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					Prospectus – May 1, 2002


                                   Variable Universal
                                   Life Insurance
                                   Pruco Life Variable
                                   Appreciable Account




                                                         ®




    Pruco Life Insurance Company
               The Prudential Variable Appreciable Account
                                          with respect to

                        Variable Appreciable Life Contracts
                         Variable Universal Life Contracts
                   Survivorship Variable Universal Life Contracts


The Report of Independent Accountants on Page B-41 of the prospectus for the above-mentioned
Prudential contracts is hereby amended to include the signature of PricewaterhouseCoopers, LLP,
and now reads as follows:


                         REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder of
The Prudential Insurance Company of America

In our opinion, the accompanying consolidated statements of financial position and the related
consolidated statements of operations, of stockholder’s equity and of cash flows present fairly, in
all material respects, the financial position of The Prudential Insurance Company of America and
its subsidiaries at December 31, 2001 and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company’s management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.


PricewaterhouseCoopers LLP
New York, New York
February 12, 2002




RIASUP Ed. 8-2002
PROSPECTUS
May 1, 2002

PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT




Variable Universal Life
This prospectus describes an individual flexible premium variable universal life insurance contract (the "Contract")
offered by Pruco Life Insurance Company ("Pruco Life," "us," "we," or "our"). The Contract provides life insurance
coverage with flexible premium payments.

As of December 12, 2001, Pruco Life no longer offered these Contracts for sale.

Investment Choices:

Variable Universal Life offers a wide variety of investment choices, including 35 variable investment options that invest
in mutual funds managed by these leading asset managers:

•   Prudential Investments LLC
•   A I M Advisors, Inc.
•   American Century Investment Management, Inc.
•   Janus Capital Management LLC
•   MFS Investment Management7
•   T. Rowe Price International, Inc.

For a complete list of the 35 available variable investment options and their investment objectives, see The Funds,
page 7.

You may also choose to invest your Contract’s premiums and its earnings in the fixed-rate option which pays a
guaranteed interest rate. See The Fixed-Rate Option, page 12.

This prospectus describes the Contract generally and the Pruco Life Variable Appreciable Account (the "Account").
The attached prospectuses for the Funds and their related statements of additional information describe the
investment objectives and the risks of investing in the Fund portfolios. Pruco Life may add additional investment
options in the future. Please read this prospectus and keep it for future reference.

The Securities and Exchange Commission ("SEC") maintains a Web site (http://www.sec.gov) that contains material
incorporated by reference and other information regarding registrants that file electronically with the SEC.

Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.

The Contract may be purchased through registered representatives located in banks and other financial
institutions. An investment in the Contract is not a bank deposit and is not insured or guaranteed by the
Federal Deposit Insurance Corporation ("FDIC") or any other governmental agency and may lose value. An
investment is also not a condition to the provision or term of any banking service or activity. The
participating bank is not a registered broker-dealer and is not affiliated with Pruco Securities Corporation.

                                               Pruco Life Insurance Company
                                                    213 Washington Street
                                               Newark, New Jersey 07102-2992
                                                 Telephone: (800) 778-2255
                                                           35263(&786 &217(176
                                                                                                                                                                            Page

DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS..............................................................................1

INTRODUCTION AND SUMMARY ...................................................................................................................................2
  Brief Description of the Contract ................................................................................................................................2
  Charges..........................................................................................................................................................................2
  Types of Death Benefit .................................................................................................................................................5
  Premium Payments.......................................................................................................................................................5
  Refund............................................................................................................................................................................6

GENERAL INFORMATION ABOUT PRUCO LIFE INSURANCE COMPANY, THE PRUCO LIFE VARIABLE
APPRECIABLE ACCOUNT, AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE
UNDER THE CONTRACT .................................................................................................................................................7
 Pruco Life Insurance Company ...................................................................................................................................7
 The Pruco Life Variable Appreciable Account...........................................................................................................7
 The Funds......................................................................................................................................................................7
 Voting Rights...............................................................................................................................................................12
 The Fixed-Rate Option ...............................................................................................................................................12
 Which Investment Option Should Be Selected?......................................................................................................13

DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS ...................................................................13
 Charges and Expenses ..............................................................................................................................................13
 Requirements for Issuance of a Contract ................................................................................................................18
 Short-Term Cancellation Right or "Free-Look" .......................................................................................................18
 Types of Death Benefit ...............................................................................................................................................18
 Changing the Type of Death Benefit .........................................................................................................................19
 Contract Date ..............................................................................................................................................................19
 Premiums.....................................................................................................................................................................19
 Allocation of Premiums..............................................................................................................................................20
 Death Benefit Guarantee ............................................................................................................................................21
 Transfers......................................................................................................................................................................22
 Dollar Cost Averaging ................................................................................................................................................23
 Auto-Rebalancing .......................................................................................................................................................23
 How a Contract’s Cash Surrender Value Will Vary..................................................................................................23
 How a Type A (Fixed) Contract’s Death Benefit Will Vary ......................................................................................24
 How a Type B (Variable) Contract’s Death Benefit Will Vary..................................................................................24
 Surrender of a Contract..............................................................................................................................................25
 Withdrawals.................................................................................................................................................................25
 Increases in Basic Insurance Amount......................................................................................................................26
 Decreases in Basic Insurance Amount ....................................................................................................................27
 When Proceeds Are Paid ...........................................................................................................................................27
 Living Needs Benefit ..................................................................................................................................................28
 Illustrations of Cash Surrender Values, Death Benefits, and Accumulated Premiums.......................................28
 Contract Loans............................................................................................................................................................30
 Sale of the Contract and Sales Commissions .........................................................................................................31
 Tax Treatment of Contract Benefits ..........................................................................................................................31
 Lapse and Reinstatement ..........................................................................................................................................33
 Legal Considerations Relating to Sex-Distinct Premiums and Benefits...............................................................33
 Other General Contract Provisions...........................................................................................................................34
 Riders...........................................................................................................................................................................34
 Substitution of Fund Shares......................................................................................................................................34
 Reports to Contract Owners ......................................................................................................................................35
 State Regulation..........................................................................................................................................................35
 Experts.........................................................................................................................................................................35
 Litigation and Regulatory Proceedings....................................................................................................................35
   Additional Information ...............................................................................................................................................36
   Financial Statements ..................................................................................................................................................36

DIRECTORS AND OFFICERS ........................................................................................................................................37

FINANCIAL STATEMENTS OF THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF THE PRUCO LIFE
VARIABLE APPRECIABLE ACCOUNT..........................................................................................................................A1

CONSOLIDATED FINANCIAL STATEMENTS OF PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES.....B1
                  '(),1,7,216 2) 63(&,$/ 7(506 86(' ,1 7+,6
                               35263(&786

accumulated net payments  The actual premium                    fixed-rate option  An investment option under which
payments you make accumulated at an effective                    interest is accrued daily at a rate that Pruco Life
annual rate of 4%, less any withdrawals you make,                declares periodically, but not less than an effective
accumulated at an effective annual rate of 4%.                   annual rate of 4%.

attained age  The insured’s age on the Contract                 Funds  Mutual funds with separate portfolios. One
date plus the number of years since then.                        or more of the available Fund portfolios may be chosen
                                                                 as an underlying investment for the Contract.
basic insurance amount  The amount of life
insurance as shown in the Contract, not including                Lifetime Death Benefit Guarantee period  The
riders. Also referred to as "face amount."                       lifetime of the Contract, during which time the Lifetime
                                                                 Death Benefit Guarantee is available if sufficient
cash surrender value  The amount payable to the                 premiums are paid. Lifetime Death Benefit Guarantee
Contract owner upon surrender of the Contract. It is             not available in Massachusetts. See Death Benefit
equal to the Contract Fund minus any Contract debt               Guarantee, page 21.
and, during the first 10 Contract years, minus the
applicable surrender charge. Also referred to in the             Limited Death Benefit Guarantee period  A period
Contract as "Net Cash Value."                                    which is determined on a case-by-case basis, during
                                                                 which time the Limited Death Benefit Guarantee is
Contract  The variable universal life insurance policy          available if sufficient premiums are paid. See Death
described in this prospectus.                                    Benefit Guarantee, page 21. The period applicable to
                                                                 your Contract is shown on the Contract data pages.
Contract anniversary  The same date as the
Contract date in each later year.                                Monthly date  The Contract date and the same date
                                                                 in each subsequent month.
Contract date  The date the Contract is effective, as
specified in the Contract.                                       Pruco Life Insurance Company  Us, we, our,
                                                                 Pruco Life. The company offering the Contract.
Contract debt  The principal amount of all
outstanding loans plus any interest accrued thereon.             separate account  Amounts under the Contract
                                                                 that are allocated to the variable investment options
Contract Fund  The total amount credited to a                   held by us in a separate account called the Pruco Life
specific Contract. On any date it is equal to the sum of         Variable Appreciable Account (the "Account"). The
the amounts in all the variable investment options and           separate account is set apart from all of the general
the fixed-rate option, and the principal amount of any           assets of Pruco Life Insurance Company.
Contract debt plus any interest earned thereon.
                                                                 valuation period  The period of time from one
Contract owner  You. Unless a different owner is                determination of the value of the amount invested in a
named in the application, the owner of the Contract is           variable investment option to the next.          Such
the insured.                                                     determinations are made when the net asset values of
                                                                 the portfolios of the Funds are calculated, which is
Contract year  A year that starts on the Contract               generally at 4:00 p.m. Eastern time on each day during
date or on a Contract anniversary. For any portion of a          which the New York Stock Exchange is open.
Contract representing an increase (see page 26),
“Contract year” is a year that starts on the effective           variable investment options  the 35 mutual funds
date of the increase.                                            available under this Contract, whose shares are held in
                                                                 the separate account.
death benefit  If the Contract is not in default, this is
the amount we will pay upon the death of the insured,            you  The owner of the Contract.
assuming no Contract debt.




                                                             1
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This Summary provides a brief overview of the more significant aspects of the Contract. We provide further detail in
the subsequent sections of this prospectus and in the Contract.

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As of December 12, 2001, Pruco Life no longer offered these Contracts for sale.

The Contract is a form of variable universal life insurance. It is based on a Contract Fund, the value of which changes
every day. The chart below describes how the value of your Contract Fund changes.

A broad objective of the Contract is to provide benefits that will increase in value if favorable investment results are
achieved. You may invest premiums in one or more of the 35 available variable investment options (in states where
they are approved) or in the fixed-rate option. Your Contract Fund value changes every day depending upon the
change in the value of the particular investment options that you have selected.

Although the value of your Contract Fund will increase if there is favorable investment performance in the variable
investment options you select, investment returns in the variable investment options are NOT guaranteed. There is a
risk that investment performance will be unfavorable and that the value of your Contract Fund will decrease. The risk
will be different, depending upon which investment options you choose. See Which Investment Option Should Be
Selected?, page 13. If you select the fixed-rate option, Pruco Life credits your account with a declared rate or rates of
interest but you assume the risk that the rate may change, although it will never be lower than an effective annual rate
of 4%.

Variable life insurance contracts are unsuitable as short-term savings vehicles. Withdrawals and loans will negate any
guarantee against lapse and may result in adverse tax consequences. See Death Benefit Guarantee, page 21, and
Tax Treatment of Contract Benefits, page 31.

The replacement of life insurance is generally not in your best interest. In most cases, if you require
additional coverage, the benefits of your existing contract can be protected by purchasing additional
insurance or a supplemental contract. If you are considering replacing a contract, you should compare the
benefits and costs of supplementing your existing contract with the benefits and costs of purchasing the
Contract described in this prospectus and you should consult with a qualified tax adviser.

This prospectus may only be offered in jurisdictions in which the offering is lawful. No person is authorized
to make any representations in connection with this offering other than those contained in this prospectus
and in the prospectuses and statements of additional information for the Funds.

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The following chart outlines the components of your Contract Fund and the adjustments which may be made including
the maximum charges which may be deducted from each premium payment and from the amounts held in the
designated investment options. These charges are largely designed to cover insurance costs and risks as well as
sales and administrative expenses.

The maximum charges shown in the chart, as well as the current lower charges, are fully described under Charges
and Expenses, page 13.




                                                             2
                                   3UHPLXP 3D\PHQW

                      •   less a charge of up to 7.5% of the premiums paid for
                          taxes attributable to premiums. In Oregon this is
                          called a premium based administrative charge.
                      •   less a charge for sales expenses of up to 4% of the
                          premiums paid.


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                To be invested in one or a combination of:
                    • 35 variable investment options
                    • The fixed-rate option


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     On the Contract Date, the Contract Fund is equal to the invested premium amount
     minus any of the charges described below which may be due on that date. Thereafter,
     the value of the Contract Fund changes daily.


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•   Addition of any new invested premium amounts.
•   Addition of any increase due to investment results of the chosen variable investment options.
•   Addition of guaranteed interest at an effective annual rate of 4% (plus any excess interest if
    applicable) on the portion of the Contract Fund allocated to the fixed-rate option.
•   Addition of guaranteed interest at an effective annual rate of 4% on the amount of any
    Contract loan. (Separately, interest charged on the loan accrues at an effective annual rate of
    4.5% or 5%. See Contract Loans, page 30.)
•   Subtraction of any decrease due to investment results of the chosen variable investment
    options.
•   Subtraction of any amount withdrawn.
•   Subtraction of the charges listed below, as applicable.


                                      'DLO\ &KDUJHV
•   Management fees and expenses are deducted from the Fund assets. See Underlying
    Portfolio Expenses chart, below.
•   We deduct a daily mortality and expense risk charge, equivalent to an annual rate of up to
    0.9%, from the assets in the variable investment options.


                                    0RQWKO\ &KDUJHV
•   We reduce the Contract Fund by a monthly administrative charge of up to $10 plus $0.07 per
    $1,000 ($10 plus $0.08 per $1,000 in Massachusetts) of the basic insurance amount; after the
    first Contract year, the $0.07 per $1,000 ($0.08 per $1,000 in Massachusetts) portion of the
    charge is reduced to $0.01 per $1,000 ($0.02 per $1,000 in Massachusetts) of the basic
    insurance amount.
•   We deduct a cost of insurance ("COI") charge.
•   We reduce the Contract Fund by a Death Benefit Guarantee risk charge of $0.01 per $1,000
    of the basic insurance amount (not applicable in Massachusetts).
•   If the Contract includes riders, we deduct rider charges from the Contract Fund.
•   If the rating class of an insured results in an extra charge, we will deduct that charge from the
    Contract Fund.




                                                   3
                             3RVVLEOH $GGLWLRQDO &KDUJHV
 •   During the first 10 Contract years, we will assess a contingent deferred sales charge if the
     Contract lapses, is surrendered, or the basic insurance amount is decreased (including as a
     result of a withdrawal or a death benefit type change). For insureds age 76 or less at issue,
     the maximum contingent deferred sales charge is 26% of the lesser of the target level
     premium or the actual premiums paid (see Premiums, page 19) for the Contract. The charge
     is level for six years and then declines monthly to zero at the end of the 10th Contract year.
     For insureds age 77 or over at issue, the maximum charge will be a lesser percentage of the
     target level premium for the Contract or the actual premiums paid.
 •   During the first 10 Contract years, we will assess a contingent deferred administrative charge
     if the Contract lapses, is surrendered or the basic insurance amount is decreased (including
     as a result of a withdrawal or a death benefit type change). This charge equals the lesser of:
     (a) $5 per $1,000 of basic insurance amount; and (b) $500. It is level for six years and then
                                                                th
     declines monthly until it reaches zero at the end of the 10 Contract year.
 •   We assess an administrative charge of up to $25 for any withdrawals.
 •   We may assess an administrative charge of up to $25 for any change in basic insurance
     amount.
 •   We assess an administrative charge of up to $25 for each transfer exceeding 12 in any
     Contract year.


                           8QGHUO\LQJ 3RUWIROLR ([SHQVHV

                                                Investment        Other     Total    Total Actual
     The Prudential Series Fund, Inc.                                    Contractual Expenses*
                                                 Advisory       Expenses
               Portfolios                                                 Expenses
                                                   Fees

 Conservative Balanced                              0.55%         0.03%            0.58%   0.58%
  Diversified Bond                                  0.40%         0.04%            0.44%   0.44%
  Equity                                            0.45%         0.04%            0.49%   0.49%
  Flexible Managed                                  0.60%         0.04%            0.64%   0.64%
  Global                                            0.75%         0.09%            0.84%   0.84%
  High Yield Bond                                   0.55%         0.05%            0.60%   0.60%
  Jennison                                          0.60%         0.04%            0.64%   0.64%
  Money Market                                      0.40%         0.03%            0.43%   0.43%
  Stock Index                                       0.35%         0.04%            0.39%   0.39%
  Value                                             0.40%         0.04%            0.44%   0.44%
  SP Aggressive Growth Asset Allocation (1)         0.84%         0.90%            1.74%   1.04%
  SP AIM Aggressive Growth                          0.95%         2.50%            3.45%   1.07%
  SP AIM Core Equity                                0.85%         1.70%            2.55%   1.00%
  SP Alliance Large Cap Growth                      0.90%         0.67%            1.57%   1.10%
  SP Alliance Technology                            1.15%         2.01%            3.16%   1.30%
  SP Balanced Asset Allocation (1)                  0.75%         0.52%            1.27%   0.92%
  SP Conservative Asset Allocation (1)              0.71%         0.35%            1.06%   0.87%
  SP Davis Value                                    0.75%         0.28%            1.03%   0.83%
  SP Deutsche International Equity                  0.90%         2.37%            3.27%   1.10%
  SP Growth Asset Allocation (1)                    0.80%         0.66%            1.46%   0.97%
  SP INVESCO Small Company Growth                   0.95%         1.89%            2.84%   1.15%
  SP Jennison International Growth                  0.85%         1.01%            1.86%   1.24%
  SP Large Cap Value                                0.80%         1.18%            1.98%   0.90%
  SP MFS Capital Opportunities                      0.75%         2.29%            3.04%   1.00%
  SP MFS Mid-Cap Growth                             0.80%         1.31%            2.11%   1.00%
  SP PIMCO High Yield                               0.60%         0.48%            1.08%   0.82%
  SP PIMCO Total Return                             0.60%         0.22%            0.82%   0.76%
  SP Prudential U.S. Emerging Growth                0.60%         0.81%            1.41%   0.90%
  SP Small/Mid Cap Value                            0.90%         0.66%            1.56%   1.05%
  SP Strategic Partners Focused Growth              0.90%         1.71%            2.61%   1.01%
* Reflects fee waivers, reimbursement of expenses, and expense reductions, if any.


                                                       4
                                      8QGHUO\LQJ 3RUWIROLR ([SHQVHV
                                                             Investment        Other           Total          Total
                           Portfolios                         Advisory                      Contractual       Actual
                                                                             Expenses
                                                                Fees                         Expenses       Expenses*
      AIM Variable Insurance Funds
      AIM V.I. Premier Equity Fund - Series I shares            0.60%          0.25%           0.85%           0.85%
      American Century Variable Portfolios, Inc. (2)
      VP Value Fund                                             0.97%          0.00%           0.97%           0.97%
      Janus Aspen Series (3)
       Growth Portfolio - Institutional Shares                  0.65%          0.01%           0.66%           0.66%
           7                            K
      MFS Variable Insurance Trust (4)
      Emerging Growth Series                                    0.75%          0.12%           0.87%           0.86%
      T. Rowe Price International Series, Inc. (5)
      International Stock Portfolio                             1.05%          0.00%           1.05%           1.05%
      * Reflects fee waivers, reimbursement of expenses, and expense reductions, if any.
  (1) Prudential Series Fund, Inc.
      Each Asset Allocation Portfolio invests shares in other Fund Portfolios. The Advisory Fees for the Asset Allocation
      Portfolios are the product of a blend of the Advisory Fees of those other Fund Portfolios, plus a 0.05% annual advisory fee
      payable to PI.
  (2) American Century Variable Portfolios, Inc.
      The “Investment Advisory Fees” include ordinary expenses of managing and operating the Fund, except brokerage
      expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary
      expenses. The Fund has a stepped fee schedule. As a result, the Fund’s management fee rate decreases as the Fund’s
      assets increase.
  (3) Janus Aspen Series
      The table reflects expenses for the fiscal year ended December 31, 2001. All expenses are shown without the effect of any
      offset arrangements.
           ®                            SM
  (4) MFS Variable Insurance Trust
      An expense offset arrangement with the Fund’s custodian resulted in a reduction in “Other Expenses” by 0.01% and is
      reflected in the “Total Actual Expenses.”
  (5) T. Rowe Price International Series, Inc.
      The “Investment Advisory Fees” include ordinary recurring operating expenses of the Funds.

The expenses relating to the Funds (other than those of the Series Fund) have been provided to Pruco Life by
the Funds. Pruco Life has not independently verified them.

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There are two types of death benefit available. You may choose a Contract with a Type A (fixed) death benefit under
which the cash surrender value varies daily with investment experience, and the death benefit generally remains at the
basic insurance amount you initially chose. However, the Contract Fund may grow to a point where the death benefit
may increase and vary with investment experience. If you choose a Contract with a Type B (variable) death benefit,
the cash surrender value and the death benefit both vary with investment experience. For either type of death benefit,
as long as the Contract is in-force, the death benefit will never be less than the basic insurance amount shown in your
Contract. See Types of Death Benefit, page 18.

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The Contract is a flexible premium contract – there are no scheduled premiums. Except for the minimum initial
premium, and subject to a minimum of $25 per subsequent payment, you choose the timing and amount of premium
payments. The Contract will remain in-force if the Contract Fund less any applicable surrender charges is greater than
zero and more than any Contract debt. Paying insufficient premiums, poor investment results, or the taking of loans or
withdrawals from the Contract will increase the possibility that the Contract will lapse. However, if the accumulated
premiums you pay are high enough, and Contract debt does not equal or exceed the Contract Fund less any
applicable surrender charges, Pruco Life guarantees that your Contract will not lapse even if investment experience is
very unfavorable and the Contract Fund drops below zero. Each Contract generally provides two guarantees, one that
lasts for the lifetime of the Contract and another that lasts for a stated, reasonably lengthy period. The guarantee for
                                                                 5
the life of the Contract requires higher premium payments. In Massachusetts, only one death benefit guarantee is
available. The length of this death benefit guarantee is generally five Contract years, however, for some Contracts, it
may be shorter. See Premiums, page 19, Death Benefit Guarantee, page 21 and Lapse and Reinstatement, page
33.

We offer and suggest regular billing of premiums even though you decide when to make premium payments and,
subject to a $25 minimum, in what amounts. You should discuss your billing options with your Pruco Life
representative when you apply for the Contract. See Premiums, page 19.

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For a limited time, you may return your Contract for a refund in accordance with the terms of its "Free-Look" provision.
See Short-Term Cancellation Right or "Free-Look," page 18.

For the DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS, see page 1.




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Pruco Life Insurance Company ("Pruco Life") is a stock life insurance company, organized in 1971 under the laws of
the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam, and in all
states except New York.

Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"), a New Jersey
stock life insurance company that has been doing business since 1875. Prudential is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey insurance holding company. As Pruco
Life’s ultimate parent, Prudential Financial exercises significant influence over the operations and capital structure of
Pruco Life and Prudential. However, neither Prudential Financial, Prudential, nor any other related company has any
legal responsibility to pay amounts that Pruco Life may owe under the contract or policy.

Pruco Life's consolidated financial statements begin on page B1 and should be considered only as bearing upon Pruco
Life's ability to meet its obligations under the Contracts.

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We have established a separate account, the Pruco Life Variable Appreciable Account (the "Account") to hold the
assets that are associated with the Contracts. The Account was established on January 13, 1984 under Arizona law
and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940
as a unit investment trust, which is a type of investment company. The Account meets the definition of a "separate
account" under the federal securities laws. The Account holds assets that are segregated from all of Pruco Life's other
assets.

Pruco Life is the legal owner of the assets in the Account. Pruco Life will maintain assets in the Account with a total
market value at least equal to the reserve and other liabilities relating to the variable benefits attributable to the
Account. These assets may not be charged with liabilities which arise from any other business Pruco Life conducts. In
addition to these assets, the Account's assets may include funds contributed by Pruco Life to commence operation of
the Account and may include accumulations of the charges Pruco Life makes against the Account. From time to time
these additional assets will be transferred to Pruco Life's general account. Pruco Life will consider any possible
adverse impact the transfer might have on the Account before making any such transfer.

The obligations to Contract owners and beneficiaries arising under the Contracts are general corporate obligations of
Pruco Life.

Currently, in states where they are approved, you may invest in one or a combination of 35 available variable
investment options. When you choose a variable investment option, we purchase shares of a mutual fund which are
held as an investment for that option. We hold these shares in the separate account. The division of the separate
account of Pruco Life that invests in a particular mutual fund is referred to in your Contract as the subaccount. Pruco
Life may add additional variable investment options in the future. The Account's financial statements begin on page
A1.

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Listed below are the mutual funds (the “Funds”) in which the variable investment options invest, the investment
objectives, and investment advisers.

Each Fund has a separate prospectus that is provided with this prospectus. You should read the Fund
prospectus before you decide to allocate assets to the variable investment option using that Fund. There is
no assurance that the investment objectives of the Funds will be met.

                                                           7
The Prudential Series Fund, Inc. (the "Series Fund"):

•   Conservative Balanced Portfolio: The investment objective is a total investment return consistent with a
    conservatively managed diversified portfolio. The Portfolio invests in a mix of equity securities, debt obligations
    and money market instruments.

•   Diversified Bond Portfolio: The investment objective is a high level of income over a longer term while providing
    reasonable safety of capital. The Portfolio normally invests at least 80% of its investable assets in higher grade
    debt obligations and high quality money market investments.

•   Equity Portfolio: The investment objective is capital appreciation. The Portfolio normally invests at least 80% of
    its investable assets in common stocks of major established corporations as well as smaller companies that we
    believe offer attractive prospects of appreciation.

•   Flexible Managed Portfolio: The investment objective is a high total return consistent with an aggressively
    managed diversified portfolio. The Portfolio invests in a mix of equity securities, debt obligations and money
    market instruments.

•   Global Portfolio: The investment objective is long-term growth of capital. The Portfolio invests primarily in
    common stocks (and their equivalents) of foreign and U.S. companies.

•   High Yield Bond Portfolio: The investment objective is a high total return. The Portfolio normally invests at least
    80% of its investable assets in high yield/high risk debt securities.

•   Jennison Portfolio (formerly Prudential Jennison Portfolio): The investment objective is long-term growth of
    capital. The Portfolio invests primarily in equity securities of major, established corporations that we believe offer
    above-average growth prospects.

•   Money Market Portfolio: The investment objective is maximum current income consistent with the stability of
    capital and the maintenance of liquidity. The Portfolio invests in high quality short-term money market instruments
    issued by the U.S. government or its agencies, as well as domestic and foreign corporations and banks.

•   Stock Index Portfolio: The investment objective is investment results that generally correspond to the
    performance of publicly-traded common stocks. The Portfolio attempts to duplicate the price and yield
    performance of the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500”) by investing at least 80%
    of its investable assets in S&P 500 stocks.

•   Value Portfolio: The investment objective is capital appreciation. The Portfolio invests primarily in common
    stocks that are trading below their underlying asset value, cash generating ability, and overall earnings and
    earnings growth.

•   SP Aggressive Growth Asset Allocation Portfolio: The investment objective is capital appreciation. The
    Portfolio invests primarily in large cap equity portfolios, international portfolios, and small/mid-cap equity portfolios.

•   SP AIM Aggressive Growth Portfolio: The investment objective is to achieve long-term growth of capital. The
    portfolio seeks to meet this objective by investing primarily in the common stocks of companies whose earnings
    the advisers expect to grow more than 15% per year.

•   SP AIM Core Equity Portfolio (formerly SP AIM Growth and Income Portfolio): The investment objective is
    growth of capital with a secondary objective of current income. The Portfolio invests as least 80% of its investable
    assets plus any borrowings made for investment purposes in securities of established companies that have long-
    term above-average growth earnings and dividends, and growth companies that the Portfolio managers believe
    have the potential for above-average growth earnings and dividends.




                                                              8
•   SP Alliance Large Cap Growth Portfolio: The investment objective is growth of capital. The Portfolio will pursue
    aggressive investment policies by investing at least 80% of the Portfolio’s investable assets in stocks of companies
    considered to have large capitalizations.

•   SP Alliance Technology Portfolio: The investment objective is growth of capital. The Portfolio normally invests
    at least 80% of its investable assets in securities of companies that use technology extensively in the development
    of new or improved products or processes.

•   SP Balanced Asset Allocation Portfolio: The investment objective is to provide a balance between current
    income and growth of capital. The Portfolio invests primarily in fixed income portfolios, large cap equity portfolios,
    small/mid-cap equity portfolios, and international equity portfolios.

•   SP Conservative Asset Allocation Portfolio: The investment objective is to provide current income with low to
    moderate capital appreciation. The Portfolio invests primarily in fixed income portfolios, large cap equity portfolios,
    and small/mid-cap equity portfolios.

•   SP Davis Value Portfolio: The investment objective is growth of capital. The Portfolio invests primarily in
    common stock of U.S. companies with market capitalizations of at least $5 billion.

•   SP Deutsche International Equity Portfolio: The investment objective is to invest for long-term capital
    appreciation. The portfolio normally invests at least 80% of its investable assets in the stocks and other equity
    securities of companies in developed countries outside the United States.

•   SP Growth Asset Allocation Portfolio: The investment objective is to provide long-term growth of capital with
    consideration also given to current income. The Portfolio invests at least 80% of its investable assets in large-cap
    equity portfolios, fixed income portfolios, international equity portfolios, and small/mid-cap equity portfolios.

•   SP INVESCO Small Company Growth Portfolio: The investment objective is long-term capital growth. The
    Portfolio invests at least 80% of its investable assets in small-capitalization companies - those which are included
    in the Russell 2000 Growth Index at the time of purchase, or if not included in that index, have market
    capitalizations of $2.5 billion or below at the time of purchase.

•   SP Jennison International Growth Portfolio: The investment objective is long-term growth of capital. Under
    normal circumstances, the Portfolio invests at least 65% of its total assets in the common stock of large to
    medium-sized foreign companies operating or based in at least five different countries.

•   SP Large Cap Value Portfolio: The investment objective is long-term growth of capital. The Portfolio normally
    invests at least 80% of its investable assets in securities of companies with large market capitalizations (those with
    market capitalizations similar to companies in the Standard & Poor’s 500 Composite Stock Price Index or the
    Russell 1000 Index).

•   SP MFS Capital Opportunities Portfolio: The investment objective is capital appreciation. The Portfolio invests,
    under normal market conditions, at least 65% of its net assets in common stocks and related securities, such as
    preferred stocks, convertible securities, and depositary receipts for those securities.

•   SP MFS Mid-Cap Growth Portfolio: The investment objective is long-term capital growth. The Portfolio invests,
    under normal market conditions, at least 80% of its investable assets in common stocks and related securities,
    such as preferred stocks, convertible securities, and depositary receipts for those securities.

•   SP PIMCO High Yield Portfolio: The investment objective is maximum total return, consistent with preservation
    of capital and prudent investment management. Under normal circumstances, the Portfolio invests at least 80% of
    its investable assets in a diversified portfolio of high yield securities (“junk bonds”) rated below investment grade,
    but rated at least B by Moody’s Investor Service, Inc. or Standard & Poor’s Ratings Group, and investment grade
    fixed income instruments.




                                                            9
•   SP PIMCO Total Return Portfolio: The investment objective is to seek maximum total return, consistent with
    preservation of capital and prudent investment management. Under normal circumstances, the Portfolio invests at
    least 65% of its assets in a diversified portfolio of fixed income instruments of varying maturities.

•   SP Prudential U.S. Emerging Growth Portfolio: The investment objective is long-term capital appreciation. The
    Portfolio normally invests at least 80% of its investable assets in equity securities of small and medium sized U.S.
    companies.

•   SP Small/Mid Cap Value Portfolio: The investment objective is long-term growth of capital. The Portfolio
    normally invests at least 80% of its investable assets in securities of companies with small to medium market
    capitalizations.

•   SP Strategic Partners Focused Growth Portfolio: The investment objective is long-term growth of capital. The
    Portfolio normally invests at least 65% of its total assets in equity-related securities of U.S. companies that the
    adviser believes to have strong capital appreciation potential.

Prudential Investments LLC (“PI”), an indirect wholly-owned subsidiary of Prudential Financial, serves as the overall
investment adviser for the Series Fund. PI will furnish investment advisory services in connection with the
management of the Series Fund portfolios under a “manager-of-managers” approach. Under this structure, PI is
authorized to select (with approval of the Series Fund’s independent directors) one or more sub-advisers to handle the
actual day-to-day investment management of each Portfolio. Ultimately, PI serves as the investment adviser for the
SP Aggressive Growth Asset Allocation, the SP Balanced Asset Allocation, the SP Conservative Asset Allocation, and
the SP Growth Asset Allocation Portfolios. PI’s business address is 100 Mulberry Street, Gateway Center Three,
Newark, New Jersey 07102.

Jennison Associates LLC (“Jennison”), also an indirect wholly-owned subsidiary of Prudential Financial, serves as the
sole sub-adviser for the Global, the Jennison, the SP Jennison International Growth, and the SP Prudential U.S.
Emerging Growth Portfolios. Jennison serves as a sub-adviser for a portion of the assets of the Equity, the Value, and
the SP Strategic Partners Focused Growth Portfolios. Jennison’s business address is 466 Lexington Avenue, New
York, New York 10017.

Prudential Investment Management, Inc. (“PIM”), also an indirect wholly-owned subsidiary of Prudential Financial,
serves as the sole sub-adviser for the Conservative Balanced, the Diversified Bond, the Flexible Managed, the High
Yield Bond, the Money Market, and the Stock Index Portfolios. PIM’s business address is 100 Mulberry Street,
Gateway Center Two, Newark, New Jersey 07102.

A I M Capital Management, Inc. ("A I M Capital") serves as the sub-adviser to the SP AIM Aggressive Growth Portfolio
and the SP AIM Core Equity Portfolio. A I M Capital's principal business address is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173.

Alliance Capital Management, L.P. ("Alliance") serves as the sub-adviser to the SP Alliance Large Cap Growth
Portfolio, the SP Alliance Technology Portfolio, and the SP Strategic Partners Focused Growth Portfolio. The sub-
adviser is located at 1345 Avenue of the Americas, New York, New York 10105.

Davis Selected Advisers, L.P. (“Davis”) serves as the sub-adviser to the SP Davis Value Portfolio. The sub-adviser is
located at 2429 East Elvira Road, Suite 101, Tucson, Arizona 85706.

Deutsche Asset Management, Inc. (“DAMI”) serves as a sub-adviser to the SP Deutsche International Equity Portfolio
and as a sub-adviser for approximately 25% of the assets of the Value Portfolio. DAMI is a wholly-owned subsidiary of
Deutsche Bank AG. DAMI’s business address is 280 Park Avenue, New York, New York 10017.

Fidelity Management & Research Company ("FMR") serves as the sub-adviser to the SP Large Cap Value Portfolio
and the SP Small/Mid Cap Value Portfolio. FMR’s business address is 82 Devonshire Street, Boston, Massachusetts
02109.

GE Asset Management Incorporated (“GEAM”) serves as a sub-adviser to approximately 25% of the assets of the
Equity Portfolio. GEAM’s ultimate parent is General Electric Corporation. GEAM’s business address is 3003 Summer
Street, Stamford, Connecticut 06904.
                                                         10
INVESCO Funds Group, Inc. ("INVESCO’) serves as the sub-adviser to the SP INVESCO Small Company Growth
Portfolio. INVESCO’s principal business address is 4350 South Monaco Street, Denver, Colorado 80237.

Massachusetts Financial Services Company ("MFS") serves as the sub-adviser for the SP MFS Capital Opportunities
Portfolio and the SP MFS Mid-Cap Growth Portfolio. The principal business address for MFS is 500 Boylston Street,
Boston, Massachusetts 02116.

Pacific Investment Management Company LLC (“PIMCO”) serves as the sub-adviser for the SP PIMCO High Yield
Portfolio and the SP PIMCO Total Return Portfolio. PIMCO is a subsidiary of Allianz Dresdner Asset Management of
America L.P., formerly PIMCO Advisors L.P. PIMCO’s principal business address is 840 Newport Center Drive,
Newport Beach, California 92660.

Salomon Brothers Asset Management, Inc. (“Salomon”) serves as a sub-adviser for a portion of the assets of the
Equity Portfolio. It is expected that under normal circumstances Salomon will manage approximately 25% of the
Portfolio. Salomon is a part of the global asset management arm of Citigroup, Inc. which was formed in 1998 as a
result of the merger of Travelers Group and Citicorp, Inc. Salomon’s business address is 388 Greenwich Street, New
York, New York 10013.

Victory Capital Management, Inc. (“Victory”) (formerly Key Asset Management, Inc.) serves as a sub-adviser for
approximately 25% of the assets of the Value Portfolio. Victory is a wholly-owned subsidiary of KeyCorp, Inc. Victory’s
business address is 127 Public Square, Cleveland, Ohio 44114.

As an investment adviser, PI charges the Series Fund a daily investment management fee as compensation for its
services. PI pays each sub-adviser out of the fee that PI receives from the Series Fund. See Deductions from
Portfolios, page 14.

AIM Variable Insurance Funds:

•   AIM V.I. Premier Equity Fund- Series I shares (formerly AIM V.I. Value Fund). Seeks to achieve long-term
    growth of capital. Income is a secondary objective.

A I M Advisors, Inc. ("AIM") is the investment adviser for this fund. The principal business address for AIM is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173.

American Century Variable Portfolios, Inc.:

•   American Century VP Value Fund. Seeks long-term capital growth with income as a secondary objective. The
    Fund seeks to achieve its objective by investing primarily in equity securities of well-established companies with
    intermediate-to-large market capitalizations that are believed by management to be undervalued at the time of
    purchase.

American Century Investment Management, Inc. ("ACIM") is the investment adviser for this fund. ACIM's principal
business address is American Century Tower, 4500 Main Street, Kansas City, Missouri 64111. The principal
underwriter of the Fund is American Century Investment Services, Inc., located at 4500 Main Street, Kansas City,
Missouri 64111.

Janus Aspen Series:

•   Growth Portfolio- Institutional Shares. Seeks long-term growth of capital in a manner consistent with the
    preservation of capital. The Portfolio normally invests in common stocks of larger, more established companies.

Janus Capital Management LLC is the investment adviser and is responsible for the day-to-day management of the
portfolio and other business affairs of the portfolio. Janus Capital Corporation's principal business address is 100
Fillmore Street, Denver, Colorado 80206-4928.



                                                          11
     ®                             SM
MFS Variable Insurance Trust :

•   Emerging Growth Series. Seeks long-term growth of capital. The Series invests, under normal market
    conditions, at least 65% of its total assets in common stocks and related securities, such as preferred stock,
    convertible securities and depositary receipts of those securities, of emerging growth companies.

MFS Investment Management7 (“Massachusetts Financial Services Company”), a Delaware corporation, is the
investment adviser to this MFS Series. The principal business address for the Massachusetts Financial Services
Company is 500 Boylston Street, Boston, Massachusetts 02116.

T. Rowe Price International Series, Inc.:

•   International Stock Portfolio. Seeks long-term growth of capital through investments primarily in common stocks
    of established, non-U.S. companies.

T. Rowe Price International, Inc. is the investment manager for this fund. The principal business address for T. Rowe
Price International, Inc. is 100 East Pratt Street, Baltimore, Maryland 21202.

The investment advisers for the Funds charge a daily investment management fee as compensation for their services.
These fees are described in the table under Deductions from Portfolios in the Charges and Expenses section, see
page 13, and are more fully described in the prospectus for each Fund.

In the future it may become disadvantageous for both variable life insurance and variable annuity contract separate
accounts to invest in the same underlying mutual funds. Although neither of the companies that invest in the Funds
nor the Funds currently foresee any such disadvantage, the Board of Directors for each Fund intends to monitor
events in order to identify any material conflict between variable life insurance and variable annuity contract owners
and to determine what action, if any, should be taken. Material conflicts could result from such things as:

    (1)   changes in state insurance law;
    (2)   changes in federal income tax law;
    (3)   changes in the investment management of any portfolio of the Funds; or
    (4)   differences between voting instructions given by variable life insurance and variable annuity contract owners.

An affiliate of each of the Funds may compensate Pruco Life based upon an annual percentage of the average assets
held in the Fund by Pruco Life under the Contracts. These percentages may vary by Fund and/or Portfolio, and reflect
administrative and other services we provide.

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We are the legal owner of the Fund shares associated with the variable investment options. However, we vote the
shares in the Fund according to voting instructions we receive from Contract owners. We will mail you a proxy, which
is a form you need to complete and return to us to tell us how you wish us to vote. When we receive those
instructions, we will vote all of the shares we own on your behalf in accordance with those instructions. We will vote
the shares for which we do not receive instructions and shares that we own, in the same proportion as the shares for
which instructions are received. We may change the way your voting instructions are calculated if it is required by
federal or state regulation. Should the applicable federal securities laws or regulations, or their current interpretation,
change so as to permit Pruco Life to vote shares of the Funds in its own right, it may elect to do so.

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Because of exemptive and exclusionary provisions, interests in the fixed-rate option under the Contract have
not been registered under the Securities Act of 1933 and the general account has not been registered as an
investment company under the Investment Company Act of 1940. Accordingly, interests in the fixed-rate
option are not subject to the provisions of these Acts, and Pruco Life has been advised that the staff of the
SEC has not reviewed the disclosure in this prospectus relating to the fixed-rate option. Any inaccurate or
misleading disclosure regarding the fixed-rate option may, however, be subject to certain generally applicable
provisions of federal securities laws.

