beyond the life  expectancy  of the
          Beneficiary).  Generally,  the distributions must begin not later than
          December 31st of the year after date of death

<PAGE>

          or such later date as the Secretary may prescribe by regulation.
     g.   If  the  designated   Beneficiary  is  Your  surviving   spouse,   the
          distributions  can be postponed to the date You would have reached age
          70 1/2, unless the surviving spouse dies in the interim.  In this case
          the  distributions  must be made as if the spouse were the Owner.  The
          surviving  spouse  may  also  rollover  the  distribution  to  his/her
          individual retirement account.
     h.   If You die  after  the  distribution  of Your  interest  has begun and
          before  Your  entire  interest  has been  distributed,  the  remaining
          portion of Your  interest must be  distributed  at least as rapidly as
          under the  method of  distribution  being  used as of the date of Your
          death.

                          CONTRIBUTIONS AND DEDUCTIONS

Each year You may  contribute  100% of  compensation  up to a maximum  of $2,000
($2,250  with  a  spousal  IRA).   This  total  includes  both   deductible  and
nondeductible contributions.

Compensation is defined as wages, salaries,  professional fees, or other amounts
derived from or received for personal service actually rendered (including,  but
not limited to, commissions for paid salesmen,  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
Keogh plan). Compensation also includes any amount includible in the individuals
gross income under section 71 with respect to a divorce or separation instrument
described in subparagraph (a) of section 71(b)(2).

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 or as deferred compensation.

The  deductible  contribution  to Your  Individual  Retirement  Annuity  program
reduces Your gross income. Therefore, even if You do not itemize Your deductions
and  You  use the  standard  deduction,  You may  still  claim a  deduction  for
contributions  to Your  Individual  Retirement  Annuity  program.  The deduction
should be reported on Form 1040 or 1040A.

               PARTICIPATION IN ANOTHER QUALIFIED RETIREMENT PLAN

If You are considered an active  Participant in a qualified  retirement  plan, a
government  plan or a Section  403(b) (Tax  Sheltered  Annuity)  plan,  and Your
adjusted gross income is over certain specified amounts, then the amount of Your
deductible  IRA  contribution  may be limited to less than $2,000  ($2,250 for a
spousal IRA).

An active  Participant  is defined as follows:  For a defined  benefit plan, You
will be  considered  an active  Participant  if You are not  excluded  under the
eligibility  requirements  of the plan for any part of the plan year  which ends
with or within Your taxable year. You are considered an active  Participant even
if You have elected to decline  participation in the plan or have failed to make
a mandatory  contribution  specified  under the plan. You are also considered an
active  Participant  even  though You have  failed to meet the  minimum  service
required  to accrue a benefit  under the plan.  For a money  purchase  or target
benefit  plan,  You  are  considered  an  active   Participant  if  an  employer
contribution  or  forfeiture  is required to be  allocated  to Your account with
respect to the plan year which ends with or within Your taxable  year.  If these
allocation are made to Your account,  You are considered an active  Participant,
even if You are not employed by the employer at any time during the plan year or
Your taxable year.

Under a profit  sharing  or stock  bonus  plan,  You are  considered  an  active
Participant if any employer contribution is added or any forfeiture is allocated
to Your account during your taxable year. The  contribution is considered  added
to Your  account on the later of the date the  contribution  is made or the date
the  contribution  is  allocated.  However,  if the  right to an  allocation  is
conditioned on the performance of a specified  number of hours (or employment on
a specified  day) and this  condition is not met, You will not be  considered an
active Participant for the taxable year in which the plan year ends.

If only earnings,  rather than  contributions and forfeitures,  are allocated to
Your account  during the plan year which ends with or within your taxable  year,
then you are not  considered an active  Participant.  If You make a voluntary or
mandatory  contribution  during Your taxable  year,  You will be  considered  an
active  Participant  for the taxable year.  Active  Participant  status does not
depend on whether or not Your rights in Your employers plan are nonforfeitable.

<PAGE>

For couples filing jointly, if either You or Your spouse is considered an active
Participant,  then  both of You are  treated  as  active  Participants.  Married
couples filing separately are not treated as married for purposes of determining
active  Participant  status,  if the couple has not lived  together  at any time
during the taxable year.

                             ACTIVE PARTICIPANT RULE

If You are considered an active Participant in an employee-maintained retirement
plan for any part of the  retirement  plan year which  ends with or within  Your
taxable year, no deductible  contribution to Your IRA will be permitted, if Your
adjusted gross income exceeds certain specified  amounts.  Adjusted gross income
for purposes of the IRA deduction limitation is calculated without regard to any
deductible IRA contribution that is made for the taxable year; however,  taxable
Social Security benefits or passive loss limitations  applicable to the taxpayer
are taken into account.

If Your adjusted gross income is greater than the applicable  dollar limit, then
the amount that may be considered a deductible  contribution is determined under
the following steps:

     (1)  Subtract the applicable dollar amount from adjusted gross income;
     (2)  Divide the answer from Step (1) by $10,000;
     (3)  Multiply  the  ratio  found  in Step  (2) by the  $2,000  contribution
          limitation ($2,250 for a spousal IRA);
     (4)  Subtract Step (3) from the contribution limitation.

If the deductible amount is not a multiple of $10, round down to the next lowest
multiple of $10.

The minimum  deductible  IRA  contribution  for any  taxpayer who is allowed any
deductible  contribution is $200. The applicable  dollar limit is $25,000 in the
case of an individual or $40,000 in the case of a married  couple filing a joint
return.  For married  couples filing  separately,  the  applicable  limit is 0$,
unless the couple has not lived together at any time during the taxable year. In
this case the applicable limit is $25,000. IRA deductions are eliminated if your
adjusted  gross  income  exceeds  $50,000  if you are  married  and file a joint
return, or $35,000 if you are unmarried.

                                 WHEN TO DEDUCT

You must make contributions to Your Individual Retirement Annuity during the tax
year for which You claim the  deduction or by the tax filing  deadline,  without
extensions.  For a  SEP-IRA,  contributions  must be made not later than the due
date of the employers tax return, including extensions.  For example, if You are
a calendar year taxpayer,  You must make  contributions no later than April 15th
in order to take a deduction for the previous year.

                           NONDEDUCTIBLE CONTRIBUTIONS

You are permitted to make nondeductible  contributions to your IRA to the extent
You are not eligible to make deductible IRA  contributions.  You may also choose
to make a  contribution  nondeductible  even if You could have deducted all or a
portion of that contribution.  The maximum  nondeductible IRA contributions that
you can make for a taxable year is the difference between $2,000 (or $2,250 if a
spousal IRA is established) and the amount of any IRA contributions You elect to
deduct for the taxable year.  Earnings on Your  non-deductible IRA contributions
(and Your deductible  contributions)  will not be taxed until  distributed  from
Your IRA.

Nondeductible  contributions  must be made no later  than  the  date  deductible
contributions must be made (that is, the due date for filing Your federal income
tax return for the taxable  year).  If You file an amended return You may change
Your nondeductible  contributions to deductible contributions or vice-versa.  If
you make a  nondeductible  contribution  to Your IRA for the taxable  year,  the
amount of such  contribution  must be reported on Your federal income tax return
for the year.

                                   AGE 70 1/2

No  contributions  may be made  during or after the tax year in which You attain
age 70 1/2.  Contributions  may be made to spousal  IRAs during or after the tax
year in which You attain age 70 1/2, as long as your spouse is under age 70 1/2.
No  deduction  for the spousal IRA can be claimed,  once the  nonworking  spouse
reaches age 70 1/2.

<PAGE>

                                 MARITAL STATUS

Each  employed  spouse can open a regular IRA if eligible and each can claim the
allowable  deduction  which is computed  separately,  whether or not they file a
joint tax return.

                           TAX STATUS OF YOUR ANNUITY

Until distributed,  Your Individual  Retirement Annuity and earnings thereon are
exempt from tax, unless You engage in a prohibited transaction.

                         TAX TREATMENT OF DISTRIBUTIONS

Taxable  distributions  from Your  Individual  Retirement  Annuity  are taxed as
ordinary income in the year of receipt, regardless of their source. They are not
eligible for capital  gains  treatment  or the special 5- or 10- year  averaging
rules that apply to lump-sum distributions from qualified employer plans.

                             ROLLOVER CONTRIBUTIONS

A  "rollover"  is  a  tax-free  transfer  of  cash  or  other  assets  from  one
tax-qualified   retirement   program  to   another.   There  are  two  kinds  of
contributions  to a rollover  IRA. In one, You transfer  amounts from one IRA to
another. With the other, You transfer amounts from Your employers qualified plan
to an IRA.

                        ROLLOVER FROM ONE IRA TO ANOTHER

You may withdraw  part of all of the assets from one IRA and transfer  them to a
rollover  IRA on a  tax-free  basis.  You do not  deduct  the  amount  which you
reinvest in the new IRA. You must  transfer the amount to be rolled over to Your
new IRA, by the 60th day after the day You receive the property  from Your first
IRA.  Partial  rollover  causes any amount not  rolled  over to be  included  in
ordinary  income as a  distribution.  You may make a rollover  from one IRA to a
rollover IRA only once a year.  The  rollover  must take place at least one year
after the day You received an amount from an IRA in an earlier  rollover.  If it
takes place before one year, the amount rolled over is an excess contribution.