                                                            12
You may choose to invest, either initially or by transfer, all or part of your Contract Fund to a fixed-rate option. This
amount becomes part of Pruco Life’s general account. The general account consists of all assets owned by Pruco Life
other than those in the Account and in other separate accounts that have been or may be established by Pruco Life.
Subject to applicable law, Pruco Life has sole discretion over the investment of the general account assets, and
Contract owners do not share in the investment experience of those assets. Instead, Pruco Life guarantees that the
part of the Contract Fund allocated to the fixed-rate option will accrue interest daily at an effective annual rate that
Pruco Life declares periodically, but not less than an effective annual rate of 4%. Pruco Life is not obligated to credit
interest at a rate higher than an effective annual rate of 4%, although we may do so.

Transfers from the fixed-rate option are subject to strict limits, see Transfers, page 22. The payment of any cash
surrender value attributable to the fixed-rate option may be delayed up to six months. See When Proceeds are Paid,
page 27.

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Historically, for investments held over relatively long periods, the investment performance of common stocks has
generally been superior to that of short or long-term debt securities, even though common stocks have been subject to
much more dramatic changes in value over short periods of time. Accordingly, portfolios such as the Equity, Global,
Jennison, Stock Index, Value, AIM V.I. Premier Equity Fund, American Century VP Value Fund, Janus Growth, MFS
Emerging Growth Series, or T. Rowe Price International Stock, for example, may be desirable options if you are willing
to accept such volatility in your Contract values. Each of these equity portfolios involves different policies and
investment risks. See The Funds, page 7, for additional equity portfolios available under the Contract and their
specific investment objectives.

You may prefer the somewhat greater protection against loss of principal (and reduced chance of high total return)
provided by the Diversified Bond Portfolio. You may want even greater safety of principal and may prefer the Money
Market Portfolio or the fixed-rate option, recognizing that the level of short-term rates may change rather rapidly. If you
are willing to take risks and possibly achieve a higher total return, you may prefer the High Yield Bond Portfolio,
recognizing that the risks are greater for lower quality bonds with normally higher yields.

You may wish to obtain diversification by relying on Prudential’s judgment for an appropriate asset mix by choosing the
Conservative Balanced Portfolio, the Flexible Managed Portfolio, the SP Aggressive Growth Asset Allocation Portfolio,
the SP Balanced Asset Allocation Portfolio, the SP Conservative Asset Allocation Portfolio, or the SP Growth Asset
Allocation Portfolio.

You may wish to divide your invested premium among two or more of the Portfolios. Your choice should take into
account your willingness to accept investment risks, how your other assets are invested, and what investment results
you may experience in the future. You should consult your Pruco Life representative from time to time about the
choices available to you under the Contract. Pruco Life recommends against frequent transfers among the several
options. Experience generally indicates that "market timing" investing, particularly by non-professional investors, is
likely to prove unsuccessful.

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The total amount invested at any time in the Contract Fund consists of the sum of the amount credited to the variable
investment options, the amount allocated to the fixed-rate option, and the principal amount of any Contract loan plus
the amount of interest credited to the Contract upon that loan. See Contract Loans, page 30. Most charges,
although not all, are made by reducing the Contract Fund.

This section provides a more detailed description of each charge that is described briefly in the chart on page 3.

In several instances we will use the terms "maximum charge" and "current charge." The "maximum charge," in each
instance, is the highest charge that Pruco Life is entitled to make under the Contract. The "current charge" is the lower

                                                            13
amount that Pruco Life is now charging. If circumstances change, we reserve the right to increase each current
charge, up to the maximum charge, without giving any advance notice.

Deductions from Premium Payments

(a) We charge up to 7.5% for taxes attributable to premiums ( in Oregon this is called a premium based administrative
    charge). For these purposes, "taxes attributable to premiums" shall include any federal, state or local income,
    premium, excise, business or any other type of tax (or component thereof) measured by or based upon the
    amount of premium received by Pruco Life. That charge is made up of two parts which currently equal a total of
    3.75% of the premiums received. The first part is a charge for state and local premium taxes. The current
    amount for this first part is 2.5% of the premium and is Pruco Life’s estimate of the average burden of state taxes
    generally. Tax rates vary from jurisdiction to jurisdiction and generally range from 0% to 5%. The rate applies
    uniformly to all policyholders without regard to state of residence. Pruco Life may collect more for this charge than
    it actually pays for state and local premium taxes. The second part is for federal income taxes measured by
    premiums, and it is currently equal to 1.25% of premiums. We believe that this charge is a reasonable estimate of
    an increase in its federal income taxes resulting from a 1990 change in the Internal Revenue Code. It is intended
    to recover this increased tax. During 2001, 2000, and 1999, Pruco Life deducted a total of approximately
    $10,152,000, $10,774,000, and $17,466,000, respectively, in taxes attributable to premiums.

(b) We charge up to 4% for sales expenses. This charge, often called a “sales load”, is deducted to compensate us
    for the costs of selling the Contracts, including commissions, advertising and the printing and distribution of
    prospectuses and sales literature.

    Currently, the charge is equal to 4% of premiums paid in each Contract year up to the amount of the target
    premium (see Premiums, page 19) and 0% of premiums paid in excess of this amount. Consequently, paying
    more than this amount in any Contract year could reduce your total sales load. For example, assume that a
    Contract with no riders or extra insurance charges has a target premium of $884 and the Contract owner would
    like to pay 10 target premiums. If the Contract owner paid $1,768 (two times the amount of the target premium)
    in every other Contract year up to the ninth year (i.e. in years 1, 3, 5, 7, 9), the sales load charge would be
    $176.80. If the Contract owner paid $884 in each of the first 10 Contract years, the total sales load would be
    $353.60. For additional information, see Increases in Basic Insurance Amount, page 26.

     Attempting to structure the timing and amount of premium payments to reduce the potential sales load may
     increase the risk that your Contract will lapse without value. Delaying the payment of target premium amounts to
     later years will adversely affect the Death Benefit Guarantee if the accumulated premium payments do not reach
     the accumulated values shown under your Contract's Limited Death Benefit Guarantee Values. See Death
     Benefit Guarantee, page 21. In addition, there are circumstances where payment of premiums that are too large
     may cause the Contract to be characterized as a Modified Endowment Contract, which could be significantly
     disadvantageous. See Tax Treatment of Contract Benefits, page 31. During 2001, 2000, and 1999, Pruco
     Life received a total of approximately $7,302,000, $6,622,000, and $4,458,000, respectively, in sales charges.

Deductions from Portfolios

We deduct an investment advisory fee daily from each portfolio of the Funds at a rate, on an annualized basis, ranging
from 0.35% for the Series Fund Stock Index Portfolio to 1.15% for the SP Alliance Technology Portfolio. The expenses
incurred in conducting the investment operations of the portfolios (such as custodian fees and preparation and
distribution of annual reports) are paid out of the portfolio's income. These expenses also vary from portfolio to
portfolio.

The total expenses of each portfolio for the year ended December 31, 2001, expressed as a percentage of the average
assets during the year, are shown below:




                                                           14
                                      7RWDO 3RUWIROLR ([SHQVHV

                                                   Investment        Other     Total    Total Actual
         The Prudential Series Fund, Inc.                                   Contractual Expenses*
                                                    Advisory       Expenses
                   Portfolios                                                Expenses
                                                      Fees

   Conservative Balanced                          0.55%        0.03%          0.58%                0.58%
    Diversified Bond                              0.40%        0.04%          0.44%                0.44%
    Equity                                        0.45%        0.04%          0.49%                0.49%
    Flexible Managed                              0.60%        0.04%          0.64%                0.64%
    Global                                        0.75%        0.09%          0.84%                0.84%
    High Yield Bond                               0.55%        0.05%          0.60%                0.60%
    Jennison                                      0.60%        0.04%          0.64%                0.64%
    Money Market                                  0.40%        0.03%          0.43%                0.43%
    Stock Index                                   0.35%        0.04%          0.39%                0.39%
    Value                                         0.40%        0.04%          0.44%                0.44%
    SP Aggressive Growth Asset Allocation (1)     0.84%        0.90%          1.74%                1.04%
    SP AIM Aggressive Growth                      0.95%        2.50%          3.45%                1.07%
    SP AIM Core Equity                            0.85%        1.70%          2.55%                1.00%
    SP Alliance Large Cap Growth                  0.90%        0.67%          1.57%                1.10%
    SP Alliance Technology                        1.15%        2.01%          3.16%                1.30%
    SP Balanced Asset Allocation (1)              0.75%        0.52%          1.27%                0.92%
    SP Conservative Asset Allocation (1)          0.71%        0.35%          1.06%                0.87%
    SP Davis Value                                0.75%        0.28%          1.03%                0.83%
    SP Deutsche International Equity              0.90%        2.37%          3.27%                1.10%
    SP Growth Asset Allocation (1)                0.80%        0.66%          1.46%                0.97%
    SP INVESCO Small Company Growth               0.95%        1.89%          2.84%                1.15%
    SP Jennison International Growth              0.85%        1.01%          1.86%                1.24%
    SP Large Cap Value                            0.80%        1.18%          1.98%                0.90%
    SP MFS Capital Opportunities                  0.75%        2.29%          3.04%                1.00%
    SP MFS Mid-Cap Growth                         0.80%        1.31%          2.11%                1.00%
    SP PIMCO High Yield                           0.60%        0.48%          1.08%                0.82%
    SP PIMCO Total Return                         0.60%        0.22%          0.82%                0.76%
    SP Prudential U.S. Emerging Growth            0.60%        0.81%          1.41%                0.90%
    SP Small/Mid Cap Value                        0.90%        0.66%          1.56%                1.05%
    SP Strategic Partners Focused Growth          0.90%        1.71%          2.61%                1.01%
  * Reflects fee waivers, reimbursement of expenses, and expense reductions, if any.


                                                      Investment        Other           Total        Total
                     Portfolios                        Advisory                      Contractual     Actual
                                                                      Expenses
                                                         Fees                         Expenses     Expenses*
AIM Variable Insurance Funds
AIM V.I. Premier Equity Fund - Series I shares           0.60%          0.25%          0.85%         0.85%
American Century Variable Portfolios, Inc. (2)
VP Value Fund                                            0.97%          0.00%          0.97%         0.97%
Janus Aspen Series (3)
 Growth Portfolio - Institutional Shares                 0.65%          0.01%          0.66%         0.66%
     7                            K
MFS Variable Insurance Trust (4)
Emerging Growth Series                                   0.75%          0.12%          0.87%         0.86%
T. Rowe Price International Series, Inc. (5)
International Stock Portfolio                            1.05%          0.00%          1.05%         1.05%
* Reflects fee waivers, reimbursement of expenses, and expense reductions, if any.




                                                       15
     (1) Prudential Series Fund, Inc.
         Each Asset Allocation Portfolio invests shares in other Fund Portfolios. The Advisory Fees for the Asset Allocation
         Portfolios are the product of a blend of the Advisory Fees of those other Fund Portfolios, plus a 0.05% annual advisory
         fee payable to PI.
     (2) American Century Variable Portfolios, Inc.
         The “Investment Advisory Fees” include ordinary expenses of managing and operating the Fund, except brokerage
         expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and
         extraordinary expenses. The Fund has a stepped fee schedule. As a result, the Fund’s management fee rate
         decreases as the Fund’s assets increase.
     (3) Janus Aspen Series
         The table reflects expenses for the fiscal year ended December 31, 2001. All expenses are shown without the effect of
         any offset arrangements.
              ®                            SM
     (4) MFS Variable Insurance Trust
         An expense offset arrangement with the Fund’s custodian resulted in a reduction in “Other Expenses” by 0.01% and is
         reflected in the “Total Actual Expenses.”
     (5) T. Rowe Price International Series, Inc.
         The “Investment Management Fees” include ordinary recurring operating expenses of the Funds.

The expenses relating to the Funds (other than those of the Series Fund) have been provided to Pruco Life by
the Funds. Pruco Life has not independently verified them.

Daily Deduction from the Contract Fund

Each day we deduct a charge from the assets of each of the variable investment options in an amount equivalent to an
effective annual rate of up to 0.9%. Currently, we charge 0.6%. This charge is intended to compensate Pruco Life for
assuming mortality and expense risks under the Contract. The mortality risk assumed is that insureds may live for
shorter periods of time than Pruco Life estimated when it determined what mortality charge to make. The expense risk
assumed is that expenses incurred in issuing and administering the Contract will be greater than Pruco Life estimated
in fixing its administrative charges. During 2001, 2000, and 1999, Pruco Life received a total of approximately
$5,796,000, $5,378,000, and $3,352,000, respectively, in mortality and expense risk charges. This charge is not
assessed against amounts allocated to the fixed-rate option.

Monthly Deductions from the Contract Fund

Pruco Life deducts the following monthly charges proportionately from the dollar amounts held in each of the chosen
investment option[s].

(a) An administrative charge based on the basic insurance amount is deducted. The charge is intended to
    compensate us for things like processing claims, keeping records and communicating with Contract owners.
    Currently, the charge is equal to $10 per Contract plus $0.07 per $1,000 ($10 per Contract plus $0.08 per $1,000
    in Massachusetts) of basic insurance amount in the first Contract year and $5 per Contract plus $0.01 per $1,000
    ($5 per Contract plus $0.02 per $1,000 in Massachusetts) of basic insurance amount in all subsequent years.
    Pruco Life reserves the right, however to charge up to $10 per Contract plus $0.07 per $1,000 ($10 per Contract
    plus $0.08 per $1,000 in Massachusetts) of basic insurance amount in the first Contract year and $10 per Contract
    plus $0.01 per $1,000 ($10 per Contract plus $0.02 per $1,000 in Massachusetts) of basic insurance amount in all
    subsequent years.

    For example, a Contract with a basic insurance amount of $100,000 would currently have a charge equal to $10
    plus $7 for a total of $17 ($10 plus $8 for a total of $18 in Massachusetts) per month for the first Contract year and
    $5 plus $1 for a total of $6 ($5 plus $2 for a total of $7 in Massachusetts) per month in all later years. The
    maximum charge for this same Contract would be $10 plus $7 for a total of $17 ($10 plus $8 for a total of $18 in
    Massachusetts) per month during the first Contract year. In later years, the maximum charge would be $10 plus
    $1 for a total of $11 ($10 plus $2 for a total of $12 in Massachusetts) per month. During 2001, 2000, and 1999,
    Pruco Life received a total of approximately $14,662,000, $12,246,000, and $6,294,000, respectively, in monthly
    administrative charges.

(b) A cost of insurance ("COI") charge is deducted. When an insured dies, the amount payable to the beneficiary
    (assuming there is no Contract debt) is larger than the Contract Fund - significantly larger if the insured dies in the
    early years of a Contract. The cost of insurance charges collected from all Contract owners enables Pruco Life to
                                                              16
    pay this larger death benefit. The maximum COI charge is determined by multiplying the "net amount at risk"
    under a Contract (the amount by which the Contract’s death benefit exceeds the Contract Fund) by maximum COI
    rates. The maximum COI rates are based upon the 1980 Commissioners Standard Ordinary ("CSO") Tables and
    an insured’s current attained age, sex (except where unisex rates apply), smoker/non-smoker status, and extra
    rating class, if any. At most ages, Pruco Life’s current COI rates are lower than the maximum rates. For additional
    information, see Increases in Basic Insurance Amount, page 26.

(c) A charge of $0.01 per $1,000 of basic insurance amount is made to compensate Pruco Life for the risk we assume
    by providing the Death Benefit Guarantee feature (not applicable in Massachusetts). See Death Benefit
    Guarantee, page 21. During 2001, 2000, and 1999 , Pruco Life received a total of approximately $2,344,000,
    $2,798,000, and $1,314,000, respectively, for this risk charge.

(d) You may add one or more of several riders to the Contract. Some riders are charged for separately. If you add
    such a rider to the basic Contract, additional charges will be deducted.

(e) If an insured is in a substandard risk classification (for example, a person in a hazardous occupation), additional
    charges will be deducted.

(f) A charge may be deducted to cover federal, state or local taxes (other than “taxes attributable to premiums”
    described above, in Oregon this is called a premium based administrative charge) that are imposed upon the
    operations of the Account. At present no such taxes are imposed and no charge is made.

    The earnings of the Account are taxed as part of the operations of Pruco Life. Currently, no charge is being made
    to the Account for Pruco Life’s federal income taxes, other than the 1.25% charge for federal income taxes
    measured by premiums. See Deductions from Premiums, page 14. Pruco Life periodically reviews the question
    of a charge to the Account for Company federal income taxes. We may make such a charge in the future for any
    federal income taxes that would be attributable to the Contracts.

Surrender Charges

(a) An additional sales load is charged if during the first 10 Contract years the Contract lapses, is surrendered or if
    the basic insurance amount is decreased. It is not deducted from the death benefit if the insured should die
    during this period. For issue ages 76 or less, this contingent deferred charge will be 26% of the lesser of: (a) the
    target level premium for the Contract; and (b) the actual premiums paid (see Premiums, page 19). The rate used
    in the calculation of this contingent deferred charge will be 22% for issue ages 77-79, 16% for issue ages 80-83
    and 13% for issue ages 84-85. The rate used in the calculation of this contingent deferred charge will remain
    level for six years. After six years, this charge will reduce monthly at a constant rate until it reaches zero at the
    end of the 10th year.

(b) If during the first 10 Contract years the Contract lapses, is surrendered or if the basic insurance amount is
    decreased, an administrative charge is deducted to cover the cost of processing applications, conducting medical
    examinations, determining insurability and the insured's rating class, and establishing records. The charge is
    equal to the lesser of: (a) $5 per $1,000 of basic insurance amount; and (b) $500. This charge is level for six
    years. After six years, this charge will be reduced monthly at a constant rate until it reaches zero at the end of the
    10th year.

We will show a surrender charge threshold amount in the Contract data pages. This threshold amount is the lowest
basic insurance amount since issue. If during the first 10 Contract years, the basic insurance amount is decreased
[including as a result of a withdrawal or a change in type of death benefit from Type A (fixed) to Type B (variable)], and
the new basic insurance amount is below the threshold, we will deduct a percentage of the surrender charge. The
percentage will be the amount by which the new basic insurance amount is less than the threshold, divided by the
threshold. After this transaction, the threshold will be updated and a corresponding new surrender charge schedule
will also be determined to reflect that portion of surrender charges deducted in the past. During 2001, 2000, and 1999,
Pruco Life received a total of approximately $6,001,000, $2,578,000, and $1,519,000 respectively, from surrendered
or lapsed Contracts.




                                                           17
Transaction Charges

(a) We currently charge an administrative processing fee equal to the lesser of $25 or 2% of the withdrawal amount in
    connection with each withdrawal.

(b) We currently do not charge an administrative processing fee in connection with a change in basic insurance
    amount. We reserve the right to make such a charge in an amount of up to $25 for any change in basic insurance
    amount.

(c) We currently charge an administrative processing fee of up to $25 for each transfer exceeding 12 in any Contract
    year.

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As of December 12, 2001, Pruco Life no longer offered these Contracts for sale. The Contract was generally issued
on insureds below the age of 81. Generally, the minimum basic insurance amount was $100,000. Pruco Life required
evidence of insurability, which may have included a medical examination, before issuing any Contract. Non-smokers
were offered the most favorable cost of insurance rates. We charge a higher cost of insurance rate and/or an
additional amount if an extra mortality risk is involved. These are the current underwriting requirements. We reserve
the right to change them on a non-discriminatory basis.

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Generally, you may return the Contract for a refund within 10 days after you receive it. Some states allow a longer
period of time during which a Contract may be returned for a refund. You can request a refund by mailing or delivering
the Contract to the representative who sold it or to the Home Office specified in the Contract. A Contract returned
according to this provision shall be deemed void from the beginning. You will then receive a refund of all premium
payments made, plus or minus any change due to investment experience. However, if applicable law so requires and
you exercise your short-term cancellation right, you will receive a refund of all premium payments made, with no
adjustment for investment experience.

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You may select either of two types of death benefit. Generally, a Contract with a Type A (fixed) death benefit has a
death benefit equal to the basic insurance amount. This type of death benefit does not vary with the investment
performance of the investment options you selected, except in certain circumstances. See How a Type A (Fixed)
Contract’s Death Benefit Will Vary, page 24. The payment of additional premiums and favorable investment results
of the variable investment options to which the assets are allocated will generally increase the cash surrender value.
See How a Contract’s Cash Surrender Value Will Vary, page 23.

A Contract with a Type B (variable) death benefit has a death benefit which will generally equal the basic insurance
amount plus the Contract Fund. Since the Contract Fund is a part of the death benefit, favorable investment
performance and payment of additional premiums generally result in an increase in the death benefit as well as in the
cash surrender value. Over time, however, the increase in the cash surrender value will be less than under a Type A
(fixed) Contract. This is because, given two Contracts with the same basic insurance amount and equal Contract
Funds, generally the cost of insurance charge for a Type B (variable) Contract will be greater. See How a Contract’s
Cash Surrender Value Will Vary, page 23 and How a Type B (Variable) Contract’s Death Benefit Will Vary, page
24. Unfavorable investment performance will result in decreases in the death benefit and in the cash surrender value.
But, as long as the Contract is not in default, the death benefit may not fall below the basic insurance amount stated in
the Contract.

In choosing a death benefit type, you should also consider whether you intend to use the withdrawal feature. Contract
owners of Type A (fixed) Contracts should note that any withdrawal may result in a reduction of the basic insurance
amount and the deduction of any applicable surrender charges. In addition, we will not allow you to make a withdrawal
that will decrease the basic insurance amount below the minimum basic insurance amount. See Withdrawals, page
25.


                                                           18
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You may change the type of death benefit on or after the first Contract anniversary and subject to Pruco Life’s
approval. We will increase or decrease the basic insurance amount so that the death benefit immediately after the
change matches the death benefit immediately before the change.

If you are changing your Contract’s type of death benefit from Type A (fixed) to Type B (variable), we will reduce the
basic insurance amount by the amount in your Contract Fund on the date the change takes place. The basic
insurance amount after the change may not be lower than the minimum basic insurance amount applicable to the
Contract. If you are changing from a Type B (variable) to a Type A (fixed) death benefit, we will increase the basic
insurance amount by the amount in your Contract Fund on the date the change takes place. This is illustrated in the
following chart.

                                          &KDQJLQJ WKH 'HDWK                      &KDQJLQJ WKH 'HDWK
                                              %HQHILW IURP                            %HQHILW IURP
                                           7\SH $      7\SH %                     7\SH %        7\SH $
                                                  Ÿ                                        Ÿ
                                          )L[HG     9DULDEOH                9DULDEOH      )L[HG

       %DVLF ,QVXUDQFH
           $PRXQW                            $300,000 Ÿ $250,000                      $250,000 Ÿ $300,000
         &RQWUDFW )XQG                        $50,000 Ÿ $50,000                        $50,000 Ÿ $50,000
          'HDWK %HQHILW                      $300,000 Ÿ $300,000                      $300,000 Ÿ $300,000

Changing your Contract’s type of death benefit from Type A (fixed) to Type B (variable) during the first 10 Contract
years may result in the assessment of surrender charges. In addition, we reserve the right to make an administrative
processing charge of up to $25 for any change in basic insurance amount, although we do not currently do so. See
Charges and Expenses, page 13.

To request a change, fill out an application for change which can be obtained from your Pruco Life representative or a
Home Office. If the change is approved, we will recompute the Contract’s charges and appropriate tables and send
you new Contract data pages. We may require you to send us your Contract before making the change.

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When the first premium payment is paid with the application for a Contract, the Contract date will ordinarily be the later
of the application date or the medical examination date. If the first premium is not paid with the application, the
Contract date will be the date on which the first premium is paid and the Contract is delivered. Under certain
circumstances, we may allow the Contract to be backdated for the purpose of lowering the insured’s issue age, but
only to a date not earlier than six months prior to the application date. This may be advantageous for some Contract
owners as a lower issue age may result in lower current charges. For a Contract that is backdated, we will credit the
initial premium as of the date of receipt and will deduct any charges due on or before that date.

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The Contract is a flexible premium contract. The minimum initial premium is due on or before the Contract date.
Thereafter, you decide when to make premium payments and, subject to a $25 minimum, in what amounts. We
reserve the right to refuse to accept any payment that increases the death benefit by more than it increases the
Contract Fund. See How a Type A (Fixed) Contract’s Death Benefit Will Vary, page 24 and How a Type B
(Variable) Contract’s Death Benefit Will Vary, page 24. There are circumstances under which the payment of
premiums in amounts that are too large may cause the Contract to be characterized as a Modified Endowment
Contract, which could be significantly disadvantageous. See Tax Treatment of Contract Benefits, page 31.

The Contract has several types of "premiums" which are described below.              Understanding them will help you
understand how the Contract works.


                                                           19
    Minimum initial premium  the premium needed to start the Contract. There is no insurance under the
    Contract unless the minimum initial premium is paid.

    Guideline premiums (not applicable in Massachusetts)  the premiums that, if paid at the beginning of each
    Contract year, will keep the Contract in-force for the lifetime of the insured regardless of investment performance,
    assuming no loans or withdrawals. These guideline premiums will be higher for a Type B (variable) Contract than
    for a Type A (fixed) Contract. For a Contract with no riders or extra risk charges, these premiums will be level. If
    certain riders are included, the guideline premium may increase each year. Payment of guideline premiums at
    the beginning of each Contract year is one way to achieve the Lifetime Death Benefit Guarantee Values shown on
    the Contract data pages. See Death Benefit Guarantee, below. When you purchase a Contract, your Pruco
    Life representative can tell you the amount[s] of the guideline premium.

    Target premiums  the premiums that, if paid at the beginning of each Contract year, will keep the Contract in-
    force during the Limited Death Benefit Guarantee period regardless of investment performance, assuming no
    loans or withdrawals. As is the case with the guideline premium, for a Contract with no riders or extra risk
    charges, these premiums will be level. If certain riders are included, the target premium may increase each year.
    Payment of target premiums at the beginning of each Contract year is one way to achieve the Limited Death
    Benefit Guarantee Values shown on the Contract data pages. At the end of the Limited Death Benefit Guarantee
    period, continuation of the Contract will depend on the Contract Fund having sufficient money to cover all charges
    or meeting the conditions of the Lifetime Death Benefit Guarantee. See Death Benefit Guarantee, below. When
    you purchase a Contract, your Pruco Life representative can tell you the amount[s] of the target premium.

    Target Level Premium  the target premium at issue minus any premiums associated with riders or with
    aviation, avocation, occupational or temporary extra insurance charges. We use the target level premium in
    calculating the contingent deferred sales charges. See Charges and Expenses, page 13.

We can bill you for the amount you select annually, semi-annually, quarterly or monthly. Because the Contract is a
flexible premium contract, there are no scheduled premium due dates. When you receive a premium notice, you are
not required to pay this amount. The Contract will remain in-force if: (1) the Contract Fund, less any applicable
surrender charges, is greater than zero and more than any Contract debt or (2) you have paid sufficient premiums, on
an accumulated basis, to meet the Death Benefit Guarantee conditions and Contract debt is not equal to or greater
than the Contract Fund, less any applicable surrender charges. You may also pay premiums automatically through
pre-authorized monthly transfers from a bank checking account. If you elect to use this feature, you choose the day of
the month on which premiums will be paid and the amount of the premiums paid.

When you apply for the Contract, you should discuss with your Pruco Life representative how frequently you would like
to be billed (if at all) and for what amount.

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On the Contract date, we deduct the charge for sales expenses and the charge for taxes attributable to premiums (in
Oregon this is called a premium based administrative charge) from the initial premium. The remainder of the initial
premium will be allocated on the Contract date among the variable investment options and/or the fixed-rate option
according to your desired allocation as specified in the application form and the first monthly deductions are made. If
the first premium is received before the Contract date, there will be a period during which the Contract owner’s initial
premium will not be invested. See Charges and Expenses, page 13.

The charge for sales expenses and the charge for taxes attributable to premiums also apply to all subsequent premium
payments. The remainder will be invested as of the end of the valuation period in which it is received at a Home
Office, in accordance with the allocation you previously designated. Provided the Contract is not in default, you may
change the way in which subsequent premiums are allocated by giving written notice to a Home Office or by
telephoning a Home Office, provided you are enrolled to use the Telephone Transfer System. There is no charge for
reallocating future premiums. All percentage allocations must be in whole numbers. For example, 33% can be
selected but 33a% cannot. Of course, the total allocation to all selected investment options must equal 100%.




                                                          20
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Although you decide what premium amounts you wish to pay, sufficient premium payments, on an accumulated basis,
will guarantee that your Contract will not lapse and a death benefit will be paid upon the death of the insured. This will
be true even if, because of unfavorable investment experience, your Contract Fund value drops to zero. However, the
guarantee is contingent upon Contract debt not being equal to or greater than the Contract Fund less any applicable
surrender charges. See Contract Loans, page 30. You should consider the importance of the Death Benefit
Guarantee to you when deciding what amounts of premiums to pay into the Contract.

For purposes of determining this guarantee, we generally calculate, and show in the Contract data pages, two sets of
values  the Lifetime Death Benefit Guarantee Values (not applicable in Massachusetts) and Limited Death Benefit
Guarantee Values. These are not cash values that you can realize by surrendering the Contract, nor are they payable
death benefits. They are values used solely to determine if a Death Benefit Guarantee is in effect. The Lifetime Death
Benefit Guarantee Values are shown for the lifetime of the Contract and are the end-of-year accumulations of
Guideline Premiums at 4% annual interest assuming premiums are paid at the beginning of each Contract year. The
Limited Death Benefit Guarantee Values are lower, but only apply for the length of the Limited Death Benefit
Guarantee period. They are the end-of-year accumulations of Target Premiums at 4% annual interest assuming
premiums are paid at the beginning of each Contract year.

The length of the Limited Death Benefit Guarantee period is determined on a case by case basis depending on things
like the insured’s age, sex (except where unisex rates apply), smoker/non-smoker status, death benefit type and extra
rating class, if any. In Massachusetts, the length of the Limited Death Benefit Guarantee period is generally five years.
The length of the Limited Death Benefit Guarantee period applicable to your particular Contract is shown on the
Contract data pages. For certain insureds, generally those who are older and/or in a substandard risk classification,
the Limited Death Benefit Guarantee period may be shorter in duration.

At the Contract date, and on each Monthly date, we calculate your Contract’s "Accumulated Net Payments" as of that
date. Accumulated Net Payments equal the premiums you paid, accumulated at an effective annual rate of 4%, less
withdrawals also accumulated at 4%.

At each Monthly date within the Limited Death Benefit Guarantee period, we will compare your Accumulated Net
Payments to the Limited Death Benefit Guarantee Value as of that date. At each Monthly date after the Limited Death
Benefit Guarantee period, we will compare your Accumulated Net Payments to the Lifetime Death Benefit Guarantee
Value as of that date (not applicable in Massachusetts). If your Accumulated Net Payments equal or exceed the
applicable (Lifetime or Limited) Death Benefit Guarantee Value and Contract debt does not equal or exceed the
Contract Fund less any applicable surrender charges, then the Contract is kept in-force, regardless of the amount in
the Contract Fund.

The Contract data pages show Lifetime Death Benefit Guarantee Values and Limited Death Benefit Guarantee Values
as of Contract anniversaries. Values for non-anniversary Monthly dates will reflect the number of months elapsed
between Contract anniversaries.

Guideline and target premiums are premium levels that, if paid at the start of each Contract year, correspond to the
Lifetime and Limited Death Benefit Guarantee Values, respectively (assuming no withdrawals or loans). See
Premiums, page 19. They are one way of reaching the Death Benefit Guarantee Values; they are certainly not the
only way.

Here is a table of typical guideline and target premiums along with corresponding Limited Death Benefit Guarantee
periods. The examples assume the insured is a male, non-smoker, with no extra risk or substandard ratings, and no
extra benefit riders added to the Contract.




                                                           21
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              35          Type A (fixed)              $   1,494                      $   884 for 35 years**
              35          Type B (variable)           $   4,896                      $   884 for 33 years**
              45          Type A (fixed)              $   2,266                      $ 1,272 for 25 years**
              45          Type B (variable)           $   6,940                      $ 1,272 for 23 years**
              55          Type A (fixed)              $   3,640                      $ 2,389 for 20 years**
              55          Type B (variable)           $ 10,324                       $ 2,389 for 18 years**
       * not applicable in Massachusetts
       ** for 5 years in Massachusetts

You should consider carefully the value of maintaining the Death Benefit Guarantee. If you desire the Death Benefit
Guarantee for lifetime protection, you may prefer to pay generally higher premiums in all years, rather than trying to
make such payments on an as needed basis. For example, if you pay only enough premium to meet the Limited Death
Benefit Guarantee Values, a substantial amount may be required to meet the Lifetime Death Benefit Guarantee Values
in order to continue the guarantee at the end of the Limited Death Benefit Guarantee period (not applicable in
Massachusetts). In addition, it is possible that the payment required to continue the guarantee after the Limited Death
Benefit Guarantee period could cause the Contract to become a Modified Endowment Contract. See Tax Treatment
of Contract Benefits, page 31.

The Death Benefit Guarantee allows considerable flexibility as to the timing of premium payments. Your Pruco Life
representative can supply sample illustrations of various premium amount and frequency combinations that correspond
to the Death Benefit Guarantee Values.

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You may, up to 12 times each Contract year, transfer amounts from one variable investment option to another variable
investment option or to the fixed-rate option without charge. There is an administrative charge of up to $25 for each
transfer made exceeding 12 in any Contract year. All or a portion of the amount credited to a variable investment
option may be transferred.

Transfers will take effect as of the end of the valuation period in which a proper transfer request is received at a Home
Office. The request may be in terms of dollars, such as a request to transfer $5,000 from one variable investment
option to another, or may be in terms of a percentage reallocation among variable investment options. In the latter
case, as with premium reallocations, the percentages must be in whole numbers. You may transfer amounts by proper
written notice to a Home Office or by telephone, provided you are enrolled to use the Telephone Transfer System. You
will automatically be enrolled to use the Telephone Transfer System unless the Contract is jointly owned or you elect
not to have this privilege. Telephone transfers may not be available on Contracts that are assigned (see Assignment,
page 34), depending on the terms of the assignment.

We will use reasonable procedures, such as asking you to provide certain personal information provided on your
application for insurance, to confirm that instructions given by telephone are genuine. We will not be held liable for
following telephone instructions that we reasonably believe to be genuine. Pruco Life cannot guarantee that you will be
able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or
market change.

Only one transfer from the fixed-rate option will be permitted during each Contract year. The maximum amount which
may be transferred out of the fixed-rate option each year is the greater of: (a) 25% of the amount in the fixed-rate
option; and (b) $2,000. Pruco Life may change these limits in the future. We may waive these restrictions for limited
periods of time in a non-discriminatory way, (e.g., when interest rates are declining).

                                                           22
The Contract was not designed for professional market timing organizations, other organizations, or individuals using
programmed, large, or frequent transfers. A pattern of exchanges that coincides with a “market timing” strategy may
be disruptive to the investment option or to the disadvantage of other contract owners. If such a pattern were to be
found, we may modify your right to make transfers by restricting the number, timing, and amount of transfers. We also
reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more
than one contract owner.

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As an administrative practice, we are currently offering a feature called Dollar Cost Averaging ("DCA"). Under this
feature, either fixed dollar amounts or a percentage of the amount designated for use under the DCA option will be
transferred periodically from the DCA Money Market investment option into other variable investment options available
under the Contract, excluding the fixed-rate option. You may choose to have periodic transfers made monthly or
quarterly. DCA transfers will not begin until the end of the “free-look” period.

Each automatic transfer will take effect as of the end of the valuation period on the date coinciding with the periodic
timing you designate provided the New York Stock Exchange is open on that date. If the New York Stock Exchange is
not open on that date, or if the date does not occur in that particular month, the transfer will take effect as of the end of
the valuation period which immediately follows that date. Automatic transfers will continue until: (1) $50 or less
remains of the amount designated for Dollar Cost Averaging, at which time the remaining amount will be transferred; or
(2) you give us notification of a change in DCA allocation or cancellation of the feature. Currently, a transfer that
occurs under the DCA feature is not counted towards the 12 free transfers permitted each Contract year. We reserve
the right to change this practice, modify the requirements, or discontinue the feature.

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As an administrative practice, we are currently offering a feature called Auto-Rebalancing. This feature allows you to
automatically rebalance variable investment option assets at specified intervals based on percentage allocations that
you choose. For example, suppose your initial investment allocation of variable investment options X and Y is split 40%
and 60%, respectively. Then, due to investment results, that split changes. You may instruct that those assets be
rebalanced to your original or different allocation percentages.

Auto-Rebalancing can be performed on a quarterly, semi-annual, or annual basis. Each rebalance will take effect as of
the end of the valuation period on the date coinciding with the periodic timing you designate, provided the New York
Stock Exchange is open on that date. If the New York Stock Exchange is not open on that date, or if the date does not
occur in that particular month, the transfer will take effect as of the end of the valuation period which immediately
follows that date. The fixed-rate option cannot participate in this administrative procedure. Currently, a transfer that
occurs under the Auto-Rebalancing feature is not counted towards the 12 free transfers permitted each Contract year.
We reserve the right to change this practice, modify the requirements, or discontinue the feature.

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You may surrender the Contract for its cash surrender value (referred to as net cash value in the Contract). The
Contract's cash surrender value on any date will be the Contract Fund less any applicable surrender charges and less
any Contract debt. See Contract Loans, page 30. The Contract Fund value changes daily, reflecting: (1) increases
or decreases in the value of the variable investment options; (2) interest credited on any amounts allocated to the
fixed-rate option; (3) interest credited on any loan; and (4) the daily asset charge for mortality and expense risks
assessed against the variable investment options. The Contract Fund value also changes to reflect the receipt of
premium payments and the monthly deductions described under Charges and Expenses, page 13. Upon request,
Pruco Life will tell you the cash surrender value of your Contract. It is possible for the cash surrender value of a
Contract to decline to zero because of unfavorable investment performance or outstanding Contract debt.

The tables on pages T1 through T4 (M1 through M4 in Massachusetts) of this prospectus illustrate approximately what
the cash surrender values would be for representative Contracts paying target premium amounts (see Premiums,
page 19), assuming hypothetical uniform investment results in the Fund portfolios. Two of the tables assume current
charges will be made throughout the lifetime of the Contract and two tables assume maximum charges will be made.
See Illustrations of Cash Surrender Values, Death Benefits, and Accumulated Premiums, page 28.
                                                             23
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As described earlier, there are two types of death benefit available under the Contract: Type A, a generally fixed death
benefit and Type B, a variable death benefit. A Type B (variable) death benefit varies with investment performance
while a Type A (fixed) death benefit does not, unless it must be increased to comply with the Internal Revenue Code’s
definition of life insurance.

Under a Type A (fixed) Contract, the death benefit is generally equal to the basic insurance amount. See Contract
Loans, page 30. If the Contract is kept in-force for several years, depending on how much premium you pay, and/or if
investment performance is reasonably favorable, the Contract Fund may grow to the point where Pruco Life will
increase the death benefit in order to ensure that the Contract will satisfy the Internal Revenue Code’s definition of life
insurance.

The death benefit under a Type A (fixed) Contract will always be the greater of:

                    (1) the basic insurance amount; and
                    (2) the Contract Fund before the deduction of any monthly charges due on that date, multiplied by
                        the attained age factor that applies.

A listing of attained age factors can be found on your Contract data pages. The latter provision ensures that the
Contract will always have a death benefit large enough so that the Contract will be treated as life insurance for tax
purposes under current law.

The following table illustrates at different ages how the attained age factor affects the death benefit for different
Contract Fund amounts. The table assumes a $100,000 Type A (fixed) Contract was issued when the insured was a
male nonsmoker, age 35, and there is no contract debt.

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      WKH                DQG WKH             WKH DWWDLQHG              WKH &RQWUDFW )XQG                       DQG WKH
   LQVXUHG LV            &RQWUDFW             DJH IDFWRU                PXOWLSOLHG E\ WKH                       'HDWK
      DJH                )XQG LV                  LV                 DWWDLQHG DJH IDFWRU LV                   %HQHILW LV
         40                 $ 10,000                3.64                          $ 36,400                       $ 100,000
         40                 $ 30,000                3.64                          $ 109,200                      $ 109,200*
         40                 $ 50,000                3.64                          $ 182,000                      $ 182,000*
         60                 $ 30,000                1.96                          $ 58,800                       $ 100,000
         60                 $ 50,000                1.96                          $ 98,000                       $ 100,000
         60                 $ 70,000                1.96                          $ 137,200                      $ 137,200*
         80                 $ 50,000                1.28                          $ 64,000                       $ 100,000
         80                 $ 80,000                1.28                          $ 102,400                      $ 102,400*
         80                 $ 90,000                1.28                          $ 115,200                      $ 115,200*
  * Note that the death benefit has been increased to comply with the Internal Revenue Code’s definition of life insurance.


This means, for example, that if the insured has reached the age of 60, and the Contract Fund is $70,000, the death
benefit will be $137,200, even though the original basic insurance amount was $100,000. In this situation, for every $1
increase in the Contract Fund, the death benefit will be increased by $1.96. We reserve the right to refuse to accept
any premium payment that increases the death benefit by more than it increases the Contract Fund. If we exercise
this right, it may in certain situations result in the loss of the death benefit guarantee.

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Under a Type B (variable) Contract, while the Contract is in-force, the death benefit will never be less than the basic
insurance amount, but will also vary, immediately after it is issued, with the investment results of the selected


                                                                24
investment options. The death benefit may be further increased to ensure that the Contract will satisfy the Internal
Revenue Code’s definition of life insurance.

The death benefit under a Type B (variable) Contract will always be the greater of:

                   (1) the basic insurance amount plus the Contract Fund before the deduction of any monthly
                       charges due on that date; and
                   (2) the Contract Fund before the deduction of any monthly charges due on that date, multiplied by
                       the attained age factor that applies.

For purposes of computing the death benefit, if the Contract Fund is less than zero we will consider it to be zero. A
listing of attained age factors can be found on your Contract data pages. The latter provision ensures that the Contract
will always have a death benefit large enough so that the Contract will be treated as life insurance for tax purposes
under current law.

The following table illustrates various attained age factors and Contract Funds and the corresponding death benefits.
The table assumes a $100,000 Type B (variable) Contract was issued when the insured was a male nonsmoker, age
35, and there is no contract debt.

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      WKH                 DQG WKH             WKH DWWDLQHG             WKH &RQWUDFW )XQG                       DQG WKH
   LQVXUHG LV             &RQWUDFW             DJH IDFWRU               PXOWLSOLHG E\ WKH                       'HDWK
      DJH                  )XQG LV                 LV                DWWDLQHG DJH IDFWRU LV                   %HQHILW LV
         40                 $ 10,000                 3.64                        $ 36,400                        $ 110,000
         40                 $ 30,000                 3.64                        $ 109,200                       $ 130,000
         40                 $ 50,000                 3.64                        $ 182,000                       $ 182,000*
         60                 $ 30,000                 1.96                        $ 58,800                        $ 130,000
         60                 $ 50,000                 1.96                        $ 98,800                        $ 150,000
         60                 $ 70,000                 1.96                        $ 137,200                       $ 170,000
         80                 $ 50,000                 1.28                        $ 64,000                        $ 150,000
         80                 $ 80,000                 1.28                        $ 102,400                       $ 180,000
         80                 $ 90,000                 1.28                        $ 115,200                       $ 190,000
  * Note that the death benefit has been increased to comply with the Internal Revenue Code’s definition of life insurance.


This means, for example, that if the insured has reached the age of 40, and the Contract Fund is $50,000, the death
benefit will be $182,000, even though the original basic insurance amount was $100,000. In this situation, for every $1
increase in the Contract Fund, the death benefit will be increased by $3.64. We reserve the right to refuse to accept
any premium payment that increases the death benefit by more than it increases the Contract Fund. If we exercise
this right, it may in certain situations result in the loss of the death benefit guarantee.

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A Contract may be surrendered for its cash surrender value while the insured is living. To surrender a Contract, we
may require you to deliver or mail the Contract with a written request in a form that meets Pruco Life’s needs, to a
Home Office. The cash surrender value of a surrendered Contract will be determined as of the end of the valuation
period in which such a request is received in a Home Office. Surrender of a Contract may have tax consequences.
See Tax Treatment of Contract Benefits, page 31.

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Under certain circumstances, you may withdraw a portion of the Contract's cash surrender value without surrendering
the Contract. The withdrawal amount is limited by the requirement that the cash surrender value after the withdrawal
may not be zero or less than zero after deducting the withdrawal charges. The amount withdrawn must be at least
$500. There is an administrative processing fee for each withdrawal which is the lesser of: (a) $25 and; (b) 2% of the
                                                               25
withdrawal amount. An amount withdrawn may not be repaid except as a premium subject to the applicable charges.
Upon request, we will tell you how much you may withdraw. Withdrawal of the cash surrender value may have tax
consequences. See Tax Treatment of Contract Benefits, page 31.

Whenever a withdrawal is made, the death benefit will immediately be reduced by at least the amount of the
withdrawal. For a Type B (variable) Contract, this will not change the basic insurance amount. However, under a Type
A (fixed) Contract, the resulting reduction in death benefit usually requires a reduction in the basic insurance amount.
If the basic insurance amount is decreased to an amount less than the basic insurance amount at issue, a surrender
charge may be deducted. See Charges and Expenses, page 13. No withdrawal will be permitted under a Type A
(fixed) Contract if it would result in a basic insurance amount of less than the minimum basic insurance amount. It is
important to note, however, that if the basic insurance amount is decreased, there is a possibility that the Contract
might be classified as a Modified Endowment Contract. See Tax Treatment of Contract Benefits, page 31. Before
making any withdrawal which causes a decrease in basic insurance amount, you should consult with your tax adviser
and your Pruco Life representative.

When a withdrawal is made, the Contract Fund is reduced by the sum of the cash withdrawn and the withdrawal fee.
An amount equal to the reduction in the Contract Fund will be withdrawn proportionally from the investment options
unless you direct otherwise.

Withdrawal of the cash surrender value increases the risk that the Contract Fund may be insufficient to provide
Contract benefits. If such a withdrawal is followed by unfavorable investment experience, the Contract may go into
default. Withdrawals may also affect whether a Contract is kept in-force under the Death Benefit Guarantee, since
withdrawals decrease the accumulated net payments. See Death Benefit Guarantee, page 21.

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Subject to state approval and subject to the underwriting requirements determined by Pruco Life, on or after the first
Contract anniversary, you may increase the amount of insurance by increasing the basic insurance amount of the
Contract. The following conditions must be met:

   (1) you must ask for the change in a form that meets Pruco Life’s needs;
   (2) the amount of the increase must be at least equal to the minimum increase in basic insurance amount shown
       under Contract Limitations in your Contract data pages;
   (3) you must prove to us that the insured is insurable for any increase;
   (4) the Contract must not be in default;
   (5) we must not be paying premiums into the Contract as a result of the insured’s total disability; and
   (6) if we ask you to do so, you must send us the Contract to be endorsed.

If we approve the change, we will send you new Contract data pages showing the amount and effective date of the
change and the recomputed charges, values and limitations. If the insured is not living on the effective date, the
change will not take effect. No administrative processing charge is currently being made in connection with an
increase in basic insurance amount. We reserve the right to make such a charge in an amount of up to $25.

For sales load purposes, the target premium is calculated separately for each basic insurance amount segment. The
target premium for each segment also includes the premium for extra insurance charges associated to that segment.
When premiums are paid, each payment is allocated to each basic insurance amount segment based on the proportion
of the target premium in each segment to the total target premiums of all segments. Currently, the sales load charge
for each segment is equal to 4% of the allocated premium paid in each Contract year up to the target premium and 0%
of allocated premiums paid in excess of the target premium. See the definition of Contract year for an increase in
basic insurance amount in DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS, page 1.

The COI rates for an increase in basic insurance amount are based upon 1980 CSO Tables, the age at the increase
effective date and the number of years since then, sex (except where unisex rates apply); smoker/nonsmoker status,
and extra rating class, if any. The net amount at risk for the whole contract (the death benefit minus the Contract
Fund) is allocated to each basic insurance amount segment based on the proportion of its basic insurance amount to
the total of all basic insurance amount segments. In addition, the attained age factor for a Contract with an increase in
basic insurance amount is based on the Insured’s attained age for the initial basic insurance amount segment. For a

                                                           26
description of attained age factor, see How a Type A (Fixed) Contract’s Death Benefit Will Vary, page 24 and How
a Type B (Variable) Contract’s Death Benefit Will Vary, page 24.

Each Contract owner who elects to increase the basic insurance amount of his or her Contract will receive a "free-look"
right which will apply only to the increase in basic insurance amount, not the entire Contract. This right is comparable
to the right afforded to a purchaser of a new Contract except that, any cost of insurance charge for the increase in the
basic insurance amount will be returned to the Contract Fund instead of a refund of premium. See Short-Term
Cancellation Right or "Free-Look", page 18. Generally, the "free-look" right would have to be exercised no later
than 10 days after receipt of the Contract as increased.

An increase in basic insurance amount may cause the Contract to be classified as a Modified Endowment Contract.
See Tax Treatment of Contract Benefits, page 31. Therefore, before increasing the basic insurance amount, you
should consult with your tax adviser and your Pruco Life representative.

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As explained earlier, you may make a withdrawal (see Withdrawals, page 25). On or after the first Contract
anniversary, you also have the option of decreasing the basic insurance amount of your Contract without withdrawing
any cash surrender value. Contract owners who conclude that, because of changed circumstances, the amount of
insurance is greater than needed will be able to decrease their amount of insurance protection, and the monthly
deductions for the cost of insurance. The amount of the decrease must be at least equal to the minimum decrease in
basic insurance amount shown under Contract Limitations in your Contract data pages. In addition, the basic
insurance amount after the decrease must be at least equal to the minimum basic insurance amount shown under
Contract Limitations in your Contract data pages. If the basic insurance amount is decreased to an amount less than
the lowest basic insurance amount since issue, a surrender charge may be deducted. No administrative processing
charge is currently being made in connection with a decrease in basic insurance amount. We reserve the right to make
such a charge in an amount of up to $25. See Charges and Expenses, page 13. If we ask you to, you must send us
your Contract to be endorsed. The Contract will be amended to show the new basic insurance amount, charges,
values in the appropriate tables and the effective date of the decrease.

We may decline a reduction if we determine it would cause the Contract to fail to qualify as "life insurance" for
purposes of Section 7702 of the Internal Revenue Code. A decrease will not take effect if the insured is not living on
the effective date.

It is important to note, however, that if the basic insurance amount is decreased, there is a possibility that the Contract
might be classified as a Modified Endowment Contract. See Tax Treatment of Contract Benefits, page 31. Before
requesting any decrease in basic insurance amount, you should consult with your tax adviser and your Pruco Life
representative.

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Pruco Life will generally pay any death benefit, cash surrender value, loan proceeds or withdrawal within seven days
after all the documents required for such a payment are received at a Home Office. Other than the death benefit,
which is determined as of the date of death, the amount will be determined as of the end of the valuation period in
which the necessary documents are received at a Home Office. However, Pruco Life may delay payment of proceeds
from the variable investment option[s] and the variable portion of the death benefit due under the Contract if the
disposal or valuation of the Account’s assets is not reasonably practicable because the New York Stock Exchange is
closed for other than a regular holiday or weekend, trading is restricted by the SEC, or the SEC declares that an
emergency exists.

With respect to the amount of any cash surrender value allocated to the fixed-rate option, Pruco Life expects to pay the
cash surrender value promptly upon request. However, Pruco Life has the right to delay payment of such cash
surrender value for up to six months (or a shorter period if required by applicable law). Pruco Life will pay interest of at
least 3% a year if it delays such a payment for 30 days or more (or a shorter period if required by applicable law).




                                                            27
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The Living Needs BenefitK is available on your Contract. The benefit may vary by state. There is no charge for
adding the benefit to a Contract. However, an administrative charge (not to exceed $150) will be made at the time the
Living Needs Benefit is paid.

Subject to state regulatory approval, the Living Needs Benefit allows you to elect to receive an accelerated payment
of all or part of the Contract’s death benefit, adjusted to reflect current value, at a time when certain special needs
exist. The adjusted death benefit will always be less than the death benefit, but will generally be greater than the
Contract’s cash surrender value. One or both of the following options may be available. A Pruco Life representative
should be consulted as to whether additional options may be available.

Terminal Illness Option. This option is available if the insured is diagnosed as terminally ill with a life expectancy of
six months or less. When satisfactory evidence is provided, Pruco Life will provide an accelerated payment of the
portion of the death benefit selected by the Contract owner as a Living Needs Benefit. The Contract owner may (1)
elect to receive the benefit in a single sum or (2) receive equal monthly payments for six months. If the insured dies
before all the payments have been made, the present value of the remaining payments will be paid to the beneficiary
designated in the Living Needs Benefit claim form in a single sum.

Nursing Home Option. This option is available after the insured has been confined to an eligible nursing home for
six months or more. When satisfactory evidence is provided, including certification by a licensed physician, that the
insured is expected to remain in the nursing home until death, Pruco Life will provide an accelerated payment of the
portion of the death benefit selected by the Contract owner as a Living Needs Benefit. The Contract owner may
(1) elect to receive the benefit in a single sum or (2) receive equal monthly payments for a specified number of years
(not more than 10 nor less than 2), depending upon the age of the insured. If the insured dies before all of the
payments have been made, the present value of the remaining payments will be paid to the beneficiary designated in
the Living Needs Benefit claim form in a single sum.

Subject to state approval, all or part of the Contract’s death benefit may be accelerated under the Living Needs
Benefit. If the benefit is only partially accelerated, a death benefit of at least $25,000 must remain under the Contract.
Pruco Life reserves the right to determine the minimum amount that may be accelerated.

No benefit will be payable if you are required to elect it in order to meet the claims of creditors or to obtain a
government benefit. Pruco Life can furnish details about the amount of Living Needs Benefit that is available to an
eligible Contract owner, and the effect on the Contract if less than the entire death benefit is accelerated.

You should consider whether adding this settlement option is appropriate in your given situation. Adding the Living
Needs Benefit to the Contract has no adverse consequences; however, electing to use it could. With the exception of
certain business-related Contracts, the Living Needs Benefit is excluded from income if the insured is terminally ill or
chronically ill as defined in the tax law (although the exclusion in the latter case may be limited). You should consult a
qualified tax adviser before electing to receive this benefit. Receipt of a Living Needs Benefit payment may also
affect your eligibility for certain government benefits or entitlements.

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The following six tables (pages T1 through T6; M1 through M6 in Massachusetts) show how a Contract’s death benefit
and cash surrender values change with the investment experience of the Account. They are "hypothetical" because
they are based, in part, upon several assumptions, which are described below. All six tables assume the following:

•   a Contract with a basic insurance amount of $100,000 bought by a 35 year old male, select, non-smoker, with no
    extra risks or substandard ratings, and no extra benefit riders added to the Contract.
•   the target premium amount (see Premiums, page 19) is paid on each Contract anniversary and no loans are
    taken.
•   the Contract Fund has been invested in equal amounts in each of the 35 portfolios of the Funds and no portion of
    the Contract Fund has been allocated to the fixed-rate option.

                                                           28
The first table (page T1; M1 in Massachusetts) assumes a Type A (fixed) Contract has been purchased and the
second table (page T2; M2 in Massachusetts) assumes a Type B (variable) Contract has been purchased. Both
assume the current charges will continue for the indefinite future. The third and fourth tables (pages T3 and T4; M3
and M4 in Massachusetts) are based upon the same assumptions except it is assumed the maximum contractual
charges have been made from the beginning. See Charges and Expenses, page 13.

Under the Type B (variable) Contract the death benefit changes to reflect investment returns. Under the Type A (fixed)
Contract, the death benefit increases only if the Contract Fund becomes large enough that an increase in the death
benefit is necessary for the Contract to satisfy the Internal Revenue Code’s definition of life insurance. See Types of
Death Benefit, page 18.

Finally, there are four assumptions, shown separately, about the average investment performance of the portfolios.
The first is that there will be a uniform 0% gross rate of return with the average value of the Contract Fund uniformly
adversely affected by very unfavorable investment performance. The other three assumptions are that investment
performance will be at a uniform gross annual rate of 4%, 8% and 12%. Actual returns will fluctuate from year to year.
In addition, death benefits and cash surrender values would be different from those shown if investment returns
averaged 0%, 4%, 8% and 12% but fluctuated from those averages throughout the years. Nevertheless, these
assumptions help show how the Contract values will change with investment experience.

The first column in the following illustrations (pages T1 through T4; M1 through M4 in Massachusetts) shows the
Contract year. The second column, to provide context, shows what the aggregate amount would be if the premiums
had been invested to earn interest, after taxes, at 4% compounded annually. The next four columns show the death
benefit payable in each of the years shown for the four different assumed investment returns. The last four columns
show the cash surrender value payable in each of the years shown for the four different assumed investment returns.
The cash surrender values in the first 10 years reflect the surrender charges that would be deducted if the Contract
were surrendered in those years.

A gross return (as well as the net return) is shown at the top of each column. The gross return represents the
combined effect of investment income and capital gains and losses, realized or unrealized, of the portfolios before any
reduction is made for investment advisory fees or other Fund expenses. The net return reflects average total annual
expenses of the 35 portfolios of 0.85%, and the daily deduction from the Contract Fund of 0.60% per year for the
tables based on current charges and 0.90% per year for the tables based on maximum charges. Thus, assuming
current charges, gross returns of 0%, 4%, 8% and 12% are the equivalent of net returns of -1.45%, 2.55%, 6.55% and
10.55%, respectively. Assuming maximum charges, gross returns of 0%, 4%, 8% and 12% are the equivalent of net
returns of -1.75%, 2.25%, 6.25% and 10.25%, respectively. The actual fees and expenses of the portfolios associated
with a particular Contract may be more or less than 0.85% and will depend on which variable investment options are
selected. The death benefits and cash surrender values shown reflect the deduction of all expenses and charges both
from the Funds and under the Contract.

If you are considering the purchase of a variable life insurance contract from another insurance company, you should
not rely upon these tables for comparison purposes. A comparison between two tables, each showing values for a 35
year old man, may be useful for a 35 year old man but would be inaccurate if made for insureds of other ages, sex, or
rating class. Your Pruco Life representative can provide you with a hypothetical illustration for your own age, sex, and
rating class.




                                                          29
                                                                    VARIABLE UNIVERSAL LIFE
                                                                 TYPE A (FIXED) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING CURRENT CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                         Cash Surrender Value (1)
                                     ---------------------------------------------------------    ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                         Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                   Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------    ---------------------------------------------------------
    Policy           at 4%            0% Gross       4% Gross       8% Gross        12% Gross      0% Gross       4% Gross        8% Gross       12% Gross
     Year          Per Year          (-1.45 Net)    (2.55 Net)     (6.55 Net)      (10.55% Net)   (-1.45 Net)    (2.55 Net)      (6.55 Net)     (10.55% Net)
    ------       -----------         -----------    -----------    -----------     ------------   -----------    -----------     -----------    ------------
      1          $     919            $100,000        $100,000       $100,000     $ 100,000         $     0         $     0       $      0(2) $         0(2)
      2          $ 1,875              $100,000        $100,000       $100,000     $ 100,000         $   267         $   337       $    409     $      484
      3          $ 2,870              $100,000        $100,000       $100,000     $ 100,000         $   816         $   956       $ 1,103      $    1,259
      4          $ 3,904              $100,000        $100,000       $100,000     $ 100,000         $ 1,354         $ 1,587       $ 1,839      $    2,112
      5          $ 4,980              $100,000        $100,000       $100,000     $ 100,000         $ 1,881         $ 2,231       $ 2,620      $    3,053
      6          $ 6,098              $100,000        $100,000       $100,000     $ 100,000         $ 2,395         $ 2,886       $ 3,447      $    4,088
      7          $ 7,261              $100,000        $100,000       $100,000     $ 100,000         $ 3,078         $ 3,734       $ 4,505      $    5,409
      8          $ 8,471              $100,000        $100,000       $100,000     $ 100,000         $ 3,745         $ 4,592       $ 5,613      $    6,844
      9          $ 9,729              $100,000        $100,000       $100,000     $ 100,000         $ 4,397         $ 5,458       $ 6,774      $    8,404
      10         $ 11,038             $100,000        $100,000       $100,000     $ 100,000         $ 5,031         $ 6,331       $ 7,989      $   10,099
      15         $ 18,409             $100,000        $100,000       $100,000     $ 100,000         $ 6,985         $ 9,850       $ 14,059     $   20,251
      20         $ 27,377             $100,000        $100,000       $100,000     $ 100,000         $ 8,617         $13,669       $ 22,267     $   36,994
      25         $ 38,288             $100,000        $100,000       $100,000     $ 129,917         $ 9,805         $17,717       $ 33,398     $   64,636
      30         $ 51,562             $100,000        $100,000       $100,000     $ 191,259         $ 9,719         $21,213       $ 48,025     $ 108,670
      35         $ 67,713             $100,000        $100,000       $106,349     $ 279,982         $ 7,802         $23,609       $ 67,739     $ 178,332
      40         $ 87,363             $100,000        $100,000       $131,593     $ 404,080         $ 1,961         $22,990       $ 93,328     $ 286,582
      45         $111,270             $      0(2)     $100,000       $163,160     $ 588,043         $     0(2)      $16,028       $125,508     $ 452,341
      50         $140,356             $      0       $       0(2)    $201,904     $ 858,208         $     0         $     0(2)    $165,495     $ 703,449
      55         $175,744             $      0        $      0       $248,424     $1,250,021        $     0         $     0       $214,158     $1,077,605
      60         $218,799             $      0        $      0       $303,246     $1,811,589        $     0         $     0       $273,194     $1,632,062
      65         $271,182             $      0        $      0       $372,776     $2,650,318        $     0         $     0       $355,025     $2,524,112

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 42 and later. Because the Target Premium is being paid,
    the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. The contract would be in default at the beginning of year
    42. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 50 and later. Because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. The contract would be in default at the beginning
    of year 50. Based on a gross return of 8% the cash surrender value would go to zero in year 1. Because the Target Premium is being paid, the Contract
    is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. Based on a gross return of 12% the cash surrender value would go to
    zero in year 1. Because the Target Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                              T1
                                                                   VARIABLE UNIVERSAL LIFE
                                                              TYPE B (VARIABLE) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING CURRENT CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                        Cash Surrender Value (1)
                                     ---------------------------------------------------------   ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                        Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                  Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------   ---------------------------------------------------------
    Policy           at 4%            0% Gross       4% Gross       8% Gross        12% Gross     0% Gross       4% Gross        8% Gross       12% Gross
     Year          Per Year          (-1.45 Net)    (2.55 Net)     (6.55 Net)     (10.55% Net)   (-1.45 Net)    (2.55 Net)      (6.55 Net)     (10.55% Net)
    ------       -----------         -----------    -----------    -----------    ------------   -----------    -----------     -----------    ------------
       1         $     919            $100,436        $100,461       $100,485      $ 100,510        $    0         $     0       $      0      $        0(2)
       2         $ 1,875              $100,994        $101,064       $101,136      $ 101,211        $ 264          $   334       $    406      $      481
       3         $ 2,870              $101,541        $101,680       $101,827      $ 101,982        $ 811          $   950       $ 1,097       $    1,252
       4         $ 3,904              $102,076        $102,307       $102,558      $ 102,830        $1,346         $ 1,577       $ 1,828       $    2,100
       5         $ 4,980              $102,598        $102,945       $103,332      $ 103,762        $1,868         $ 2,215       $ 2,602       $    3,032
       6         $ 6,098              $103,106        $103,594       $104,151      $ 104,787        $2,376         $ 2,864       $ 3,421       $    4,057
       7         $ 7,261              $103,600        $104,250       $105,015      $ 105,911        $3,052         $ 3,703       $ 4,467       $    5,363
       8         $ 8,471              $104,077        $104,915       $105,926      $ 107,144        $3,712         $ 4,550       $ 5,561       $    6,779
       9         $ 9,729              $104,537        $105,586       $106,887      $ 108,497        $4,355         $ 5,404       $ 6,704       $    8,314
      10         $ 11,038             $104,978        $106,262       $107,897      $ 109,978        $4,978         $ 6,262       $ 7,897       $    9,978
      15         $ 18,409             $106,852        $109,651       $113,758      $ 119,797        $6,852         $ 9,651       $ 13,758      $   19,797
      20         $ 27,377             $108,371        $113,242       $121,522      $ 135,686        $8,371         $13,242       $ 21,522      $   35,686
      25         $ 38,288             $109,391        $116,897       $131,736      $ 161,443        $9,391         $16,897       $ 31,736      $   61,443
      30         $ 51,562             $109,001        $119,573       $144,151      $ 202,210        $9,001         $19,573       $ 44,151      $ 102,210
      35         $ 67,713             $106,648        $120,428       $158,819      $ 266,928        $6,648         $20,428       $ 58,819      $ 166,928
      40         $ 87,363             $100,377        $116,923       $174,071      $ 378,257        $ 377          $16,923       $ 74,071      $ 268,268
      45         $111,270             $      0(2)     $105,528       $186,891      $ 550,866        $    0(2)      $ 5,528       $ 86,891      $ 423,743
      50         $140,356             $      0       $       0(2)    $191,952      $ 804,321        $    0         $     0(2)    $ 91,952      $ 659,279
      55         $175,744             $      0        $      0       $178,455      $1,171,879       $    0         $     0       $ 78,455      $1,010,240
      60         $218,799             $      0        $      0       $129,081      $1,698,669       $    0         $     0       $ 29,081      $1,530,333
      65         $271,182             $      0        $      0       $      0(2)   $2,485,434       $    0         $     0       $      0(2)   $2,367,080

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 41 and later. Because the Target Premium is being paid,
    the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at the beginning of year
    41. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 47 and later. Because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at the beginning of
    year 47. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 62 and later. Because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at the
    beginning of year 62. Based on a gross return of 12% the cash surrender value would go to zero in year 1. Because the Target Premium is being paid, the
    Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                             T2
                                                                     VARIABLE UNIVERSAL LIFE
                                                                  TYPE A (FIXED) DEATH BENEFIT
                                                                 MALE NON-SMOKER SELECT AGE 35
                                                             $100,000.00 BASIC INSURANCE AMOUNT
                                                                $884.00 ANNUAL PREMIUM PAYMENT
                                                              USING MAXIMUM CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                         Cash Surrender Value (1)
                                     ---------------------------------------------------------    ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                         Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                   Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------    ---------------------------------------------------------
    Policy          at 4%             0% Gross       4% Gross       8% Gross       12% Gross       0% Gross       4% Gross        8% Gross       12% Gross
     Year         Per Year           (-1.75 Net)    (2.25 Net)     (6.25 Net)     (10.25% Net)    (-1.75 Net)    (2.25 Net)      (6.25 Net)     (10.25% Net)
    ------       -----------         -----------    -----------    -----------    ------------    -----------    -----------     -----------    ------------
      1           $     919           $100,000        $100,000       $100,000        $100,000        $    0          $    0        $     0       $      0(2)
      2           $ 1,875             $100,000        $100,000       $100,000        $100,000        $   96          $ 160         $   225       $    292
      3           $ 2,870             $100,000        $100,000       $100,000        $100,000        $ 519           $ 641         $   770       $    907
      4           $ 3,904             $100,000        $100,000       $100,000        $100,000        $ 923           $1,122        $ 1,338       $ 1,573
      5           $ 4,980             $100,000        $100,000       $100,000        $100,000        $1,307          $1,600        $ 1,928       $ 2,295
      6           $ 6,098             $100,000        $100,000       $100,000        $100,000        $1,668          $2,074        $ 2,540       $ 3,075
      7           $ 7,261             $100,000        $100,000       $100,000        $100,000        $2,189          $2,724        $ 3,356       $ 4,101
      8           $ 8,471             $100,000        $100,000       $100,000        $100,000        $2,688          $3,368        $ 4,194       $ 5,197
      9           $ 9,729             $100,000        $100,000       $100,000        $100,000        $3,161          $4,003        $ 5,056       $ 6,369
      10          $ 11,038            $100,000        $100,000       $100,000        $100,000        $3,608          $4,627        $ 5,939       $ 7,624
      15          $ 18,409            $100,000        $100,000       $100,000        $100,000        $4,475          $6,590        $ 9,755       $ 14,489
      20          $ 27,377            $100,000        $100,000       $100,000        $100,000        $4,292          $7,773        $13,930       $ 24,798
      25          $ 38,288            $100,000        $100,000       $100,000        $100,000        $2,333          $7,261        $17,886       $ 40,456
      30          $ 51,562            $100,000        $100,000       $100,000        $114,450        $    0          $3,412        $20,480       $ 65,028
      35          $ 67,713            $100,000        $100,000       $100,000        $159,024        $    0          $    0        $19,078       $101,289
      40          $ 87,363            $      0(2)    $       0(2)    $100,000        $215,272        $    0(2)       $    0(2)     $ 7,383       $152,675
      45          $111,270            $      0        $      0       $      0(2)     $290,121        $    0          $    0        $     0(2)    $223,170
      50          $140,356            $      0        $      0       $      0        $388,601        $    0          $    0        $     0       $318,525
      55          $175,744            $      0        $      0       $      0        $516,449        $    0          $    0        $     0       $445,215
      60          $218,799            $      0        $      0       $      0        $686,710        $    0          $    0        $     0       $618,658
      65          $271,182            $      0        $      0       $      0        $878,058        $    0          $    0        $     0       $836,246

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 28 and later, but because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. The contract would be in default at the beginning of
    year 36. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 33 and later, but because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. The contract would be in default at the
    beginning of year 36. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 42 and later. Because the Target
    Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years. The contract would be in default
    at the beginning of year 42. Based on a gross return of 12% the cash surrender value would go to zero in year 1. Because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 35 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                              T3
                                                                   VARIABLE UNIVERSAL LIFE
                                                              TYPE B (VARIABLE) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING MAXIMUM CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                         Cash Surrender Value (1)
                                     ---------------------------------------------------------    ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                         Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                   Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------    ---------------------------------------------------------
    Policy          at 4%             0% Gross       4% Gross       8% Gross       12% Gross       0% Gross       4% Gross        8% Gross       12% Gross
     Year         Per Year           (-1.75 Net)    (2.25 Net)     (6.25 Net)     (10.25% Net)    (-1.75 Net)    (2.25 Net)      (6.25 Net)     (10.25% Net)
    ------       -----------         -----------    -----------    -----------    ------------    -----------    -----------     -----------    ------------
       1          $     919           $100,384        $100,407       $100,430       $100,453         $    0          $    0        $     0       $      0
       2          $ 1,875             $100,823        $100,886       $100,952       $101,019         $   94          $ 157         $   222       $    289
       3          $ 2,870             $101,244        $101,365       $101,494       $101,630         $ 514           $ 635         $   764       $    900
       4          $ 3,904             $101,644        $101,841       $102,056       $102,290         $ 914           $1,111        $ 1,326       $ 1,560
       5          $ 4,980             $102,023        $102,314       $102,639       $103,003         $1,293          $1,584        $ 1,910       $ 2,273
       6          $ 6,098             $102,378        $102,780       $103,242       $103,771         $1,648          $2,050        $ 2,512       $ 3,041
       7          $ 7,261             $102,710        $103,238       $103,863       $104,599         $2,163          $2,691        $ 3,315       $ 4,052
       8          $ 8,471             $103,017        $103,688       $104,503       $105,492         $2,652          $3,323        $ 4,139       $ 5,127
       9          $ 9,729             $103,298        $104,127       $105,162       $106,455         $3,116          $3,944        $ 4,980       $ 6,272
      10          $ 11,038            $103,552        $104,552       $105,839       $107,492         $3,552          $4,552        $ 5,839       $ 7,492
      15          $ 18,409            $104,335        $106,376       $109,427       $113,987         $4,335          $6,376        $ 9,427       $ 13,987
      20          $ 27,377            $104,019        $107,282       $113,046       $123,209         $4,019          $7,282        $13,046       $ 23,209
      25          $ 38,288            $101,898        $106,285       $115,739       $135,811         $1,898          $6,285        $15,739       $ 35,811
      30          $ 51,562            $100,000        $101,797       $115,691       $152,298         $    0          $1,797        $15,691       $ 52,298
      35          $ 67,713            $      0(2)    $       0(2)    $109,326       $172,254         $    0(2)       $    0(2)     $ 9,326       $ 72,254
      40          $ 87,363            $      0        $      0       $      0(2)    $193,367         $    0          $    0        $     0(2)    $ 93,367
      45          $111,270            $      0        $      0       $      0       $208,903         $    0          $    0        $     0       $108,903
      50          $140,356            $      0        $      0       $      0       $206,697         $    0          $    0        $     0       $106,697
      55          $175,744            $      0        $      0       $      0       $161,975         $    0          $    0        $     0       $ 61,975
      60          $218,799            $      0        $      0       $      0      $       0(2)      $    0          $    0        $     0       $      0(2)
      65          $271,182            $      0        $      0       $      0       $      0         $    0          $    0        $     0       $      0

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 28 and later, but because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at the beginning of
    year 34. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 32 and later, but because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at the
    beginning of year 34. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 39 and later. Because the Target
    Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in default at
    the beginning of year 39. Based on a gross return of 12% the cash surrender value would go to zero in year 1 and in year 59 and later. Because the
    Target Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 33 years. The contract would be in
    default at the beginning of year 59.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                              T4
                                                                 FOR MASSACHUSETTS ONLY
                                                                    VARIABLE UNIVERSAL LIFE
                                                                 TYPE A (FIXED) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING CURRENT CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                         Cash Surrender Value (1)
                                     ---------------------------------------------------------    ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                         Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                   Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------    ---------------------------------------------------------
    Policy           at 4%            0% Gross       4% Gross       8% Gross        12% Gross      0% Gross       4% Gross        8% Gross       12% Gross
     Year          Per Year          (-1.45 Net)    (2.55 Net)     (6.55 Net)      (10.55% Net)   (-1.45 Net)    (2.55 Net)      (6.55 Net)     (10.55% Net)
    ------       -----------         -----------    -----------    -----------     ------------   -----------    -----------     -----------    ------------
      1          $     919            $100,000        $100,000       $100,000     $ 100,000         $     0         $     0       $      0(2) $         0(2)
      2          $ 1,875              $100,000        $100,000       $100,000     $ 100,000         $   267         $   337       $    409     $      484
      3          $ 2,870              $100,000        $100,000       $100,000     $ 100,000         $   816         $   956       $ 1,103      $    1,259
      4          $ 3,904              $100,000        $100,000       $100,000     $ 100,000         $ 1,354         $ 1,587       $ 1,839      $    2,112
      5          $ 4,980              $100,000        $100,000       $100,000     $ 100,000         $ 1,881         $ 2,231       $ 2,620      $    3,053
      6          $ 6,098              $100,000        $100,000       $100,000     $ 100,000         $ 2,395         $ 2,886       $ 3,447      $    4,088
      7          $ 7,261              $100,000        $100,000       $100,000     $ 100,000         $ 3,078         $ 3,734       $ 4,505      $    5,409
      8          $ 8,471              $100,000        $100,000       $100,000     $ 100,000         $ 3,745         $ 4,592       $ 5,613      $    6,844
      9          $ 9,729              $100,000        $100,000       $100,000     $ 100,000         $ 4,397         $ 5,458       $ 6,774      $    8,404
      10         $ 11,038             $100,000        $100,000       $100,000     $ 100,000         $ 5,031         $ 6,331       $ 7,989      $   10,099
      15         $ 18,409             $100,000        $100,000       $100,000     $ 100,000         $ 6,985         $ 9,850       $ 14,059     $   20,251
      20         $ 27,377             $100,000        $100,000       $100,000     $ 100,000         $ 8,617         $13,669       $ 22,267     $   36,994
      25         $ 38,288             $100,000        $100,000       $100,000     $ 129,917         $ 9,805         $17,717       $ 33,398     $   64,636
      30         $ 51,562             $100,000        $100,000       $100,000     $ 191,259         $ 9,719         $21,213       $ 48,025     $ 108,670
      35         $ 67,713             $100,000        $100,000       $106,349     $ 279,982         $ 7,802         $23,609       $ 67,739     $ 178,332
      40         $ 87,363             $100,000        $100,000       $131,593     $ 404,080         $ 1,961         $22,990       $ 93,328     $ 286,582
      45         $111,270             $      0(2)     $100,000       $163,160     $ 588,043         $     0(2)      $16,028       $125,508     $ 452,341
      50         $140,356             $      0       $       0(2)    $201,904     $ 858,208         $     0         $     0(2)    $165,495     $ 703,449
      55         $175,744             $      0        $      0       $248,424     $1,250,021        $     0         $     0       $214,158     $1,077,605
      60         $218,799             $      0        $      0       $303,246     $1,811,589        $     0         $     0       $273,194     $1,632,062
      65         $271,182             $      0        $      0       $372,776     $2,650,318        $     0         $     0       $355,025     $2,524,112

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 42 and later. Because the Target Premium is being paid,
    the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of year
    42. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 50 and later. Because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of
    year 50. Based on a gross return of 8% the cash surrender value would go to zero in year 1. Because the Target Premium is being paid, the Contract is
    kept inforce through the Limited Death Benefit Guarantee Period of 5 years. Based on a gross return of 12% the cash surrender value would go to zero in
    year 1. Because the Target Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                              M1
                                                                 FOR MASSACHUSETTS ONLY
                                                                   VARIABLE UNIVERSAL LIFE
                                                              TYPE B (VARIABLE) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING CURRENT CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                        Cash Surrender Value (1)
                                     ---------------------------------------------------------   ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                        Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                  Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------   ---------------------------------------------------------
    Policy           at 4%            0% Gross       4% Gross       8% Gross        12% Gross     0% Gross       4% Gross        8% Gross       12% Gross
     Year          Per Year          (-1.45 Net)    (2.55 Net)     (6.55 Net)     (10.55% Net)   (-1.45 Net)    (2.55 Net)      (6.55 Net)     (10.55% Net)
    ------       -----------         -----------    -----------    -----------    ------------   -----------    -----------     -----------    ------------
       1         $     919            $100,436        $100,461       $100,485      $ 100,510        $    0         $     0       $      0      $        0(2)
       2         $ 1,875              $100,994        $101,064       $101,136      $ 101,211        $ 264          $   334       $    406      $      481
       3         $ 2,870              $101,541        $101,680       $101,827      $ 101,982        $ 811          $   950       $ 1,097       $    1,252
       4         $ 3,904              $102,076        $102,307       $102,558      $ 102,830        $1,346         $ 1,577       $ 1,828       $    2,100
       5         $ 4,980              $102,598        $102,945       $103,332      $ 103,762        $1,868         $ 2,215       $ 2,602       $    3,032
       6         $ 6,098              $103,106        $103,594       $104,151      $ 104,787        $2,376         $ 2,864       $ 3,421       $    4,057
       7         $ 7,261              $103,600        $104,250       $105,015      $ 105,911        $3,052         $ 3,703       $ 4,467       $    5,363
       8         $ 8,471              $104,077        $104,915       $105,926      $ 107,144        $3,712         $ 4,550       $ 5,561       $    6,779
       9         $ 9,729              $104,537        $105,586       $106,887      $ 108,497        $4,355         $ 5,404       $ 6,704       $    8,314
      10         $ 11,038             $104,978        $106,262       $107,897      $ 109,978        $4,978         $ 6,262       $ 7,897       $    9,978
      15         $ 18,409             $106,852        $109,651       $113,758      $ 119,797        $6,852         $ 9,651       $ 13,758      $   19,797
      20         $ 27,377             $108,371        $113,242       $121,522      $ 135,686        $8,371         $13,242       $ 21,522      $   35,686
      25         $ 38,288             $109,391        $116,897       $131,736      $ 161,443        $9,391         $16,897       $ 31,736      $   61,443
      30         $ 51,562             $109,001        $119,573       $144,151      $ 202,210        $9,001         $19,573       $ 44,151      $ 102,210
      35         $ 67,713             $106,648        $120,428       $158,819      $ 266,928        $6,648         $20,428       $ 58,819      $ 166,928
      40         $ 87,363             $100,377        $116,923       $174,071      $ 378,257        $ 377          $16,923       $ 74,071      $ 268,268
      45         $111,270             $      0(2)     $105,528       $186,891      $ 550,866        $    0(2)      $ 5,528       $ 86,891      $ 423,743
      50         $140,356             $      0       $       0(2)    $191,952      $ 804,321        $    0         $     0(2)    $ 91,952      $ 659,279
      55         $175,744             $      0        $      0       $178,455      $1,171,879       $    0         $     0       $ 78,455      $1,010,240
      60         $218,799             $      0        $      0       $129,081      $1,698,669       $    0         $     0       $ 29,081      $1,530,333
      65         $271,182             $      0        $      0       $      0(2)   $2,485,434       $    0         $     0       $      0(2)   $2,367,080

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 41 and later. Because the Target Premium is being paid,
    the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of year
    41. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 47 and later. Because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of
    year 47. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 62 and later. Because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the
    beginning of year 62. Based on a gross return of 12% the cash surrender value would go to zero in year 1. Because the Target Premium is being paid, the
    Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                             M2
                                                                 FOR MASSACHUSETTS ONLY
                                                                    VARIABLE UNIVERSAL LIFE
                                                                 TYPE A (FIXED) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING MAXIMUM CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                        Cash Surrender Value (1)
                                     ---------------------------------------------------------   ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                        Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                  Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------   ---------------------------------------------------------
    Policy          at 4%             0% Gross       4% Gross       8% Gross       12% Gross      0% Gross       4% Gross        8% Gross       12% Gross
     Year         Per Year           (-1.75 Net)    (2.25 Net)     (6.25 Net)     (10.25% Net)   (-1.75 Net)    (2.25 Net)      (6.25 Net)     (10.25% Net)
    ------       -----------         -----------    -----------    -----------    ------------   -----------    -----------     -----------    ------------
      1           $     919           $100,000        $100,000       $100,000        $100,000       $    0          $    0        $     0       $      0(2)
      2           $ 1,875             $100,000        $100,000       $100,000        $100,000       $   96          $ 160         $   225       $    292
      3           $ 2,870             $100,000        $100,000       $100,000        $100,000       $ 519           $ 641         $   770       $    907
      4           $ 3,904             $100,000        $100,000       $100,000        $100,000       $ 923           $1,122        $ 1,338       $ 1,573
      5           $ 4,980             $100,000        $100,000       $100,000        $100,000       $1,307          $1,600        $ 1,928       $ 2,295
      6           $ 6,098             $100,000        $100,000       $100,000        $100,000       $1,668          $2,074        $ 2,540       $ 3,075
      7           $ 7,261             $100,000        $100,000       $100,000        $100,000       $2,189          $2,724        $ 3,356       $ 4,101
      8           $ 8,471             $100,000        $100,000       $100,000        $100,000       $2,688          $3,368        $ 4,194       $ 5,197
      9           $ 9,729             $100,000        $100,000       $100,000        $100,000       $3,161          $4,003        $ 5,056       $ 6,369
      10          $ 11,038            $100,000        $100,000       $100,000        $100,000       $3,608          $4,627        $ 5,939       $ 7,624
      15          $ 18,409            $100,000        $100,000       $100,000        $100,000       $4,475          $6,590        $ 9,755       $ 14,489
      20          $ 27,377            $100,000        $100,000       $100,000        $100,000       $4,292          $7,773        $13,930       $ 24,798
      25          $ 38,288            $100,000        $100,000       $100,000        $100,000       $2,333          $7,261        $17,886       $ 40,456
      30          $ 51,562            $      0(2)     $100,000       $100,000        $114,450       $    0(2)       $3,412        $20,480       $ 65,028
      35          $ 67,713            $      0       $       0(2)    $100,000        $159,024       $    0          $    0(2)     $19,078       $101,289
      40          $ 87,363            $      0        $      0       $100,000        $215,272       $    0          $    0        $ 7,383       $152,675
      45          $111,270            $      0        $      0       $      0(2)     $290,121       $    0          $    0        $     0(2)    $223,170
      50          $140,356            $      0        $      0       $      0        $388,601       $    0          $    0        $     0       $318,525
      55          $175,744            $      0        $      0       $      0        $516,449       $    0          $    0        $     0       $445,215
      60          $218,799            $      0        $      0       $      0        $686,710       $    0          $    0        $     0       $618,658
      65          $271,182            $      0        $      0       $      0        $878,058       $    0          $    0        $     0       $836,246