                    ROLLOVER FROM A QUALIFIED PLAN TO AN IRA

You may make a tax-free  transfer of a distribution  of Your share in Your prior
employer's  qualified  employer  plan to a rollover  IRA. In order to rollover a
distribution,  certain  requirements must be satisfied.  You may make a rollover
contribution to your IRA if the distribution  from the retirement plan was (a) a
"lump sum  distribution",  (b) a partial  distribution  which is at least 50% of
your account  balance in the retirement  plan,  (c) a  distribution  due to Your
status  as a  surviving  spouse,  or  (d) a  distribution  You  received  from a
tax-qualified  retirement  plan,  pursuant to a  "qualified  domestic  relations
order",  subject to certain other  restrictions.  You must elect the rollover as
the  Secretary of Treasury  prescribes by  regulation.  All or part of a partial
distribution  can be rolled over. If a distribution is made to Your spouse after
Your death,  Your surviving spouse can elect tax-free  rollover  treatment.  The
most You can rollover is the fair market value of the assets You receive as Your
share from Your  employer's  plan (other than  accumulated  deductible  employee
contributions).  Also, the rollover amount must be deposited in the rollover IRA
within 60 days,  after the day You receive the  distribution.  Due to the strict
limitations  applicable to rollover  contributions,  You should obtain competent
tax advice before attempting to make a rollover contribution.

                      TRANSFER FROM ONE TRUSTEE TO ANOTHER

If you  transfer  the fund in Your IRA from one  trustee  directly  to  another,
either at Your request or at the trustees request, this is not a rollover. It is
a transfer  that is not  affected by the  one-year  waiting  period.  You do not
deduct the amount  transferred.  You do not  include  this  amount in Your gross
income, if You do not receive any of it.

                       EXCISE TAX ON EXCESS CONTRIBUTIONS

Generally,   any   contributions   exceeding  the  combined   deductible,   plus
nondeductible  limitations are excess contributions,  subject to a nondeductible
6% excise tax. The tax is imposed for the year the excess  contribution is made.
You do not have to

<PAGE>

pay the tax if You did not deduct the excess  contribution  and You  withdraw it
(plus any  earnings),  by the due date  (including  extensions)  for filing Your
income tax return.. However, earnings timely withdrawn are taxable income in the
year in which the excess contribution was made.  Additionally,  despite the fact
that a timely  withdrawn  excess  contribution is not considered a distribution,
earnings attributable to it are. Such earnings are subject to the 10% penalty on
premature  distributions,  unless the  Participant  is 59 1/2 years of age.  The
excess  amounts which are not withdrawn in a timely matter are subject to the 6%
excise tax in the year of contribution and are carried over and taxed each year,
until the year the  excess  is  reduced  in one of the  following  ways.  Excess
contributions  made in year may be applied against the contribution  limits in a
later year, if the  contributions in the later years are less than the allowable
limit.  The excess may be reduced by distribution of the excess part,  which did
not exceed  $2,000  ($2,500  for a spousal  IRA),  as long as no  deduction  was
allowed  for the  excess.  The  excess  may  also  be  reduced  by  distribution
includible  in income.  This  distribution  may also be subject to 10% premature
distribution tax.

                             PROHIBITED TRANSACTIONS

Certain  transactions  such as  borrowing  from your annuity are  prohibited  by
Section  4975 of the  Internal  Revenue Code and will cause Your annuity to lose
its exemption from taxation. The annuity would become immediately taxable at its
full value.  In addition,  if You have not reached 59 1/2, you may be liable for
an additional 10% tax on the amount borrowed.

                             PREMATURE DISTRIBUTIONS

If You receive a payment from Your  Individual  Retirement  Annuity,  before You
attain age 59 1/2 or become disabled, the payment will be considered a premature
distribution,  unless the payment was made based on Your life  expectancy or the
life expectancy of You and a designated  beneficiary,  or a period not exceeding
Your life  expectancy  or the joint life  expectancies  of You and a  designated
beneficiary. If You receive a premature distribution,  the amount received (less
any amounts  representing Your nondeductible  contributions) is included in Your
gross  income in the taxable year of receipt and Your income tax  liability  for
the year is increased  by an amount equal to 10% of the amount of the  premature
distribution which is includible in Your gross income. The amount distributed to
You is not  includible in Your gross income or subject to the 10% penalty tax to
the extent a rollover contribution is made with the distributed funds.

                            TAXATION OF DISTRIBUTIONS

If You receive a distribution and have made no nondeductible contributions,  the
amount received is included in Your gross income in the taxable year of receipt.
If You have made nondeductible IRA contributions,  the amount includible in Your
gross income is as follows:

     (1)  Find the total of all IRA account  balances as of December 31st of the
          year of distributions;
     (2)  Add IRA distributions made during the year to Step (1);
     (3)  Add all IRA rollovers  which had not been rolled over at year end, but
          which are rolled over in the following year to the answer in Step (2);
     (4)  Divide unrecovered nondeductible contributions by Step (3);
     (5)  Multiply Step (4) by the distribution amount; and
     (6)  Subtract Step (5) from the distribution amount.

Your income tax  liability  may be increased by 10% of the amount  includible in
Your gross income, if the distribution is considered a premature distribution.

                              ADDITIONAL PENALTIES

If You overstate Your nondeductible contribution,  You will be liable for a $100
penalty for the year in which the overstatement occurred.

                                DISABILITY CASES

If  payments  are made or  deemed  made to You from Your  Individual  Retirement
Annuity  before You  attain age 59 1/2  because  You  become  disabled,  the 10%
premature distribution tax does not apply.

<PAGE>

              MINIMUM PAYMENTS AND PENALTIES FOR UNDER-DISTRIBUTION

Amounts contributed to an Individual  Retirement Annuity are intended to be used
for  retirement  purposes and are not to be retained in Your Annuity  beyond the
maximum age for payout.  If  sufficient  payments  are not timely made from Your
Annuity,  You will be liable for an excise tax of 50%  (explained  below) on the
under-distribution.

                          FIFTY PERCENT 50% EXCISE TAX

A 50% excise tax will be imposed  on the  under-distribution,  representing  the
difference  between the minimum payout required for the tax year in question and
the amount actually paid out to You.

            FIFTEEN PERCENT (15%) EXCISE TAX ON EXCESS DISTRIBUTIONS

If you  receive  total  distributions  from Your IRA and from any  tax-qualified
retirement  plans  and  tax-sheltered  annuities  in excess  of  $150,000  for a
calendar  year,  You  may  be  subject  to a  15%  excise  tax  on  such  excess
distribution.  You  should  consult  with  Your tax  advisor  if You  anticipate
receiving  distributions  in excess of $150,000  for a calendar  year as certain
exceptions and transitional rules may be applied.

                               REQUIRED TAX FILING

If You make an excess  contribution,  receive a premature  distribution,  or are
already receiving IRA benefits and have not taken out enough money for the year,
the You must file IRS Form 5329 for that particular year. Form 8606 is filed for
Nondeductible IRA Contributions and Nontaxable IRA Distributions.

                         FEDERAL INCOME TAX WITHHOLDING

The taxable portion of distributions  from Your IRA is subject to federal income
tax withholding unless You elect not to have withholding apply. If You elect not
to have  withholding  apply  to  taxable  distributions  from  Your  IRA,  or if
insufficient  federal income tax is withheld from any  distribution,  You may be
responsible  for payment of the  estimated  taxes,  as well as for any penalties
applicable  under the  estimated  tax rules.  The  amount of federal  income tax
required to be withheld on any payment  will  generally  equal 10% of the amount
distributed.  Additional  information  regarding  withholding  and the necessary
election forms will be provided to You at the time a distribution is requested.

                               ESTATE AND GIFT TAX

For  information  on how  estate  and gift tax laws  relate  to Your  Individual
Retirement Annuity, see IRS Publication 448, Federal Estate and Gift Taxes.

                             ADDITIONAL INFORMATION

Further information about Individual  Retirement  Annuities can be obtained from
any District Office of the Internal  Revenue  Service.  Refer to IRS Publication
590.

                              DISCLOSURE STATEMENT

The above  disclosures  are a  nontechnical  restatement  and summary of certain
provisions  of the  Internal  Revenue  Code  which may  affect  Your  Individual
Retirement  Annuity.  Your legal  rights and  obligations  are  governed  by the
Internal  Revenue Code and  Regulations  and the Annuity Policy issued by Acacia
Life Insurance Company.  This disclosure statement is not intended to constitute
tax  advice,  and You should  consult a  competent  tax  advisor  about Your own
circumstances.  GUARANTEED  VALUES Based on the Insurance  Company's  guaranteed
cash  value,  the cash  available  to You, if You were to withdraw at the end of
years 1, 2, 3, 4, 5, age 60,  age 65,  and age 70, is  specified  on the  Policy
Schedule page.

                              IMPORTANT INFORMATION

Prior to the earlier of the Maturity Date or the Date of the Death of the Owner,
You may withdraw  all or a portion of the current  Surrender  Value,  on written
request to Our Service Office. If there are Joint Owners, both must agree to the
withdrawal.  The Surrender  Value is equal to the Policy  Account Value less any
applicable  Surrender  Charges,  the Annual Policy Fee, and any Premium or other
Taxes. The appropriate  surrender charge percentage of each Premium Payment used
in

<PAGE>

the Surrender Charge  calculation is determined by the number of years since the
Premium  Payment was  deposited.  Any  withdrawals  up to and including  100% of
earnings  since the last Policy  Anniversary in all  Sub-accounts  and the Fixed
Account plus up to 10% of the Policy Account Value  remaining in any Policy Year
may also be withdrawn free of Surrender Charges.

To  determine  the  Surrender  Charge  for a  particular  Premium  Payment,  the
Surrender  Charge  percentage  is  multiplied  by the Premium  Payment  less any
withdrawals  previously  allocated to the Premium  Payment.  The total Surrender
Charge is then  determined  by summing  the  previous  result  over all  Premium
Payments  used in the  calculation.  The  Surrender  Charge will be based on the
excess of the Surrender amount over the Free Withdrawal  Amount.  This excess is
distributed  over the  Premium  Payments  on a first-in  first-out  basis  until
exhausted.

THE TAX LAW PROVISIONS  REGARDING  ANNUITIES ARE VERY COMPLEX AND ARE SUBJECT TO
PERIODIC AMENDMENT AND TO CONTINUAL  ADMINISTRATIVE AND JUDICIAL INTERPRETATION.
YOU ARE  ENCOURAGED  TO DISCUSS  THE TAX  ASPECTS OF THIS  POLICY  WITH YOUR TAX
ADVISOR.

                              FINANCIAL DISCLOSURE

The following  illustrative  guaranteed  annuity values assume you contribute to
the  Allocator  2001 Annuity (I) $1,000 on the first day of each and every year,
beginning  on the issue  date,  and (ii)  $1,000 on the issue date  only.  These
values reflect the guaranteed minimum interest rate of 4%.

                         GUARANTEED CASH SURRENDER VALUE

END OF POLICY YEAR           $1,000 PAID ANNUALLY           $1,000 PAID AT ISSUE
------------------           --------------------           --------------------
        1                              824                           904
        2                            1,752                           888
        3                            2,702                           872
        4                            3,779                           874
        5                            5,170                           911
        60                         134,725                             0
        65                         155,848                             0
        70                         183,847                             0

Any interest rate  credited  under the Policy in excess of the  guaranteed  rate
will be declared  periodically.  You may receive  separately an  illustration of
projected  values based on the initial  declared  interest rate for this policy.
Premium tax may be deducted in certain states. Withdrawals may be subject to the
Surrender Charge described in the prospectus for the Policy.

                              VARIABLE SUB-ACCOUNTS

Growth in the value of the amounts  credited  to the  Variable  Sub-Accounts  is
neither  projected nor  guaranteed.  The charges made and method for calculating
earnings under the Variable Sub-Accounts are described in the prospectus for the
Policy.

The Policy has been  designed  to be used as an  Individual  Retirement  Annuity
(IRA) under Section 408(b) of the Internal Revenue Code.

Acacia  Life  Insurance  Company  reserves  the  right to amend  the  Policy  as
necessary  or advisable  from time to time to comply with future  changes in the
Internal Revenue Code,  regulations,  or any other  requirements  imposed by the
IRS,  to  obtain  or  maintain  its  approval  of the  policy  as an  Individual
Retirement Annuity.

Acacia Life Insurance  Company will furnish You with an annual  statement  which
will report Your contributions made for each tax year and Your contract value at
the end of the year.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          /s/ Robert Clyde

          Secretary                                     President

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                       INDIVIDUAL RETIREMENT ANNUITY RIDER

This Rider is attached to and made a part of the Policy to qualify the Policy as
an Individual  Retirement  Annuity  (Annuity) under the Internal Revenue Code of
1986,  as  amended  (the  Code),  and to permit  the use of the Policy to fund a
Simplified  Employee  Pension  Plan, as authorized by the 1978 Revenue Act. This
Rider is effective as of the Policy Date. Where the provisions of this Rider and
the Policy disagree, the provisions of this Rider will apply.

This plan is intended to qualify under the Code for tax favored status. Language
contained  in this  Policy  referring  to  Federal  tax  statutes  or  rules  is
informational  and instructional and this language is not subject to approval or
disapproval  by the state in which  the  Policy is  issued  for  delivery.  Your
qualifying  status is the  controlling  factor as to  whether  your  funds  will
receive tax favored  treatment  rather than the Policy.  Any  provisions  of the
Policy that would allow joint ownership,  or that would allow more than 1 person
to share  distribution  is deleted.  Please ask Your tax advisor if you have any
questions as to whether or not you qualify.

                                   AMENDMENTS

OWNERSHIP - The Annuitant is the owner of the Policy and may exercise all rights
under the Policy during his or her lifetime.  The Annuitant's rights to benefits
under the Policy are nonforfeitable.

ASSIGNMENT - The Policy is not  transferable or assignable  (other than pursuant
to a divorce decree in accordance  with  applicable  law) and is established for
the  exclusive  benefit of the Annuitant  and his  beneficiaries.  It may not be
sold, assigned, alienated, or pledged as collateral for a loan or as security.

PREMIUM  PAYMENTS - Premium  Payments  shall be in cash.  The following  Premium
Payments shall be accepted under this Policy:

     (a)  Rollover  contributions  described  in  Sections  402(c),   403(a)(4),
          403(b)(8), and 408(d)(3) of the Code;
     (b)  Amounts  transferred  from another  individual  retirement  account or
          annuity;
     (c)  Contributions pursuant to a Simplified Employee Pension as provided in
          Section 408(k) of the Code; and
     (d)  Other  Premium  Payments  in an amount not in excess of $2,000 for any
          year.

The Annuitant shall have the sole  responsibility  for  determining  whether any
Premium Payment meets applicable income tax requirements.

This  Policy  does not  require  any  particular  number or  amount  of  Premium
Payments.  Any refund of Premium  Payments  (other  than those  attributable  to
excess  contributions)  must be applied,  before the close of the calendar  year
following  the year of the refund,  toward  additional  Premium  Payments or the
purchase of additional benefits.

MATURITY  DATE - In no event may the Maturity  Date,  either as specified on the
Specifications Page of the Policy or as subsequently changed, be a date prior to
the date the Annuitant attains age 59 1/2.

The Maturity Date shall be no later than April 1 of the calendar year  following
the calendar year in which the Annuitant attains age 70 1/2. The Annuitant shall
have the sole  responsibility  for requesting a distribution  that complies with
this Rider and applicable law.

ANNUITY OPTIONS (IF APPLICABLE) - The annuity options available to the Annuitant
shall not extend beyond the following  period [(a) and (c) or (b) and (d) may be
combined]:

     (a)  the life of the Annuitant;
     (b)  the  joint  lives  of  the  Annuitant  and  a  designated   individual
          Beneficiary;
     (c)  a period certain not longer than the life expectancy of the Annuitant;
     (d)  a period  certain  not longer  than the joint life and  survivor  life
          expectancies of the Annuitant and a designated individual Beneficiary.

<PAGE>

OPTIONAL  METHODS OF  SETTLEMENT  (IF  APPLICABLE)  - The options  available for
application of the proceeds  payable under the Policy during the lifetime of the
Annuitant  shall be those under  Annuity  Options  above.  Such  Payments  shall
commence on or before the  Maturity  Date and shall be payable in  substantially
equal amounts, no less frequently than annually.

DISTRIBUTIONS - If the Annuitant's entire interest is to be distributed in other
than a lump sum, then the minimum amount to be distributed each year (commencing
with the  calendar  year  following  the  calendar  year in which the  Annuitant
attains age 70 1/2 and each year  thereafter)  shall be determined in accordance
with Code  Section  408(b)(3)  and the  regulations  thereunder,  including  the
incidental death benefit  requirements of Section  401(a)(9)(G) of the Code, the
regulations   thereunder,   and  the  minimum  distribution  incidental  benefit
requirement of Proposed Income Tax Regulations section  1.401(a)(9)-2.  Payments
must be either nonincreasing or may increase only as provided in Proposed Income
Tax Regulation section 1.401(a)(9)-1, Q&A F-3.

If the Annuitant  dies on or after the Maturity Date and before all the proceeds
have been paid, any proceeds remaining will be paid at least as rapidly as under
the method for payment in effect at the time of the Annuitant's death.

If the payment of the proceeds has not begun prior to the Annuitant's death, all
the proceeds must generally be paid within five years after the date of death.