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 28 and later, but because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of
    year 28. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 33 and later, but because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the
    beginning of year 33. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 42 and later. Because the Target
    Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at
    the beginning of year 42. Based on a gross return of 12% the cash surrender value would go to zero in year 1. Because the Target Premium is being paid,
    the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                             M3
                                                                 FOR MASSACHUSETTS ONLY
                                                                   VARIABLE UNIVERSAL LIFE
                                                              TYPE B (VARIABLE) DEATH BENEFIT
                                                                MALE NON-SMOKER SELECT AGE 35
                                                            $100,000.00 BASIC INSURANCE AMOUNT
                                                               $884.00 ANNUAL PREMIUM PAYMENT
                                                             USING MAXIMUM CONTRACTUAL CHARGES

                                                           Death Benefit (1)                                         Cash Surrender Value (1)
                                     ---------------------------------------------------------    ---------------------------------------------------------
                                                Assuming Hypothetical Gross (and Net)                         Assuming Hypothetical Gross (and Net)
                   Premiums                          Annual Investment Return of                                   Annual Investment Return of
    End of       Accumulated         ---------------------------------------------------------    ---------------------------------------------------------
    Policy          at 4%             0% Gross       4% Gross       8% Gross       12% Gross       0% Gross       4% Gross        8% Gross       12% Gross
     Year         Per Year           (-1.75 Net)    (2.25 Net)     (6.25 Net)     (10.25% Net)    (-1.75 Net)    (2.25 Net)      (6.25 Net)     (10.25% Net)
    ------       -----------         -----------    -----------    -----------    ------------    -----------    -----------     -----------    ------------
       1          $     919           $100,384        $100,407       $100,430       $100,453         $    0          $    0        $     0       $      0
       2          $ 1,875             $100,823        $100,886       $100,952       $101,019         $   94          $ 157         $   222       $    289
       3          $ 2,870             $101,244        $101,365       $101,494       $101,630         $ 514           $ 635         $   764       $    900
       4          $ 3,904             $101,644        $101,841       $102,056       $102,290         $ 914           $1,111        $ 1,326       $ 1,560
       5          $ 4,980             $102,023        $102,314       $102,639       $103,003         $1,293          $1,584        $ 1,910       $ 2,273
       6          $ 6,098             $102,378        $102,780       $103,242       $103,771         $1,648          $2,050        $ 2,512       $ 3,041
       7          $ 7,261             $102,710        $103,238       $103,863       $104,599         $2,163          $2,691        $ 3,315       $ 4,052
       8          $ 8,471             $103,017        $103,688       $104,503       $105,492         $2,652          $3,323        $ 4,139       $ 5,127
       9          $ 9,729             $103,298        $104,127       $105,162       $106,455         $3,116          $3,944        $ 4,980       $ 6,272
      10          $ 11,038            $103,552        $104,552       $105,839       $107,492         $3,552          $4,552        $ 5,839       $ 7,492
      15          $ 18,409            $104,335        $106,376       $109,427       $113,987         $4,335          $6,376        $ 9,427       $ 13,987
      20          $ 27,377            $104,019        $107,282       $113,046       $123,209         $4,019          $7,282        $13,046       $ 23,209
      25          $ 38,288            $100,000        $106,285       $115,739       $135,811         $1,898          $6,285        $15,739       $ 35,811
      30          $ 51,562            $      0(2)     $101,797       $115,691       $152,298         $    0(2)       $1,797        $15,691       $ 52,298
      35          $ 67,713            $      0       $       0(2)    $109,326       $172,254         $    0          $    0(2)     $ 9,326       $ 72,254
      40          $ 87,363            $      0        $      0       $      0(2)    $193,367         $    0          $    0        $     0(2)    $ 93,367
      45          $111,270            $      0        $      0       $      0       $208,903         $    0          $    0        $     0       $108,903
      50          $140,356            $      0        $      0       $      0       $206,697         $    0          $    0        $     0       $106,697
      55          $175,744            $      0        $      0       $      0       $161,975         $    0          $    0        $     0       $ 61,975
      60          $218,799            $      0        $      0       $      0      $       0(2)      $    0          $    0        $     0       $      0(2)
      65          $271,182            $      0        $      0       $      0       $      0         $    0          $    0        $     0       $      0

(1) Assumes no Contract loan has been made.
(2) Based on a gross return of 0% the cash surrender value would go to zero in year 1 and in year 28 and later, but because the Target Premium is being
    paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the beginning of
    year 28. Based on a gross return of 4% the cash surrender value would go to zero in year 1 and in year 32 and later, but because the Target Premium is
    being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at the
    beginning of year 32. Based on a gross return of 8% the cash surrender value would go to zero in year 1 and in year 39 and later. Because the Target
    Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in default at
    the beginning of year 39. Based on a gross return of 12% the cash surrender value would go to zero in year 1 and in year 59 and later. Because the
    Target Premium is being paid, the Contract is kept inforce through the Limited Death Benefit Guarantee Period of 5 years. The contract would be in
    default at the beginning of year 59.

The hypothetical investment rates of return shown above and elsewhere in this prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or less than those shown and will depend on a number of factors including the
investment allocations made by an owner, prevailing interest rates, and rate of inflation. The Death Benefit and Cash Surrender Value for a contract would
be different from those shown if the actual rates of return average 0%, 4%, 8%, and 12% over a period of years but also fluctuated above or below those
averages for individual contract years. No representations can be made by Pruco Life or the funds that these hypothetical rates of return can be achieved
for any one year or sustained over any period of time.




                                                                              M4
&RQWUDFW /RDQV

You may borrow from Pruco Life an amount up to the current loan value of your Contract less any existing Contract
debt using the Contract as the only security for the loan. The loan value at any time is equal to the sum of (1) 90% of
the portion of the cash value attributable to the variable investment options, and (2) the balance of the cash value,
provided the Contract is not in default. The cash value is equal to the Contract Fund less any surrender charge. A
Contract in default has no loan value. The minimum loan amount you may borrow is $200.

Interest charged on a loan accrues daily. Interest is due on each Contract anniversary or when the loan is paid back,
whichever comes first. If interest is not paid when due, it becomes part of the loan and we will charge interest on it,
too. Except in the case of preferred loans, we charge interest at an effective annual rate of 5%.

A portion of any amount you borrow on or after the 10th Contract anniversary may be considered a preferred loan.
The maximum preferred loan amount is the total amount you may borrow minus the total net premiums paid (net
premiums equal premiums paid less total withdrawals, if any). If the net premium amount is less than zero, we will, for
purposes of this calculation, consider it to be zero. Only new loans borrowed after the 10th Contract anniversary may
be considered preferred loans. Standard loans will not automatically be converted into preferred loans. Preferred
loans are charged interest at an effective annual rate of 4.5%.

The Contract debt is the amount of all outstanding loans plus any interest accrued but not yet due. If at any time the
Contract debt equals or exceeds the Contract Fund less any applicable surrender charges, the Contract will go into
default. See Lapse and Reinstatement, page 33. If the Contract debt equals or exceeds the Contract Fund less any
applicable surrender charges and you fail to keep the Contract in-force, the amount of unpaid Contract debt will be
treated as a distribution and will be immediately taxable to the extent of gain in the contract. Reinstatement of the
contract after lapse will not eliminate the taxable income which we are required to report to the Internal Revenue
Service. See Tax Treatment of Contract Benefits, page 31.

When a loan is made, an amount equal to the loan proceeds is transferred out of the Account and/or the fixed-rate
option, as applicable. Unless you ask us to take the loan amount from specific investment options and we agree, the
reduction will be made in the same proportions as the value in each variable investment option and the fixed-rate
option bears to the total value of the Contract. While a loan is outstanding, the amount that was so transferred will
continue to be treated as part of the Contract Fund. It will be credited with an effective annual rate of return of 4%. On
each Monthly date, we will increase the portion of the Contract Fund in the investment options by interest credits
accrued on the loan since the last Monthly date. The net cost of a standard loan is 1% and the net cost of a preferred
loan is ½%.

A loan will not cause the Contract to lapse as long as Contract debt does not equal or exceed the Contract Fund, less
any applicable surrender charges. Loans from Modified Endowment Contracts may be treated for tax purposes as
distributions of income. See Tax Treatment of Contract Benefits, page 31.

Loans you take against the Contract are ordinarily treated as debt and are not considered distributions subject to tax.
However, you should know that the Internal Revenue Service may take the position that the loan should be treated as
a distribution for tax purposes because of the relatively low differential between the loan interest rate and the
Contract’s crediting rate. Distributions are subject to income tax. Were the Internal Revenue Service to take this
position, Prudential would take reasonable steps to attempt to avoid this result, including modifying the Contract’s loan
provisions, but cannot guarantee that such efforts would be successful.

Any Contract debt will directly reduce a Contract's cash surrender value and will be subtracted from the death benefit
to determine the amount payable. In addition, even if the loan is fully repaid, it may have an effect on future death
benefits because the investment results of the selected investment options will apply only to the amount remaining
invested under those options. The longer the loan is outstanding, the greater the effect is likely to be. The effect could
be favorable or unfavorable. If investment results are greater than the rate being credited on the amount of the loan
while the loan is outstanding, values under the Contract will not increase as rapidly as they would have if no loan had
been made. If investment results are below that rate, Contract values will be higher than they would have been had no
loan been made.

When you repay all or part of a loan, we will increase the portion of the Contract Fund in the investment options by the
amount of the loan you repay using the investment allocation for future premium payments as of the loan payment
                                                           30
date, plus interest credits accrued on the loan since the last transaction date. If loan interest is paid when due, it will
not change the portion of the Contract Fund allocated to the investment options. We reserve the right to change the
manner in which we allocate loan repayments.

6DOH RI WKH &RQWUDFW DQG 6DOHV &RPPLVVLRQV

Pruco Securities Corporation ("Prusec"), an indirect wholly-owned subsidiary of Prudential, acts as the principal
underwriter of the Contract. Prusec, organized in 1971 under New Jersey law, is registered as a broker and dealer
under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc.
Prusec’s principal business address is 751 Broad Street, Newark, New Jersey 07102-3777. The Contract is sold by
registered representatives of Prusec who are also authorized by state insurance departments to do so. The Contract
may also be sold through other broker-dealers authorized by Prusec and applicable law to do so. Registered
representatives of such other broker-dealers may be paid on a different basis than described below.

Generally, representatives will receive a commission of no more than:

   (1) 50% of the premiums received in the first year on premiums up to the target premium (see Premiums, page
       19);
   (2) 5% of premiums received in years two through 10 on premiums up to the target premium; and (3) 3% on
       premiums received in the first 10 years in excess of the target premium or received after 10 years.

If the basic insurance amount is increased, representatives will generally receive a commission of no more than:

   (1) 25% of the premiums received up to the target premium for the increase received in the first year;
   (2) 5% of the premiums received up to the target premium for years two through 10; and
   (3) 3% on other premiums received for the increase.

Moreover, trail commissions of up to 0.025% of an amount determined by averaging the Contract Fund less all
outstanding loans as of the first and last day of each calendar quarter may be paid.

Representatives with less than four years of service may receive compensation on a different basis. Representatives
who meet certain productivity or persistency standards may be eligible for additional compensation.

7D[ 7UHDWPHQW RI &RQWUDFW %HQHILWV

This summary provides general information on the federal income tax treatment of the Contract. It is not a complete
statement of what the federal income taxes will be in all circumstances. It is based on current law and interpretations,
which may change. It does not cover state taxes or other taxes. It is not intended as tax advice. You should consult
your own qualified tax adviser for complete information and advice.

Treatment as Life Insurance. The Contract must meet certain requirements to qualify as life insurance for tax
purposes. These requirements include certain definitional tests and rules for diversification of the Contract’s
investments. For further information on the diversification requirements, see Taxation of the Fund in the statement of
additional information for the Series Fund.

We believe we have taken adequate steps to insure that the Contract qualifies as life insurance for tax purposes.
Generally speaking, this means that:

        •   you will not be taxed on the growth of the funds in the Contract, unless you receive a distribution from the
            Contract,

        •   the Contract’s death benefit will be income tax free to your beneficiary.

Although we believe that the Contract should qualify as life insurance for tax purposes, there are some uncertainties,
particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question.
Accordingly, we reserve the right to make changes -- which will be applied uniformly to all Contract owners after
advance written notice -- that we deem necessary to insure that the Contract will qualify as life insurance.

                                                            31
Pre-Death Distributions. The tax treatment of any distribution you receive before the insured’s death depends on
whether the Contract is classified as a Modified Endowment Contract.

      Contracts Not Classified as Modified Endowment Contracts.

            •    If you surrender the Contract or allow it to lapse, you will be taxed on the amount you receive in
                 excess of the premiums you paid less the untaxed portion of any prior withdrawals. For this purpose,
                 you will be treated as receiving any portion of the cash surrender value used to repay Contract debt.
                 In other words, you will immediately have taxable income to the extent of gain in the Contract.
                 Reinstatement of the contract after lapse will not eliminate the taxable income which we are required
                 to report to the Internal Revenue Service. The tax consequences of a surrender may differ if you take
                 the proceeds under an income payment settlement option.

            •    Generally, you will be taxed on a withdrawal to the extent the amount you receive exceeds the
                 premiums you paid for the Contract less the untaxed portion of any prior withdrawals. However, under
                 some limited circumstances, in the first 15 Contract years, all or a portion of a withdrawal may be
                 taxed if the Contract Fund exceeds the total premiums paid less the untaxed portions of any prior
                 withdrawals, even if total withdrawals do not exceed total premiums paid.

            •    Extra premiums for optional benefits and riders generally do not count in computing the premiums paid
                 for the Contract for the purposes of determining whether a withdrawal is taxable.

            •    Loans you take against the Contract are ordinarily treated as debt and are not considered distributions
                 subject to tax. However, there is some risk the Internal Revenue Service might assert that the
                 preferred loan should be treated as a distribution for tax purposes because of the relatively low
                 differential between the loan interest rate and Contract’s crediting rate. Were the Internal Revenue
                 Service to take this position, Pruco Life would take reasonable steps to avoid this result, including
                 modifying the Contract’s loan provisions.

      Modified Endowment Contracts.

             •   The rules change if the Contract is classified as a Modified Endowment Contract. The Contract could
                 be classified as a Modified Endowment Contract if premiums in amounts that are too large are paid or
                 a decrease in the face amount of insurance is made (or a rider removed). The addition of a rider or
                 an increase in the face amount of insurance may also cause the Contract to be classified as a
                 Modified Endowment Contract. You should first consult a qualified tax adviser and your Pruco Life
                 representative if you are contemplating any of these steps.

             •   If the Contract is classified as a Modified Endowment Contract, then amounts you receive under the
                 Contract before the insured's death, including loans and withdrawals, are included in income to the
                 extent that the Contract Fund before surrender charges exceeds the premiums paid for the Contract
                 increased by the amount of any loans previously included in income and reduced by any untaxed
                 amounts previously received other than the amount of any loans excludible from income. An
                 assignment of a Modified Endowment Contract is taxable in the same way. These rules also apply to
                 pre-death distributions, including loans and assignments, made during the two-year period before the
                 time that the Contract became a Modified Endowment Contract.

             •   Any taxable income on pre-death distributions (including full surrenders) is subject to a penalty of 10
                 percent unless the amount is received on or after age 59½, on account of your becoming disabled or
                 as a life annuity. It is presently unclear how the penalty tax provisions apply to Contracts owned by
                 businesses.

             •   All Modified Endowment Contracts issued by us to you during the same calendar year are treated as
                 a single Contract for purposes of applying these rules.

Investor Control. Treasury Department regulations do not provide guidance concerning the extent to which you may
direct your investment in the particular variable investment options without causing you, instead of Pruco Life, to be
considered the owner of the underlying assets. Because of this uncertainty, Pruco Life reserves the right to make such
                                                          32
changes as it deems necessary to assure that the Contract qualifies as life insurance for tax purposes. Any such
changes will apply uniformly to affected Contract owners and will be made with such notice to affected Contract owners
as is feasible under the circumstances.

Withholding. You must affirmatively elect that no taxes be withheld from a pre-death distribution. Otherwise, the
taxable portion of any amounts you receive will be subject to withholding. You are not permitted to elect out of
withholding if you do not provide a social security number or other taxpayer identification number. You may be subject
to penalties under the estimated tax payment rules if your withholding and estimated tax payments are insufficient to
cover the tax due.

Other Tax Considerations. If you transfer or assign the Contract to someone else, there may be gift, estate and/or
income tax consequences. If you transfer the Contract to a person two or more generations younger than you (or
designate such a younger person as a beneficiary), there may be Generation Skipping Transfer tax consequences.
Deductions for interest paid or accrued on Contract debt or on other loans that are incurred or continued to purchase
or carry the Contract may be denied. Your individual situation or that of your beneficiary will determine the federal
estate taxes and the state and local estate, inheritance and other taxes due if you or the insured dies.

Business-Owned Life Insurance. If a business, rather than an individual, is the owner of the Contract, there are
some additional rules. Business Contract owners generally cannot deduct premium payments. Business Contract
owners generally cannot take tax deductions for interest on Contract debt paid or accrued after October 13, 1995. An
exception permits the deduction of interest on policy loans on Contracts for up to 20 key persons. The interest
deduction for Contract debt on these loans is limited to a prescribed interest rate and a maximum aggregate loan
amount of $50,000 per key insured person. The corporate alternative minimum tax also applies to business-owned life
insurance. This is an indirect tax on additions to the Contract Fund or death benefits received under business-owned
life insurance policies.

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Pruco Life will determine the value of the Contract Fund on each Monthly date. If the Contract Fund less any
applicable surrender charges is zero or less, the Contract is in default unless it remains in-force under the Death
Benefit Guarantee. See Death Benefit Guarantee, page 21. If the Contract debt ever grows to be equal to or more
than the Contract Fund less any applicable surrender charges, the Contract will be in default. Should this happen,
Pruco Life will send you a notice of default setting forth the payment which we estimate will keep the Contract in-force
for three months from the date of default. This payment must be received at a Home Office within the 61-day grace
period after the notice of default is mailed or the Contract will end and have no value. A Contract that lapses with an
outstanding Contract loan may have tax consequences. See Tax Treatment of Contract Benefits, page 31.

A Contract that ended in default may be reinstated within 5 years after the date of default if the following conditions are
met: (1) renewed evidence of insurability is provided on the insured; (2) submission of certain payments sufficient to
bring the Contract up to date plus a premium that we estimate will cover all charges and deductions for the next three
months; and (3) any Contract debt with interest to date must be restored or paid back. If the Contract debt is restored
and the debt with interest would exceed the loan value of the reinstated Contract, the excess must be paid to us before
reinstatement. The reinstatement date will be the Monthly date that coincides with or next follows the date we approve
your request. We will deduct all required charges from your payment and the balance will be placed into your Contract
Fund. If we approve the reinstatement, we will credit the Contract Fund with an amount equal to the surrender charge
applicable as of the date of reinstatement.

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The Contract generally employs mortality tables that distinguish between males and females. Thus, premiums and
benefits differ under Contracts issued on males and females of the same age. However, in those states that have
adopted regulations prohibiting sex-distinct insurance rates, premiums and cost of insurance charges will be based on
male rates, whether the insureds are male or female. In addition, employers and employee organizations considering
purchase of a Contract should consult their legal advisers to determine whether purchase of a Contract based on
sex-distinct actuarial tables is consistent with Title VII of the Civil Rights Act of 1964 or other applicable law.




                                                            33
2WKHU *HQHUDO &RQWUDFW 3URYLVLRQV

Assignment. This Contract may not be assigned if the assignment would violate any federal, state or local law or
regulation prohibiting sex distinct rates for insurance. Generally, the Contract may not be assigned to an employee
benefit plan or program without Pruco Life’s consent. Pruco Life assumes no responsibility for the validity or sufficiency
of any assignment. We will not be obligated to comply with any assignment unless we receive a copy at a Home
Office.

Beneficiary. You designate and name your beneficiary in the application. Thereafter, you may change the beneficiary,
provided it is in accordance with the terms of the Contract. Should the insured die with no surviving beneficiary, the
insured’s estate will become the beneficiary.

Incontestability. We will not contest the Contract after it has been in-force during the insured’s lifetime for two years
from the issue date except when any change is made in the Contract that requires Pruco Life's approval and would
increase our liability. We will not contest such change after it has been in effect for two years during the lifetime of the
insured.

Misstatement of Age or Sex. If the insured's stated age or sex or both are incorrect in the Contract, Pruco Life will
adjust the death benefit payable and any amount to be paid, as required by law, to reflect the correct age and sex. Any
such benefit will be based on what the most recent deductions from the Contract Fund would have provided at the
insured's correct age and sex.

Settlement Options. The Contract grants to most owners, or to the beneficiary, a variety of optional ways of receiving
Contract proceeds, other than in a lump sum. Any Pruco Life representative authorized to sell this Contract can
explain these options upon request.

Suicide Exclusion. Generally, if the insured, whether sane or insane, dies by suicide within two years from the
Contract date, the Contract will end and Pruco Life will return the premiums paid, less any Contract debt, and less any
withdrawals. Generally, if the insured, whether sane or insane, dies by suicide after two years from the issue date, but
within two years of the effective date of an increase in the basic insurance amount, we will pay, as to the increase in
amount, no more than the sum of the premiums paid on and after the effective date of an increase.

5LGHUV

Contract owners may be able to obtain extra fixed benefits which may require an additional premium. These optional
insurance benefits will be described in what is known as a "rider" to the Contract. Charges applicable to the riders will
be deducted from the Contract Fund on each Monthly date.

One rider pays certain premiums into the Contract if the insured is totally disabled within the meaning of the provision.
Others pay an additional amount if the insured dies within a stated number of years after issue; similar benefits may be
available if the insured's spouse or child should die. The amounts of these benefits are fully guaranteed at issue; they
do not depend on the performance of the Account, although they will no longer be available if the Contract lapses.
Certain restrictions may apply; they are clearly described in the applicable rider.

Any Pruco Life representative authorized to sell the Contract can explain these extra benefits further. Samples of the
provisions are available from Pruco Life upon written request.

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Although Pruco Life believes it to be unlikely, it is possible that in the judgment of its management, one or more of the
portfolios of the Funds may become unsuitable for investment by Contract owners because of investment policy
changes, tax law changes, or the unavailability of shares for investment. In that event, Pruco Life may seek to
substitute the shares of another portfolio or of an entirely different mutual fund. Before this can be done, the approval
of the SEC, and possibly one or more state insurance departments, may be required. Contract owners will be notified
of any such substitution.




                                                            34
5HSRUWV WR &RQWUDFW 2ZQHUV

Once each year, Pruco Life will send you a statement that provides certain information pertinent to your own Contract.
This statement will detail values, transactions made, and specific Contract data that apply only to your particular
Contract.

You will also be sent annual and semi-annual reports of the Funds showing the financial condition of the portfolios and
the investments held in each portfolio.

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Pruco Life is subject to regulation and supervision by the Department of Insurance of the State of Arizona, which
periodically examines its operations and financial condition. It is also subject to the insurance laws and regulations of
all jurisdictions in which it is authorized to do business.

Pruco Life is required to submit annual statements of its operations, including financial statements, to the insurance
departments of the various jurisdictions in which it does business to determine solvency and compliance with local
insurance laws and regulations.

In addition to the annual statements referred to above, Pruco Life is required to file with Arizona and other jurisdictions
a separate statement with respect to the operations of all its variable contract accounts, in a form promulgated by the
National Association of Insurance Commissioners.

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The consolidated financial statements of Pruco Life and its subsidiaries as of December 31, 2001 and 2000 and for
each of the three years in the period ended December 31, 2001 and the financial statements of the Variable Universal
Life Subaccounts of the Account as of December 31, 2001 and for each of the three years in the period then ended
included in this prospectus have been so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in auditing and accounting.
PricewaterhouseCoopers LLP’s principal business address is 1177 Avenue of the Americas, New York, New York
10036.

Actuarial matters included in this prospectus have been examined by Pamela A. Schiz, MAAA, FSA, Vice President
and Actuary of Prudential, whose opinion is filed as an exhibit to the registration statement.

/LWLJDWLRQ DQG 5HJXODWRU\ 3URFHHGLQJV

We are subject to legal and regulatory actions in the ordinary course of our businesses, including class actions.
Pending legal and regulatory actions include proceedings specific to our practices and proceedings generally
applicable to business practices in the industries in which we operate. In certain of these lawsuits, large and/or
indeterminate amounts are sought, including punitive or exemplary damages.

Beginning in 1995, regulatory authorities and customers brought significant regulatory actions and civil litigation
against Pruco Life and Prudential involving individual life insurance sales practices. In 1996, Prudential, on behalf of
itself and many of its life insurance subsidiaries, including Pruco Life, entered into settlement agreements with relevant
insurance regulatory authorities and plaintiffs in the principal life insurance sales practices class action lawsuit covering
policyholders of individual permanent life insurance policies issued in the United States from 1982 to 1995. Pursuant
to the settlements, the companies agreed to various changes to their sales and business practices controls, to a series
of fines, and to provide specific forms of relief to eligible class members. Virtually all claims by class members filed in
connection with the settlements have been resolved and virtually all aspects of the remediation program have been
satisfied.

As of December 31, 2001 Prudential and/or Pruco Life remained a party to approximately 44 individual sales practices
actions filed by policyholders who “opted out” of the class action settlement relating to permanent life insurance
policies issued in the United States between 1982 and 1995. In addition, there were 19 sales practices actions
pending that were filed by policyholders who were members of the class and who failed to “opt out” of the class action
settlement. Prudential and Pruco Life believed that those actions are governed by the class settlement release and
                                                             35
expects them to be enjoined and/or dismissed. Additional suits may be filed by class members who “opted out” of the
class settlements or who failed to “opt out” but nevertheless seek to proceed against Prudential and/or Pruco Life. A
number of the plaintiffs in these cases seek large and/or indeterminate amounts, including punitive or exemplary
damages. Some of these actions are brought on behalf of multiple plaintiffs. It is possible that substantial punitive
damages might be awarded in any of these actions and particularly in an action involving multiple plaintiffs.

Prudential has indemnified Pruco Life for any liabilities incurred in connection with sales practices litigation covering
policyholders of individual permanent life insurance policies issued in the United States from 1982 to 1995.

Pruco Life’s litigation is subject to many uncertainties, and given the complexity and scope, the outcomes cannot be
predicted. It is possible that the results of operations or the cash flow of Pruco Life in a particular quarterly or annual
period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters.
Management believes, however, that the ultimate outcome of all pending litigation and regulatory matters should not
have a material adverse effect on Pruco Life’s financial position.

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Pruco Life has filed a registration statement with the SEC under the Securities Act of 1933, relating to the offering
described in this prospectus. This prospectus does not include all the information set forth in the registration
statement. Certain portions have been omitted pursuant to the rules and regulations of the SEC. The omitted
information may, however, be obtained from the SEC's Public Reference Section at 450 Fifth Street, N.W.,
Washington, D.C. 20549, or by telephoning (800) SEC-0330, upon payment of a prescribed fee.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each
household ("householding"), in lieu of sending a copy to each contract owner that resides in the household. You
should be aware that you can revoke or "opt out" of householding at any time by calling 1-877-778-5008.

Further information may also be obtained from Pruco Life. Its address and telephone number are set forth on the
inside front cover of this prospectus.

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The financial statements of the Account should be distinguished from the consolidated financial statements of Pruco
Life and its subsidiaries, which should be considered only as bearing upon the ability of Pruco Life to meet its
obligations under the Contracts.




                                                            36
                                      ',5(&7256 $1' 2)),&(56

The directors and major officers of Pruco Life, listed with their principal occupations during the past 5 years, are shown
below.
                                      ',5(&7256 2) 358&2 /,)(

JAMES J. AVERY, JR., Vice Chairman and Director – President, Prudential Individual Life Insurance since 1998;
prior to 1998: Senior Vice President, Chief Actuary and CFO, Prudential Individual Insurance Group.

VIVIAN L. BANTA, President, Chairman, and Director - Executive Vice President, Individual Financial Services, U.S.
Consumer Group since 2000; 1998 to 1999: Consultant, Individual Financial Services; prior to 1998: Consultant,
Morgan Stanley.

RICHARD J. CARBONE, Director – Senior Vice President and Chief Financial Officer since 1997.

HELEN M. GALT, Director – Company Actuary, Prudential since 1993.

JEAN D. HAMILTON, Director – Executive Vice President, Prudential Institutional since 1998; prior to 1998: President,
Diversified Group.

RONALD P. JOELSON, Director – Senior Vice President, Prudential Asset, Liability and Risk Management since
1999; prior to 1999: President, Guaranteed Products, Prudential Institutional.

DAVID R. ODENATH, JR., Director – President, Prudential Investments since 1999; prior to 1999: Senior Vice
President and Director of Sales, Investment Consulting Group, PaineWebber.


                              2)),&(56 :+2 $5( 127 ',5(&7256

SHAUN M. BYRNES, Senior Vice President – Senior Vice President, Director of Mutual Funds, Annuities and UITs,
Prudential Investments since 2001; 2000 to 2001: Senior Vice President, Director of Research, Prudential Investments;
1999 to 2000: Senior Vice President, Director of Mutual Funds, Prudential Investments; prior to 1999: Vice President,
Mutual Funds, Prudential Investments.

C. EDWARD CHAPLIN, Treasurer – Senior Vice President and Treasurer, Prudential since 2000; prior to 2000, Vice
President and Treasurer, Prudential.

THOMAS F. HIGGINS, Senior Vice President – Vice President, Annuity Services, Prudential Individual Financial
Services since 1999; 1998 to 1999: Vice President, Mutual Funds, Prudential Individual Financial Services; prior to
1998: Principal, Mutual Fund Operations, The Vanguard Group.

CLIFFORD E. KIRSCH, Chief Legal Officer and Secretary – Chief Counsel, Variable Products, Prudential Law
Department since 1995.

ANDREW J. MAKO, Executive Vice President – Vice President, Finance, U.S. Consumer Group since 1999; prior to
1999: Vice President, Business Performance Management Group.

ESTHER H. MILNES, Senior Vice President – Vice President and Chief Actuary, Prudential Individual Life Insurance
since 1999; prior to 1999: Vice President and Actuary, Prudential Individual Insurance Group.

JAMES M. O’CONNOR, Senior Vice President and Actuary – Vice President, Guaranteed Products since 2001; 1998
to 2000: Corporate Vice President, Guaranteed Products; prior to 1998: Corporate Actuary, Prudential Investments.

SHIRLEY H. SHAO, Senior Vice President and Chief Actuary – Vice President and Associate Actuary, Prudential since
1996.




                                                           37
WILLIAM J. ECKERT, IV, Vice President and Chief Accounting Officer – Vice President and IFS Controller, Prudential
Enterprise Financial Management since 2000; 1999 to 2000: Vice President and Individual Life Controller, Prudential
Enterprise Financial Management; prior to 1999: Vice President, Accounting, Enterprise Financial Management.


The business address of all directors and officers of Pruco Life is 213 Washington Street, Newark, New Jersey 07102-
2992.

Pruco Life directors and officers are elected annually.




                                                          38
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF NET ASSETS
December 31, 2001
                                                                                                  SUBACCOUNT

                                                               Prudential     Prudential                    Prudential     Prudential     Prudential
                                                                 Money        Diversified    Prudential      Flexible     Conservative       High
                                                                 Market         Bond           Equity       Managed        Balanced       Yield Bond
                                                                Portfolio      Portfolio      Portfolio      Portfolio      Portfolio      Portfolio
ASSETS
 Investment in The Prudential Series
   Fund, Inc. Portfolios and non-Prudential
   administered funds, at net asset value
   [Note 3] . . . . . . . . . . . . . . . . . . . . . . . .   $349,839,083   $110,731,045   $703,215,510   $955,949,976   $519,655,583   $123,195,19
  Net Assets . . . . . . . . . . . . . . . . . . . . . . .    $349,839,083   $110,731,045   $703,215,510   $955,949,976   $519,655,583   $123,195,197


NET ASSETS, representing:
 Accumulation units [Note 9] . . . . . . . . . . .            $349,839,083   $110,731,045   $703,215,510   $955,949,976   $519,655,583   $123,195,197
                                                              $349,839,083   $110,731,045   $703,215,510   $955,949,976   $519,655,583   $123,195,197
  Units outstanding . . . . . . . . . . . . . . . . . . .      261,935,942     46,789,362    116,535,070    215,067,105    140,725,098    105,849,938




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                   A1
                                                     SUBACCOUNTS (Continued)
                                                                                                              MFS
 Prudential                                                 T. Rowe Price                      Janus        Emerging        American
   Stock        Prudential     Prudential     Prudential     International     AIM V.I.        Aspen         Growth          Century
   Index          Value          Global       Jennison           Stock          Value         Growth         Series            VP
  Portfolio      Portfolio      Portfolio      Portfolio       Portfolio        Fund          Portfolio     Portfolio      Value Fund




$346,036,521   $126,261,132   $149,253,440   $188,382,064   $ 12,194,047     $ 31,179,593   $ 41,581,094   $ 30,478,768   $ 20,519,416
$346,036,521   $126,261,132   $149,253,440   $188,382,064   $ 12,194,047     $ 31,179,593   $ 41,581,094   $ 30,478,768   $ 20,519,416



$346,036,521   $126,261,132   $149,253,440   $188,382,064   $ 12,194,047     $ 31,179,593   $ 41,581,094   $ 30,478,768   $ 20,519,416
$346,036,521   $126,261,132   $149,253,440   $188,382,064   $ 12,194,047     $ 31,179,593   $ 41,581,094   $ 30,478,768   $ 20,519,416
 138,625,056     38,853,389    104,124,371     91,199,469     13,812,608       23,474,544     31,504,648     22,432,632     13,747,523




                         SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                  A2
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF OPERATIONS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                    SUBACCOUNTS
                                                                               Prudential                                         Prudential
                                                                              Money Market                                     Diversified Bond
                                                                                Portfolio                                          Portfolio
                                                                 2001            2000            1999             2001               2000             1999
INVESTMENT INCOME
  Dividend income . . . . . . . . . . . . . . . . . . .       $ 15,473,101    $ 21,923,321    $ 11,957,892    $   6,380,881     $   5,176,774     $          0

EXPENSES
  Charges to contract owners for assuming
    mortality risk and expense risk
    [Note 4A] . . . . . . . . . . . . . . . . . . . . . . .      2,303,740       2,167,079       1,437,464         613,429           488,119          467,557
  Reimbursement for excess expenses
    [Note 4D]. . . . . . . . . . . . . . . . . . . . . . .         (15,258)        (17,693)        (10,332)         (30,105)          (33,239)         (18,429)
NET EXPENSES . . . . . . . . . . . . . . . . . . . .             2,288,482       2,149,386       1,427,132         583,324           454,880          449,128
NET INVESTMENT INCOME (LOSS) . . . . . .                        13,184,619      19,773,935      10,530,760        5,797,557         4,721,894         (449,128)

NET REALIZED AND UNREALIZED GAIN
 (LOSS) ON INVESTMENTS
  Capital gains distributions received . . . . . .                       0               0               0               0             9,972          217,355
  Realized gain (loss) on shares redeemed . .                            0               0               0         207,050           197,518           69,374
  Net change in unrealized gain (loss)
    on investments . . . . . . . . . . . . . . . . . . .                 0               0               0         (193,949)        2,385,205         (831,201)
NET GAIN (LOSS) ON INVESTMENTS . . . .                                   0               0               0          13,101          2,592,695         (544,472)

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS. . . . . . . . . . . . . . . . . . . . .          $ 13,184,619    $ 19,773,935    $ 10,530,760    $   5,810,658     $   7,314,589     $   (993,600)




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                   A3
                                                            SUBACCOUNTS (Continued)
                    Prudential                                      Prudential                                      Prudential
                      Equity                                    Flexible Managed                               Conservative Balanced
                     Portfolio                                       Portfolio                                       Portfolio
      2001             2000           1999             2001            2000       1999                  2001           2000             1999


$    6,147,094     $ 15,250,367    $ 14,415,104    $ 37,245,389    $ 39,776,142    $      53,182     $ 18,119,680    $ 21,005,230    $ 24,546,800




     4,445,708        4,831,399       5,122,283       5,930,666       6,662,208         7,020,385       3,181,724       3,462,486       3,606,639

      (699,934)        (739,884)       (692,806)     (2,404,604)     (2,677,881)       (2,725,324)       (969,399)     (1,119,468)     (1,065,488)
     3,745,774        4,091,515       4,429,477       3,526,062       3,984,327         4,295,061       2,212,325       2,343,018       2,541,151
     2,401,320       11,158,852       9,985,627      33,719,327      35,791,815        (4,241,879)     15,907,355      18,662,212      22,005,649




    39,313,409      133,707,648     101,838,960      14,435,412      15,770,519        13,493,901       5,530,731       4,283,674       3,418,854
    (6,226,455)      12,759,291      30,562,177        (766,904)      9,064,141         8,687,128          25,993       3,922,178       4,164,171

(130,167,379)      (137,457,632)    (45,860,592)   (110,624,014)    (80,774,371)       66,161,585     (34,874,461)    (31,790,718)      7,019,129
    (97,080,425)      9,009,307      86,540,545     (96,955,506)    (55,939,711)       88,342,614     (29,317,737)    (23,584,866)     14,602,154




$ (94,679,105) $ 20,168,159        $ 96,526,172    $ (63,236,179) $ (20,147,896) $ 84,100,735        $ (13,410,382) $ (4,922,654) $ 36,607,803




                             SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                        A4
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF OPERATIONS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                          SUBACCOUNTS
                                                                                   Prudential                                            Prudential
                                                                                High Yield Bond                                         Stock Index
                                                                                    Portfolio                                             Portfolio
                                                                   2001              2000               1999               2001            2000                 1999
INVESTMENT INCOME
  Dividend income . . . . . . . . . . . . . . . . . . .       $   9,415,103      $    9,035,452     $    231,604     $    3,533,175     $    3,342,887     $    3,454,325

EXPENSES
  Charges to contract owners for assuming
    mortality risk and expense risk
    [Note 4A] . . . . . . . . . . . . . . . . . . . . . . .         461,217             462,703          491,069          2,082,296          2,296,284          1,869,495
  Reimbursement for excess expenses
    [Note 4D]. . . . . . . . . . . . . . . . . . . . . . .                 0                   0                0                  0                  0                0
NET EXPENSES . . . . . . . . . . . . . . . . . . . .                461,217             462,703          491,069          2,082,296          2,296,284          1,869,495
NET INVESTMENT INCOME (LOSS) . . . . . .                          8,953,886           8,572,749          (259,465)        1,450,879          1,046,603          1,584,830

NET REALIZED AND UNREALIZED GAIN
 (LOSS) ON INVESTMENTS
  Capital gains distributions received . . . . . .                         0                  0                 0         20,100,170        13,128,272          4,290,756
  Realized gain (loss) on shares redeemed . .                     (1,309,365)          (666,603)         (829,891)       (10,468,125)       10,510,388         15,770,959
  Net change in unrealized gain (loss)
    on investments . . . . . . . . . . . . . . . . . . .          (8,079,289)        (14,601,384)       4,361,938        (59,008,116)       (63,495,247)       36,090,405
NET GAIN (LOSS) ON INVESTMENTS . . . .                            (9,388,654)        (15,267,987)       3,532,047        (49,376,071)       (39,856,587)       56,152,120
NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS. . . . . . . . . . . . . . . . . . . . .          $    (434,768) $ (6,695,238) $            3,272,582    $ (47,925,192) $ (38,809,984) $ 57,736,950




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                         A5
                                                                     SUBACCOUNTS (Continued)
                       Prudential                                          Prudential                                                    Prudential
                         Value                                               Global                                                      Jennison
                        Portfolio                                           Portfolio                                                     Portfolio
      2001               2000                1999               2001          2000         1999                         2001                2000               1999


$    1,904,411     $    2,310,478       $    2,352,951    $      563,568     $    1,450,526     $     582,037     $      328,013     $      153,030       $     187,237