The five-year rule does not apply to that portion of the proceeds which:

     1.   is  payable  to  or  for  the  benefit  of  a  designated   individual
          Beneficiary; and
     2.   will be paid over the lifetime of that Beneficiary; so long as payment
          begins not later than  December 31 of the  calendar  year  immediately
          following the calendar year of the Annuitant's death.

In addition,  the five-year  rule does not apply to that portion of the proceeds
which:

     1.   is  payable  to  or  for  the  benefit  of  a  designated   individual
          Beneficiary who is the surviving spouse; and
     2.   will be paid over the lifetime of the surviving spouse;

so long as payment  begins not later than the date on which the Annuitant  would
have  attained age 70 1/2.  Any portion of the  proceeds  paid to a child of the
Annuitant will be treated as if paid to the surviving spouse if the remainder of
the proceeds is payable to the  surviving  spouse when the child reaches the age
of majority.

If the  Annuitant  dies  before his entire  interest  has been  distributed,  no
additional  Premium  Payments will be accepted under this Policy after his death
unless the Beneficiary is his or her surviving spouse.

If  the  Annuitant's  spouse  is  not  the  named  Beneficiary,  the  method  of
distribution  selected will assure that at least 50% of the present value of the
amount available for distribution is paid within the Annuitant's life expectancy
and that such method of  distribution  complies  with the  requirements  of Code
Section 408(b)(3) and the regulations thereunder.

For purposes of the foregoing  provisions,  life  expectancy  and joint and last
survivor  expectancy shall be determined by use of the expected return multiples
in Tables V and VI of Treasury Regulation 1.72.9 in accordance with Code Section
408(b)(3) and the  regulations  thereunder.  Unless the Annuitant (or his or her
spouse)  elects  otherwise  prior  to the time  distributions  are  required  to
commence,  the Annuitant's  life expectancy and, if applicable,  the Annuitant's
spouse life expectancy  will be  recalculated  annually based on the Annuitant's
attained  ages  in the  year  for  which  the  required  distribution  is  being
determined.  The  life  expectancy  of a  non-spouse  Beneficiary  will  not  be
recalculated.

The annual  distribution  required  to be made by the  Maturity  Date is for the
calendar year in which the Annuitant  reaches age 70 1/2.  Annual  distributions
for subsequent years, including the year in which the Maturity Date occurs, must
be made by December 31 of that year. The amount  distributed for each year shall
equal or exceed the Policy Account Value as of the close of business on December
31 of the preceding year, divided by the applicable life expectancy or joint and
last survivor expectancy.

The Annuitant may satisfy the minimum  distribution  requirements  under Section
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  requirement for two or
more IRAs. For this purpose,  if the Annuitant owns two or more IRAs, he may use
the alternative  method  described in Notice 88-38,  1988-1 C.B. 524, to satisfy
the minimum distribution requirements.

<PAGE>

This  provision  shall not affect any option  elected during the lifetime of the
Annuitant under which payments have commenced during the Annuitant's lifetime to
continue for a period not extending  beyond the life expectancy of the Annuitant
or the Annuitant and designated individual Beneficiary.

EXCESS CONTRIBUTIONS - Excess contributions are:

     (a)  Premiums  Paid to a  Simplified  Employee  Pension by the  Annuitant's
          employer  for a taxable year in excess of the lesser of $30,000 or 15%
          of compensation (not to exceed $150,000);
     (b)  Premiums  Paid by the  Annuitant  for a taxable  year in excess of the
          lesser of $2,000 or the Annuitant's compensation;
     (c)  Premiums  Paid for the  Annuitant  by his or her  spouse for a taxable
          year in excess of the  lesser of $2,000 or the  spouse's  compensation
          for the taxable year, where the Annuitant did not receive compensation
          for the taxable  year and where both  spouses  file a joint income tax
          return for the taxable year (the maximum total  contribution  for both
          such spouses during the taxable year is $2,250).

NOTE:  Premiums  Paid as  Rollover  contributions  are not subject to the excess
contribution limits.

PREMATURE  DISTRIBUTIONS  - To avoid income and penalty taxes,  no  distribution
(surrender or withdrawal) can be made prior to the Annuitant's age 59 1/2 except
in the event of death or disability (disability means inability to engage in any
substantial,  gainful activity by reason of any medically  determinable physical
or mental  impairment which can be expected to result in death or to be of long,
continued and indefinite duration).

ANNUAL REPORT - We will furnish annual calendar reports concerning the status of
the Policy.

AMENDMENT RIGHT - This Individual Retirement Annuity Rider may be amended by the
Company to qualify  the Policy as an  Individual  Retirement  Annuity  under the
Code,  and  applicable  rules and  regulations.  Any such  amendment may be made
effective  the date of issue of the Policy.  A copy of the amended Rider will be
sent to the Annuitant to be attached to the Policy.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          /s/ Robert Clyde

          Secretary                                     President

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                     TAX SHELTERED ANNUITY ENDORSEMENT UNDER
               SECTION 403(B) OF THE INTERNAL REVENUE CODE OF 1986

At the Owners request, this (Acacia Life) Endorsement is a part of the Policy to
which it is attached by Acacia Life  Insurance  Company.  The provisions of this
endorsement  shall override any other  conflicting  provisions  contained in, or
forming part of, the Policy. The attachment of this Endorsement to the Policy is
intended to meet the form requirements,  limitations, and in all other respects,
qualify under the provisions of section  403(b) of the Internal  Revenue Code of
1986 ("the Code"), as amended from time to time and interpreted by Regulation or
Ruling.

The  Policy,  for as long as this  Endorsement  remains  in  effect,  is  hereby
modified as follows:

     1.   The Annuitant will at all times be the sole Owner of this Policy.

     2.   The Owner's rights under this Policy shall be  nonforfeitable  and for
          the exclusive benefit of the Owner and his or her Beneficiaries.

     3.   Premiums  under the Policy  must be paid by an employer  described  in
          section 501(c)(3) which is exempt from tax under section 501(a) of the
          Code, or an employer who is an educational  organization  described in
          Section 170(b)(1)(A)(ii) of the Code, or an employer which is a State,
          political  subdivision of a State, or an agency or  instrumentality of
          any or more  of the  foregoing.  Premiums  paid  by the  employer  may
          include  contributions  made pursuant to salary reduction  agreements.
          Premiums may also be paid by the Owner from the proceeds of a transfer
          from  another tax  sheltered  annuity,  policy,  contract or custodial
          agreement qualified under Section 403(b) of the Code.

     4.   This Policy is not transferable by the Owner,  except that this Policy
          may be  transferred  to a former spouse of the Owner under a Qualified
          Domestic  Relations  Order, as defined in Code section 414(p).  In the
          event of a transfer pursuant to a Qualified  Domestic Relations Order,
          the  transferee  shall for all  purposes be treated as the Owner under
          this Policy. No benefits under this Policy may be sold,  assigned,  or
          pledged as collateral  for a loan, or as security for the  performance
          of an obligation, or for any other purpose.

     5.   Premium  payments  may not  exceed  the  applicable  limits of section
          403(b),  section  415(c) and section 402(g) of the Code, as determined
          under the employer's Plan.

     6.   Should  this  Policy be  issued to the Owner as part of an  employer's
          403(b) Plan or Program which is subject to the requirements of Title I
          of the Employee  Retirement  Income  Security Act of 1974,  as amended
          ("ERISA"), then any distributions from this Policy shall be subject to
          the applicable requirements of ERISA and the employer's Plan. The Plan
          Administrator  shall certify  compliance with those  requirements in a
          form satisfactory to us.

     7.   Distributions  attributable to contributions made pursuant to a salary
          reduction agreement (within the meaning of section 402(g)(3)(C) of the
          Code) and  earnings  (credited  after  December  31,  1988) may not be
          distributed unless the Owner has satisfied one of the following:

          a.   attained age 591/2;
          b.   separated from service;
          c.   died;
          d.   become disabled (within the meaning of Code section 72(m)(7));
          e.   incurred a financial hardship;
          f.   if the Owner of this Annuity makes an election in writing to take
               a series of  substantially  equal  periodic  payments  which will
               comply with code sections 72(g)(2)(D) or 72(t)(2)(A)(iv);
          g.   such other conditions have occurred as may be satisfactory  under
               the Income Tax Regulations. To the extent required by Regulations
               issued under section  403(b) or other  sections of the Code,  the
               Company  may  require  written  proof of the  events in items (a)
               through  (c) and  such  proof  must  be  satisfactory  under  the
               Regulations.  The  restrictions  of this Part of the  Endorsement
               shall only apply with respect to:

<PAGE>

               (i)  Contributions  made  after  the  close of the last plan year
                    beginning  before  January  1,  1989 and  earnings  on those
                    contributions.
               (ii) Earnings  on  amounts  held as of the close of the last plan
                    year beginning January 1, 1989.
               (iii)Amounts transferred from other section 403(b) plans that are
                    subject to these restrictions, and earnings thereon.

     8.   Distributions  from this Policy shall be made in  accordance  with the
          minimum   distribution   incidental  benefit  requirement  of  section
          403(b)(10) of the Code,  including section  1.403(b)-2 of the Proposed
          Income Tax Regulations, as amended.

          Any  method  of  payment  selected  on  behalf  of the  Owner  must be
          primarily to  distribute  benefits to the Owner and not to  designated
          Beneficiaries or others.  Accordingly,  any method of payment selected
          for an Owner must be such that:  (a) the present  value of payments to
          be made to the Owner under the optional method of payment  selected is
          more  than  fifty  percent  (50%) of the  present  value of the  total
          payments  to be made to the  Owner and his  Beneficiaries;  or (b) the
          payments to the Owner begin as of his or her  retirement  with a like,
          or lesser amount, payable to the Owner's spouse if the spouse survives
          the Owner or with a like, or lesser amount, payable to another for the
          lifetime of the spouse if the spouse survives the Owner.

     9.   Distributions  from this Policy shall be made in  accordance  with the
          minimum distribution requirement of section 403(b)(10) of the Code.

          In  accordance  with  regulations  prescribed  by the Secretary of the
          Treasury or his delegate,  the entire  interest under this Policy will
          begin to be  distributed  to the Owner no later  than the first day of
          April  following  the calendar  year in which the Owner attains age 70
          1/2 (required  beginning date);  provided,  however, if this Policy is
          issued  in  connection  with a  government  or  church  sponsored  tax
          sheltered annuity plan, the required beginning date shall be the April
          1 of the calendar  year  following  the later of the calendar  year in
          which the Owner retires or attains age 70 1/2.

          Payments will be distributed in equal or  substantially  equal amounts
          and in annual or more frequent installments over:

          a.   The  Owner's  life or the lives of the Owner and his or her named
               Beneficiary; or
          b.   A period not exceeding  the Owner's life  expectancy or the joint
               and last  survivor  life  expectancy  of the Owner and his or her
               named  Beneficiary.  In  addition,  distributions  in the form of
               annuity  payments  must be  either  non-increasing  or  they  may
               increase only as provided in Q&A F-3 of section  1.401(a)(9)-1 of
               the Proposed  Income Tax  Regulations.  Any method of  settlement
               described in the Settlement Options section of the Policy, except
               for the Interest Only Election,  that satisfies these  conditions
               can  be  selected.   Distributions   subsequent  to  the  initial
               distribution  must be made prior to December  31 of the  calendar
               year. The amount to be distributed each year,  beginning with the
               first calendar year for which distributions are required and then
               for each  succeeding  calendar  year,  shall not be less than the
               quotient  obtained by dividing the Owner's  benefit by the lesser
               of:
               i)   the applicable life expectancy; or
               ii)  if the  Owner's  spouse  is not the named  Beneficiary,  the
                    applicable  divisor  determined  from the table set forth in
                    Q&A-4 of section  1.401(a)(9)-2  of the Proposed  Income Tax
                    Regulations.  Distributions  after  the  death of the  Owner
                    shall be calculated  using the applicable life expectancy as
                    the relevant  divisor  without regard to Proposed Income Tax
                    Regulations section 1.401(a)(9)-2.

               Life  expectancy  is  computed  by  use of  the  expected  return
               multiples in Tables V and VI of section  1.72-9 of the Income Tax
               Regulations.  Unless  otherwise  elected by the Owner by the time
               distributions are required to begin,  life expectancies  shall be
               recalculated annually.  Such election shall be irrevocable by the
               Owner  and  shall  apply  to  all  subsequent   years.  The  life
               expectancy of a non-spouse  Beneficiary may not be  recalculated.
               Instead,  life expectancy  will be calculated  using the attained
               age of such  Beneficiary  during the  calendar  year in which the
               Owner attains Age 70 1/2, and payments for subsequent years shall
               be calculated  based on such life  expectancy  reduced by one for
               each calendar year which has elapsed since the calendar year life
               expectancy was first calculated.

<PAGE>

               If the  amount  distributed  is less than that  required  by Code
               section  403(b)(10),  an excise tax is imposed on the Owner.  The
               excise  tax will be an amount  equal to 50% of the  excess of the
               minimum amount  required to be distributed  during the year, over
               the amount actually distributed.

               The provisions of this part of the  endorsement  shall only apply
               to benefits accruing after December 31, 1986.

     10.  Distributions  following the Owner's death shall be made in accordance
          with section 403(b)(10) of the Code.

          The Death Benefit in all cases will be paid  according to the terms of
          this provision, provided due proof of the Owner's death is received at
          the Acacia Life's Service Office.

          If the Owner dies after distribution of his interest under this Policy
          has begun,  the remaining  portion of such interest  under this Policy
          will  continue  to be  distributed  at least as  rapidly  as under the
          method of  distribution  being used prior to the Owner's death. If the
          Owner  dies  before  distribution  of his or her  interest  under this
          Policy begins,  distribution of the Owner's entire interest under this
          Policy  shall be  completed  by  December  31,  of the  calendar  year
          containing  the fifth  anniversary  of the Owners  death except to the
          extent that an election is made to receive distributions in accordance
          with (a) or (b) below:

          a)   If a primary Beneficiary is named by the Owner, then the interest
               under this  Policy will begin to be paid in  substantially  equal
               installments  over the life or over a period  certain not greater
               than the life expectancy of the primary Beneficiary commencing on
               or before December 31 of the calendar year immediately  following
               the calendar year in which the Owner died.

          b)   If the primary  Beneficiary is the Owner's surviving spouse,  the
               date  distributions  are required to begin in accordance with (a)
               above  shall not be earlier  than the later of A)  December 31 of
               the calendar  year  immediately  following  the calendar  year in
               which the Owner died or B)  December 31 of the  calendar  year in
               which the Owner  would have  attained  Age 701/2.  The  surviving
               spouse  may  accelerate  these  payments  at any  time,  such  as
               increasing  the  frequency  or  amount  of  such  payments.  Life
               expectancy is computed by use of the expected return multiples in
               Tables V and VI of section 1.72-9 of the Income Tax  Regulations.
               For purposes of distributions  beginning after the Owner's death,
               unless  otherwise  elected  by the  surviving  spouse by the time
               distributions are required to begin,  life expectancies  shall be
               recalculated annually.  Such election shall be irrevocable by the
               surviving spouse and shall apply to all subsequent  years. In the
               case of any other designated Beneficiary, life expectancy will be
               calculated using the attained age of such Beneficiary  during the
               calendar  year in  which  distributions  are  required  to  begin
               pursuant to this part, and payments for subsequent years shall be
               calculated based on such life expectancy  reduced by one for each
               calendar  year which has  elapsed  since the  calendar  year life
               expectancy was first calculated.

               Distributions  under  this part are  considered  to have begun if
               distributions  are made on  account  of the  Owner  reaching  his
               required  beginning  date or if prior to the  required  beginning
               date  distributions  irrevocably begin to the Owner over a period
               permitted  and  in  an  annuity  form  acceptable  under  section
               403(b)(10)  of the  Code,  including  section  1.403(b)-2  of the
               Proposed   Income  Tax   Regulations.   If  the  Owner   receives
               distributions  in the form of  installment  payments prior to the
               required  beginning date and the Owner dies,  distributions  will
               not be considered to have begun.

     11.  Notwithstanding  any  provisions of this Policy to the contrary,  with
          respect to distributions made after December 31, 1992, the Owner shall
          be permitted  to elect to have any  "eligible  rollover  distribution"
          transferred  directly to an "eligible  retirement plan" that the Owner
          specifies.  Policy  provisions  otherwise  applicable to distributions
          continue to apply to the direct transfer  option.  The Owner shall, in
          the time and manner  prescribed by the Company,  specify the amount to
          be directly  transferred and the "eligible retirement plan" to receive
          the transfer.  Any portion of a distribution  which is not transferred
          shall be distributed to the Owner.

          The term "eligible rollover distribution" means any distribution other
          than a distribution of substantially  equal periodic payments over the
          life or life  expectancy  of the Owner (or  joint  life or joint  life
          expectancies of the Owner and the Owner's designated Beneficiary) or a
          distribution  over a period  certain  of ten  years  or more.  Amounts
          required  to be  distributed  under  Code  section  401(a)(9)  are not
          eligible rollover distributions. The direct

<PAGE>

          transfer option applies only to eligible rollover  distributions which
          would otherwise be includible in gross income if not transferred.

          The term  "eligible  retirement  plan" means an Individual  Retirement
          Account as described in Code section 408(a), an Individual  Retirement
          Annuity  as  described  in Code  section  408(a),  or a Tax  Sheltered
          Annuity  plan or program  described  under code  section  403(b) which
          accepts rollovers.

          The  direct  rollover  or  transfer  option  applies  to  the  Owner's
          surviving  spouse after the Owner's death;  however,  distributions to
          the  surviving  spouse  may  only  be  transferred  to  an  Individual
          Retirement Account or Individual  Retirement Annuity.  For purposes of
          the direct rollover or transfer  option, a spouse or former spouse who
          is the alternate payee under a Qualified  Domestic  Relations Order as
          defined in Code section 414(p) will be treated as the Owner.

          With regard to an eligible  rollover  distribution,  the Company shall
          provide the Owner within the applicable  period a written  explanation
          of the direct rollover option.