       721,077            604,613             611,129            956,939          1,182,883           794,369          1,154,010          1,333,546             641,137

              0                     0                0                  0                  0                 0                  0                     0                0
       721,077            604,613             611,129            956,939          1,182,883           794,369          1,154,010          1,333,546             641,137
     1,183,334          1,705,865            1,741,822          (393,371)           267,643           (212,332)         (825,997)         (1,180,516)           (453,900)




    11,274,676          8,208,818           11,452,953         36,932,786        12,714,275          1,020,553          1,880,687        30,686,678            6,522,518
    (2,902,326)           235,309            2,443,128        (44,447,974)       14,596,534         14,965,295        (30,303,947)        2,706,746            6,738,415

    (12,867,316)        5,167,691           (4,214,000)       (24,049,939)       (65,229,412)       45,405,939        (12,056,705)       (81,921,624)         29,898,188
     (4,494,966)       13,611,818            9,682,081        (31,565,127)       (37,918,603)       61,391,787        (40,479,965)       (48,528,200)         43,159,121



$ (3,311,632) $ 15,317,683              $ 11,423,903      $ (31,958,498) $ (37,650,960) $ 61,179,455              $ (41,305,962) $ (49,708,716) $ 42,705,221




                                SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                     A6
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF OPERATIONS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                           SUBACCOUNTS

                                                                                  T. Rowe Price                                               AIM V.I.
                                                                               International Stock                                             Value
                                                                                     Portfolio                                                 Fund
                                                                   2001               2000               1999                2001              2000              1999
INVESTMENT INCOME
  Dividend income . . . . . . . . . . . . . . . . . . .       $     256,845      $      67,909       $     22,529       $      40,899     $      33,466      $     36,577

EXPENSES
  Charges to contract owners for assuming
    mortality risk and expense risk
    [Note 4A] . . . . . . . . . . . . . . . . . . . . . . .          76,491             59,943             23,027             173,163           132,875            45,204
  Reimbursement for excess expenses
    [Note 4D]. . . . . . . . . . . . . . . . . . . . . . .                 0                  0                    0                 0                   0               0
NET EXPENSES . . . . . . . . . . . . . . . . . . . .                 76,491             59,943             23,027             173,163           132,875            45,204
NET INVESTMENT INCOME (LOSS) . . . . . .                            180,354              7,966                  (498)        (132,264)           (99,409)           (8,627)

NET REALIZED AND UNREALIZED GAIN
 (LOSS) ON INVESTMENTS
  Capital gains distributions received . . . . . .                         0           325,965             70,806              620,835        1,165,874            191,273
  Realized gain (loss) on shares redeemed . .                     (2,241,343)         (661,711)           865,549           (3,673,769)        (556,248)         1,390,692
  Net change in unrealized gain (loss)
    on investments . . . . . . . . . . . . . . . . . . .            173,753           (914,981)           728,570            (700,858)        (5,012,498)         759,066
NET GAIN (LOSS) ON INVESTMENTS . . . .                            (2,067,590)        (1,250,727)         1,664,925          (3,753,792)       (4,402,872)        2,341,031

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS. . . . . . . . . . . . . . . . . . . . .          $ (1,887,236) $ (1,242,761) $              1,664,427      $ (3,886,056) $ (4,502,281) $            2,332,404




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                        A7
                                                                  SUBACCOUNTS (Continued)
                                                                           MFS
                   Janus Aspen                                        Emerging Growth
                     Growth                                               Series                                             American Century
                     Portfolio                                           Portfolio                                            VP Value Fund
      2001             2000               1999               2001          2000         1999                     2001              2000             1999


$       29,109     $      807,214     $     26,559     $             0    $            0    $           0    $    129,021     $     75,220      $    26,882




       239,451            191,347           54,421            177,194           184,275           63,390           90,036           45,513           21,707

              0                  0                0                  0                 0                0               0                0                 0
       239,451            191,347           54,421            177,194           184,275           63,390           90,036           45,513           21,707
      (210,342)           615,867           (27,862)         (177,194)         (184,275)          (63,390)         38,985           29,707             5,175




         78,896         1,881,970           42,800           1,912,358         1,452,209                0                0         192,475           254,685
    (13,281,570)        1,502,918          967,207         (16,373,718)       (1,498,368)       4,379,704        1,875,730         491,680          (180,693)

     1,970,576         (10,742,056)       3,145,569         2,195,233         (7,574,276)       4,577,759         111,580         1,011,915         (236,903)
    (11,232,098)        (7,357,168)       4,155,576        (12,266,127)       (7,620,435)       8,957,463        1,987,310        1,696,070         (162,911)




$ (11,442,440) $ (6,741,301) $            4,127,714    $ (12,443,321) $ (7,804,710) $           8,894,073    $   2,026,295    $   1,725,777     $   (157,736)




                                SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                A8
                                            FINANCIAL STATEMENTS OF
                                  THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                 THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                      SUBACCOUNTS
                                                                                 Prudential                                          Prudential
                                                                                Money Market                                      Diversified Bond
                                                                                  Portfolio                                           Portfolio
                                                                   2001            2000            1999              2001               2000              1999
OPERATIONS
 Net investment income (loss) . . . . . . . . .         ...     $ 13,184,619    $ 19,773,935    $ 10,530,760    $    5,797,557     $    4,721,894    $     (449,128)
 Capital gains distributions received . . . . .         ...                0               0               0                 0              9,972           217,355
 Realized gain (loss) on shares redeemed                ...                0               0               0           207,050            197,518            69,374
 Net change in unrealized gain (loss) on
   investments . . . . . . . . . . . . . . . . . . .    ...                0               0               0          (193,949)         2,385,205          (831,201)

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS . . . . . . . . . . . . . . . . . . . . . .           13,184,619      19,773,935      10,530,760         5,810,658          7,314,589          (993,600)

CONTRACT OWNER TRANSACTIONS
 Contract Owner Net Payments . . . . . . . . . . .                34,096,846      46,510,902     291,867,279        10,765,650         11,819,293         9,213,218
 Policy Loans . . . . . . . . . . . . . . . . . . . . . . .       (1,844,612)     (7,829,678)     (4,003,912)       (2,000,490)        (1,659,052)       (1,646,549)
 Policy Loan Repayments and Interest . . . . . .                   2,013,475       3,136,456       3,688,681         1,891,514          1,668,688         1,939,244
 Surrenders, Withdrawals and
   Death Benefits . . . . . . . . . . . . . . . . . . . .          (4,832,020)     (4,229,392)     (3,216,419)       (3,549,654)        (5,010,626)       (3,977,332)
 Net Transfers From (To) Other Subaccounts
   or Fixed Rate Option . . . . . . . . . . . . . . . .          (57,159,116)    (26,777,857)    (68,358,175)       12,509,096          2,592,035           (41,084)
 Administrative and Other Charges . . . . . . . .                (10,238,244)     (8,721,658)     (6,681,729)       (5,385,962)        (4,043,988)       (3,374,192)

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM CONTRACT
 OWNER TRANSACTIONS . . . . . . . . . . . . .                    (37,963,671)      2,088,773     213,295,725        14,230,154          5,366,350         2,113,305

TOTAL INCREASE (DECREASE) IN NET
 ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . .      (24,779,052)     21,862,708     223,826,485        20,040,812         12,680,939         1,119,705

NET ASSETS
 Beginning of year . . . . . . . . . . . . . . . . . . . .       374,618,135     352,755,427     128,928,942        90,690,233         78,009,294        76,889,589
  End of year . . . . . . . . . . . . . . . . . . . . . . . .   $349,839,083    $374,618,135    $352,755,427    $110,731,045       $ 90,690,233      $ 78,009,294




                                   SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                    A9
                                                                 SUBACCOUNTS (Continued)
                    Prudential                                           Prudential                                             Prudential
                      Equity                                         Flexible Managed                                      Conservative Balanced
                     Portfolio                                            Portfolio                                              Portfolio
      2001             2000              1999               2001            2000         1999                       2001           2000             1999


$    2,401,320 $ 11,158,852        $     9,985,627    $    33,719,327 $      35,791,815     $     (4,241,879) $ 15,907,355       $ 18,662,212    $ 22,005,649
    39,313,409  133,707,648            101,838,960         14,435,412        15,770,519           13,493,901     5,530,731          4,283,674       3,418,854
    (6,226,455)  12,759,291             30,562,177           (766,904)        9,064,141            8,687,128        25,993          3,922,178       4,164,171

(130,167,379)      (137,457,632)       (45,860,592)       (110,624,014)      (80,774,371)         66,161,585      (34,874,461)    (31,790,718)      7,019,129




    (94,679,105)     20,168,159         96,526,172         (63,236,179)      (20,147,896)         84,100,735      (13,410,382)     (4,922,654)     36,607,803



     43,770,604      42,565,304         21,967,601          58,453,601        57,932,122           25,375,491      32,824,176      34,130,144      16,841,992
    (19,253,604)    (22,807,204)       (25,270,787)        (23,789,039)      (30,334,158)         (31,546,845)    (10,623,760)    (12,325,683)    (13,483,060)
     18,129,785      18,961,480         22,439,687          25,512,897        25,376,705           32,238,484      11,547,769      11,313,927      12,607,451

    (40,359,889)    (39,941,255)       (35,567,708)        (59,975,699)      (57,164,266)         (53,970,161)    (32,447,245)    (28,790,357)    (25,211,828)

     (3,591,944)    (35,007,754)       (31,481,752)        (11,956,088)      (49,024,693)         (28,719,869)     (6,415,659)    (25,008,238)    (11,980,279)
    (25,330,797)    (24,831,927)       (25,189,715)        (35,582,374)      (36,333,319)         (37,896,636)    (20,090,769)    (20,379,353)    (20,727,360)




    (26,635,845)    (61,061,356)       (73,102,674)        (47,336,702)      (89,547,609)         (94,519,536)    (25,205,488)    (41,059,560)    (41,953,084)



(121,314,950)       (40,893,197)        23,423,498        (110,572,881)     (109,695,505)         (10,418,801)    (38,615,870)    (45,982,214)     (5,345,281)


 824,530,460        865,423,657     842,000,159        1,066,522,857       1,176,218,362        1,186,637,163     558,271,453     604,253,667     609,598,948
$703,215,510       $824,530,460    $865,423,657       $ 955,949,976       $1,066,522,857    $1,176,218,362       $519,655,583    $558,271,453    $604,253,667




                                   SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                A10
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                          SUBACCOUNTS
                                                                                     Prudential                                      Prudential
                                                                                  High Yield Bond                                   Stock Index
                                                                                      Portfolio                                       Portfolio
                                                                     2001              2000            1999            2001            2000               1999
OPERATIONS
 Net investment income (loss) . . . . . . . . .           ..    $    8,953,886 $      8,572,749 $       (259,465) $ 1,450,879 $ 1,046,603           $     1,584,830
 Capital gains distributions received . . . . .           ..                 0                0                0    20,100,170  13,128,272                4,290,756
 Realized gain (loss) on shares redeemed.                 ..        (1,309,365)        (666,603)        (829,891)  (10,468,125) 10,510,388               15,770,959
 Net change in unrealized gain (loss) on
   investments . . . . . . . . . . . . . . . . . . . .    ..        (8,079,289)     (14,601,384)       4,361,938     (59,008,116)    (63,495,247)        36,090,405

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS . . . . . . . . . . . . . . . . . . . . .                 (434,768)       (6,695,238)      3,272,582     (47,925,192)    (38,809,984)        57,736,950

CONTRACT OWNER TRANSACTIONS
 Contract Owner Net Payments . . . . . . . . . .                     5,748,119        5,464,094        3,691,424      47,538,467      49,900,843         34,027,403
 Policy Loans . . . . . . . . . . . . . . . . . . . . . . .         (1,104,797)        (752,193)        (901,124)     (5,875,496)     (8,469,839)        (9,143,580)
 Policy Loan Repayments and Interest . . . . .                       1,375,264          800,641          942,474       4,712,003       4,230,885          8,218,322
 Surrenders, Withdrawals and
   Death Benefits . . . . . . . . . . . . . . . . . . . .            (2,936,697)       (1,963,376)     (1,587,661)    (12,718,992)    (12,956,007)       (12,349,782)
 Net Transfers From (To) Other Subaccounts
   or Fixed Rate Option . . . . . . . . . . . . . . .               50,092,008        (2,546,985)     (1,433,615)      4,575,382      25,759,714         50,141,104
 Administrative and Other Charges . . . . . . . .                   (2,676,253)       (2,336,359)     (2,332,129)    (18,772,036)    (16,977,972)       (12,115,753)

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM CONTRACT
 OWNER TRANSACTIONS . . . . . . . . . . . . .                       50,497,644        (1,334,178)     (1,620,631)     19,459,328      41,487,624         58,777,714

TOTAL INCREASE (DECREASE) IN NET
 ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .          50,062,876        (8,029,416)      1,651,951     (28,465,864)      2,677,640     116,514,664

NET ASSETS
 Beginning of year . . . . . . . . . . . . . . . . . . .            73,132,321       81,161,737       79,509,786     374,502,385     371,824,745        255,310,081
  End of year . . . . . . . . . . . . . . . . . . . . . . . .   $123,195,197       $ 73,132,321     $ 81,161,737    $346,036,521    $374,502,385    $371,824,745




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                       A11
                                                                SUBACCOUNTS (Continued)
                    Prudential                                        Prudential                                            Prudential
                      Value                                             Global                                              Jennison
                     Portfolio                                         Portfolio                                             Portfolio
      2001            2000              1999               2001          2000         1999                    2001            2000            1999


$     1,183,334 $     1,705,865    $    1,741,822    $      (393,371) $    267,643      $      (212,332) $    (825,997) $ (1,180,516) $        (453,900)
     11,274,676       8,208,818        11,452,953         36,932,786    12,714,275            1,020,553      1,880,687    30,686,678          6,522,518
     (2,902,326)        235,309         2,443,128        (44,447,974)   14,596,534           14,965,295    (30,303,947)    2,706,746          6,738,415

    (12,867,316)      5,167,691        (4,214,000)       (24,049,939)    (65,229,412)        45,405,939     (12,056,705)    (81,921,624)     29,898,188




     (3,311,632)     15,317,683        11,423,903        (31,958,498)    (37,650,960)        61,179,455     (41,305,962)    (49,708,716)     42,705,221



     15,257,589      14,251,719         9,746,539         14,451,309      14,739,398          5,006,744      47,964,876      48,284,668      30,287,545
     (3,022,720)     (2,633,185)       (2,784,001)        (1,522,307)     (2,428,695)        (1,079,045)     (4,866,256)     (8,584,646)     (4,044,172)
      2,259,240       2,009,559         2,348,262          1,227,073       1,151,064            818,588       3,595,600       3,292,236       1,878,823

     (7,485,893)     (4,276,845)       (4,314,358)        (3,702,751)     (2,853,578)        (1,254,030)    (11,086,810)     (7,023,561)     (3,757,076)

     10,239,151      (2,866,084)       (7,934,532)        (1,547,184)     22,758,745         40,973,920      (6,839,104)     68,964,610      55,494,343
     (7,116,533)     (5,322,042)       (4,541,664)        (5,943,139)     (5,024,811)        (2,371,271)    (17,276,404)    (15,272,165)     (7,124,250)




     10,130,834       1,163,122        (7,479,754)         2,963,001      28,342,123         42,094,906      11,491,902      89,661,142      72,735,213



      6,819,202      16,480,805         3,944,149        (28,995,497)     (9,308,837)       103,274,361     (29,814,060)     39,952,426     115,440,434


    119,441,930     102,961,125        99,016,976        178,248,937     187,557,774         84,283,413     218,196,124     178,243,698      62,803,264
$126,261,132       $119,441,930    $102,961,125      $149,253,440       $178,248,937    $187,557,774       $188,382,064    $218,196,124    $178,243,698




                             SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                            A12
                                             FINANCIAL STATEMENTS OF
                                   THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                                  THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT


STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2001, 2000 and 1999
                                                                                                             SUBACCOUNTS

                                                                                    T. Rowe Price                                         AIM V.I.
                                                                                 International Stock                                       Value
                                                                                       Portfolio                                           Fund
                                                                     2001               2000               1999            2001            2000            1999
OPERATIONS
 Net investment income (loss) . . . . . . . . .           ..    $      180,354 $           7,966 $             (498) $   (132,264) $         (99,409) $       (8,627)
 Capital gains distributions received . . . . .           ..                 0           325,965             70,806       620,835          1,165,874         191,273
 Realized gain (loss) on shares redeemed.                 ..        (2,241,343)         (661,711)           865,549    (3,673,769)          (556,248)      1,390,692
 Net change in unrealized gain (loss) on
   investments . . . . . . . . . . . . . . . . . . . .    ..          173,753           (914,981)           728,570         (700,858)     (5,012,498)       759,066

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM
 OPERATIONS . . . . . . . . . . . . . . . . . . . . .               (1,887,236)       (1,242,761)          1,664,427      (3,886,056)     (4,502,281)      2,332,404

CONTRACT OWNER TRANSACTIONS
 Contract Owner Net Payments . . . . . . . . . .                     6,138,868         6,920,046           2,977,838      14,997,294      17,590,605       8,558,676
 Policy Loans . . . . . . . . . . . . . . . . . . . . . . .           (131,335)         (172,590)            (29,165)       (429,547)       (242,336)       (177,358)
 Policy Loan Repayments and Interest . . . . .                          20,063             8,559               1,269          42,403          77,734           6,360
 Surrenders, Withdrawals and
   Death Benefits . . . . . . . . . . . . . . . . . . . .              (603,085)         (221,989)            (61,496)     (1,729,773)       (505,220)       (145,243)
 Net Transfers From (To) Other Subaccounts
   or Fixed Rate Option . . . . . . . . . . . . . . .                 (713,893)        1,070,230             442,737        (100,065)      4,459,612       2,503,335
 Administrative and Other Charges . . . . . . . .                   (1,965,274)       (1,497,355)           (555,992)     (5,331,211)     (4,128,600)     (1,473,668)

NET INCREASE (DECREASE) IN NET
 ASSETS RESULTING FROM CONTRACT
 OWNER TRANSACTIONS . . . . . . . . . . . . .                        2,745,344         6,106,901           2,775,191       7,449,101      17,251,795       9,272,102

TOTAL INCREASE (DECREASE) IN NET
 ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .            858,108          4,864,140           4,439,618       3,563,045      12,749,514      11,604,506

NET ASSETS
 Beginning of year . . . . . . . . . . . . . . . . . . .            11,335,939         6,471,799           2,032,181      27,616,548      14,867,034       3,262,528
  End of year . . . . . . . . . . . . . . . . . . . . . . . .   $ 12,194,047       $ 11,335,939        $   6,471,799    $ 31,179,593    $ 27,616,548    $ 14,867,034




                                    SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                                        A13
                                                              SUBACCOUNTS (Continued)
                                                                       MFS
                   Janus Aspen                                    Emerging Growth
                     Growth                                           Series                                         American Century
                     Portfolio                                       Portfolio                                        VP Value Fund
      2001             2000              1999            2001          2000         1999                 2001              2000             1999


$      (210,342) $      615,867     $     (27,862) $    (177,194) $   (184,275) $          (63,390) $       38,985    $      29,707     $       5,175
         78,896       1,881,970            42,800      1,912,358     1,452,209                   0               0          192,475           254,685
    (13,281,570)      1,502,918           967,207    (16,373,718)   (1,498,368)          4,379,704       1,875,730          491,680          (180,693)

     1,970,576       (10,742,056)        3,145,569       2,195,233      (7,574,276)      4,577,759        111,580         1,011,915          (236,903)




    (11,442,440)      (6,741,301)        4,127,714     (12,443,321)     (7,804,710)      8,894,073       2,026,295        1,725,777          (157,736)



    22,361,501       27,476,107         10,318,898      14,540,408      20,790,578       8,690,503       5,487,254        4,893,696         3,324,711
      (371,519)        (244,924)          (133,935)       (307,420)       (330,128)       (203,531)       (285,517)         (65,391)          (12,970)
        62,000           99,798              5,698          58,644          35,808          12,824          22,961           18,048             2,466

     (1,286,578)      (1,539,958)         (133,244)      1,242,777      (3,507,207)       (149,983)       257,164          (803,781)          (72,617)

        295,758        7,486,380         3,891,786      (1,158,460)      3,375,920       5,836,315       1,367,895         3,782,818        1,449,853
     (7,836,228)      (6,271,221)       (1,841,631)     (5,481,194)     (4,595,574)     (1,511,977)     (2,197,206)       (1,176,808)        (616,554)




    13,224,934       27,006,182         12,107,572       8,894,755      15,769,397      12,674,151       4,652,551        6,648,582         4,074,889



     1,782,494       20,264,881         16,235,286      (3,548,566)      7,964,687      21,568,224       6,678,846        8,374,359         3,917,153


    39,798,600       19,533,719          3,298,433      34,027,334      26,062,647       4,494,423      13,840,570        5,466,211         1,549,058
$ 41,581,094       $ 39,798,600     $ 19,533,719      $ 30,478,768    $ 34,027,334    $ 26,062,647    $ 20,519,416    $ 13,840,570      $   5,466,211




                              SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A20

                                                                          A14
                             NOTES TO FINANCIAL STATEMENTS OF
                        THE VARIABLE UNIVERSAL LIFE SUBACCOUNTS OF
                       THE PRUCO LIFE VARIABLE APPRECIABLE ACCOUNT
                                      December 31, 2001


Note 1:   General

          Pruco Life Variable Appreciable Account (the “Account”) was established on January 13, 1984 under Arizona
          law as a separate investment account of Pruco Life Insurance Company (“Pruco Life”) which is a wholly-
          owned subsidiary of The Prudential Insurance Company of America (“Prudential”). The assets of the
          Account are segregated from Pruco Life’s other assets. Proceeds from purchases of Pruco Life’s Variable
          Appreciable Life (“VAL”) contracts and Pruco Life’s Variable Universal Life (“VUL”) contracts are invested in
          the Account.

          The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment
          trust. The Account is a funding vehicle for individual variable life contracts. Each contract offers the option
          to invest in various subaccounts, each of which invests in either a corresponding portfolio of The Prudential
          Series Fund, Inc. (the “Series Fund”) or one of the non-Prudential administered funds. Investment options
          vary by contract. Options available to the VUL contracts which invest in a corresponding portfolio of the
          Series Fund are: Prudential Money Market Portfolio, Prudential Diversified Bond Portfolio, Prudential Equity
          Portfolio, Prudential Flexible Managed Portfolio, Prudential Conservative Balanced Portfolio, Prudential High
          Yield Bond Portfolio, Prudential Stock Index Portfolio, Prudential Value Portfolio, Prudential Global Portfolio,
          Prudential Jennison Portfolio. Options available for the VUL Contracts which invest in a corresponding
          portfolio of the non-Prudential administered funds are: T. Rowe Price International Stock Portfolio, AIM V.I.
          Value Fund, Janus Aspen Growth Portfolio, MFS Emerging Growth Series Portfolio, American Century VP
          Value Fund. These financial statements relate only to the subaccounts available to the VUL contract owners.

          The Series Fund is a diversified open-end management investment company, and is managed by Prudential.


Note 2:   Significant Accounting Policies

          The accompanying financial statements are prepared in conformity with accounting principles generally
          accepted in the United States of America (“GAAP”). The preparation of the financial statements in
          conformity with GAAP requires management to make estimates and assumptions that affect the reported
          amounts and disclosures. Actual results could differ from those estimates.

          Investments—The investments in shares of the Series Fund or the non-Prudential administered funds are
          stated at the net asset values of the respective portfolios, which value their investment securities at fair
          value.

          Security Transactions—Realized gains and losses on security transactions are reported on an average cost
          basis. Purchase and sale transactions are recorded as of the trade date of the security being purchased or
          sold.

          Distributions Received—Dividend and capital gain distributions received are reinvested in additional shares
          of the Series Fund or the non-Prudential administered funds and are recorded on the ex-dividend date.




                                                          A15
Note 3:   Investment Information for The Pruco Life Variable Appreciable Account

          The net asset value per share for each portfolio of the Series Fund, or the non-Prudential administered
          funds, the number of shares (rounded) of each portfolio held by the Account and the aggregate cost of
          investments in such shares at December 31, 2001 were as follows:


                                                                             PORTFOLIOS

                                         Prudential       Prudential                             Prudential     Prudential
                                           Money          Diversified        Prudential           Flexible     Conservative
                                           Market            Bond              Equity            Managed        Balanced
                                          Portfolio        Portfolio          Portfolio           Portfolio      Portfolio
          Number of shares (rounded):     34,983,908        9,747,451         34,319,937         64,634,887      37,958,772
          Net asset value per share:    $      10.00     $      11.36       $      20.49     $        14.79    $      13.69
          Cost:                         $349,839,083     $107,641,586       $773,799,328     $1,013,860,757    $534,779,276


                                                                        PORTFOLIOS (Continued)

                                         Prudential       Prudential
                                         High Yield         Stock            Prudential          Prudential     Prudential
                                           Bond             Index              Value               Global       Jennison
                                          Portfolio        Portfolio          Portfolio           Portfolio      Portfolio
          Number of shares (rounded):     22,813,925       10,936,679          7,049,756         9,761,507       10,144,430
          Net asset value per share:    $       5.40     $      31.64       $      17.91     $       15.29     $      18.57
          Cost:                         $146,960,589     $336,065,149       $127,201,733     $ 184,228,276     $237,933,043


                                                                        PORTFOLIOS (Continued)
                                                                                                   MFS
                                        T. Rowe Price                          Janus             Emerging       American
                                         International     AIM V.I.            Aspen              Growth         Century
                                             Stock          Value             Growth              Series        VP Value
                                           Portfolio        Fund              Portfolio          Portfolio        Fund
          Number of shares (rounded):      1,063,125        1,335,314          2,090,553           1,695,148      2,757,986
          Net asset value per share:    $      11.47     $      23.35       $      19.89     $         17.98   $       7.44
          Cost:                         $ 12,141,078     $ 35,761,040       $ 46,751,360     $    30,895,576   $ 19,631,767




                                                         A16
Note 4:   Charges and Expenses

          A. Mortality Risk and Expense Risk Charges

               The mortality risk and expense risk charges, at an effective annual rate of up to 0.60% for VAL
               contracts, and 0.90% for VUL contracts are applied daily against the net assets held in each
               subaccount. Mortality risk is that contract owners may not live as long as estimated and expense risk
               is that the cost of issuing and administering the policies may exceed related charges by Pruco Life.
               Pruco Life intends to charge only 0.60% on VUL contracts, but reserves the right to make the full
               0.90% charge.

          B. Deferred Sales Charge

               A deferred sales charge is imposed upon the surrender of certain variable life insurance contracts to
               compensate Pruco Life for sales and other marketing expenses. The amount of any sales charge will
               depend on the number of years that have elapsed since the contract was issued. No sales charge will
               be imposed after the tenth year of the contract. No sales charge will be imposed on death benefits.

          C.   Partial Withdrawal Charge

               A charge is imposed by Pruco Life on partial withdrawals of the cash surrender value. A charge equal to
               the lesser of $25 of 2% will be made in connection with each partial withdrawal of the cash surrender
               value of a contract.

          D.   Expense Reimbursement

               The Account is reimbursed by Pruco Life for expenses in excess of 0.40% of VAL’s average daily net
               assets incurred by the Money Market, Diversified Bond, Equity, Flexible Managed, and the Conservative
               Balanced Portfolios of the Series Fund.

          E. Cost of Insurance and Other Related Charges

               Contract owners contributions are subject to certain deductions prior to being invested in the Account.
               The deductions are for (1) transaction costs which are deducted from each premium payment to cover
               premium collection and processing costs; (2) state premium taxes; and (3) sales charges which are
               deducted in order to compensate Pruco Life for the cost of selling the contract. Contracts are also
               subject to monthly charges for the costs of administering the contract and to compensate Pruco Life
               for the guaranteed minimum death benefit risk.


Note 5:   Taxes

          Pruco Life is taxed as a “life insurance company” as defined by the Internal Revenue Code. The results of
          operations of the Account form a part of Prudential’s consolidated federal tax return. Under current federal
          law, no federal income taxes are payable by the Account. As such, no provision for tax liability has been
          recorded in these financial statements.




                                                         A17
Note 6:   Unit Activity

          Transactions in units (including transfers among subaccounts) for the years ended December 31, 2001, 2000
          and 1999 were as follows:


                                                                                     SUBACCOUNTS
                                                      Prudential Money Market                            Prudential Diversified Bond
                                                             Portfolio                                            Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:     485,833,820       532,634,304       688,439,469     14,897,197        14,641,128        18,867,479
          Contract Owner Redemptions:      (517,434,307)     (528,113,809)     (501,235,815)    (6,969,612)       (6,060,817)      (13,957,645)

                                                                                SUBACCOUNTS (Continued)
                                                           Prudential Equity                             Prudential Flexible Managed
                                                               Portfolio                                           Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:      35,225,616        39,941,680        17,583,983      23,442,217       22,697,791        18,092,420
          Contract Owner Redemptions:       (34,231,350)      (43,175,201)      (21,980,273)    (30,456,261)     (37,766,563)      (33,917,508)

                                                                                SUBACCOUNTS (Continued)
                                                 Prudential Conservative Balanced                        Prudential High Yield Bond
                                                             Portfolio                                            Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:      15,894,495        16,329,684        14,980,379     55,489,870          6,512,392      11,122,173
          Contract Owner Redemptions:       (20,537,733)      (23,390,485)      (22,112,313)    (5,708,106)        (5,894,718)     (9,085,397)

                                                                                SUBACCOUNTS (Continued)
                                                       Prudential Stock Index                                  Prudential Value
                                                             Portfolio                                            Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:    105,881,794         98,826,586      108,072,695      115,148,472       38,487,390       10,044,553
          Contract Owner Redemptions:      (90,367,112)       (80,470,275)     (81,305,298)    (109,597,263)     (33,937,765)      (8,957,622)

                                                                                SUBACCOUNTS (Continued)
                                                           Prudential Global                                Prudential Jennison
                                                               Portfolio                                         Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:     156,987,750       126,724,685      114,173,237     108,569,967       118,181,750       204,117,698
          Contract Owner Redemptions:      (154,065,953)     (113,761,479)     (82,857,290)    (99,973,501)      (91,168,292)     (175,266,138)

                                                                                SUBACCOUNTS (Continued)
                                                 T. Rowe Price International Stock                              AIM V.I. Value
                                                             Portfolio                                              Fund
                                              2001               2000             1999            2001              2000               1999

           Contract Owner Contributions:    216,987,393      100,259,512         46,454,627      27,709,382       52,280,940        19,310,773
           Contract Owner Redemptions:     (213,104,278)     (94,955,974)       (43,751,608)    (22,307,056)     (42,455,455)      (13,395,423)

                                                                                SUBACCOUNTS (Continued)
                                                       Janus Aspen Growth                              MFS Emerging Growth Series
                                                            Portfolio                                          Portfolio
                                              2001               2000             1999            2001              2000               1999
          Contract Owner Contributions:      65,387,677        35,576,304       12,731,721       92,471,685       68,675,633        55,426,917
          Contract Owner Redemptions:       (56,445,184)      (21,847,723)      (5,602,997)     (86,592,247)     (60,894,074)      (48,361,164)

                                                     SUBACCOUNTS (Continued)
                                                       American Century VP
                                                           Value Fund
                                              2001               2000             1999
          Contract Owner Contributions:     126,147,139        45,362,261         6,373,133
          Contract Owner Redemptions:      (122,798,623)      (38,989,776)       (2,897,228)


                                                                 A18
Note 7:   Purchases and Sales of Investments

          The aggregate costs of purchases and proceeds from sales of investments in the Series Fund and the non-
          Prudential administered funds for the year ended December 31, 2001 were as follows:

                                                                                          PORTFOLIOS

                                                     Prudential       Prudential                                Prudential       Prudential
                                                       Money          Diversified           Prudential           Flexible       Conservative
                                                       Market           Bond                  Equity            Managed          Balanced
                                                      Portfolio        Portfolio             Portfolio           Portfolio        Portfolio
          Purchases . . . . . . . . . . . . . .     $ 562,391,774    $ 17,527,358         $ 32,320,147         $ 6,516,721      $ 5,866,885
          Sales . . . . . . . . . . . . . . . . .   $(602,643,927)   $ (3,880,528)        $ (62,701,766)       $ (57,379,484)   $ (33,284,698)



                                                                                      PORTFOLIOS (Continued)

                                                     Prudential       Prudential
                                                     High Yield         Stock               Prudential          Prudential       Prudential
                                                       Bond             Index                 Value               Global         Jennison
                                                      Portfolio        Portfolio             Portfolio           Portfolio        Portfolio
          Purchases . . . . . . . . . . . . . .     $ 55,465,912     $ 136,488,957        $ 172,180,482        $ 209,730,964    $ 141,354,823
          Sales . . . . . . . . . . . . . . . . .   $ (5,429,484)    $(119,111,924)       $(162,770,724)       $(207,724,902)   $(131,016,930)


                                                                                      PORTFOLIOS (Continued)
                                                                                                                   MFS
                                                    T. Rowe Price                             Janus              Emerging         American
                                                     International      AIM V.I.              Aspen               Growth           Century
                                                         Stock           Value               Growth               Series          VP Value
                                                       Portfolio         Fund                Portfolio           Portfolio          Fund
          Purchases . . . . . . . . . . . . .       $ 202,326,798    $ 29,982,949         $ 81,490,692         $ 117,777,652    $ 162,097,608
          Sales . . . . . . . . . . . . . . . . .   $(199,657,946)   $ (22,707,011)       $ (68,505,210)       $(109,060,091)   $(157,535,094)




                                                                      A19
Note 8:          Related Party Transactions

                 Prudential and its affiliates perform various services on behalf of the mutual fund company and administers
                 the Series Fund in which the Account invests and may receive fees for the services performed. These
                 services include, among other things, shareholder communications, preparation, postage, fund transfer
                 agency and various other record keeping and customer service functions.


Note 9: Financial Highlights

                 Pruco Life sells a number of variable life insurance products that are funded by the Account. These products
                 have unique combinations of features and fees that are charged against the contract owner’s account
                 balance. Differences in the fee structure result in a variety of unit values, expense ratios and total returns.

                 The following table was developed by determining which products offered by Pruco Life have the lowest and
                 highest total return. Only product designs within each subaccount that had units outstanding throughout the
                 respective periods were considered when determining the lowest and highest total return. The summary may
                 not reflect the minimum and maximum contract charges offered by the Company as contract owners may not
                 have selected all available and applicable contract options as discussed in note 1.
                                                                         At December 31, 2001                               For the year ended December 31, 2001
                                                                 Units     Unit Fair Value      Net Assets    Investment*        Expense Ratio**          Total Return***
                                                                (000s)    Lowest to Highest       (000s)     Income Ratio       Lowest to Highest        Lowest to Highest

Prudential Money Market . . . . . . . . . . . . . . . .        261,936   1.25552 To 2.19874     $349,839        4.02%           0.57% To 0.60%           3.48% To    3.51%
Prudential Diversified Bond . . . . . . . . . . . . . . .        46,789   1.31342 To 3.47473     $110,731        6.21%           0.56% To 0.60%           6.34% To    6.38%
Prudential Equity . . . . . . . . . . . . . . . . . . . . .    116,535   1.37832 To 7.32260     $703,216        0.83%           0.50% To 0.60%         –11.71% To –11.62%
Prudential Flexible Managed . . . . . . . . . . . . . .        215,067   1.26663 To 4.71001     $955,950        3.75%           0.35% To 0.60%          –6.24% To –6.01%
Prudential Conservative Balanced . . . . . . . . . .           140,725   1.28828 To 4.00354     $519,656        3.40%           0.40% To 0.60%          –2.60% To –2.41%
Prudential High Yield Bond . . . . . . . . . . . . . . .       105,850   1.03945 To 2.24949     $123,195       12.19%           0.60% To 0.60%          –1.04% To –1.03%
Prudential Stock Index . . . . . . . . . . . . . . . . . .     138,625   1.60022 To 4.90359     $346,037        1.02%           0.60% To 0.60%         –12.57% To –12.57%
Prudential Value . . . . . . . . . . . . . . . . . . . . . .    38,853   1.68979 To 5.26628     $126,261        1.57%           0.60% To 0.60%          –2.66% To –2.66%
Prudential Global . . . . . . . . . . . . . . . . . . . . .    104,124   1.33447 To 1.73500     $149,253        0.35%           0.60% To 0.60%         –18.11% To –18.11%
Prudential Jennison. . . . . . . . . . . . . . . . . . . .      91,199   1.66508 To 2.40452     $188,382        0.17%           0.60% To 0.60%         –18.74% To –18.74%
T. Rowe Price International Stock . . . . . . . . . .           13,813   0.88282 To 0.88282      $12,194        2.03%           0.60% To 0.60%         –22.67% To –22.67%
AIM V.I. Value . . . . . . . . . . . . . . . . . . . . . . .    23,475   1.32823 To 1.32823      $31,180        0.14%           0.60% To 0.60%         –13.08% To –13.08%
Janus Aspen Growth . . . . . . . . . . . . . . . . . . .        31,505   1.31984 To 1.31984      $41,581        0.07%           0.60% To 0.60%         –25.18% To –25.18%
MFS Emerging Growth Series . . . . . . . . . . . . .            22,433   1.35868 To 1.35868      $30,479        0.85%           0.60% To 0.60%         –33.88% To –33.88%
American Century VP Value Fund . . . . . . . . . .              13,748   1.49259 To 1.49259      $20,519        0.85%           0.60% To 0.60%          12.15% To 12.15%


   * These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net
     of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality
     and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the
     timing of the declaration of dividends by the underlying fund in which the subaccounts invest.
 ** These ratios represent the annualized contract expenses of the separate account, net of reimbursement of excess expenses, consisting primarily
    of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values.
    Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.
*** These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions
    for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of
    these expenses in the calculation would result in a reduction in the total return presented. The total return is calculated for the year ended
    December 31, 2001.




                                                                                      A20
                      REPORT OF INDEPENDENT ACCOUNTANTS


To the Contract Owners of the
Variable Universal Life Subaccounts of
Pruco Life Variable Appreciable Account
and the Board of Directors of the
Pruco Life Insurance Company

In our opinion, the accompanying statements of net assets and the related statements of operations
and of changes in net assets present fairly, in all material respects, the financial position of each of
the Variable Universal Life Subaccounts (as defined in Note 1) of Pruco Life Variable Appreciable
Account at December 31, 2001, and the results of each of their operations and the changes in each
of their net assets for each of the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the responsibility of the
management of the Pruco Life Insurance Company; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits, which included confirmation of
fund shares owned at December 31, 2001 with the transfer agents of the investee mutual funds,
provide a reasonable basis for our opinion.