     12.  Acacia  Life  may,  if it  becomes  necessary  under  the Code and the
          Regulations  thereunder,  discontinue acceptance of premiums as of the
          date specified by Acacia Life through a written notice to the Owner if
          the  Owner  ceases  to be  employed  by an  organization  exempt  from
          taxation  under  section  501(c)(3)  of the  Code or a  public  school
          system.  However,  the Policy shall continue in force, subject to such
          elections  as the Owner or Acacia Life may make to  terminate it under
          its provisions.

     13.  As a condition to the issuance of this Endorsement to the Policy,  the
          Owner agrees to be solely  responsible  for  complying,  in operation,
          with  the  provisions  and  limitations  of this  Endorsement  and the
          Regulations under section 403(b) of the Code and other applicable law.
          The Owner  further  agrees to provide  Acacia  Life any  documentation
          necessary in order to maintain this Policy's  compliance under section
          403(b) of the Code.

     14.  The Owner may terminate this agreement by surrendering this Policy.

     15.  This Policy is  restricted  as required by the Internal  Revenue Code,
          including  any  Regulations  or Rulings  thereto.  The Policy  will be
          considered  amended  automatically to comply with any changes required
          to maintain  compliance  with the Code or other  applicable  law.  The
          Owner agrees that he or she will surrender this Policy upon request so
          that it may be  appropriately  endorsed or written to conform with the
          above  conditions  or any  amendments  to section  403(b) of the Code.
          Acacia Life  reserves  the right to amend this  Endorsement  to comply
          with future changes in the Code and any  Regulations or Rulings issued
          under the provisions of the Code.  Acacia Life shall provide the Owner
          with a copy of any such amendment.

IN  WITNESS  WHEREOF,   Acacia  Life  has  caused  this  Tax  Sheltered  Annuity
Endorsement  to be executed as of the  Effective  Date of the Policy which it is
attached and of which it becomes a part.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          /s/ Robert Clyde

          Secretary                                     President

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                              QUALIFIED PLAN RIDER

This Rider is part of the Policy.  This Policy is issued to or  purchased by the
Trustee of a Pension or  Profit-sharing  Plan  intended to qualify under section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code").  This plan
is intended to qualify under the Internal  Revenue Code for tax favored  status.
Language  contained in this Policy referring to Federal tax statutes or rules is
informational  and instructional and this language is not subject to approval or
disapproval by the state in which the Policy is issued for delivery.

Your qualifying  status is the controlling  factor as to whether your funds will
receive tax favored  treatment  rather than the insurance  contract.  Please ask
Your tax advisor if you have any questions as to whether or not you qualify.

The following provisions apply and replace any contrary Policy provisions:

     (1)  Except as allowed by the Qualified Pension or  Profit-sharing  Plan of
          which this Policy is a part, the Policy may not be transferred,  sold,
          assigned, discounted or pledged, either as collateral for a loan or as
          security  for  the  performance  of an  obligation  or for  any  other
          purpose, to any person other than the Company.

     (2)  This Policy shall be subject to the  provisions,  terms and conditions
          of the Qualified Pension or Profit-sharing Plan of which the Policy is
          a part. Any payment,  distribution or transfer under this Policy shall
          comply  with the  provisions,  terms  and  conditions  of such Plan as
          determined by the Plan Administrator, Trustee or other designated Plan
          Fiduciary.  THE  COMPANY  SHALL BE UNDER NO  OBLIGATION  EITHER (a) TO
          DETERMINE WHETHER ANY SUCH PAYMENT,  DISTRIBUTION OR TRANSFER COMPLIES
          WITH  THE  PROVISIONS,  TERMS  AND  CONDITIONS  OF  SUCH  PLAN OR WITH
          APPLICABLE  LAW, OR (b) TO ADMINISTER  SUCH PLAN,  INCLUDING,  WITHOUT
          LIMITATION,  ANY PROVISIONS  REQUIRED BY THE RETIREMENT  EQUITY ACT OF
          1984.

     (3)  Notwithstanding  any  provision  to the contrary in this Policy or the
          Qualified  Pension or  Profit-sharing  plan of which this  Policy is a
          part, the Company reserves the right to amend or modify this Policy or
          Rider to the  extent  necessary  to comply  with any law,  regulation,
          ruling or other  requirement  deemed by the Company to be necessary to
          establish  or  maintain  the  Qualified  status  of  such  Pension  or
          Profit-sharing Plan.

Except as otherwise  set forth above,  this Rider is subject to the  exclusions,
definition, and provisions of the Policy.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          /s/ Robert Clyde

          Secretary                                     President

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                          RETIREMENT PLAN ANNUITY RIDER

This Rider is  attached  to and made a part of the Policy to qualify  the Policy
for purchase by the trustee (the  "Trustee") of a retirement  plan under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code").  Where the
provisions  of this Rider and those of the Policy  disagree,  the  provisions of
this Rider will apply.

This plan is intended to qualify under the Code for tax favored status. Language
contained  in this  Policy  referring  to  Federal  tax  statutes  or  rules  is
informational  and instructional and this language is not subject to approval or
disapproval by the state in which the Policy is issued for delivery.

Your qualifying  status is the controlling  factor as to whether your funds will
receive  tax  favored  treatment  rather  than the  Policy.  Please ask your tax
advisor if you have any questions as to whether or not you qualify.

AMENDMENTS

MATURITY DATE - The date on which the proceeds are to be paid. The Maturity Date
may not be later  than  April 1 of the  year  following  the  year in which  the
Annuitant attains age 70 1/2.

ANNUITANT - The Annuitant is the person named in the Application upon whose life
payments are based.

SUM  PAYABLE AT DEATH - In the event the sum  payable at death is payable to the
Annuitant's  surviving  spouse,  these proceeds will be paid as a monthly income
for  as  long  as the  spouse  lives,  beginning  at  the  Annuitant's  earliest
retirement age under the terms of the retirement plan (or the Annuitant's death,
if later),  unless the surviving  spouse  selects a different  method of payment
available  under this Rider.  This  selection  will be effective only when filed
with us on a form approved by us.

OWNERSHIP  - Unless and until the Trustee  assigns the Policy to the  Annuitant,
the Trustee may exercise all rights under the Policy  except as provided in this
Rider. Thereafter,  the Annuitant is the Owner and may exercise all rights under
the Policy except as provided in this Rider.

ASSIGNMENTS  - Except as permitted  by the terms of the  retirement  plan,  this
Policy may not be sold, assigned, discounted or pledged as collateral for a loan
or as security for the performance of an obligation or for any other purpose, to
any person other than us. To the extent  permitted  by law,  this Policy will be
exempt from the claims of creditors.

BENEFICIARY  -  The  Beneficiary  is  determined   according  to  the  following
provisions:

     1.   The  Beneficiary  is  the  Annuitant's  surviving  spouse  unless  the
          Annuitant  named a different  Beneficiary  with the written consent of
          the  surviving  spouse.  In order  to be  effective,  the  Annuitant's
          designation and the spouse's  consent must be filed with us, on a form
          approved by us, during the "consent period." The spouse's consent must
          acknowledge  the  effect of the  consent  and must be  witnessed  by a
          notary public or a representative of the Retirement Plan.

     2.   If  there  is  no  surviving  spouse  of  the  Annuitant,  or  if  the
          Annuitant's  spouse cannot be located,  or if IRS regulations  permit,
          the  Beneficiary  is the person(s)  named in the  Application.  In the
          event there is no  surviving  Beneficiary  of the  Annuitant,  the sum
          payable  upon the  Annuitant's  death is  payable  to the  Annuitant's
          estate.

     3.   In the event a "qualified domestic relations order" (such as a divorce
          decree)  within the meaning of Section 414(p) of the Code so requires,
          the beneficiary will be determined  according to the above provisions,
          as modified by the provisions of the order.

BENEFICIARY  CHANGE  - The  Annuitant  may  change  the  Beneficiary  while  the
Annuitant  is  alive.  To do this,  send a  written  request  to Us.  If the new
Beneficiary is a person or entity other than the Annuitant's spouse, also send a
spousal  consent  that  satisfies  the above  requirements.  When  recorded  and
acknowledged,  the change will be effective as of the date the Annuitant and the
Annuitant's spouse, if applicable, signed the request. The change will not apply
to any payments made or other action taken by us before recording.

<PAGE>

OPTIONAL  METHODS  FOR  PAYMENT OF POLICY  PROCEEDS - SPECIAL  CONDITIONS  - The
method of payment for Policy proceeds (other than proceeds  payable by reason of
the Annuitant's death) is determined according to the following provisions:

     1.   If the Annuitant is married on the Maturity Date, the proceeds will be
          paid  under a joint and 50%  contingent  survivor  method of  payment,
          unless, during the "consent period," the Annuitant selects a different
          method of payment  available under this Rider with the written consent
          of the Annuitant's  spouse. In order to be effective,  the Annuitant's
          selection  and the  spouse's  consent  must be filed with Our  Service
          Office,  on a form  approved  by Us during  the  consent  period.  The
          "consent  period"  begins 90 days before the Maturity date and ends on
          the day before payment begins.  The spouse's  consent must acknowledge
          the effect of the consent and must be witnessed by a notary  public or
          a representative of the Retirement Plan.