PricewaterhouseCoopers LLP
New York, New York
April 15, 2002




                                                  A21
Pruco Life Insurance Company and Subsidiary
Consolidated Statements of Financial Position
December 31, 2001 and 2000 (In Thousands)


                                                                                              2001             2000

ASSETS
Fixed maturities
   Available for sale, at fair value (amortized cost, 2001: $3,935,472; 2000:$3,552,244)    $ 4,024,893    $    3,561,521
   Held to maturity, at amortized cost (fair value, 2000: $320,634)                                   -           324,546
Equity securities - available for sale, at fair value (cost, 2001: $173; 2000: $13,446)             375            10,804
Commercial loans on real estate                                                                   8,190             9,327
Policy loans                                                                                    874,065           855,374
Short-term investments                                                                          215,610           202,815
Other long-term investments                                                                      84,342            83,738
         Total investments                                                                    5,207,475         5,048,125
Cash and cash equivalents                                                                       374,185           453,071
Deferred policy acquisition costs                                                             1,159,830         1,132,653
Accrued investment income                                                                        77,433            82,297
Reinsurance recoverable                                                                         300,697            31,568
Receivables from affiliates                                                                      33,074            51,586
Other assets                                                                                     20,134            29,445
Separate Account assets                                                                      14,920,584        16,230,264
TOTAL ASSETS                                                                               $ 22,093,412    $   23,059,009

LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities
Policyholders’ account balances                                                              $ 3,947,690   $    3,646,668
Future policy benefits and other policyholder liabilities                                        808,230          702,862
Cash collateral for loaned securities                                                            190,022          185,849
Securities sold under agreements to repurchase                                                    80,715          104,098
Income taxes payable                                                                             266,096          235,795
Other liabilities                                                                                228,596          120,891
Separate Account liabilities                                                                  14,920,584       16,230,264
Total liabilities                                                                             20,441,933       21,226,427
Contingencies (See Footnote 12)
Stockholder’s Equity
Common stock, $10 par value;
     1,000,000 shares, authorized;
     250,000 shares, issued and outstanding                                                       2,500             2,500
Paid-in-capital                                                                                 466,748           466,748
Retained earnings                                                                             1,147,665         1,361,924

Accumulated other comprehensive income (loss):
   Net unrealized investment gains                                                               34,718             4,730
   Foreign currency translation adjustments                                                        (152)           (3,320)
Accumulated other comprehensive income                                                           34,566             1,410
Total stockholder’s equity                                                                    1,651,479         1,832,582
TOTAL LIABILITIES AND
  STOCKHOLDER’S EQUITY                                                                     $ 22,093,412    $ 23,059,009




                                         See Notes to Consolidated Financial Statements




                                                                B- 1
Pruco Life Insurance Company and Subsidiary
Consolidated Statements of Operations and Comprehensive Income
Years Ended December 31, 2001, 2000 and 1999 (In Thousands)


                                                                      2001               2000           1999

REVENUES

Premiums                                                          $    90,868       $ 121,921       $    98,976
Policy charges and fee income                                         490,185         474,861           414,425
Net investment income                                                 343,638         337,919           276,821
Realized investment losses, net                                       (60,476)        (20,679)          (32,545)
Asset management fees                                                   7,897          71,160            60,392
Other income                                                            4,962           2,503             1,397

Total revenues                                                        877,074            987,685        819,466

BENEFITS AND EXPENSES

Policyholders’ benefits                                               256,080            248,063        205,042
Interest credited to policyholders’ account balances                  195,966            171,010        136,852
General, administrative and other expenses                            382,701            410,684        392,041

Total benefits and expenses                                           834,747            829,757        733,935

Income from operations before income taxes                             42,327            157,928         85,531

Income tax (benefit) provision                                        (25,255)            54,432         29,936

NET INCOME                                                             67,582            103,496         55,595

Other comprehensive income (loss), net of tax:

   Unrealized gains (losses) on securities, net of
   reclassification adjustment                                         29,988             33,094        (38,266)

   Foreign currency translation adjustments                             3,168               (993)          (742)

Other comprehensive income (loss)                                      33,156             32,101        (39,008)

TOTAL COMPREHENSIVE INCOME                                     $ 100,738           $     135,597    $    16,587




                                        See Notes to Consolidated Financial Statements




                                                           B- 2
Pruco Life Insurance Company and Subsidiary
Consolidated Statements of Changes in Stockholder’s Equity
Years Ended December 31, 2001, 2000 and 1999 (In Thousands)
                                                                                           Accumulated
                                                                                               other             Total
                                                Common      Paid-in-       Retained       comprehensive      stockholder’s
                                                 stock      capital        earnings        income (loss)         equity

Balance, January 1, 1999                        $ 2,500    $ 439,582     $ 1,202,833          $    8,317         $ 1,653,232

Net income                                            -             -         55,595                    -             55,595

Change in foreign currency
translation adjustments, net of taxes                 -             -               -               (742)               (742)

Change in net unrealized
investment losses, net of
reclassification adjustment and taxes                 -             -               -             (38,266)           (38,266)

Balance, December 31, 1999                        2,500      439,582       1,258,428              (30,691)         1,669,819

Net income                                            -             -        103,496                    -            103,496

Contribution from Parent                              -       27,166                -                   -             27,166

Change in foreign currency
translation adjustments, net of taxes                 -             -               -               (993)               (993)

Change in net unrealized
investment losses, net of
reclassification adjustment and taxes                 -             -               -             33,094              33,094

Balance, December 31, 2000                        2,500      466,748       1,361,924               1,410           1,832,582

Net income                                            -             -         67,582                    -             67,582

Policy credits issued to eligible
policyholders                                         -             -        (128,025)                  -           (128,025)

Dividends to Parent                                   -             -       (153,816)                   -           (153,816)

Change in foreign currency translation
adjustments, net of taxes                             -             -               -              3,168               3,168

Change in net unrealized investment
gains, net of reclassification adjustment
and taxes
                                                      -             -               -             29,988              29,988

Balance, December 31, 2001                  $      2,500   $ 466,748      $ 1,147,665     $       34,566     $     1,651,479




                                         See Notes to Consolidated Financial Statements




                                                             B- 3
Pruco Life Insurance Company and Subsidiary
Consolidated Statements of Cash Flows
Years Ended December 31, 2001, 2000 and 1999 (In Thousands)
                                                                         2001                2000                 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                           $      67,582       $    103,496     $        55,595
Adjustments to reconcile net income to net cash (used in)
  provided by operating activities:
  Policy charges and fee income                                            (54,970)           (72,275)            (83,961)
  Interest credited to policyholders’ account balances                     195,966            171,010             136,852
  Realized investment losses, net                                           60,476             20,679              32,545
  Amortization and other non-cash items                                    (49,594)           (48,141)             75,037
  Change in:
      Future policy benefits and other policyholders’ liabilities          105,368             73,340              100,743
      Accrued investment income                                              4,864            (13,380)              (7,803)
      Receivable from/Payable to affiliate                                  18,512            (24,907)             (66,081)
      Policy loans                                                         (40,645)           (63,022)             (25,435)
      Deferred policy acquisition costs                                   (100,281)           (69,868)            (201,072)
      Income taxes payable/receivable                                       38,839             90,195              (47,758)
      Other, net                                                           (38,114)            51,011               18,974
Cash Flows From (Used in) Operating Activities                             208,003            218,138              (12,364)
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale/maturity of:
      Fixed maturities:
          Available for sale                                             2,653,798           2,273,789         3,076,848
          Held to maturity                                                       -              64,245            45,841
      Equity securities                                                        482               1,198             5,209
      Commercial loans on real estate                                        1,137               1,182             6,845
      Other long-term investments                                                -              15,039               385
  Payments for the purchase of:
      Fixed maturities:
          Available for sale                                             (2,961,861)      (2,782,541)         (3,452,289)
          Held to maturity                                                        -                -             (24,170)
      Equity securities                                                        (184)         (11,134)             (5,110)
      Other long-term investments                                              (130)          (6,917)            (39,094)
  Cash collateral for loaned securities, net                                  4,174           98,513              14,000
  Securities sold under agreement to repurchase, net                        (23,383)          82,947             (28,557)
  Short-term investments, net                                               (12,766)        (118,418)             92,199
Cash Flows Used In Investing Activities                                    (338,733)        (382,097)           (307,893)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Policyholders’ account deposits                                       1,456,668          2,409,399           3,457,158
  Policyholders’ account withdrawals                                   (1,313,300)        (1,991,363)         (3,091,565)
  Cash dividend to Parent                                                 (26,048)                 -                   -
  Cash provided to affiliate                                              (65,476)                 -                   -
Cash Flows (Used in) From Financing Activities                             51,844            418,036             365,593
  Net increase in Cash and cash equivalents                               (78,886)           254,077              45,336
  Cash and cash equivalents, beginning of year                            453,071            198,994             153,658
CASH AND CASH EQUIVALENTS, END OF YEAR                               $    374,185        $ 453,071            $ 198,994

SUPPLEMENTAL CASH FLOW INFORMATION
  Income taxes (received) paid                                       $     (46,021)      $     (14,832)       $    55,144
NON-CASH TRANSACTIONS DURING THE YEAR
  Dividend paid with fixed maturities                                $      81,952       $          -         $          -
  Taiwan branch dividend paid with net assets/liabilities            $      45,816       $          -         $          -
  Policy credits issued to eligible policyholders                    $     128,025       $          -         $          -
  Contribution from Parent                                           $           -       $     27,166         $          -



                                        See Notes to Consolidated Financial Statements



                                                              B- 4
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

1. BUSINESS

Pruco Life Insurance Company (“the Company”) is a stock life insurance company, organized in 1971 under the laws of the
state of Arizona. The Company is licensed to sell individual life insurance, variable life insurance, term life insurance, variable
and fixed annuities, and a non-participating guaranteed interest contract (“GIC”) called Prudential Credit Enhanced GIC
(“PACE”) in the District of Columbia, Guam and in all states and territories except New York. The Company also had
marketed individual life insurance through its branch office in Taiwan. The branch office was transferred to an affiliated
Company on January 31, 2001, as described in Footnote 14.

The Company has one wholly owned subsidiary, Pruco Life Insurance Company of New Jersey (“PLNJ”). PLNJ is a stock life
insurance company organized in 1982 under the laws of the state of New Jersey. It is licensed to sell individual life insurance,
variable life insurance, term life insurance, fixed and variable annuities only in the states of New Jersey and New York. Another
wholly owned subsidiary, The Prudential Life Insurance Company of Arizona (“PLICA”) was dissolved on September 30,
2000. All assets and liabilities were transferred to the Company. PLICA had no new business sales in 2000 or 1999.

The Company is a wholly owned subsidiary of The Prudential Insurance Company of America (“Prudential”), an insurance
company founded in 1875 under the laws of the state of New Jersey. On December 18, 2001 (“the date of demutualization”)
Prudential converted from a mutual life insurance company to a stock life insurance company and became an indirect wholly
owned subsidiary of Prudential Financial, Inc. (the “Holding Company”). The demutualization was completed in accordance
with Prudential’s Plan of Reorganization, which was approved by the Commissioner of the New Jersey Department of Banking
and Insurance in October 2001.

Prudential intends to make additional capital contributions to the Company, as needed, to enable it to comply with its reserve
requirements and fund expenses in connection with its business. Generally, Prudential is under no obligation to make such
contributions and its assets do not back the benefits payable under the Company’s policyholder contracts. During 2000, a
capital contribution of $27.2 million resulted from the forgiveness of an intercompany receivable.

The Company is engaged in a business that is highly competitive because of the large number of stock and mutual life insurance
companies and other entities engaged in marketing insurance products, and individual and group annuities.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”). The Company has extensive transactions and relationships with Prudential and other
affiliates, as more fully described in Footnote 14. Due to these relationships, it is possible that the terms of these transactions
are not the same as those that would result from transactions among wholly unrelated parties.

Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, in particular deferred policy acquisition costs (“DAC”) and future policy
benefits, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ from those estimates.

Investments
Fixed maturities classified as “available for sale” are carried at estimated fair value. Fixed maturities that the Company has
both the intent and ability to hold to maturity are stated at amortized cost and classified as “held to maturity”. The amortized
cost of fixed maturities is written down to estimated fair value if a decline in value is considered to be other than temporary.
Unrealized gains and losses on fixed maturities “available for sale”, including the effect on deferred policy acquisition costs and
policyholders’ account balances that would result from the realization of unrealized gains and losses are included in a separate
component of equity, “Accumulated other comprehensive income (loss)”, net of income taxes.

Equity securities, available for sale, comprised of common and non-redeemable preferred stock, are carried at estimated fair
value. The associated unrealized gains and losses, the effects on deferred policy acquisition costs and on policyholders’ account
balances that would result from the realization of unrealized gains and losses, are included in a separate component of equity,
“Accumulated other comprehensive income (loss)”, net of income taxes.




                                                             B- 5
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Commercial loans on real estate are stated primarily at unpaid principal balances, net of unamortized discounts and an
allowance for losses. The allowance for losses includes a loan specific reserve for impaired loans and a portfolio reserve for
incurred but not specifically identified losses. Impaired loans include those loans for which it is probable that all amounts due
according to the contractual terms of the loan agreement will not be collected. Impaired loans are measured at the present value
of expected future cash flows discounted at the loan's effective interest rate, or at the fair value of the collateral if the loan is
collateral dependent. Interest received on impaired loans, including loans that were previously modified in a troubled debt
restructuring, is either applied against the principal or reported as revenue, according to management's judgment as to the
collectibility of principal. Management discontinues accruing interest on impaired loans after the loans are 90 days delinquent
as to principal or interest, or earlier when management has serious doubts about collectibility. When a loan is recognized as
impaired, any accrued but uncollectible interest is reversed against interest income of the current period. Generally, a loan is
restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the
payment of interest has been interrupted for a substantial period, a regular payment performance has been established. The
portfolio reserve for incurred but not specifically identified losses considers the Company's past loan loss experience, the
current credit composition of the portfolio, historical credit migration, property type diversification, default and loss severity
statistics and other relevant factors.

Policy loans are carried at unpaid principal balances.

Short-term investments, consisting of highly liquid debt instruments other than those held in “Cash and cash equivalents,”
with a maturity of twelve months or less when purchased, are carried at amortized cost, which approximates fair value.

Other long-term investments represent the Company’s investments in joint ventures and partnerships in which the Company
does not exercise control, derivatives held for purposes other than trading, and investments in the Company’s own Separate
Accounts. Joint ventures and partnerships are recorded using the equity method of accounting, reduced for other than
temporary declines in value. The Company’s investment in the Separate Accounts is carried at estimated fair value. The
Company’s net income from investments in joint ventures and partnerships is generally included in “Net investment income.”

Realized investment losses, net are computed using the specific identification method. Costs of fixed maturity and equity
securities are adjusted for impairments considered to be other than temporary. Impairment adjustments are included in
“Realized investment gains (losses), net.” Factors considered in evaluating whether a decline in value is other than temporary
are: 1) whether the decline is substantial; 2) the Company’s ability and intent to retain the investment for a period of time
sufficient to allow for an anticipated recovery in value; 3) the duration and extent to which the market value has been less than
cost; and 4) the financial condition and near-term prospects of the issuer.

Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments, and other debt issues
with a maturity of three months or less when purchased.

Deferred policy acquisition costs
The costs that vary with and that are related primarily to the production of new insurance and annuity business are deferred to
the extent that they are deemed recoverable from future profits. Such costs include commissions, costs of policy issuance and
underwriting, and variable field office expenses. Deferred policy acquisition costs are subject to recognition testing at the time
of policy issue and recoverability and premium deficiency testing at the end of each accounting period. Deferred policy
acquisition costs, for certain products, are adjusted for the impact of unrealized gains or losses on investments as if these gains
or losses had been realized, with corresponding credits or charges included in “Accumulated other comprehensive income
(loss).”

Policy acquisition costs related to interest-sensitive and variable life products and certain investment-type products are deferred
and amortized over the expected life of the contracts (periods ranging from 25 to 30 years) in proportion to estimated gross
profits arising principally from investment results, mortality and expense margins, and surrender charges based on historical and
anticipated future experience, which is updated periodically. The effect of changes to estimated gross profits on unamortized
deferred acquisition costs is reflected in “General and administrative expenses” in the period such estimated gross profits are
revised.




                                                              B- 6
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred policy acquisition costs related to non-participating term insurance are amortized over the expected life of the
contracts in proportion to premium income. For guaranteed investment contracts, acquisition costs are expensed as incurred.

Prudential and the Company have offered programs under which policyholders, for a selected product or group of products, can
exchange an existing policy or contract issued by Prudential or the Company for another form of policy or contract. These
transactions are known as internal replacements. If the new policies have terms that are substantially similar to those of the
earlier policies, the DAC is retained with respect to the new policies and amortized over the life of the new policies. If the terms
of the new policies are not substantially similar to those of the former policy, the unamortized DAC on the surrendered policies
is immediately charged to expense.

Securities loaned
Securities loaned are treated as financing arrangements and are recorded at the amount of cash received as collateral. The
Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities,
respectively. The Company monitors the market value of securities loaned on a daily basis with additional collateral obtained as
necessary. Non-cash collateral received is not reflected in the consolidated statements of financial position because the debtor
typically has the right to redeem the collateral on short notice. Substantially all of the Company’s securities loaned are with
large brokerage firms.

Securities sold under agreements to repurchase
Securities sold under agreements to repurchase are treated as financing arrangements and are carried at the amounts at which the
securities will be subsequently reacquired, including accrued interest, as specified in the respective agreements. Assets to be
repurchased are the same, or substantially the same, as the assets transferred and the transferor, through right of substitution,
maintains the right and ability to redeem the collateral on short notice. The market value of securities to be repurchased is
monitored and additional collateral is obtained, where appropriate, to protect against credit exposure.

Securities lending and securities repurchase agreements are used to generate net investment income and facilitate trading
activity. These instruments are short-term in nature (usually 30 days or less). Securities loaned are collateralized principally by
U.S. Government and mortgage-backed securities. Securities sold under repurchase agreements are collateralized principally by
cash. The carrying amounts of these instruments approximate fair value because of the relatively short period of time between
the origination of the instruments and their expected realization.

Separate Account Assets and Liabilities
Separate Account assets and liabilities are reported at estimated fair value and represent segregated funds which are invested for
certain policyholders and other customers. The assets consist of common stocks, fixed maturities, real estate related securities,
and short-term investments. The assets of each account are legally segregated and are not subject to claims that arise out of any
other business of the Company. Investment risks associated with market value changes are borne by the customers, except to
the extent of minimum guarantees made by the Company with respect to certain accounts. The investment income and gains or
losses for Separate Accounts generally accrue to the policyholders and are not included in the Consolidated Statements of
Operations and Comprehensive Income. Mortality, policy administration and surrender charges on the accounts are included in
“Policy charges and fee income”.

Separate Accounts represent funds for which investment income and investment gains and losses accrue directly to, and
investment risk is borne by, the policyholders, with the exception of the Pruco Life Modified Guaranteed Annuity Account.
The Pruco Life Modified Guaranteed Annuity Account is a non-unitized Separate Account, which funds the Modified
Guaranteed Annuity Contract and the Market Value Adjustment Annuity Contract. Owners of the Pruco Life Modified
Guaranteed Annuity and the Market Value Adjustment Annuity Contracts do not participate in the investment gain or loss from
assets relating to such accounts. Such gain or loss is borne, in total, by the Company.

Contingencies
Amounts related to contingencies are accrued if it is probable that a liability has been incurred and an amount is reasonably
estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate
resolution of the matter that are reasonably estimable and, if so, they are included in the accrual.




                                                             B- 7
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Insurance Revenue and Expense Recognition
Premiums from insurance policies are generally recognized when due. Benefits are recorded as an expense when they are
incurred. For traditional life insurance contracts, a liability for future policy benefits is recorded using the net level premium
method. For individual annuities in payout status, a liability for future policy benefits is recorded for the present value of
expected future payments based on historical experience.

Amounts received as payment for interest-sensitive life, individual annuities and guaranteed investment contracts are reported as
deposits to “Policyholders’ account balances”. Revenues from these contracts reflected as “Policy charges and fee income”
consist primarily of fees assessed during the period against the policyholders’ account balances for mortality charges, policy
administration charges and surrender charges. Benefits and expenses for these products include claims in excess of related
account balances, expenses of contract administration, interest credited and amortization of deferred policy acquisition costs.

Premiums, benefits and expenses are stated net of reinsurance ceded to other companies. Estimated reinsurance recoverables
and the cost of reinsurance are recognized over the life of the reinsured policies using assumptions consistent with those used to
account for the underlying policies.

Foreign Currency Translation Adjustments
Assets and liabilities of the Taiwan branch are translated to U.S. dollars at the exchange rate in effect at the end of the period.
Revenues, benefits and other expenses are translated at the average rate prevailing during the period. Cumulative translation
adjustments arising from the use of differing exchange rates from period to period are charged or credited directly to “Other
comprehensive income (loss).” The cumulative effect of changes in foreign exchange rates are included in “Accumulated other
comprehensive income (loss)”.

Asset Management Fees
Through December 31, 2000, the Company received asset management fee income from policyholder account balances invested
in The Prudential Series Funds (“PSF”), which are a portfolio of mutual fund investments related to the Company’s Separate
Account products (refer to Note 14). In addition, the Company receives fees from policyholder account balances invested in
funds managed by companies other than Prudential. Asset management fees are recognized as income as earned.

Derivative Financial Instruments
Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, or
the value of securities or commodities. Derivative financial instruments used by the Company include swaps, futures, forwards
and option contracts and may be exchange-traded or contracted in the over-the-counter market. See Note 11 for a discussion of
the Company’s use of derivative financial instruments and the related accounting and reporting treatment for such instruments.

Income Taxes
The Company and its subsidiary are members of the consolidated federal income tax return of Prudential and file separate
company state and local tax returns. Pursuant to the tax allocation arrangement with Prudential, total federal income tax
expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are
recognized in the consolidated federal tax provision. Deferred income taxes are generally recognized, based on enacted rates,
when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is
recorded to reduce a deferred tax asset to that portion that is expected to be realized.

New Accounting Pronouncements
In September 2000, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards
(“SFAS”) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a
replacement of FASB Statement No. 125.” The Company has adopted the provisions of SFAS No. 140 relating to transfers and
extinguishments of liabilities which are effective for periods occurring after March 31, 2001. The adoption did not have an
effect on the results of operations of the Company.




                                                             B- 8
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In June 2001, the FASB issued SFAS No. 141, “Business Combinations” and SFAS No. 142, “Goodwill and Other Intangible
Assets.” SFAS No. 141 requires that the Company account for all business combinations in the scope of the statement using the
purchase method. SFAS No. 142 requires that an intangible asset acquired either individually or with a group of other assets
shall initially be recognized and measured based on fair value. An intangible asset with a finite life is amortized over its useful
life to the reporting entity; an intangible asset with an indefinite useful life, including goodwill, is not amortized. All intangible
assets shall be tested for impairment in accordance with the statement. SFAS No. 142 is effective for fiscal years beginning
after December 15, 2001; however, goodwill and intangible assets acquired after June 30, 2001 are subject immediately to the
nonamortization and amortization provisions of this statement. As of December 31, 2001, The Company does not have any
goodwill or intangible assets.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS
No. 144 eliminated the requirement that discontinued operations be measured at net realizable value or that entities include
losses that have not yet occurred. SFAS No. 144 eliminated the exception to consolidation for a subsidiary for which control is
likely to be temporary. SFAS No. 144 requires that long-lived assets that are to be disposed of by sale be measured at the lower
of book value or fair value less cost to sell. An impairment for assets that are not considered to be disposed of is recognized
only if the carrying amounts of long-lived assets are not recoverable and exceed their fair values. Additionally, SFAS No. 144
expands the scope of discontinued operations to include all components of an entity with operations and cash flows that (1) can
be distinguished from the rest of the entity and (2) will be eliminated from the ongoing operations of the entity in a disposal
transaction. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and,
generally, its provisions are to be applied prospectively.

Reclassifications
Certain amounts in the prior years have been reclassified to conform to the current year presentation.




                                                              B- 9
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

3. INVESTMENTS

Fixed Maturities and Equity Securities:
The following tables provide additional information relating to fixed maturities and equity securities as of December 31:

                                                                                      2001
                                                                            Gross            Gross
                                                       Amortized          Unrealized       Unrealized           Estimated
                                                         Cost               Gains           Losses              Fair Value
                                                                                 (In Thousands)
Fixed Maturities Available For Sale
U.S. Treasury Securities and Obligations of
   U.S. Government Corporations and Agencies           $     303,606       $        1,496     $     1,648          $ 303,454
Foreign Government Bonds                                      27,332                2,122               -              29,454
Corporate Securities                                        3,594,386             116,186          28,834            3,681,738
Mortgage-backed Securities                                    10,148                 160               61              10,247
Total Fixed Maturities Available For Sale              $ 3,935,472         $ 119,964          $    30,543       $ 4,024,893

Equity Securities Available For Sale                   $         173      $          220       $       18        $        375



                                                                                       2000
                                                                            Gross            Gross
                                                        Amortized         Unrealized       Unrealized           Estimated
                                                          Cost              Gains           Losses              Fair Value
                                                                                 (In Thousands)
 Fixed Maturities Available For Sale
 U.S. Treasury Securities and Obligations of
    U.S. Government Corporations and Agencies           $     309,609         $    7,888      $       17       $      317,480
 Foreign Government Bonds                                     136,133              8,093             520              143,706
 Corporate Securities                                       3,075,023             43,041           49,538            3,068,526
 Mortgage-backed Securities                                    31,479                330               0               31,809
 Total Fixed Maturities Available For Sale              $ 3,552,244           $ 59,352        $    50,075      $ 3,561,521

 Fixed Maturities Held To Maturity
 Corporate Securities                                   $     324,546         $     1,500     $     5,412       $     320,634
 Total Fixed Maturities Held To Maturity                $     324,546         $     1,500     $     5,412       $     320,634

 Equity Securities Available For Sale                   $      13,446         $       197     $     2,839       $      10,804




                                                              B-10
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

3. INVESTMENTS (continued)

The amortized cost and estimated fair value of fixed maturities, by contractual maturities at December 31, 2001 is shown below:
                                                          Available For Sale
                                                       Amortized             Estimated Fair
                                                          Cost                    Value
                                                                (In Thousands)

         Due in one year or less                     $     802,235              $     821,790
         Due after one year through five years           1,841,097                  1,885,535
         Due after five years through ten years          1,026,709                  1,045,693
         Due after ten years                               255,283                    261,628
         Mortgage-backed securities                          10,148                    10,247
         Total                                       $   3,935,472            $     4,024,893

Actual maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.

Proceeds from the sale of fixed maturities available for sale during 2001, 2000, and 1999, were $2,380.4 million, $2,103.6
million, and $2,950.4 million, respectively. Gross gains of $40.3 million, $15.3 million, $13.1 million, and gross losses of
$47.7 million, $33.9 million, and $31.1 million, were realized on those sales during 2001, 2000, and 1999, respectively.

Proceeds from the maturity of fixed maturities available for sale during 2001, 2000, and 1999, were $273.4 million, $170.2
million, and $126.5 million, respectively.

Writedowns for impairments which were deemed to be other than temporary for fixed maturities were $53.5 million, $12.3
million, and $11.2 million, for the years 2001, 2000 and 1999, respectively.

Due to the adoption of FAS 133, “Accounting for Derivative Instruments and Hedging Activities”, on January 1, 2001, the
entire portfolio of fixed maturities classified as held to maturity were transferred to the available for sale category. The
aggregate amortized cost of the securities was $324.5 million. Unrealized investment losses of $2.5 million, net of tax were
recorded in “Accumulated Other Comprehensive income (loss)” at the time of transfer.

During 2000, certain securities classified as held to maturity were transferred to the available for sale portfolio. These actions
were taken as a result of a significant deterioration in credit worthiness. The aggregate amortized cost of the securities
transferred was $6.6 million. Gross unrealized investment losses of $0.3 million were recorded in “Accumulated Other
Comprehensive income (loss)” at the time of transfer. Prior to transfer, impairments related to these securities, if any, were
included in “realized investment losses, net”. During the year ended December 31, 1999, there were no securities classified as
held to maturity that were transferred. During the years ended December 31, 2001, 2000, and 1999, there were no securities
classified as held to maturity that were sold.

Commercial Loans on Real Estate
The Company’s commercial loans on real estate were collateralized by the following property types at December 31:

                                                              2001                                2000
                                                                            (In Thousands)

          Retail Stores                              $      4,623       56.4%              $     5,615      60.2%
          Industrial Buildings                              3,567       43.6%                    3,712      39.8%
              Net Carrying Value                     $      8,190      100.0%              $    9,327      100.0%

The concentration of commercial loans are in the states of Washington (47%), New Jersey (44%), and North Dakota (9%).




                                                             B-11
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

3. INVESTMENTS (continued)

Special Deposits and Restricted Assets
Fixed maturities of $2.9 million and $8.0 million at December 31, 2001 and 2000, respectively, were on deposit with
governmental authorities or trustees as required by certain insurance laws. Equity securities restricted as to sale were $.2
million at December 31, 2001 and 2000, respectively.

Other Long-Term Investments
The Company’s “Other long-term investments” of $84.3 million and $83.7 million as of December 31, 2001 and 2000,
respectively, are comprised of joint ventures and limited partnerships, the Company’s investment in the Separate Accounts and
certain derivatives for other than trading. Joint ventures and limited partnerships totaled $35.8 million and $34.3 million at
December 31, 2001 and 2000, respectively. The Company’s share of net income from the joint ventures was $1.6 million, $.9
million, and $.3 million, for the years ended December 31, 2001, 2000 and 1999, respectively, and is reported in “Net
investment income.” The Company’s investment in the Separate Accounts was $44.0 million and $46.9 million at December 31,
2001 and 2000, respectively.

Investment Income and Investment Gains and Losses

Net investment income arose from the following sources for the years ended December 31:

                                                                          2001             2000                     1999
                                                                                      (In Thousands)

 Fixed Maturities - Available For Sale                            $       279,477      $       237,042      $       188,236
 Fixed Maturities - Held To Maturity                                            -               26,283               29,245
 Equity Securities – Available For Sale                                        71                   18                    -
 Commercial Loans On Real Estate                                              905                1,010                2,825
 Policy Loans                                                              48,149               45,792               42,422
 Short-Term Investments and Cash Equivalents                               24,253               29,582               19,208
 Other                                                                      6,021               16,539                4,432
 Gross Investment Income                                                  358,876              356,266              286,368
    Less: Investment Expenses                                             (15,238)             (18,347)              (9,547)
 Net Investment Income                                            $       343,638      $       337,919      $       276,821


Realized investment losses, net including charges for other than temporary reductions in value, for the years ended December
31, were from the following sources:

                                                                          2001             2000                     1999
                                                                                      (In Thousands)

 Fixed Maturities - Available For Sale                                $    (60,924)        $    (34,600)        $    (29,192)
 Fixed Maturities - Held To Maturity                                             -                 (212)                 102
 Equity Securities – Available For Sale                                        (56)                 271                  392
 Derivatives                                                                (1,396)              15,039               (1,557)
 Other                                                                       1,900               (1,177)              (2,290)

 Realized Investment Losses, Net                                      $    (60,476)        $    (20,679)        $    (32,545)

Securities Pledged to Creditors
The Company pledges investment securities it owns to unaffiliated parties through certain transactions including securities
lending, securities sold under agreements to repurchase, and futures contracts. At December 31, 2001 and 2000, the carrying
value of fixed maturities available for sale pledged to third parties as reported in the Consolidated Statements of Financial
Position were $265.2 million and $287.8 million, respectively.




                                                           B-12
    Pruco Life Insurance Company and Subsidiary
    Notes to Consolidated Financial Statements

    3. INVESTMENTS (continued)

    Net Unrealized Investment Gains (Losses)

    Net unrealized investment gains (losses) on securities available for sale are included in the Consolidated Statements of Financial
    Position as a component of “Accumulated other comprehensive income (loss).” Changes in these amounts include reclassification
    adjustments to exclude from “Other Comprehensive income (loss),” those items that are included as part of “Net income” for a period
    that also had been part of “Other Comprehensive income (loss)” in earlier periods. The amounts for the years ended December 31, net
    of tax, are as follows:

                                                                                                                    Accumulated
                                                                                                                       Other
                                                                                                                   Comprehensive
                                                                                                                   Income (Loss)
                                                                   Deferred                        Deferred        Related To Net
                                                 Unrealized         Policy        Policyholders’ Income Tax          Unrealized
                                                Gains(Losses)     Acquisition        Account      (Liability)        Investment
                                                On Investments      Costs            Balances       Benefit        Gains(Losses)
                                                                                  (In Thousands)

Balance, January 1, 1999                         $     25,169       $ (13,115)     $     2,680      $ (4,832)       $     9,902
Net investment gains(losses) on investments
arising during the period                            (138,268)                -               -        47,785           (90,483)
Reclassification adjustment for gains(losses)
included in net income                                 28,698                 -               -        (9,970)           18,728
Impact of net unrealized investment
gains(losses) on deferred policy acquisition                -          53,407                 -       (16,283)           37,124
costs
Impact of net unrealized investment
gains(losses) on policyholders’ account                     -                 -          (5,712)        2,077            (3,635)
balances
Balance, December 31, 1999                            (84,401)         40,292            (3,032)       18,777           (28,364)
Net investment gains(losses) on investments
arising during the period                              56,707                 -               -       (21,539)           35,168
Reclassification adjustment for gains(losses)
included in net income                                 34,329                 -               -       (13,039)           21,290
Impact of net unrealized investment
gains(losses) on deferred policy acquisition                -          (39,382)               -        14,177           (25,205)
costs
Impact of net unrealized investment
gains(losses) on policyholders’ account                     -                 -          2,877         (1,036)            1,841
balances
Balance, December 31, 2000                              6,635               910           (155)        (2,660)            4,730
Net investment gains(losses) on investments
arising during the period                              22,007                 -               -        (7,922)           14,085
Reclassification adjustment for gains(losses)
included in net income                                 60,980                 -               -       (21,953)           39,027
Impact of net unrealized investment
gains(losses) on deferred policy acquisition                -          (41,223)               -        14,840           (26,383)
costs
Impact of net unrealized investment
gains(losses) on policyholders’ account                     -                 -          5,092         (1,833)            3,259
balances
Balance, December 31, 2001                       $     89,622       $ (40,313)     $     4,937      $ (19,528)      $    34,718




                                                                     B-13
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

4. DEFERRED POLICY ACQUISITION COSTS

The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows:

                                                                             2001                 2000                    1999
                                                                                             (In Thousands)
Balance, Beginning of Year                                            $     1,132,653       $    1,062,785          $     861,713
Capitalization of Commissions, Sales and Issue Expenses                       295,823              242,322                242,373
Amortization                                                                 (156,092)            (129,049)               (96,451)
Change In Unrealized Investment (Gains) Losses                                 (41,223)            (39,382)                53,407
Foreign Currency Translation                                                     1,773              (4,023)                 1,743
Transfer of Taiwan branch balance to an affiliated company                    (73,104)                   -                      -
Balance, End of Year                                                      $ 1,159,830       $    1,132,653          $   1,062,785


5. POLICYHOLDERS’ LIABILITIES

Future policy benefits and other policyholder liabilities at December 31, are as follows:

                                                                   2001                             2000
                                                                         (In Thousands)
          Life Insurance – Domestic                                $ 500,974          $              429,825
          Life Insurance – Taiwan                                    260,632                         226,272
          Individual Annuities                                        32,423                          31,817
          Group Annuities                                             14,201                          14,948
                                                                   $ 808,230          $              702,862

Life insurance liabilities include reserves for death benefits. Annuity liabilities include reserves for annuities that are in payout
status.


The following table highlights the key assumptions generally utilized in calculating these reserves:

             Product                               Mortality                        Interest Rate             Estimation Method

Life Insurance - Domestic               Generally rates guaranteed in           2.5% to 11.25%             Net level premium based
Variable and Interest-Sensitive         calculating cash surrender                                         on non-forfeiture interest
                                        values                                                             rate

Life Insurance - Domestic Term          Best estimate plus a provision           6.5% to 6.75%             Net level premium plus a
Insurance                               for adverse deviation                                              provision for adverse
                                                                                                           deviation

Life Insurance - International          Generally the Taiwan standard            6.25% to 7.5%             Net level premium plus a
                                        table plus a provision for                                         provision for adverse
                                        adverse deviation                                                  deviation.

Individual Annuities                    Mortality table varies based on         6.25% to 11.0%             Present value of expected
                                        the issue year of the contract.                                    future payments based on
                                        Current table (for 1998 & later                                    historical experience
                                        issues) is the Annuity 2000
                                        Mortality Table with certain
                                        modifications

Group Annuities                         1950 & 1971 Group Annuity                     14.75%               Present value of expected
                                        Mortality Table with certain                                       future payments based on
                                        modifications                                                      historical experience




                                                               B-14
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

Policyholders’ account balances at December 31, are as follows:


                                                                  2001                         2000
                                                                           (In Thousands)

          Interest-Sensitive Life Contracts                 $       1,976,710             $    1,886,714
          Individual Annuities                                        976,237                    859,996
          Guaranteed Investment Contracts                             994,743                    899,958
                                                            $       3,947,690             $    3,646,668


Policyholders’ account balances for interest-sensitive life, individual annuities, and guaranteed investment contracts are equal to
policy account values plus unearned premiums. The policy account values represent an accumulation of gross premium
payments plus credited interest less withdrawals, expenses and mortality charges.

Certain contract provisions that determine the policyholder account balances are as follows:

             Product                                 Interest Rate                     Withdrawal / Surrender Charges

Interest Sensitive Life Contracts                    3.0% to 6.75 %                  Various up to 10 years

Individual Annuities                                 3.0% to 16.0%                   0% to 7% for up to 9 years

Guaranteed Investment Contracts                     4.32% to 8.03%                   Subject to market value withdrawal
                                                                                     provisions for any funds withdrawn
                                                                                     other than for benefit responsive and
                                                                                     contractual payments




                                                             B-15
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

6. REINSURANCE

The Company participates in reinsurance, with Prudential and other companies, in order to provide greater diversification of
business, provide additional capacity for future growth and limit the maximum net loss potential arising from large risks.
Reinsurance ceded arrangements do not discharge the Company or the insurance subsidiary as the primary insurer. Ceded
balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the
Company under the terms of the reinsurance agreements. The likelihood of a material reinsurance liability reassumed by the
Company is considered to be remote. The affiliated reinsurance agreements, including the Company’s reinsurance of all its
Taiwanese business, are described further in Note 14.

Reinsurance amounts included in the Consolidated Statements of Operations and Comprehensive Income for the year ended
December 31, are as follows:

                                                                2001                    2000                        1999
                                                                                   (In Thousands)
       Domestic:
       Reinsurance premiums ceded – affiliated              $         (9,890)      $          (7,641)       $          (5,630)
       Reinsurance premiums ceded – unaffiliated                    (13,399)                  (2,475)                         -
       Policyholders’ benefits ceded                                 10,803                    3,558                    3,140

       Taiwan after the transfer:
       Reinsurance premiums ceded -affiliated                       (82,433)                        -                         -
       Policyholders’ benefits ceded-affiliated                      12,859                         -                         -

       Taiwan before the transfer:
       Reinsurance premiums ceded – affiliated                          (107)                 (1,573)                  (1,252)
       Reinsurance premiums ceded -unaffiliated                         (167)                 (2,830)                  (1,745)
       Policyholders’ benefits ceded                                      71                   1,914                    1,088
       Reinsurance premiums assumed                                      162                   1,671                    1,778



Reinsurance recoverables, included in the Company’s Consolidated Statements of Financial Position at December 31, were as
follows:


                                                                       2001                     2000
                                                                              (In Thousands)

         Domestic Life Insurance - affiliated                   $         11,014          $         8,765
         Domestic Life Insurance - unaffiliated                           14,850                    2,037
         Other Reinsurance - affiliated                                   14,201                   14,948

         Taiwan Life Insurance-affiliated                               260,632                        -
         Taiwan Life Insurance-unaffiliated                                   -                    5,818
                                                                $       300,697           $       31,568


The gross and net amounts of life insurance in force at December 31, were as follows:


                                                             2001                       2000                           1999
                                                                                 (In Thousands)

           Life Insurance Face Amount In Force         $    84,317,628             $   66,327,999               $     54,954,680
           Ceded To Other Companies                        (25,166,264)                (7,544,363)                    (2,762,319)
           Net Amount of Life Insurance In Force       $    59,151,364             $   58,783,636               $     52,192,361




                                                           B-16
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

7. EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans
The Company had a non-contributory defined benefit pension plan that covered substantially all of its Taiwanese employees.
The pension plan was transferred to an affiliate on January 31, 2001 as described in Note 14. This plan was established as of
September 30, 1998 and the projected benefit obligation and related expenses at December 31, 2000 were not material to the
Consolidated Statements of Financial Position or results of operations for the years presented. All other employee benefit costs
are allocated to the Company by Prudential in accordance with the service agreement described in Footnote 14.


8. INCOME TAXES

The components of income taxes for the years ended December 31, are as follows:


                                                                         2001             2000                      1999
                                                                                     (In Thousands)
   Current Tax Expense (Benefit):
    U.S.                                                         $       (100,946)      $        8,588      $        (14,093)
    State and Local                                                         1,866                   38                   378
    Foreign                                                                   124                   35                    15
    Total                                                                 (98,956)               8,661               (13,700)


   Deferred Tax Expense (Benefit):
    U.S.                                                                   76,155               43,567                42,320
    State and Local                                                        (2,454)               2,204                 1,316
    Total                                                                  73,701               45,771                43,636

   Total Income Tax Expense                                      $        (25,255)     $        54,432      $         29,936


The income tax expense for the years ended December 31, differs from the amount computed by applying the expected federal
income tax rate of 35% to income from operations before income taxes for the following reasons:


                                                                      2001                2000                      1999
                                                                                     (In Thousands)


   Expected Federal Income Tax Expense                               $  14,814              $   55,275          $    29,936
     State and Local Income Taxes                                         (382)                  1,457                1,101
     Non taxable investment income                                     (38,693)                 (6,443)              (1,010)
     Incorporation of Taiwan Branch                                     (1,774)                       -                   -
     Other                                                                 780                   4,143                  (91)
     Total Income Tax Expense                                        $ (25,255)             $   54,432          $    29,936




                                                            B-17
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

8. INCOME TAXES (continued)

Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table:


                                                                         2001                      2000
                                                                                (In Thousands)
             Deferred Tax Assets
               Insurance Reserves                                    $     43,317              $     100,502
               State Net Operating Losses                                   5,642                      1,400
               Other                                                        9,309                      8,610
               Deferred Tax Assets                                         58,268                    110,512

             Deferred Tax Liabilities
               Deferred Acquisition Costs                                 324,082                    324,023
               Net Unrealized Gains on Securities                          32,264                      2,389
               Investments                                                 20,644                     19,577
               Deferred Tax Liabilities                                   376,990                    345,989

             Net Deferred Tax Liability                            $      318,722              $     235,477


Management believes that based on its historical pattern of taxable income, the Company and its subsidiary will produce
sufficient income in the future to realize its deferred tax assets. Adjustments to the valuation allowance will be made if there is a
change in management’s assessment of the amount of the deferred tax asset that is realizable. At December 31, 2001 and 2000,
the Company and its subsidiary had no federal operating loss carryforwards for tax purposes. At December 31, 2001 and
December 31, 2000, the Company had state operating loss carryforwards for tax purposes of $369 million and $91 million,
which expire by 2021 and 2020, respectively.

The Internal Revenue Service (the “Service”) has completed all examinations of the consolidated federal income tax returns
through 1992. The Service has examined the years 1993 through 1995. Discussions are being held with the Service with
respect to proposed adjustments. Management, however, believes there are adequate defenses against, or sufficient reserves to
provide for such adjustments. The Service has completed its examination of 1996 and has begun its examination of 1997
through 2000.


9. STATUTORY NET INCOME AND SURPLUS

The Company is required to prepare statutory financial statements in accordance with accounting practices prescribed or
permitted by the Arizona Department of Insurance and the New Jersey Department of Banking and Insurance. Statutory
accounting practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future
policy benefit liabilities using different actuarial assumptions and valuing investments, deferred taxes, and certain assets on a
different basis.

Statutory net income (loss) of the Company amounted to $71.5 million, $(50.5) million, and $(82.3) million for the years ended
December 31, 2001, 2000, and 1999, respectively. Statutory surplus of the Company amounted to $728.7 million and $849.6
million at December 31, 2001 and 2000, respectively.

In March 1998, the NAIC adopted the Codification of Statutory Accounting Principles guidance (“Codification”), which
replaces the current Accounting Practices and Procedures manual as the NAIC’s primary guidance on statutory accounting as of
January 1, 2001. Codification provides guidance for areas where statutory accounting has been silent and changes current
statutory accounting in certain areas. The Company has adopted the Codification guidance effective January 1, 2001. As a result
of these changes, the Company reported an increase to statutory surplus of $88 million, primarily relating to the recognition of
deferred tax assets.




                                                              B-18
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values presented below have been determined using available market information and by applying valuation
methodologies. Considerable judgment is applied in interpreting data to develop the estimates of fair value. Estimated fair
values may not be realized in a current market exchange. The use of different market assumptions and/or estimation
methodologies could have a material effect on the estimated fair values. The following methods and assumptions were used in
calculating the estimated fair values (for all other financial instruments presented in the table, the carrying value approximates
estimated fair value).

Fixed maturities and Equity securities
Estimated fair values for fixed maturities and equity securities, other than private placement securities, are based on quoted
market prices or estimates from independent pricing services. Generally, fair values for private placement securities are
estimated using a discounted cash flow model which considers the current market spreads between the U.S. Treasury yield
curve and corporate bond yield curve, adjusted for the type of issue, its current credit quality and its remaining average life. The
estimated fair value of certain non-performing private placement securities is based on amounts estimated by management.

Commercial loans on real estate
The estimated fair value of the portfolio of commercial loans on real estate is primarily based upon the present value of the
expected future cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the current market spread for a similar
quality loan.

Policy loans
The estimated fair value of policy loans is calculated using a discounted cash flow model based upon current U.S. Treasury rates
and historical loan repayment patterns.

Investment contracts
For guaranteed investment contracts, estimated fair values are derived using discounted projected cash flows, based on interest
rates being offered for similar contracts with maturities consistent with those remaining for the contracts being valued. For
individual deferred annuities and other deposit liabilities, fair value approximates carrying value.

Derivative financial instruments
Refer to Note 11 for the disclosure of fair values on these instruments.




                                                              B-19
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

10. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

The following table discloses the carrying amounts and estimated fair values of the Company’s financial instruments at
December 31:


                                                              2001                                   2000
                                                   Carrying             Estimated             Carrying            Estimated
                                                    Value               Fair Value             Value              Fair Value
                                                                               (In Thousands)
Financial Assets:

  Fixed Maturities: Available For Sale             $ 4,024,893          $    4,024,893        $ 3,561,521         $ 3,561,521
  Fixed Maturities: Held To Maturity                         -                       -            324,546             320,634
  Equity Securities                                        375                     375             10,804              10,804
  Commercial Loans on Real Estate                        8,190                  10,272              9,327              10,863
  Policy Loans                                         874,065                 934,203            855,374             883,460
  Short-Term Investments                               215,610                 215,610            202,815             202,815
  Cash and Cash Equivalents                            374,185                 374,185            453,071             453,071
  Separate Account Assets                           14,920,584              14,920,584         16,230,264          16,230,264

Financial Liabilities:
  Investment Contracts                               2,003,265               2,053,259           1,762,794          1,784,767
  Cash Collateral for Loaned Securities                190,022                 190,022             185,849            185,849
  Securities Sold Under Repurchase Agreements           80,715                  80,715             104,098            104,098
  Separate Account Liabilities                      14,920,584              14,920,584          16,230,264         16,230,264




11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS

Adoption of Statement of Financial Accounting Standards No. 133

The Company adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended, on January
1, 2001. The adoption of this statement did not have a material impact on the results of operations of the Company.

Accounting for Derivatives and Hedging Activities

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, or
the value of securities or commodities. Derivative financial instruments used by the Company include swaps, futures, forwards
and option contracts and may be exchange-traded or contracted in the over-the-counter market. Derivatives may be held for
trading purposes or held for purposes other than trading. All of the Company’s derivatives are held for purposes other than
trading.

Derivatives held for purposes other than trading are used to seek to reduce exposure to interest rates and foreign currency risks
associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. Other than
trading derivatives are also used to manage the characteristics of the Company’s asset/liability mix, and to manage the interest
rate and currency characteristics of invested assets.

Derivatives held for purposes other than trading are recognized on the Consolidated Statements of Financial Position at their
fair value. On the date the derivative contract is entered into, the Company designates the derivative as either (1) a hedge of the
fair value of a recognized asset or liability or unrecognized firm commitment (“fair value” hedge), (2) a hedge of a forecasted
transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge),
(3) a foreign currency or cash flow hedge (“foreign currency” hedge), (4) a hedge of a net investment in a foreign operation, or
(5) a derivative that does not qualify for hedge accounting. As of December 31, 2001, none of the Company’s derivatives
qualify for hedge accounting treatment.




                                                             B-20
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (continued)

If a derivative does not qualify for hedge accounting, it is recorded at fair value in “Other long-term investments” or “Other
liabilities” in the Consolidated Statements of Financial Position, and changes in fair value are included in earnings without
considering changes in fair value of the hedged assets or liabilities. See “Types of Derivative Instruments” for further discussion
of the classification of derivative activity in current earnings.

Types of Derivative Instruments

Interest Rate Swaps
The Company uses interest rate swaps to reduce market risk from changes in interest rates and to manage interest rate exposures
arising from mismatches between assets and liabilities. Under interest rate swaps, the Company agrees with other parties to
exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to
an agreed notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are
made by either party. Cash is paid or received based on the terms of the swap. These transactions are entered into pursuant to
master agreements that provide for a single net payment to be made by one counterparty at each due date. The fair value of swap
agreements is estimated based on proprietary pricing models or market quotes.

If the criteria for hedge accounting are not met, the swap agreements are accounted for at fair value with changes in fair value
reported in “Realized investment losses, net” in the Consolidated Statement of Operations. During the period that interest rate
swaps are outstanding, net receipts or payments are include in” Net investment income” in the Consolidated Statement of
Operations.

Futures and Options
The Company uses exchange-traded Treasury futures and options to reduce market risk from changes in interest rates, and to
manage the duration of assets and the duration of liabilities supported by those assets. In exchange-traded futures transactions,
the Company agrees to purchase or sell a specified number of contracts, the value of which are determined by the value of
designated classes of Treasury securities, and to post variation margin on a daily basis in an amount equal to the difference in
the daily market values of those contracts. The Company enters into exchange-traded futures and options with regulated futures
commissions merchants who are members of a trading exchange. The fair value of futures and options is based on market
quotes.

Treasury futures move substantially in value as interest rates change and can be used to either modify or hedge existing interest
rate risk. This strategy protects against the risk that cash flow requirements may necessitate liquidation of investments at
unfavorable prices resulting from increases in interest rates. This strategy can be a more cost effective way of temporarily
reducing the Company’s exposure to a market decline than selling fixed income securities and purchasing a similar portfolio
when such a decline is believed to be over.

If futures meet hedge accounting criteria, changes in their fair value are deferred and recognized as an adjustment to the carrying
value of the hedged item. Deferred gains or losses from the hedges for interest-bearing financial instruments are amortized as a
yield adjustment over the remaining lives of the hedged item. Futures that do not qualify as hedges are carried at fair value with
changes in value reported in “Realized investment losses, net.”

When the Company anticipates a significant decline in the stock market which will correspondingly affect its diversified
portfolio, it may purchase put index options where the basket of securities in the index is appropriate to provide a hedge against
a decrease in the value of the equity portfolio or a portion thereof. This strategy effects an orderly sale of hedged securities.
When the Company has large cash flows which it has allocated for investment in equity securities, it may purchase call index
options as a temporary hedge against an increase in the price of the securities it intends to purchase. This hedge permits such
investment transactions to be executed with the least possible adverse market impact.

Option premium paid or received is reported as an asset or liability and amortized into income over the life of the option. If
options meet the criteria for hedge accounting, changes in their fair value are deferred and recognized as an adjustment to the
hedged item. Deferred gains or losses from the hedges for interest-bearing financial instruments are recognized as an
adjustment to interest income or expense of the hedged item. If the options do not meet the criteria for hedge accounting, they
are fair valued, with changes in fair value reported in current period earnings.




                                                             B-21
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (continued)

Currency Derivatives
The Company uses currency swaps to reduce market risk from changes in currency values of investments denominated in
foreign currencies that the Company either holds or intends to acquire and to manage the currency exposures arising from
mismatches between such foreign currencies and the US Dollar.

Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one
currency and another at a forward exchange rate and calculated by reference to an agreed principal amount. Generally, the
principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These
transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one
counterparty for payments made in the same currency at each due date.

If currency swaps are effective as hedges of foreign currency translation and transaction exposures, gains or losses are recorded
in a manner similar to the hedged item. If currency swaps do not meet hedge accounting criteria, gains or losses from those
derivatives are recognized in “Realized investment (losses) gains, net.”

The table below summarizes the Company’s outstanding positions by derivative instrument types as of December 31, 2001 and
2000. All amounts presented have been classified as other than trading based on management’s intent at the time of contract and
throughout the life of the contract.


                                               Other than Trading Derivatives
                                                December 31, 2001 and 2000
                                                       (In Thousands)

                                                    2001                                                2000
                                                 Estimated           Carrying                        Estimated            Carrying
                                Notional         Fair Value           Value          Notional        Fair Value            Value
Non-Hedge Accounting

Swap Instruments
Interest Rate
   Asset                       $      9,470      $        638        $     638      $      9,470     $        327     $         327
   Liability                              -                 -                -                 -                -                 -
Currency
   Asset                             24,785             3,858             3,858                 -                 -                  -
   Liability                              -                 -                 -                 -                 -                  -
Future Contracts
US Treasury Futures
   Asset                             76,800               394              394          139,800             3,530              3,530
   Liability                         64,500               238              238           61,900             1,067              1,067

Hedge Accounting

Swap Instruments
Currency
  Asset                                    -                  -                 -         28,326            1,633              2,155
  Liability                                -                  -                 -              -                -                  -




                                                              B-22
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

11. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (continued)

Credit Risk
The current credit exposure of the Company’s derivative contracts is limited to the fair value at the reporting date. Credit risk is
managed by entering into transactions with creditworthy counterparties and obtaining collateral where appropriate and
customary. The Company also attempts to minimize its exposure to credit risk through the use of various credit monitoring
techniques. All of the net credit exposure for the Company from derivative contracts are with investment grade counterparties.
As of December 31, 2001, 86% of notional consisted of interest rate derivatives, and 14% of notional consisted of foreign
currency derivatives.


12. CONTINGENCIES AND LITIGATION

Prudential and the Company are subject to legal and regulatory actions in the ordinary course of their businesses, including
class actions. Pending legal and regulatory actions include proceedings relating to aspects of the businesses and operations that
are specific to the Company and Prudential and that are typical of the businesses in which the Company and Prudential operate.
Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters,
the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages.

Beginning in 1995, regulatory authorities and customers brought significant regulatory actions and civil litigation against the
Company and Prudential involving individual life insurance sales practices. In 1996, Prudential, on behalf of itself and many of
its life insurance subsidiaries including the Company entered into settlement agreements with relevant insurance regulatory
authorities and plaintiffs in the principal life insurance sales practices class action lawsuit covering policyholders of individual
permanent life insurance policies issued in the United States from 1982 to 1995. Pursuant to the settlements, the companies
agreed to various changes to their sales and business practices controls, to a series of fines, and to provide specific forms of
relief to eligible class members. Virtually all claims by class members filed in connection with the settlements have been
resolved and virtually all aspects of the remediation program have been satisfied. While the approval of the class action
settlement is now final, Prudential and the Company remain subject to oversight and review by insurance regulators and other
regulatory authorities with respect to its sales practices and the conduct of the remediation program. The U.S. District Court has
also retained jurisdiction as to all matters relating to the administration, consummation, enforcement and interpretation of the
settlements.

As of December 31, 2001, Prudential and/or the Company remained a party to approximately 44 individual sales practices
actions filed by policyholders who “opted out” of the class action settlement relating to permanent life insurance policies issued
in the United States between 1982 and 1995. In addition, there were 19 sales practices actions pending that were filed by
policyholders who were members of the class and who failed to “opt out” of the class action settlement. Prudential and the
Company believe that those actions are governed by the class settlement release and expects them to be enjoined and/or
dismissed. Additional suits may be filed by class members who “opted out” of the class settlements or who failed to “opt out”
but nevertheless seek to proceed against Prudential and/or the Company. A number of the plaintiffs in these cases seek large
and/or indeterminate amounts, including punitive or exemplary damages. Some of these actions are brought on behalf of
multiple plaintiffs. It is possible that substantial punitive damages might be awarded in any of these actions and particularly in
an action involving multiple plaintiffs.

Prudential has indemnified the Company for any liabilities incurred in connection with sales practices litigation covering
policyholders of individual permanent life insurance policies issued in the United States from 1982 to 1995.

The Company’s litigation is subject to many uncertainties, and given the complexity and scope, the outcomes cannot be
predicted. It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual
period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters.
Management believes, however, that the ultimate outcome of all pending litigation and regulatory matters should not have a
material adverse effect on the Company’s financial position.




                                                              B-23
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

13. DIVIDENDS

The Company is subject to Arizona law which limits the amount of dividends that insurance companies can pay to stockholders.
The maximum dividend which may be paid in any twelve month period without notification or approval is limited to the lesser
of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar
year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, the
Company would not be permitted a dividend distribution until December 29, 2002.

During 2001, the Company received approval from the Arizona Department of Insurance to pay an extraordinary dividend to
Prudential of $108 million.


14. RELATED PARTY TRANSACTIONS

The Company has extensive transactions and relationships with Prudential and other affiliates. It is possible that the terms of
these transactions are not the same as those that would result from transactions among wholly unrelated parties.

Expense Charges and Allocations
All of the Company’s expenses are allocations or charges from Prudential or other affiliates. These expenses can be grouped
into the following categories: general and administrative expenses, retail distribution expenses and asset management fees.

The Company’s general and administrative expenses are charged to the Company using allocation methodologies based on
business processes. Management believes that the methodology is reasonable and reflects costs incurred by Prudential to
process transactions on behalf of the Company. Prudential and the Company operate under service and lease agreements
whereby services of officers and employees (except for those agents employed directly by the Company in Taiwan), supplies,
use of equipment and office space are provided by Prudential. The Company is allocated estimated distribution expenses from
Prudential’s retail agency network for both its domestic life and annuity products. The Company has capitalized the majority of
these distribution expenses as deferred policy acquisition costs. Beginning April 1, 2000, Prudential and the Company agreed to
revise the estimate of allocated distribution expenses to reflect a market based pricing arrangement.

In accordance with a profit sharing agreement with Prudential that was in effect through December 31, 2000, the Company
received fee income from policyholder account balances invested in the Prudential Series Funds (“PSF”). These revenues were
recorded as “Asset management fees” in the Consolidated Statements of Operations and Comprehensive Income. The Company
was charged an asset management fee by Prudential Global Asset Management (“PGAM”) and Jennison Associates LLC
(“Jennison”) for managing the PSF portfolio. These fees are a component of “general, administrative and other expenses.”

On September 29, 2000, the Board of Directors for the Prudential Series Fund, Inc. (“PSFI”) adopted resolutions to terminate
the existing management agreement between PSFI and Prudential, and has appointed another subsidiary of Prudential as the
fund manager for the PSF. The change was approved by the shareholders of PSF during early 2001 and effective January 1,
2001. The Company no longer receives fees associated with the PSF. In addition, the Company will no longer incur the asset
management expense from PGAM and Jennison associated with the PSF.

Corporate Owned Life Insurance
The Company has sold three Corporate Owned Life Insurance (“COLI”) policies to Prudential. The cash surrender value
included in Separate Accounts was $647.2 million and $685.9 million at December 31, 2001 and December 31, 2000,
respectively. The fees received related to the COLI policies were $7.0 million and $9.6 million for the years ending December
31, 2001 and 2000.




                                                           B-24
Pruco Life Insurance Company and Subsidiary
Notes to Consolidated Financial Statements

14.   RELATED PARTY TRANSACTIONS (continued)

Reinsurance
The Company currently has four reinsurance agreements in place with Prudential and affiliates. Specifically, the Company has a
reinsurance Group Annuity Contract, whereby the reinsurer, in consideration for a single premium payment by the Company,
provides reinsurance equal to 100% of all payments due under the contract. In addition, there are two yearly renewable term
agreements in which the Company may offer and the reinsurer may accept reinsurance on any life in excess of the Company’s
maximum limit of retention. The Company is not relieved of its primary obligation to the policyholder as a result of these
reinsurance transactions. These agreements had no material effect on net income for the periods ended December 31, 2001 or
2000. The fourth agreement, which is new for 2001, is described in the following paragraphs.

On January 31, 2001, the Company transferred all of its assets and liabilities associated with the Company’s Taiwan branch
including Taiwan’s insurance book of business to an affiliated Company, Prudential Life Insurance Company of Taiwan Inc.
(“Prudential of Taiwan”), a wholly owned subsidiary of the Holding Company.

The mechanism used to transfer this block of business in Taiwan is referred to as a “full acquisition and assumption”
transaction. Under this mechanism, the Company is jointly liable with Prudential of Taiwan for two years from the giving of
notice to all obligees for all matured obligations and for two years after the maturity date of not-yet-matured obligations.
Prudential of Taiwan is also contractually liable, under indemnification provisions of the transaction, for any liabilities that may
be asserted against the Company. The transfer of the insurance related assets and liabilities was accounted for as a long-
duration coinsurance transaction under accounting principles generally accepted in the United States. Under this accounting
treatment, the insurance related liabilities remain on the books of the Company and an offsetting reinsurance recoverable is
established.

As part of this transaction, the Company made a capital contribution to Prudential of Taiwan in the amount of the net equity of
the Company’s Taiwan branch as of the date of transfer. In July 2001, the Company dividended its interest in Prudential of
Taiwan to Prudential.

Premiums and benefits ceded for the period ending December 31, 2001 from the Taiwan coinsurance agreement were $82.4
million and $12.9 million, respectively.

Debt Agreements
In July 1998, the Company established a revolving line of credit facility of up to $500 million with Prudential Funding LLC, a
wholly owned subsidiary of Prudential. There is no outstanding debt relating to this credit facility as of December 31, 2001 or
December 31, 2000.




                                                             B-25
                             Report of Independent Accountants



To the Board of Directors and Stockholder of
Pruco Life Insurance Company

In our opinion, the consolidated financial statements listed in the accompanying index present
fairly, in all material respects, the financial position of Pruco Life Insurance Company (a
wholly-owned subsidiary of The Prudential Insurance Company of America) and its subsidiary
at December 31, 2001 and 2000, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America. These financial statements are
the responsibility of the Company’s management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, New York
February 21, 2002




                                           B-26
                  The Prudential Series Fund, Inc.
                   SP Mid Cap Growth Portfolio
                                    Prospectus dated May 1, 2002
                                 Supplement dated December 16, 2002

  Effective December 16, 2002, Calamos Asset Management, Inc. will replace Massachusetts Financial
Services Company (MFS) as subadviser to the SP Mid Cap Growth Portfolio (formerly, SP MFS Mid Cap
Growth Portfolio).
  The following replaces the discussion of MFS in the section of the prospectus titled ‘‘How the Fund is
Managed—Portfolio Managers:’’
           Calamos Asset Management, Inc. (‘‘Calamos’’) is the subadviser to the SP Mid-Cap Growth
     Portfolio. Calamos, a registered investment advisor, is a wholly-owned subsidiary of Calamos Holdings,
     Inc. As of October 31, 2002, Calamos managed approximately $11.7 billion in assets for institutions,
     individuals, investment companies and hedge funds. Calamos’ address is 1111 E. Warrenville Road,
     Naperville, Illinois 60563-1463.
           John P. Calamos, Chief Executive Officer and President of Calamos, Nick P. Calamos, Chief
     Investment Officer and Executive Vice President of Calamos, and John P. Calamos, Jr., Executive Vice
     President of Calamos, manage the SP Mid Cap Growth Portfolio. Each has been with Calamos since
     1987. John P. Calamos and Nick P. Calamos have managed money together at Calamos or a related
     entity for nearly 20 years.




PSFSUP5
                  The Prudential Series Fund, Inc.
                                Supplement dated December 13, 2002 to
                                     Prospectus dated May 1, 2002

                                             Value Portfolio
  The following amends the sections of the prospectus entitled ‘‘How the Portfolios Invest—Investment
Objectives and Policies, ’’How the Fund Is Managed—Investment Sub-Advisers,‘‘ and ’’How the Fund is
Managed—Portfolio Managers:‘‘
  Effective as of the close of business on December 12, 2002, Jennison Associates LLC is responsible for
managing 100% of the Portfolio’s assets. The portfolio managers for the Portfolio are Tom Kolefas and
Bradley Goldberg. Bradley Goldberg has announced his intention to retire effective December 31, 2002.
Following Mr. Goldberg’s retirement, Mr. Kolefas will continue as the portfolio manager for the Portfolio.

                                             Equity Portfolio
  The following amends the section of the prospectus entitled ’’How the Fund is Managed—Portfolio
Managers:‘‘
  Bradley Goldberg has announced his intention to retire effective December 31, 2002. Following Mr.
Goldberg’s retirement, the portion of the Portfolio managed by Jennison Associates LLC will continue to be
managed by Tom Kolefas.




PSFSUP6
                   The Prudential Series Fund, Inc.
                                    Supplement dated October 18, 2002
                                      Prospectus dated May 1, 2002

                                      SP PIMCO High Yield Portfolio
   Effective immediately, Raymond G. Kennedy will replace Benjamin L. Trosky as portfolio manager. The
following replaces the section titled ‘‘How the Fund is Managed—Portfolio Managers:’’
   The Portfolio is managed by Raymond G. Kennedy. Mr. Kennedy is a Managing Director of PIMCO, and he
joined PIMCO as a credit analyst in 1996. Prior to joining PIMCO, Mr. Kennedy was associated with the
Prudential Insurance Company of America as a private placement asset manager.

                                  SP MFS Capital Opportunities Portfolio
    Effective immediately, S. Irfan Ali and Kenneth J. Enright, CFA, will serve as co-portfolio managers of the
SP MFS Capital Opportunities Portfolio replacing Maura Shaughnessy. The following replaces the section
titled ‘‘How the Fund is Managed—Portfolio Managers:’’
  The Portfolio is managed by S. Irfan Ali and Kenneth J. Enright. Mr. Ali is a Senior Vice President and
portfolio manager of the MFS Strategic Growth portfolios. He joined MFS as a research analyst in 1993 and
earned his M.B.A. from the Harvard Business School. Mr. Enright is a Senior Vice President and portfolio
manager of the MFS Strategic Value portfolios and assists on the team managed MFS Total Return portfolios.
He joined MFS in 1986 as a research analyst and earned his M.B.A. from Babson College.




PSFSUP4
                   The Prudential Series Fund, Inc.
                         Supplement dated September 19, 2002 to Prospectus and
                          Statement of Additional Information, dated May 1, 2002

                                      SP AIM Core Equity Portfolio
   The following supplements the sections of the prospectus entitled ‘‘Investment Objectives and Principal
Strategies,’’ and ‘‘How the Portfolios Invest—Investment Objectives and Policies:’’
   The Portfolio’s investment objective is growth of capital. The Portfolio’s secondary objective of current
income is deleted.

                                SP Deutsche International Equity Portfolio
   The following supplements the sections of the prospectus entitled ‘‘Investment Objectives and Principal
Strategies,’’ ‘‘How The Portfolios Invest—Investment Objectives and Policies,’’ ‘‘How The Fund Is Managed—
Investment Sub-Advisers,’’ and ‘‘How The Fund Is Managed—Portfolio Managers:’’
  Effective September 30, 2002, Deutsche Asset Management Investment Services Limited (DeAMIS) is the
sub-adviser to the Portfolio. DeAMIS is a wholly owned subsidiary of Deutsche Bank AG. As of June 30, 2002
DeAMIS’ total assets under management were $5.667 billion. DeAMIS’ address is One Appold Street, London
EC2A 2UU.
   The following portfolio managers are responsible for the day-to-day management of the Portfolio’s
investments:

  Alexander Tedder, Managing Director of DeAMIS and Co-Manager of the Portfolio
     Head of EAFE Equity Portfolio Selection Team
     Joined DeAMIS in 1994 as a portfolio manager
     Was a European analyst (1990-1994) and representative (1992-1994) for Schroeders
     12 years of investment experience
     Fluent in German, French, Italian and Spanish
     Masters in Economics and Business Administration from Freiburg University

  Clare Brody, Director of DeAMIS and Co-Manager of the Portfolio
     Joined DeAMIS in 1993
     10 years of investment industry experience
     Chartered Financial Analyst
     B.S., Cornell University

  Stuart Kirk, Vice President of DeAMIS and Co-Manager of the Portfolio
     Joined Deutsche Bank AG, Paris Branch in 1995
     Seven years of investment industry experience
     Asia-Pacific analyst
     M.A. from Cambridge University




PSFSUP3
  Marc Slendebroek,Vice President of DeAMIS and Co-Manager of the Portfolio
     Portfolio manager for EAFE Equities: London
     Joined Deutsche Asset Management Americas, Inc. (formerly, Zurich Scudder Investments, Inc.) in 1994
     after five years of experience as equity analyst at Kleinwort Benson Securities and at Enskilda Securities
     Fluent in English, Dutch, German, Swedish and Norwegian
     M.A. from University of Leiden, Netherlands

  Joseph DeSantis, Managing Director of DeAMIS and Co-Manager of the Portfolio
     Oversees all equity portfolio managers based in the Americas region
     Joined Deutsche Asset Management, Inc. (formerly, Zurich Scudder Investments, Inc.) in 2000
     Chief Investment Officer at Chase Trust Bank in Tokyo, Japan, a division of Chase Global Asset
     Management and Mutual Funds (1996-2000)
     Head of International Equities at Chase in New York (1992-1996)
     Positions as a portfolio manager at Chase and as the founder and later Investment Strategist at Strategic
     Research International, Inc.
     B.A. from the University of Cincinnati
  The following supplements the section of the Statement of Additional Information entitled ‘‘Investment
Management And Distribution Arrangements—Investment Management Arrangements:’’
   Deutsche Asset Management Investment Services Limited (DeAMIS) is the subadviser to the SP Deutsche
International Equity Portfolio. All references to Deutsche Asset Management, Inc. and/or DAMI with respect to
the SP Deutsche International Equity Portfolio are hereby deleted and replaced accordingly.
                   The Prudential Series Fund, Inc.
                                   Supplement dated August 29, 2002 to
                                      Prospectus, dated May 1, 2002

                                  SP Alliance Large Cap Growth Portfolio
  The following supplements the section of the prospectus entitled ‘‘How the Portfolios Invest—Investment
Objectives and Policies:’’
  The Portfolio usually invests in about 40-60 companies, with the 25 most highly regarded of these
companies generally constituting approximately 70% of the Portfolio’s investable assets. Alliance seeks to gain
positive returns in good markets while providing some measure of protection in poor markets.

                                     SP MFS Mid-Cap Growth Portfolio
  The following supplements the section of the prospectus entitled ‘‘Portfolio Managers:’’
   The Portfolio is managed by a team. MFS Senior Vice President Mark Regan, who had been a co-manager
for the Portfolio, retired effective June 30, 2002. David Sette-Ducati will continue as a member of the
management team.
   Eric Fischman joined the management team during April 2002. Mr. Fischman is a Senior Vice President of
MFS. Mr. Fischman joined MFS as a research analyst during 2000 and was named a portfolio manager in
April 2002. He earned an M.B.A. degree from Columbia Business School in 1998, a law degree from Boston
University School of Law, and a bachelor’s degree from Cornell University. From 1998 to 2000, Mr. Fischman
served as an equity research analyst at State Street Research. Prior to that, he served as an equity research
analyst at Dreyfus Corporation. Mr. Fischman also holds the Chartered Financial Analyst (CFA) designation.

                              SP INVESCO Small Company Growth Portfolio
  The following supplements the section of the Prospectus entitled ‘‘Portfolio Managers:’’
  The following individuals are primarily responsible for the day-to-day management of the Portfolio’s
holdings:
   Stacie L. Cowell, a senior vice president of INVESCO, is the lead portfolio manager of the Portfolio. Before
joining INVESCO in 1997, Stacie was senior equity analyst with Founders Asset Management and a capital
markets and trading analyst with Chase Manhattan Bank in New York. She is a CFA charterholder. Stacie
holds an M.S. in Finance from the University of Colorado and a B.A. in Economics from Colgate University.
  Cameron Cooke is the co-portfolio manager of the Portfolio. Mr. Cooke joined the investment division of
INVESCO in 2000. Prior to joining INVESCO, Cameron was a senior equity analyst at Wells Capital Manage-
ment. Mr. Cooke holds a B.A. in economics from the University of North Carolina at Chapel Hill.




PSFSUP1
                                     SP PIMCO High Yield Portfolio
                                    SP PIMCO Total Return Portfolio
                                Diversified Conservative Growth Portfolio
  The following supplements the section of the prospectus entitled ‘‘How the Portfolios Invest—Investment
Objectives and Policies:’’
   Each Portfolio may invest in swap agreements, including interest rate, credit default, currency exchange
rate and total return swaps. Each Portfolio may also invest in preferred stock, and may invest in debt from
emerging markets. Each Portfolio may invest in event-linked bonds.

                                             Jennison Portfolio
  The following supplements the section of the Prospectus entitled ‘‘How the Portfolios Invest—Investment
Objectives and Policies:’’
  The Portfolio may invest in equity swap agreements.

                                Diversified Conservative Growth Portfolio
  The following supplements the section of the Prospectus entitled ‘‘How the Portfolios Invest—Investment
Objectives and Policies:’’
   The Portfolio may enter into short sales of securities. No more than 25% of the Portfolio’s net assets may
be used as collateral or segregated for purposes of securing a short sale obligation.
                                      AIM VARIABLE INSURANCE FUNDS

                                    AIM V.I. AGGRESSIVE GROWTH FUND

                                                 (Series I shares)

                                         Supplement dated June 28, 2002
                                       to the Prospectus dated May 1, 2002


Effective July 1, 2002, the following paragraph replaces in its entirety the first paragraph under the heading “FUND
MANAGEMENT - Portfolio Managers” on page 3 of the prospectus:

        The advisor uses a team approach to investment management. The individual members of the
        team (co-managers) who are primarily responsible for the management of the fund’s portfolio
        are:

        •   Robert M. Kippes (lead manager), Senior Portfolio Manager, who has been responsible for
            the fund since 1998 and has been associated with the advisor and/or its affiliates since 1989.

        •   Ryan E. Crane, Senior Portfolio Manager, who has been responsible for the fund since 1999
            and has been associated with the advisor and/or its affiliates since 1994.

        •   Jay K. Ruchin, Portfolio Manager, who has been responsible for the fund since 2000 and has
            been associated with the advisor and/or its affiliates since 1998. From 1996 to 1998, he was
            an associate equity analyst for Prudential Securities.

        They are assisted by the Mid Cap Growth Team. More information on the fund’s management
        team may be found on our website (http://www.aimfunds.com).


                                      AIM VARIABLE INSURANCE FUNDS

                                          AIM V.I. CORE EQUITY FUND

                                                 (Series I shares)

                                           Supplement dated July 1, 2002
                                       to the Prospectus dated May 1, 2002

Effective September 30, 2002, the following paragraph replaces in its entirety the first paragraph under the heading
“INVESTMENT OBJECTIVES AND STRATEGIES - AIM V.I. Core Equity Fund (formerly, AIM V.I. Growth and
Income Fund)” on page 1 of the prospectus:

        The fund’s primary investment objective is growth of capital.


Effective July 1, 2002, the following paragraph replaces in its entirety the first paragraph under the heading “FUND
MANAGEMENT - Portfolio Managers” on page 3 of the prospectus:

        •   Ronald S. Sloan (lead manager), Senior Portfolio Manager, who has been responsible for the
            fund since 2002 and has been associated with the advisor and/or its affiliates since 1998.
            From 1993 to 1998, he was President of Verissimo Research and Management, Inc.

        •   Michael Yellen, Senior Portfolio manager, who has been responsible for the fund since 2002
            and has been associated with the advisor and/or its affiliates since 1994.

        They are assisted by the Mid Cap Core Team. More information on the fund’s management team
        may be found on our website (http://www.aimfunds.com).




PSFSUP2 Ed. 7/2002
            The Prudential Series Fund, Inc.
                                               Prospectus

                                               May 1, 2002




       Conservative Balanced Portfolio                         SP Balanced Asset Allocation Portfolio
           Diversified Bond Portfolio                       SP Conservative Asset Allocation Portfolio
                Equity Portfolio                                      SP Davis Value Portfolio
          Flexible Managed Portfolio                        SP Deutsche International Equity Portfolio
                Global Portfolio                                SP Growth Asset Allocation Portfolio
           High Yield Bond Portfolio                       SP INVESCO Small Company Growth Portfolio
               Jennison Portfolio                           SP Jennison International Growth Portfolio
            Money Market Portfolio                                 SP Large Cap Value Portfolio
             Stock Index Portfolio                             SP MFS Capital Opportunities Portfolio
                 Value Portfolio                                 SP MFS Mid-Cap Growth Portfolio
SP Aggressive Growth Asset Allocation Portfolio                    SP PIMCO High Yield Portfolio
     SP AIM Aggressive Growth Portfolio                           SP PIMCO Total Return Portfolio
         SP AIM Core Equity Portfolio                      SP Prudential U.S. Emerging Growth Portfolio
    SP Alliance Large Cap Growth Portfolio                       SP Small/Mid-Cap Value Portfolio
       SP Alliance Technology Portfolio                   SP Strategic Partners Focused Growth Portfolio




                      As with all mutual funds, the Securities and Exchange Commission
                      has not approved or disapproved the Fund’s shares nor has the
                      SEC determined that this prospectus is complete or accurate. It is
                      a criminal offense to state otherwise.

                      A particular Portfolio may not be available under the variable life
                      insurance or variable annuity contract which you have chosen. The
                      prospectus of the specific contract which you have chosen will
                      indicate which Portfolios are available and should be read in
                      conjunction with this prospectus.
Table of Contents

 1    RISK/RETURN SUMMARY

 1    Investment Objectives and Principal Strategies
12    Principal Risks
16    Evaluating Performance

45    HOW THE PORTFOLIOS INVEST

45    Investment Objectives and Policies

45    Conservative Balanced Portfolio
46    Diversified Bond Portfolio
47    Equity Portfolio
48    Flexible Managed Portfolio
50    Global Portfolio
50    High Yield Bond Portfolio
51    Jennison Portfolio
52    Money Market Portfolio
53    Stock Index Portfolio
54    Value Portfolio
55    SP AIM Aggressive Growth Portfolio
56    SP AIM Core Equity Portfolio
58    SP Alliance Large Cap Growth Portfolio
59    SP Alliance Technology Portfolio
60    SP Asset Allocation Portfolios
61    SP Aggressive Growth Asset Allocation Portfolio
62    SP Balanced Asset Allocation Portfolio
62    SP Conservative Asset Allocation Portfolio
63    SP Growth Asset Allocation Portfolio
63    SP Davis Value Portfolio
64    SP Deutsche International Equity Portfolio
67    SP INVESCO Small Company Growth Portfolio
67    SP Jennison International Growth Portfolio
69    SP Large Cap Value Portfolio
70    SP MFS Capital Opportunities Portfolio
71    SP MFS Mid-Cap Growth Portfolio
72    SP PIMCO High Yield Portfolio
73    SP PIMCO Total Return Portfolio
75    SP Prudential U.S. Emerging Growth Portfolio
77    SP Small/Mid-Cap Value Portfolio
78    SP Strategic Partners Focused Growth Portfolio
Table of Contents (continued)

81    OTHER INVESTMENTS AND STRATEGIES

81    ADRs
81    Convertible Debt and Convertible Preferred Stock
81    Derivatives
81    Dollar Rolls
81    Equity Swaps
81    Forward Foreign Currency Exchange Contracts
81    Futures Contracts
82    Interest Rate Swaps
82    Joint Repurchase Account
82    Loans and Assignments
82    Mortgage-related Securities
82    Options
83    Real Estate Investment Trusts
83    Repurchase Agreements
83    Reverse Repurchase Agreements
83    Short Sales
83    Short Sales Against-the-Box
83    When-Issued and Delayed Delivery Securities

84    HOW THE FUND IS MANAGED

84    Board of Directors
84    Investment Adviser
85    Investment Sub-Advisers
87    Portfolio Managers

94    HOW TO BUY AND SELL SHARES OF THE FUND

95    Net Asset Value
96    Distributor

96    OTHER INFORMATION

96    Federal Income Taxes
97    Monitoring for Possible Conflicts

97    FINANCIAL HIGHLIGHTS

(For more information—see back cover)




                                                         2
RISK/RETURN SUMMARY
This prospectus provides information about The Prudential Series Fund, Inc. (the Fund), which consists of 36
separate portfolios (each, a Portfolio).

The Fund offers two classes of shares in each Portfolio: Class I and Class II. Class I shares are sold only to separate
accounts of The Prudential Insurance Company of America and its affiliates (Prudential) as investment options under
variable life insurance and variable annuity contracts (the Contracts). (A separate account keeps the assets supporting
certain insurance contracts separate from the general assets and liabilities of the insurance company.) Class II shares
are offered only to separate accounts of non-Prudential insurance companies for the same types of Contracts. Not
every Portfolio is available under every Contract. The prospectus for each Contract lists the Portfolios currently
available through that Contract.

This section highlights key information about each Portfolio available under your Contract. Additional information
follows this summary and is also provided in the Fund’s Statement of Additional Information (SAI).

INVESTMENT OBJECTIVES AND PRINCIPAL STRATEGIES
The following summarizes the investment objectives, principal strategies and principal risks for each of the Portfolios.
We describe the terms listed as principal risks on page 12. While we make every effort to achieve the investment
objective for each Portfolio, we can’t guarantee success and it is possible that you could lose money.

Conservative Balanced Portfolio
The Portfolio’s investment objective is total investment return consistent with a conservatively managed
diversified portfolio. This Portfolio may be appropriate for an investor who wants diversification with a relatively lower
risk of loss than that associated with the Flexible Managed Portfolio (see below). To achieve our objective, we invest in
a mix of equity securities, debt obligations and money market instruments. Up to 30% of the Portfolio’s total assets may
be invested in foreign securities. We may invest a portion of the Portfolio’s assets in high-yield/high-risk debt securities,
which are riskier than high-grade securities. While we make every effort to achieve our objective, we can’t guarantee
success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ credit risk
    ‰ foreign investment risk
    ‰ high yield risk
    ‰ interest rate risk
    ‰ market risk
    ‰ management risk

Diversified Bond Portfolio
The Portfolio’s investment objective is a high level of income over a longer term while providing reasonable
safety of capital. This means we look for investments that we think will provide a high level of current income, but
which are not expected to involve a substantial risk of loss of capital through default. To achieve our objective, we
normally invest at least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment
purposes) in high-grade debt obligations and high-quality money market investments. We may purchase securities that
are issued outside the U.S. by foreign or U.S. issuers. In addition, we may invest a portion of the Portfolio’s assets in
high-yield/high-risk debt securities, which are riskier than high-grade securities. While we make every effort to achieve
our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ credit risk
    ‰ foreign investment risk
    ‰ high yield risk
    ‰ interest rate risk
    ‰ management risk
Equity Portfolio
The Portfolio’s investment objective is long-term growth of capital. To achieve our objective, we normally invest at
least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment purposes) in
common stocks of major established corporations as well as smaller companies that we believe offer attractive
prospects of appreciation. The Portfolio may invest up to 30% of its total assets in foreign securities. While we make
every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰   company risk
    ‰   foreign investment risk
    ‰   market risk
    ‰   management risk


Flexible Managed Portfolio
The Portfolio’s investment objective is a high total return consistent with an aggressively managed diversified
portfolio. This Portfolio may be appropriate for an investor who wants diversification and is willing to accept a relatively
high level of loss in an effort to achieve greater appreciation. To achieve our objective, we invest in a mix of equity
securities, debt obligations and money market instruments. The Portfolio may invest in foreign securities. A portion of
the debt portion of the Portfolio may be invested in high-yield/high-risk debt securities, which are riskier than high-grade
securities. While we make every effort to achieve our objective, we can’t guarantee success and it is possible that you
could lose money.

    Principal Risks:
    ‰ company risk
    ‰ credit risk
    ‰ foreign investment risk
    ‰ high yield risk
    ‰ interest rate risk
    ‰ market risk
    ‰ management risk

Global Portfolio
The Portfolio’s investment objective is long-term growth of capital. To achieve this objective, we invest primarily in
common stocks (and their equivalents) of foreign and U.S. companies. Generally, we invest in at least three countries,
including the U.S., but we may invest up to 35% of the Portfolio’s assets in companies located in any one country other
than the U.S. While we make every effort to achieve our objective, we can’t guarantee success and it is possible that
you could lose money.