          Under the joint and 50%  contingent  survivor  method of payment,  the
          Proceeds will be paid to the Annuitant as a monthly income for as long
          as the Annuitant  lives. If the Annuitant's  spouse as of the Maturity
          Date survives the Annuitant,  the monthly  payments will reduce to 50%
          of the initial  amount and  continue to be paid to this spouse as long
          as this spouse lives.

          The Annuitant may change to another method of payment  available under
          this Rider during the  "consent  period." If the change is to a method
          of payment other than the joint and 50% contingent  survivor method of
          payment, send a written request, with a spousal consent that satisfies
          the  above  requirements,  to us.  The  change  will not  apply to any
          payments or other action taken by Us before recording.

     2.   If the Annuitant is not married on the Maturity Date, or if the spouse
          cannot  be  located,  or if  IRS  regulations  otherwise  permit,  the
          proceeds will be paid to the Annuitant as a monthly income for as long
          as the Annuitant lives,  with no guaranteed  period or amount,  unless
          the Annuitant  selects a different  method of payment  available under
          this Rider. In order to be effective,  the Annuitant's  selection must
          be filed  with us,  on a form  approved  by us,  during  the  "consent
          period." The "consent  period" begins 90 days before the maturity date
          and ends on the day before payments begin. The Annuitant may change to
          another  method of  payment  available  under  this  Rider  during the
          "consent period." To do this, send a written request to us. The change
          will not apply to any payments made or other action taken by us before
          recording.

     3.   In the event a "qualified domestic relations order" (such as a divorce
          decree) within the meaning of Section  414(p) of the Internal  Revenue
          Code so required,  the method of payment will be determined  according
          to the above provisions, as modified by the provisions of the order.

     4.   In the event a married Annuitant elects to withdraw any part or all of
          the  Surrender  Value of the Policy  before  the  Maturity  Date,  the
          Annuitant  must  obtain the  consent of the  Annuitant's  spouse.  The
          spouse's  consent must be filed with us, on a form approved by us, and
          must  acknowledge  the effect of the  consent  and be  witnessed  by a
          notary public or a representative  of the Retirement Plan. The methods
          of payment  available  under this Rider are:  joint and 50% contingent
          survivor,   joint  and  50%  survivor,   lifetime  income  (without  a
          guaranteed period or amount), lifetime income with a guaranteed amount
          equal  to  the  Policy's  accumulation  value  on the  Maturity  Date,
          lifetime income with a 10-year guaranteed  period,  lump-sum and, upon
          request and if available, other lifetime income methods of payment. No
          less than 30 days and no more that 90 days before the  Maturity  Date,
          we will send a written  notice  explaining  these  methods  of payment
          (together  with election and consent  forms) to the  Annuitant's  last
          known address.  This written notice will also explain the  Annuitant's
          right to select a method  of  payment,  the  right to the  Annuitant's
          spouse to consent  to any  method of payment  other than the joint and
          50% contingent survivor method, the right of the Annuitant's to revoke
          a selection and the effect of the revocation.

DIRECT  ROLLOVER  - If  this  Policy  has  been  assigned  by the  Trustee  to a
Distributee, the Distributee may elect, at the time and in the manner prescribed
by Us, to have any portion of an Eligible Rollover Distribution paid directly to
an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

     1.   An "Eligible Rollover  Distribution" is any distribution of all or any
          portion of the balance to the credit of the  Distributee,  except that
          an  Eligible  Rollover   Distribution   does  not  include:   (a)  any
          distribution  that is one of a series of substantially  equal periodic
          payments (not less  frequently  than  annually) made for life (or life
          expectancy)  of the  Distributee  or the joint  lives  (or joint  life
          expectancies) of the Distributee and the Distributees Beneficiary,  or
          for a

<PAGE>

          specified  period of ten years or more;  (b) any  distribution  to the
          extent such  distribution  is required under Section  401(a)(9) of the
          Code; and (c) the portion of any  distribution  that is not includible
          in gross income.

     2.   An "Eligible  Retirement  Plan" is an  individual  retirement  account
          described  in Section  408(a) of the Code,  an  individual  retirement
          annuity  described  in Section  408(b) of the Code,  an  annuity  plan
          described  in  Section  403(a)  of  the  Code,  or a  qualified  trust
          described in Section 401(a) of the Code, that accepts the Distributees
          Eligible Rollover  Distribution.  However,  in the case of an Eligible
          Rollover  Distribution to the surviving spouse, an Eligible Retirement
          Plan is an  individual  retirement  account or  individual  retirement
          annuity.

     3.   A  "Distributee"  includes (a) the  Annuitant,  and (b) the Annuitants
          surviving  spouse or former spouse who is the alternate  payee under a
          qualified  domestic  relations  order, as defined in Section 414(p) of
          the Code, with regard to the interest of the spouse or former spouse.

     4.   A "Direct Rollover" is a payment by Us to the Eligible Retirement Plan
          specified by the  Distributee.  This provision shall be interpreted in
          accordance   with  Code  Section   401(a)(31)   and  the   regulations
          thereunder.

ANNUITY  OPTIONS - The annuity  options  available  to the  Annuitant  shall not
extend beyond the following period [(a) and (c) or (b) and (d) may be combined]:
a. the  life of the  Annuitant;  b.  the  joint  lives  of the  Annuitant  and a
designated individual Beneficiary;  c. a period certain not longer than the life
expectancy of the Annuitant;  d. a period certain not longer than the joint life
and survivor life  expectancies  of the  Annuitant  and a designated  individual
Beneficiary.

REQUIRED  DISTRIBUTION - If the Annuitants  entire interest is to be distributed
in other than a lump sum, then the minimum  amount to be  distributed  each year
(commencing  with the calendar  year  following  the calendar  year in which the
Annuitant  attains age 70 1/2 and each year  thereafter)  shall be determined in
accordance with Code Section 401(a)(9) and the regulations thereunder, including
the incidental death benefit  requirements of Section  401(a)(9)(G) of the Code,
the regulations  thereunder,  and the minimum  distribution  incidental  benefit
requirement of Proposed Income Tax Regulation  section  1.401(a)(9)-2.  Payments
must be either nonincreasing or may increase only as provided in Proposed Income
Tax Regulation section 1.401(a)(9)-1, Q&A F-3.

If the Annuitant  dies on or after the Maturity Date and before all the proceeds
have been paid, any proceeds remaining will be paid at least as rapidly as under
the method for payment in effect at the time of the Annuitant's death.

If the payment of proceeds has not begun prior to the Annuitants  death, all the
proceeds must  generally be paid within five years after the date of death.  The
five-year rule does not apply to the portion of proceeds which:

     1.   is  payable  to  or  for  the  benefit  of  a  designated   individual
          beneficiary; and

     2.   will be paid over the lifetime of that Beneficiary;

so long as payment  begins  not later  than  December  31 of the  calendar  year
immediately following the calendar year of the Annuitant's death.

In addition,  the five-year  rule does not apply to that portion of the proceeds
which:

     1.   is  payable  to  or  for  the  benefit  of  a  designated   individual
          Beneficiary who is the surviving spouse; and

     2.   will be paid over the lifetime of the surviving spouse;

so long as payment  begins not later than the date on which the Annuitant  would
have  attained age 70 1/2.  Any portion of the  proceeds  paid to a child of the
Annuitant will be treated as if paid to the surviving spouse of the remainder of
the proceeds is payable to the  surviving  spouse when the child reaches the age
of majority.

If  the  Annuitant's  spouse  is  not  the  named  Beneficiary,  the  method  of
distribution  selected will assure that at least 50% of the present value of the
amount available for distribution is paid within the Annuitants life expectancy.

For purposes of the foregoing  provisions,  life  expectancy  and joint and last
survivor  expectancy shall be determined by use of the expected return multiples
in Treasury  Regulation 1.72-9 in accordance with Code Section 401(a)(9) and the
regulations  thereunder.  Unless the Annuitant  (or his spouse) elect  otherwise
prior to the time distributions are required to commence, the

<PAGE>

Annuitant's  life  expectancy and, if applicable,  the  Annuitant's  spouse life
expectancy will be recalculated  annually based on the Annuitants  attained ages
in the year for which the required  distribution is being  determined.  The life
expectancy of a non-spouse Beneficiary will not be recalculated.

The annual  distribution  required  to be made by the  Maturity  Date is for the
calendar year in which the  Annuitant  reached age 70 1/2.  Annual  payments for
subsequent years,  including the year in which the Maturity Date occurs, must be
made by December  31 of that year.  The amount  distributed  for each year shall
equal or exceed the Policy Account Value as of the close of business on December
31 of the preceding year, divided by the applicable life expectancy or joint and
last survivor expectancy.

This  provision  shall not affect any option  elected during the lifetime of the
Annuitant under which payments have commenced during the Annuitant's lifetime to
continue for a period not extending  beyond the life expectancy of the Annuitant
or the Annuitant and designated individual Beneficiary.

ADMINISTRATION - We may rely on information  submitted by the Annuitant or other
appropriate  person to determine whether an Annuitant is married as of any date.
We will not be required at any time to determine the validity of any marriage or
the effectiveness of any common law  relationship.  We may require the Annuitant
or other  appropriate  person to  provide  an  affidavit  or other  satisfactory
evidence as to the Annuitant's  marital status or as to any other fact needed to
administer this Rider. The Annuitant or other  appropriate  party is responsible
for  providing  us with a copy of any  domestic  relations  order to  which  the
Annuitant is a party.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          /s/ Robert Clyde

          Secretary                                     President

<PAGE>

                          ACACIA LIFE INSURANCE COMPANY

                  ENDORSEMENT FOR ACACIA LIFE INSURANCE COMPANY
                  (ACACIA LIFE) - QUALIFIED PLAN POLICY LOANS

THIS ENDORSEMENT FORMS PART OF THE POLICY TO WHICH IT IS ATTACHED.

THE  ERISA  RULES  RELATING  TO LOANS  ARE  COMPLEX  AND VARY  DEPENDING  ON THE
INDIVIDUAL  CIRCUMSTANCES OF EACH POLICY. PLEASE BE SURE TO CHECK WITH YOUR PLAN
ADMINISTRATOR FOR COMPLETE INFORMATION. EMPLOYERS AND OWNERS SHOULD CONSULT WITH
QUALIFIED ADVISERS BEFORE EXERCISING THE LOAN PRIVILEGES.

1.   ELIGIBILITY - An Owner of a Policy  issued in connection  with a Retirement
     Plan that is Qualified under Section 401 or 403(b) of the Internal  Revenue
     Code (but not Section 408) may request a Loan from Acacia  Life,  using his
     or her Policy Account Value as the only security for the Loan by submitting
     a proper  written  request to Acacia Life's Service  Office,  provided that
     Loans are permitted by the  Participant's  Plan. No other Policy Owners may
     borrow  against the  Policy.  These  Loans are  subject to  conditions  and
     requirements  of the  Employee  Retirement  Income  Security  Act  of  1974
     ("ERISA"),  as well as the terms of any Retirement  Plan in connection with
     which the Policy has been purchased.

2.   LOAN AMOUNT - A Loan may be taken by eligible  Owners at any time after the
     first  Policy year while the  Annuitant  is living and before the  Maturity
     Date. The minimum Loan that can be taken at any time is $1,000. The maximum
     Loan  that  can be taken at any time is the  amount  that  produces  a Loan
     balance immediately after the Loan that is the lesser of 50% of the Owner's
     Policy  Account  Value or  $50,000  reduced  by the  excess (if any) of the
     highest  outstanding  Loan  balance  within the  preceding  12 month period
     ending on the date the Loan is made.  Reference should be made to the terms
     of the particular  Qualified Plan for any additional Loan restrictions.  At
     any time a new Loan is made,  the sum of all prior Loans and Loan  interest
     outstanding,  when added to the current  Loan  applied  for, may not exceed
     that limit.

3.   ALLOCATION  OF POLICY LOAN - An Owner may  allocate a Policy Loan among the
     Fixed  Account and the  Sub-accounts  of the  Variable  Account  which have
     Policy  Account  Value.  If no such  allocation  is made,  Acacia Life will
     allocate the Loan to the Fixed  Account and among the  Sub-accounts  in the
     same  proportion  that the value in each  Sub-account  bears to the  Policy
     Account Value less  indebtedness at the end of the Valuation  Period during
     which the request is received.  Proceeds of the Loan will  normally be paid
     within seven days after receipt of a written request. Postponement of Loans
     may take place under certain circumstances.  (See, Postponement of Payments
     in Policy).

4.   EFFECT OF POLICY LOAN - We will transfer Policy Account Value in the amount
     of the loan to the Loan Account from the Fixed Account and  Sub-accounts in
     the same  proportion  that each account  bears to the Policy  Account Value
     less  indebtedness  at the end of the  Valuation  Period  during  which the
     request  is  received,  reducing  the value in the Fixed  Account  and each
     Sub-account.  The Loan Account is part of the General Account to be used as
     collateral  for any  Policy  Loan.  No  charge  will be  imposed  for these
     transfers.

     While the amount to secure the loan is held in the Loan Account,  the Owner
     forgoes  the  investment  experience  of the  Sub-accounts  and the current
     interest rate of the Fixed Account on the loaned amount. Outstanding Policy
     Debt will reduce the amount of Accumulated Value paid upon full withdrawal,
     upon  payment  of a death  benefit  or upon  the  Owner's  exercise  of the
     Free-Look right.

5.   INTEREST RATES - Acacia Life will charge interest on any outstanding Policy
     Loan.  The  interest  rate charged on Policy Loans is 6%. Value in the Loan
     Account  equal to  indebtedness  will be credited  with  interest at 4% per
     year. NO ADDITIONAL  INTEREST WILL BE CREDITED TO THIS VALUE.  The interest
     earned  will be credited no less  frequently  than once each Policy  month.
     Upon repayment of indebtedness, the portion of the repayment allocated to a
     Sub-account in accordance with the repayment of indebtedness provision will
     be  transferred  to  the   Sub-account  and  increase  the  value  in  that
     Sub-account.

6.   REPAYMENT  OF LOANS - Loan must be repaid  with five years (20 years if the
     Owner  certifies  to Acacia  Life that the Loan is to be used to  acquire a
     principal  residence for the  Annuitant).  Loan  repayments must be made at
     least quarterly.  Loans not repaid within the required time periods will be
     subject to taxation as distributions from the Policy. Loans may

<PAGE>

     be  prepaid  at any time  before  the  Maturity  Date.  Repayments  of Loan
     principal  plus  accrued  interest  will be due on the  Policy's  Quarterly
     Anniversary.  Repayment  must be received at Acacia Life's  Service  Office
     before the end of the last day of the next calendar quarter after which the
     payment is due. If the  repayment  is not  received  before the end of such
     calendar  quarter,  the loan will be in  default  and a partial  withdrawal
     equal to the entire  defaulted  Loan balance and any  applicable  Surrender
     Charge  will  be  made  from  the  Policy  and  paid to  Acacia  Life.  The
     outstanding balance will be deducted first 100% to the Policy Account Value
     in the Loan Account and then among the accounts in the same proportion that
     the value in the Fixed  Account  and each  Sub-account  bears to the Policy
     Account Value less  indebtedness at the end of the Valuation Period. In the
     event of a default, the entire Policy Account Value (not just the defaulted
     amount) may be subject to taxation as a distribution.

     Prepayment of the entire  outstanding  Policy Debt may be made. At the time
     of the prepayment, the Policy Owner will be billed for any interest due and
     unpaid.  The Loan will be  considered  paid when the  interest  due is also
     paid.

     Unless  otherwise   requested  by  an  Owner,  a  Loan  repayment  will  be
     transferred  into the Sub-accounts and the Fixed Account in accordance with
     Your most recent allocation instructions.

7.   ADDITIONAL  ERISA  RESTRICTIONS - Before we will make a Loan under an ERISA
     governed plan:

          a.   The Policy  Owner's  spouse,  if any, must consent to the Loan in
               the form and manner specified by ERISA; and

          b.   The administrator of the plan must certify in writing,  in a form
               acceptable  to  us,  that  the   requirements  of  ERISA  Section
               408(b)(1) and the regulations thereunder have been satisfied.

     We reserve the right to impose  other terms and  conditions  on Loans as we
     determine necessary or appropriate to satisfy applicable law.

8.   LIMITATION  ON LOANS FOR POLICIES USED WITH  QUALIFIED  PLANS - This Policy
     may be used with several types of Qualified Plans. The tax rules applicable
     to  participants in such Qualified Plans vary according to the type of plan
     and terms and conditions thereof. Owners, Annuitants, and Beneficiaries are
     cautioned  that the rights of any  person to any  benefits  including  loan
     privileges  may be  subject  to  the  terms  and  conditions  of the  plans
     themselves  or limited by  applicable  law  regardless  of the terms of the
     Policy and Riders issued in connection with the plans.

THE  POLICY AND RIDERS  ARE  SUBJECT  TO THE TERMS AND  CONDITIONS  OF THE PLANS
THEMSELVES OR MAY BE LIMITED BY APPLICABLE  LAW,  REGARDLESS OF THE TERMS OF THE
POLICY OR RIDERS  THERETO,  WHERE THERE IS A CONFLICT  BETWEEN  (1)THE TERMS AND
CONDITIONS OF THE PLANS AND/OR APPLICABLE LAW AND (2) THE POLICY AND RIDERS, THE
FORMER SHALL CONTROL AND THE CONFLICTING POLICY OR RIDER PROVISION SHALL BE NULL
AND VOID.

                          ACACIA LIFE INSURANCE COMPANY

   /s/ Robert John H. Sands                          --

          Secretary                                     President

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