    Principal Risks:
    ‰   company risk
    ‰   foreign investment risk
    ‰   market risk
    ‰   management risk


High Yield Bond Portfolio
The Portfolio’s investment objective is a high total return. In pursuing our objective, we normally invest at least 80% of
the Portfolio’s investable assets (net assets plus any borrowings made for investment purposes) in high-yield/high-risk
debt securities. Such securities have speculative characteristics and are riskier than high-grade securities. The Portfolio
may invest up to 20% of its total assets in foreign debt obligations. While we make every effort to achieve our objective,
we can’t guarantee success and it is possible that you could lose money.




                                                             2
    Principal Risks:
    ‰ credit risk
    ‰ foreign investment risk
    ‰ high yield risk
    ‰ interest rate risk
    ‰ market risk
    ‰ management risk

Jennison Portfolio (formerly, Prudential Jennison Portfolio)
The Portfolio’s investment objective is to achieve long-term growth of capital. To achieve this objective, we invest
primarily in equity securities of major, established corporations that we believe offer above-average growth prospects.
The Portfolio may invest up to 30% of its total assets in foreign securities. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk

Money Market Portfolio
The Portfolio’s investment objective is maximum current income consistent with the stability of capital and the
maintenance of liquidity. To achieve our objective, we invest in high-quality short-term money market instruments
issued by the U.S. government or its agencies, as well as by corporations and banks, both domestic and foreign. The
Portfolio will invest only in instruments that mature in thirteen months or less, and which are denominated in U.S.
dollars. While we make every effort to achieve our objective, we can’t guarantee success.

    Principal Risks:
    ‰ credit risk
    ‰ interest rate risk
    ‰ management risk

 An investment in the Money Market Portfolio is not a bank deposit and is not insured or guaranteed by the Federal
 Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to maintain a net asset
 value of $10 per share, it is possible to lose money by investing in the Portfolio.



    Principal Risks:
    ‰ company risk
    ‰ credit risk
    ‰ derivatives risk
    ‰ foreign investment risk
    ‰ industry/sector risk
    ‰ interest rate risk
    ‰ management risk
    ‰ market risk

Stock Index Portfolio
The Portfolio’s investment objective is investment results that generally correspond to the performance of
publicly-traded common stocks. To achieve our objective, we attempt to duplicate the price and yield of the
Standard & Poor’s 500 Composite Stock Price Index (S&P 500) by investing at least 80% of the Portfolio’s investable
assets (net assets plus any borrowings made for investment purposes) in S&P 500 stocks. The S&P 500 represents

                                                           3
more than 70% of the total market value of all publicly-traded common stocks and is widely viewed as representative of
publicly-traded common stocks as a whole. The Portfolio is not “managed” in the traditional sense of using market and
economic analyses to select stocks. Rather, the portfolio manager purchases stocks in proportion to their weighting in
the S&P 500. While we make every effort to achieve our objective, we can’t guarantee success and it is possible that
you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ market risk

Value Portfolio
The Portfolio’s investment objective is capital appreciation. To achieve our objective, we invest primarily in common
stocks that are undervalued — those stocks that are trading below their underlying asset value, cash generating ability and
overall earnings and earnings growth. We normally invest at least 65% of the Portfolio’s total assets in the common stock
and convertible securities of companies that we believe will provide investment returns above those of the Standard &
Poor’s 500 Composite Stock Price Index (S&P 500) or the New York Stock Exchange (NYSE) Composite Index. Most of
our investments will be securities of large capitalization companies. The Portfolio may invest up to 25% of its total assets in
real estate investment trusts (REITs) and up to 30% of its total assets in foreign securities. There is a risk that “value”
stocks can perform differently from the market as a whole and other types of stocks and can continue to be undervalued by
the markets for long periods of time. While we make every effort to achieve our objective, we can’t guarantee success and
it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ credit risk
    ‰ foreign investment risk
    ‰ interest rate risk
    ‰ market risk

SP Aggressive Growth Asset Allocation Portfolio
The SP Aggressive Growth Asset Allocation Portfolio seeks capital appreciation by investing in large cap equity
Portfolios, international Portfolios, and small/mid-cap equity Portfolios. Pertinent risks are those associated with each
Portfolio in which this Portfolio invests. While we make every effort to achieve our objective, we can’t guarantee
success and it is possible that you could lose money.

The SP Aggressive Growth Asset Allocation Portfolio invests in shares of the following Fund Portfolios:
    ‰    a large capitalization equity component (approximately 40% of the Portfolio, invested in shares of the SP
         Davis Value Portfolio (20% of Portfolio), the SP Alliance Large Cap Growth Portfolio (10% of Portfolio), and
         the Jennison Portfolio (10% of Portfolio)); and
    ‰    an international component (approximately 35% of the Portfolio, invested in shares of the SP Jennison
         International Growth Portfolio (17.5% of Portfolio) and the SP Deutsche International Equity Portfolio (17.5%
         of Portfolio)); and
    ‰    a small/mid-capitalization equity component (approximately 25% of the Portfolio, invested in shares of the SP
         Small/Mid-Cap Value Portfolio (12.5% of Portfolio) and the SP Prudential U.S. Emerging Growth Portfolio
         (12.5% of Portfolio)).

For more information on the underlying Portfolios, please refer to their investment summaries included in this
prospectus.

SP AIM Aggressive Growth Portfolio
The Portfolio’s investment objective is to achieve long-term growth of capital. The Portfolio seeks to meet this
objective by investing primarily in the common stocks of companies whose earnings the portfolio managers expect to

                                                              4
grow more than 15% per year. Growth stocks usually involve a higher level of risk than value stocks, because growth
stocks tend to attract more attention and more speculative investments than value stocks. On behalf of the Portfolio,
A I M Capital Management, Inc. will invest in securities of small- and medium-sized growth companies, may invest up
to 25% of its total assets in foreign securities and may invest up to 25% of its total assets in real estate investment
trusts (REITs). While we make every effort to achieve our objective, we can’t guarantee success and it is possible that
you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ liquidity risk
    ‰ management risk
    ‰ market risk

SP AIM Core Equity Portfolio (formerly, SP AIM Growth and Income Portfolio)
The Portfolio’s primary investment objective is growth of capital with a secondary objective of current income. The
Portfolio seeks to meet these objectives by investing at least 80% of its investable assets (net assets plus any
borrowings made for investment purposes) in equity securities, including convertible securities of established
companies that have long-term above-average growth in earnings and dividends, and growth companies that the
portfolio managers believe have the potential for above-average growth in earnings and dividends. In complying with
this 80% requirement, the Portfolio’s investments may include synthetic instruments. Synthetic instruments are
investments that have economic characteristics similar to the Portfolio’s direct investments and may include warrants,
futures, options, exchange-traded funds and ADRs. A I M Capital Management, Inc. considers whether to sell a
particular security when they believe the security no longer has that potential or the capacity to generate income. The
Portfolio may invest up to 20% of its total assets in foreign securities. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ credit risk
    ‰ derivatives risk
    ‰ foreign investment risk
    ‰ interest rate risk
    ‰ leveraging risk
    ‰ liquidity risk
    ‰ management risk
    ‰ market risk

SP Alliance Large Cap Growth Portfolio
The Portfolio’s investment objective is growth of capital by pursuing aggressive investment policies. The Portfolio
normally invests at least 80% of the Portfolio’s investable assets (net assets plus any borrowings made for investment
purposes) in stocks of companies considered to have large capitalizations (i.e., similar to companies included in the S&P
500 Index). Up to 15% of the Portfolio’s total assets may be invested in foreign securities. Unlike most equity funds, the
Portfolio focuses on a relatively small number of intensively researched companies. Alliance Capital Management, L.P.
(“Alliance”) selects the Portfolio’s investments from a research universe of more than 500 companies that have strong
management, superior industry positions, excellent balance sheets, and superior earnings growth prospects. “Alliance”,
“Alliance Capital” and their logos are registered marks of Alliance Capital Management, L.P. While we make every effort
to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk

                                                            5
SP Alliance Technology Portfolio
The Portfolio’s objective is growth of capital. The Portfolio normally invests at least 80% of its investable assets (net
assets plus any borrowings made for investment purposes) in securities of companies that use technology extensively
in the development of new or improved products or processes. Within this framework, the Portfolio may invest in any
company and industry and in any type of security with potential for capital appreciation. It invests in well-known,
established companies or in new or unseasoned companies. The Portfolio also may invest in debt securities and up to
25% of its total assets in foreign securities. In addition, technology stocks, especially those of smaller, less-seasoned
companies, tend to be more volatile than the overall stock market. The Portfolio may invest up to 25% of its total assets
in foreign securities. While we make every effort to achieve our objective, we can’t guarantee success and it is possible
that you could lose money. This Portfolio is advised by Alliance Capital Management, L.P.

    Principal Risks:
    ‰   company risk
    ‰   credit risk
    ‰   foreign investment risk
    ‰   industry/sector risk
    ‰   interest rate risk
    ‰   liquidity risk
    ‰   management risk
    ‰   market risk

SP Balanced Asset Allocation Portfolio
The SP Balanced Asset Allocation Portfolio seeks to provide a balance between current income and growth of capital
by investing in fixed income Portfolios, large cap equity Portfolios, small/mid-cap equity Portfolios, and international
equity Portfolios. Pertinent risks are those associated with each Portfolio in which this Portfolio invests. While we make
every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

The SP Balanced Asset Allocation Portfolio invests in shares of the following Portfolios:
    ‰    a fixed income component (approximately 40% of the Portfolio, invested in shares of the SP PIMCO Total
         Return Portfolio (25% of Portfolio) and the SP PIMCO High Yield Portfolio (15% of Portfolio)); and
    ‰    a large capitalization equity component (approximately 35% of the Portfolio, invested in shares of the SP
         Davis Value Portfolio (17.5% of Portfolio), the SP Alliance Large Cap Growth Portfolio (8.75% of Portfolio),
         and the Jennison Portfolio (8.75% of Portfolio)); and
    ‰    a small/mid capitalization equity component (approximately 15% of the Portfolio, invested in shares of the SP
         Small/Mid-Cap Value Portfolio (7.5% of Portfolio) and the SP Prudential U.S. Emerging Growth Portfolio (7.5%
         of Portfolio)); and
    ‰    an international component (approximately 10% of the Portfolio, invested in shares of the SP Jennison
         International Growth Portfolio (5% of Portfolio) and the SP Deutsche International Equity Portfolio (5% of
         Portfolio)).

For more information on the underlying Portfolios, please refer to their investment summaries included in this
prospectus.

SP Conservative Asset Allocation Portfolio
The SP Conservative Asset Allocation Portfolio seeks to provide current income with low to moderate capital
appreciation by investing in fixed income Portfolios, large cap equity Portfolios, and small/mid-cap equity Portfolios.
Pertinent risks are those associated with each Portfolio in which this Portfolio invests. While we make every effort to
achieve our objective, we can’t guarantee success and it is possible that you could lose money.

The SP Conservative Asset Allocation Portfolio invests in shares of the following Portfolios:
    ‰    a fixed income component (approximately 60% of the Portfolio, invested in shares of the SP PIMCO Total
         Return Portfolio (40% of Portfolio) and the SP PIMCO High Yield Portfolio (20% of Portfolio)); and

                                                            6
    ‰    a large capitalization equity component (approximately 30% of the Portfolio, invested in shares of the SP
         Davis Value Portfolio (15% of Portfolio), the SP Alliance Large Cap Growth Portfolio (7.5% of Portfolio), and
         the Jennison Portfolio (7.5% of Portfolio)); and
    ‰    a small/mid capitalization equity component (approximately 10% of the Portfolio, invested in shares of the SP
         Small/Mid-Cap Value Portfolio (5% of Portfolio) and the SP Prudential U.S. Emerging Growth Portfolio (5% of
         Portfolio)).

For more information on the underlying Portfolios, please refer to their investment summaries included in this
prospectus.


SP Davis Value Portfolio
SP Davis Value Portfolio’s investment objective is growth of capital. The Portfolio invests primarily in common stock of
U.S. companies with market capitalizations of at least $5 billion.

The portfolio managers use the investment philosophy of Davis Selected Advisers, L.P. to select common stocks of
quality, overlooked growth companies at value prices and to hold them for the long-term. They look for companies with
sustainable growth rates selling at modest price-earnings multiples that they hope will expand as other investors
recognize the company’s true worth. The portfolio managers believe that if you combine a sustainable growth rate with
a gradually expanding multiple, these rates compound and can generate returns that could exceed average returns
earned by investing in large capitalization domestic stocks. They consider selling a company if the company no longer
exhibits the characteristics that they believe foster sustainable long-term growth, minimize risk and enhance the
potential for superior long-term returns. There is a risk that “Value” Stocks can perform differently from the market as a
whole and other types of stocks and can continue to be undervalued by the markets for long periods of time. While we
make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰   company risk
    ‰   liquidity risk
    ‰   management risk
    ‰   market risk


SP Deutsche International Equity Portfolio
The Portfolio’s investment objective is to invest for long-term capital appreciation. The Portfolio normally invests at
least 80% of its investable assets (net assets plus borrowings made for investment purposes) in the stocks and other
equity securities of companies in developed countries outside the United States. The Portfolio seeks to achieve its goal
by investing primarily in companies in developed foreign countries. The companies are selected by an extensive
tracking system plus the input of experts from various financial disciplines. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money. This Portfolio is advised by
Deutsche Asset Management Inc. (DAMI)

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk

SP Growth Asset Allocation Portfolio
The SP Growth Asset Allocation Portfolio seeks to provide long-term growth of capital with consideration also given to
current income, by investing in large-cap equity Portfolios, fixed income Portfolios, international equity Portfolios, and
small/mid-cap equity Portfolios. Pertinent risks are those associated with each Portfolio in which this Portfolio invests.
While we make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose
money.

                                                             7
The Growth Asset Allocation Portfolio invests in shares of the following Portfolios:
    ‰    a large capitalization equity component (approximately 45% of the Portfolio, invested in shares of the SP
         Davis Value Portfolio (22.5% of Portfolio), the SP Alliance Large Cap Growth Portfolio (11.25% of Portfolio),
         and the Jennison Portfolio (11.25% of Portfolio)); and
    ‰    a fixed income component (approximately 20% of the Portfolio, invested in shares of the SP PIMCO High
         Yield Portfolio (10% of Portfolio) and the SP PIMCO Total Return Portfolio (10% of Portfolio)); and
    ‰    an international component (approximately 20% of the Portfolio, invested in shares of the SP Jennison
         International Growth Portfolio (10% of Portfolio) and the SP Deutsche International Equity Portfolio (10% of
         Portfolio)); and
    ‰    a small/mid capitalization equity component (approximately 15% of the Portfolio, invested in shares of the SP
         Small/Mid-Cap Value Portfolio (7.5% of Portfolio) and the SP Prudential U.S. Emerging Growth Portfolio (7.5%
         of Portfolio)).

For more information on the underlying Portfolios, please refer to their investment summaries included in this
prospectus.


SP INVESCO Small Company Growth Portfolio
The Portfolio seeks long-term capital growth. Under normal circumstances, the Portfolio will invest at least 80% of its
investable assets (net assets plus any borrowings made for investment purposes) in small-capitalization companies —
 those which are included in the Russell 2000 Growth Index at the time of purchase, or if not included in that index,
have market capitalizations of $2.5 billion or below at the time of purchase.

Investments in small, developing companies carry greater risk than investments in larger, more established companies.
Developing companies generally face intense competition, and have a higher rate of failure than larger companies. On
the other hand, large companies were once small companies themselves, and the growth opportunities of some small
companies may be quite high. While we make every effort to achieve our objective, we can’t guarantee success and it
is possible that you could lose money. This Portfolio is advised by INVESCO Funds Group, Inc.

    Principal Risks:
    ‰ company risk
    ‰ management risk
    ‰ market risk

SP Jennison International Growth Portfolio
The Portfolio’s investment objective is long-term growth of capital. The Portfolio seeks to achieve this objective by
investing in equity-related securities of foreign issuers. This means the Portfolio looks for investments that Jennison
Associates LLC thinks will increase in value over a period of years. To achieve its objective, the Portfolio invests
primarily in the common stock of large and medium-sized foreign companies. Under normal circumstances, the
Portfolio invests at least 65% of its total assets in common stock of foreign companies operating or based in at least
five different countries. The Portfolio looks primarily for stocks of companies whose earnings are growing at a faster
rate than other companies. These companies typically have characteristics such as above average growth in earnings
and cash flow, improving profitability, strong balance sheets, management strength and strong market share for its
products. The Portfolio also tries to buy such stocks at attractive prices in relation to their growth prospects. While we
make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰   company risk
    ‰   foreign investment risk
    ‰   market risk




                                                             8
SP Large Cap Value Portfolio
The Portfolio’s investment objective is long-term growth of capital. The portfolio’s investment strategy includes
normally investing at least 80% of its investable assets (net assets plus any borrowings made for investment purposes)
in securities of companies with large market capitalizations (those with market capitalizations similar to companies in
the Standard & Poor’s 500 Composite Stock Price Index or the Russell 1000 Index). The Portfolio normally invests its
assets primarily in common stocks. The Portfolio invests in securities of companies that Fidelity Management &
Research Company (FMR) believes are undervalued in the marketplace in relation to factors such as assets, earnings,
growth potential or cash flow in relation to securities of other companies in the same industry (stocks of these
companies are often called “value” stocks). The Portfolio invests in domestic and foreign issuers. The Portfolio uses
fundamental analysis of each issuer’s financial condition, its industry position and market and economic conditions,
along with statistical models to evaluate growth potential, valuation, liquidity and investment risk, to select investments.
There is a risk that “value” stocks can perform differently from the market as a whole and other types of stocks and can
continue to be undervalued by the markets for long periods of time. An investment in this Portfolio, like any Portfolio, is
not a deposit of a bank, and is not insured by the Federal Deposit Insurance Corporation or any other government
agency. While we make every effort to achieve our objective, we can’t guarantee success and it is possible that you
could lose money.

    Principal Risks:
    ‰   company risk
    ‰   foreign investment risk
    ‰   management risk
    ‰   market risk

SP MFS Capital Opportunities Portfolio
The Portfolio’s investment objective is capital appreciation. The Portfolio invests, under normal market conditions, at
least 65% of its net assets in common stocks and related securities, such as preferred stocks, convertible securities
and depositary receipts for those securities. The Portfolio focuses on companies which Massachusetts Financial
Services Company (MFS) believes have favorable growth prospects and attractive valuations based on current and
expected earnings or cash flow. The Portfolio’s investments may include securities listed on a securities exchange or
traded in the over-the-counter markets. MFS uses a bottom-up, as opposed to a top-down, investment style in
managing the Portfolio. This means that securities are selected based upon fundamental analysis (such as an analysis
of earnings, cash flows, competitive position and management’s abilities) performed by the Portfolio’s portfolio manager
and MFS’s large group of equity research analysts. The Portfolio may invest in foreign securities (including emerging
market securities), through which it may have exposure to foreign currencies. The Portfolio may engage in active and
frequent trading to achieve its principal investment strategies. While we make every effort to achieve our objective, we
can’t guarantee success and it is possible that you could lose money. High portfolio turnover results in higher
transaction costs and can affect the Portfolio’s performance.

    Principal Risks:
    ‰   company risk
    ‰   foreign investment risk
    ‰   management risk
    ‰   market risk
    ‰   portfolio turnover risk

SP MFS Mid-Cap Growth Portfolio
The Portfolio’s investment objective is long-term growth of capital. The Portfolio invests, under normal market
conditions, at least 80% of its investable assets (net assets plus any borrowings made for investment purposes) in
common stocks and related securities, such as preferred stocks, convertible securities and depositary receipts for
those securities. These securities typically are of medium market capitalizations, which Massachusetts Financial
Services Company (MFS) believes have above-average growth potential.

Medium market capitalization companies are defined by the Portfolio as companies with market capitalizations equaling
or exceeding $250 million but not exceeding the top of the Russell Midcap™ Growth Index range at the time of the

                                                             9
Portfolio’s investment. This Index is a widely recognized, unmanaged index of mid-cap common stock prices.
Companies whose market capitalizations fall below $250 million or exceed the top of the Russell Midcap™ Growth
Index range after purchase continue to be considered medium-capitalization companies for purposes of the Portfolio’s
80% investment policy. The Portfolio’s investments may include securities listed on a securities exchange or traded in
the over-the-counter markets. MFS uses a bottom-up, as opposed to a top-down, investment style in managing the
Portfolio. This means that securities are selected based upon fundamental analysis (such as an analysis of earnings,
cash flows, competitive position and management’s abilities) performed by the portfolio manager and MFS’s large
group of equity research analysts. The Portfolio is a non-diversified mutual fund portfolio. This means that the Portfolio
may invest a relatively high percentage of its assets in a small number of issuers. The Portfolio may invest in foreign
securities (including emerging markets securities). The Portfolio is expected to engage in active and frequent trading to
achieve its principal investment strategies. While we make every effort to achieve our objective, we can’t guarantee
success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk
    ‰ portfolio turnover risk

SP PIMCO High Yield Portfolio
The investment objective of the Portfolio is to seek maximum total return, consistent with preservation of capital
and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under
normal circumstances at least 80% of its investable assets (net assets plus any borrowings made for investment
purposes) in a diversified portfolio of high yield/high risk securities rated below investment grade but rated at least B by
Moody’s Investor Service, Inc. (Moody’s) or Standard & Poor’s Ratings Group (S&P), or, if unrated, determined by
Pacific Investment Management Company (PIMCO) to be of comparable quality. The remainder of the Portfolio’s
assets may be invested in investment grade fixed income instruments. The average duration of the Portfolio normally
varies within a two- to six-year time frame based on PIMCO’s forecast for interest rates. The Portfolio may invest
without limit in U.S. dollar-denominated securities of foreign issuers. The Portfolio may invest up to 15% of its assets in
euro-denominated securities. The Portfolio normally will hedge at least 75% of its exposure to the euro to reduce the
risk of loss due to fluctuations in currency exchange rates. While we make every effort to achieve our objective, we
can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ credit risk
    ‰ derivatives risk
    ‰ foreign investment risk
    ‰ high yield risk
    ‰ interest rate risk
    ‰ leveraging risk
    ‰ liquidity risk
    ‰ management risk
    ‰ market risk
    ‰ mortgage risk

SP PIMCO Total Return Portfolio
The investment objective of the Portfolio is to seek maximum total return, consistent with preservation of capital
and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under
normal circumstances at least 65% of its assets in a diversified portfolio of fixed income instruments of varying
maturities. The average portfolio duration of this Portfolio normally varies within a three- to six-year time frame based
on PIMCO’s forecast for interest rates. While we make every effort to achieve our objective, we can’t guarantee
success and it is possible that you could lose money.

                                                             10
    Principal Risks:
    ‰ credit risk
    ‰ derivatives risk
    ‰ interest rate risk
    ‰ management risk

SP Prudential U.S. Emerging Growth Portfolio
The Portfolio’s investment objective is long-term capital appreciation, which means that the Portfolio seeks
investments whose price will increase over several years. The Portfolio normally invests at least 80% of its investable
assets (net assets plus any borrowings made for investment purposes) in equity securities of small and medium-sized
U.S. companies that Jennison Associates LLC believes have the potential for above-average growth. The Portfolio also
may use derivatives for hedging or to improve the Portfolio’s returns. The Portfolio may actively and frequently trade its
portfolio securities. High portfolio turnover results in higher transaction costs and can affect the Portfolio’s performance.
While we make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose
money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk

SP Small/Mid-Cap Value Portfolio
The Portfolio’s investment objective is long-term growth of capital. The Portfolio’s investment strategy includes
normally investing at least 80% of its investable assets (net assets plus any borrowings made for investment purposes)
in securities of companies with small to medium market capitalizations (those with market capitalizations similar to
companies in the S&P Small Cap 600 or the Russell 2000 for small market capitalization and the S&P MidCap 400 or
the Russell Midcap® Index for medium market capitalization). The Portfolio normally invests its assets primarily in
common stocks. The Portfolio invests in securities of companies that Fidelity Management & Research Company
(FMR) believes are undervalued in the marketplace in relation to factors such as assets, earnings, growth potential or
cash flow, or in relation to securities of other companies in the same industry, (stocks of these companies are often
called “value” stocks). The Portfolio invests in domestic and foreign issuers. The Portfolio uses fundamental analysis of
each issuer’s financial condition, its industry position and market and economic conditions, along with statistical models
to evaluate growth potential, valuation, liquidity and investment risk to select investments. There is a risk that “value”
stocks can perform differently from the market as a whole and other types of stocks and can continue to be
undervalued by the markets for long periods of time. An investment in this Portfolio, like any Portfolio, is not a deposit
of a bank, and is not insured by the Federal Deposit Insurance Corporation or any other government agency. While we
make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ liquidity risk
    ‰ management risk
    ‰ market risk

SP Strategic Partners Focused Growth Portfolio
The Portfolio’s investment objective is long-term growth of capital. This means the Portfolio seeks investments
whose price will increase over several years. The Portfolio normally invests at least 65% of its total assets in equity-
related securities of U.S. companies that the adviser believes to have strong capital appreciation potential. The
Portfolio’s strategy is to combine the efforts of two investment advisers and to invest in the favorite stock selection
ideas of three portfolio managers (two of whom invest as a team). Each investment adviser to the Portfolio utilizes a
growth style to select approximately 20 securities. The portfolio managers build a portfolio with stocks in which they

                                                             11
have the highest confidence and may invest more than 5% of the Portfolio’s assets in any one issuer. The Portfolio is
nondiversified, meaning it can invest a relatively high percentage of its assets in a small number of issuers. Investing in
a nondiversified portfolio, particularly a portfolio investing in approximately 40 equity-related securities, involves greater
risk than investing in a diversified portfolio because a loss resulting from the decline in the value of one security may
represent a greater portion of the total assets of a nondiversified portfolio. The Portfolio may actively and frequently
trade its portfolio securities. While we make every effort to achieve our objective, we can’t guarantee success and it is
possible that you could lose money. This Portfolio is advised by Jennison Associates LLC and Alliance Capital
Management, L.P.

    Principal Risks:
    ‰ company risk
    ‰ foreign investment risk
    ‰ management risk
    ‰ market risk
    ‰ portfolio turnover risk

PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Like any mutual fund, an investment in a Portfolio could
lose value, and you could lose money. The following summarizes the principal risks of investing in the Portfolios.

Company risk. The price of the stock of a particular company can vary based on a variety of factors, such as the
company’s financial performance, changes in management and product trends, and the potential for takeover and
acquisition. This is especially true with respect to equity securities of smaller companies, whose prices may go up and
down more than equity securities of larger, more established companies. Also, since equity securities of smaller
companies may not be traded as often as equity securities of larger, more established companies, it may be difficult or
impossible for a Portfolio to sell securities at a desirable price. Foreign securities have additional risks, including
exchange rate changes, political and economic upheaval, the relative lack of information about these companies,
relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.

Credit risk. Debt obligations are generally subject to the risk that the issuer may be unable to make principal and
interest payments when they are due. There is also the risk that the securities could lose value because of a loss of
confidence in the ability of the borrower to pay back debt. Non-investment grade debt — also known as “high-yield
bonds” and “junk bonds” — have a higher risk of default and tend to be less liquid than higher-rated securities.

Derivatives risk. Derivatives are financial contracts whose value depends on, or is derived from, the value of an
underlying asset, interest rate or index. The Portfolios typically use derivatives as a substitute for taking a position in
the underlying asset and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or
currency risk. A Portfolio may also use derivatives for leverage, in which case their use would involve leveraging risk. A
Portfolio’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with
investing directly in securities and other traditional investments. Derivatives are subject to a number of risks described
elsewhere, such as liquidity risk, interest rate risk, market risk, credit risk and management risk. They also involve the
risk of mispricing or improper valuation and the risk that changes in the value of the derivative may not correlate
perfectly with the underlying asset, rate or index. A Portfolio investing in a derivative instrument could lose more than
the principal amount invested. Also, suitable derivative transactions may not be available in all circumstances.

Foreign investment risk. Investing in foreign securities generally involves more risk than investing in securities of
U.S. issuers. Foreign investment risk includes the specific risks described below.
    Currency risk. Changes in currency exchange rates may affect the value of foreign securities held by a Portfolio
    and the amount of income available for distribution. If a foreign currency grows weaker relative to the U.S. dollar,
    the value of securities denominated in that foreign currency generally decreases in terms of U.S. dollars. If a
    Portfolio does not correctly anticipate changes in exchange rates, its share price could decline as a result. In
    addition, certain hedging activities may cause the Portfolio to lose money and could reduce the amount of income
    available for distribution.

                                                             12
    Emerging market risk. To the extent that a Portfolio invests in emerging markets to enhance overall returns, it
    may face higher political, information, and stock market risks. In addition, profound social changes and business
    practices that depart from norms in developed countries’ economies have sometimes hindered the orderly growth
    of emerging economies and their stock markets in the past. High levels of debt may make emerging economies
    heavily reliant on foreign capital and vulnerable to capital flight.

    Foreign market risk. Foreign markets, especially those in developing countries, tend to be more volatile than U.S.
    markets and are generally not subject to regulatory requirements comparable to those in the U.S. Because of
    differences in accounting standards and custody and settlement practices, investing in foreign securities generally
    involves more risk than investing in securities of U.S. issuers.

    Information risk. Financial reporting standards for companies based in foreign markets usually differ from those in
    the United States. Since the “numbers” themselves sometimes mean different things, the sub-advisers devote
    much of their research effort to understanding and assessing the impact of these differences upon a company’s
    financial conditions and prospects.

    Liquidity risk. Stocks that trade less can be more difficult or more costly to buy, or to sell, than more liquid or
    active stocks. This liquidity risk is a factor of the trading volume of a particular stock, as well as the size and
    liquidity of the entire local market. On the whole, foreign exchanges are smaller and less liquid than the U.S.
    market. This can make buying and selling certain shares more difficult and costly. Relatively small transactions in
    some instances can have a disproportionately large effect on the price and supply of shares. In certain situations, it
    may become virtually impossible to sell a stock in an orderly fashion at a price that approaches an estimate of its
    value.

    Political developments. Political developments may adversely affect the value of a Portfolio’s foreign securities.

    Political risk. Some foreign governments have limited the outflow of profits to investors abroad, extended
    diplomatic disputes to include trade and financial relations, and imposed high taxes on corporate profits.

    Regulatory risk. Some foreign governments regulate their exchanges less stringently, and the rights of
    shareholders may not be as firmly established.

High yield risk. Portfolios that invest in high yield securities and unrated securities of similar credit quality (commonly
known as “junk bonds”) may be subject to greater levels of interest rate, credit and liquidity risk than Portfolios that do
not invest in such securities. High yield securities are considered predominantly speculative with respect to the issuer’s
continuing ability to make principal and interest payments. An economic downturn or period of rising interest rates could
adversely affect the market for high yield securities and reduce a Portfolio’s ability to sell its high yield securities
(liquidity risk).

Industry/sector risk. Portfolios that invest in a single market sector or industry can accumulate larger positions in
single issuers or an industry sector. As a result, the Portfolio’s performance may be tied more directly to the success or
failure of a smaller group of portfolio holdings.

Interest rate risk. Fixed income securities are subject to the risk that the securities could lose value because of
interest rate changes. For example, bonds tend to decrease in value if interest rates rise. Debt obligations with longer
maturities sometimes offer higher yields, but are subject to greater price shifts as a result of interest rate changes than
debt obligations with shorter maturities.

Leveraging risk. Certain transactions may give rise to a form of leverage. Such transactions may include, among
others, reverse repurchase agreements, loans of portfolio securities, and the use of when-issued, delayed delivery or
forward commitment contracts. The use of derivatives may also create leveraging risks. To mitigate leveraging risk, a
sub-adviser can segregate liquid assets or otherwise cover the transactions that may give rise to such risk. The use of
leverage may cause a Portfolio to liquidate portfolio positions when it may not be advantageous to do so to satisfy its
obligations or to meet segregation requirements. Leverage, including borrowing, may cause a Portfolio to be more
volatile than if the Portfolio had not been leveraged. This is because leveraging tends to exaggerate the effect of any
increase or decrease in the value of a Portfolio’s securities.

                                                            13
Liquidity risk. Liquidity risk exists when particular investments are difficult to purchase or sell. A Portfolio’s
investments in illiquid securities may reduce the returns of the Portfolio because it may be unable to sell the illiquid
securities at an advantageous time or price. Portfolios with principal investment strategies that involve foreign
securities, derivatives or securities with substantial market and/or credit risk tend to have the greatest exposure to
liquidity risk.

Management risk. Actively managed investment portfolios are subject to management risk. Each sub-adviser will
apply investment techniques and risk analyses in making investment decisions for the Portfolios, but there can be no
guarantee that these will produce the desired results.

Market risk. Common stocks are subject to market risk stemming from factors independent of any particular security.
Investment markets fluctuate. All markets go through cycles and market risk involves being on the wrong side of a
cycle. Factors affecting market risk include political events, broad economic and social changes, and the mood of the
investing public. You can see market risk in action during large drops in the stock market. If investor sentiment turns
gloomy, the price of all stocks may decline. It may not matter that a particular company has great profits and its stock is
selling at a relatively low price. If the overall market is dropping, the values of all stocks are likely to drop. Generally, the
stock prices of large companies are more stable than the stock prices of smaller companies, but this is not always the
case. Smaller companies often offer a smaller range of products and services than large companies. They may also
have limited financial resources and may lack management depth. As a result, stocks issued by smaller companies
may fluctuate in value more than the stocks of larger, more established companies.

Mortgage risk. A Portfolio that purchases mortgage related securities is subject to certain additional risks. Rising
interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in
interest rates. As a result, in a period of rising interest rates, a Portfolio that holds mortgage-related securities may
exhibit additional volatility. This is known as extension risk. In addition, mortgage-related securities are subject to
prepayment risk. When interest rates decline, borrowers may pay off their mortgages sooner than expected. This can
reduce the returns of a Portfolio because the Portfolio will have to reinvest that money at the lower prevailing interest
rates.

Portfolio turnover risk. A Portfolio’s investments may be bought and sold relatively frequently. A high turnover rate
may result in higher brokerage commissions and taxable capital gain distributions to a Portfolio’s shareholders.

                                                            *   *    *

For more information about the risks associated with the Portfolios, see “How the Portfolios Invest — Investment
Risks.”

                                                            *   *    *




                                                                14
EVALUATING PERFORMANCE

Conservative Balanced Portfolio

A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a stock index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                         1 YEAR        5 YEARS       10 YEARS
Class I shares                                             2.02%         5.69%          7.55%
S&P 500**                                                 11.88%        10.70%         12.93%
Conservative Balanced Custom Blended Index***              2.22%         8.81%          9.81%
Lipper Average****                                         2.87%         8.04%          9.19%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. Source: Lipper, Inc.
 *** The Conservative Balanced Custom Blended Index consists of the Standard & Poor’s 500 Composite Stock Price
     Index (50%), the Lehman Aggregate Bond Index (40%) and the T-Bill 3 Month Blend (10%). These returns do not
     include the effect of investment management expenses. These returns would have been lower if they included the
     effect of these expenses. Source: Prudential Investments LLC.
**** The Lipper/Variable Insurance Products (VIP) Balanced Average is calculated by Lipper Analytical Services, Inc.
     and reflects the investment return of certain portfolios underlying variable life and annuity products. The returns are
     net of investment fees and fund expenses but not product charges. These returns would have been lower if they
     included the effect of product charges. Source: Lipper, Inc.




                                                            15
Diversified Bond Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a market index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                     1 YEAR         5 YEARS          10 YEARS
Class I shares                                        6.98%           6.27%             6.92%
Lehman Aggregate Bond Index**                         8.44%           7.43%             7.23%
Lipper Average***                                     7.57%           6.44%             7.07%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Lehman Aggregate Bond Index is comprised of more than 5,000 government and corporate bonds. These
    returns do not include the effect of any investment management expenses. These returns would have been lower
    if they included the effect of these expenses. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) Corporate Debt BBB Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of product charges. Source: Lipper, Inc.




                                                            16
Equity Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a stock index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.


Average Annual Returns* (as of 12/31/01)
                                                                                                                 SINCE
                                                                                                               CLASS II
                                                                                                              INCEPTION
                                                          1 YEAR           5 YEARS          10 YEARS            (5/3/99)
Class I shares                                              11.18%           7.06%           12.09%                —
Class II shares                                             11.57%            —                —                  3.75%
S&P 500**                                                   11.88%          10.70%           12.93%               4.31%
Russell 1000® Index***                                      20.42%           8.27%           10.79%                —
Lipper Average****                                          13.03%           7.94%           11.14%                —
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. Source: Lipper, Inc.
 *** The Russell 1000® Index consists of the 1000 largest securities in the Russell 3000 Index. The Russell 3000 Index
     consists of the 3000 largest companies, as determined by market capitalization. These returns do not include the
     effect of any investment management expenses. These returns would have been lower if they included the effect
     of these expenses. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Core Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. Source: Lipper, Inc.




                                                            17
Flexible Managed Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a market index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                    1 YEAR           5 YEARS          10 YEARS
Class I shares                                        5.68%            5.43%            8.27%
S&P 500**                                            11.88%           10.70%           12.93%
Flexible Managed
  Custom Blended Index***                              4.00%           9.26%           10.52%
Lipper Average****                                     5.27%           7.95%            9.62%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of
     large U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the
     effect of any investment management expenses. These returns would have been lower if they included the effect
     of these expenses. Source: Lipper, Inc.
 *** The Flexible Managed Custom Blended Index consists of the S&P 500 (60%), the Lehman Aggregate Bond Index
     (35%) and the T-Bill 3-month Blend (5%). The returns do not include the effect of any investment management
     expenses. These returns would have been lower if they included the effect of these expenses. Source Prudential
     Investments LLC.
**** The Lipper Variable Insurance Products (VIP) Flexible Portfolio Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. Source: Lipper, Inc.




                                                            18
Global Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a market index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                  1 YEAR          5 YEARS         10 YEARS
Class I shares                                     17.64%          6.11%            9.39%
MSCI World Index**                                 16.82%          5.37%            8.06%
Lipper Average***                                  15.28%          6.38%            9.57%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Morgan Stanley Capital International World Index (MSCI World Index) is a weighted index comprised of
    approximately 1,500 companies listed on the stock exchanges of the U.S.A., Europe, Canada, Australia, New
    Zealand and the Far East. These returns do not include the effect of any investment management expenses.
    These returns would have been lower if they included the effect of these expenses. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) Global Funds Average is calculated by Lipper Analytical Services,
    Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products. The
    returns are net of investment fees and fund expenses but not product charges. These returns would have been
    lower if they included the effect of these charges. Source: Lipper, Inc.




                                                          19
High Yield Bond Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a market index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                    1 YEAR          5 YEARS          10 YEARS
Class I shares                                        0.44%          1.28%             6.64%
Lehman High Yield Index**                             5.28%          3.11%             7.58%
Lipper Average***                                     1.13%          1.60%             6.59%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Lehman High Yield Index is made up of over 700 noninvestment grade bonds. The index is an unmanaged
    index that includes the reinvestment of all interest but does not reflect the payment of transaction costs and
    advisory fees associated with an investment in the Portfolio. These returns would have been lower if they included
    the effect of these expenses. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) High Current Yield Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. Source: Lipper, Inc.




                                                            20
Jennison Portfolio (formerly, Prudential Jennison Portfolio)


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a stock index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                    SINCE CLASS I        SINCE CLASS II
                                                                                      INCEPTION            INCEPTION
                                                       1 YEAR        5 YEARS            (4/25/95)            (2/10/00)
Class I shares                                          18.25%        11.70%            14.66%                  —
Class II shares                                         18.60%          —                 —                    21.45%
S&P 500**                                               11.88%        10.70%            14.66%                  8.50%
Russell 1000® Growth Index***                           20.42%         8.27%            12.90%                  —
Lipper Average****                                      21.88%         8.75%            12.70%                  —
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. Companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell 1000® Growth Index consists of those securities included in the Russell 1000 Index that have a
     greater-than-average growth orientation. These returns do not include the effect of any investment management
     expenses. These returns would have been lower if they included the effect of these expenses. The “Since
     Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Growth Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            21
Money Market Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a group of similar mutual funds. Past performance does not
assure that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                1 YEAR           5 YEARS          10 YEARS
Class I shares                                     4.22%             5.24%             4.80%
Lipper Average**                                   3.73%             4.96%             4.54%
 * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
** The Lipper Variable Insurance Products (VIP) Money Market Average is calculated by Lipper Analytical Services,
   Inc., and reflects the investment return of certain portfolios underlying variable life and annuity products. These
   returns are net of investment fees and fund expenses but not product charges. These returns would have been
   lower if they included the effect of these charges. Source: Lipper, Inc.


7-Day Yield* (as of 12/31/01)

  Money Market Portfolio                           1.89%
  Average Money Market Fund**                      1.45%
 * The Portfolio’s yield is after deduction of expenses and does not include Contract charges.
** Source: iMoneyNet, Inc. As of 12/31/01, based on the iMoneyNet First and Second Tier General Purpose Retail
   Universe.




                                                           22
Stock Index Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a stock index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                   1 YEAR          5 YEARS          10 YEARS
Class I shares                                       12.05%         10.47%            12.61%
S&P 500**                                            11.88%         10.70%            12.93%
Lipper Average***                                    12.22%         10.37%            12.53%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
    U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
    of any investment management expenses. These returns would have been lower if they included the effect of
    these expenses. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) S&P 500 Index Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. Source: Lipper, Inc.




                                                           23
Value Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how returns can change from year to year and by showing
how the Portfolio’s average annual returns compare with a stock index and a group of similar mutual funds. Past
performance does not mean that the Portfolio will achieve similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                  1 YEAR          5 YEARS         10 YEARS
Class I Shares                                      2.08%          11.18%           13.14%
S&P 500**                                          11.88%          10.70%           12.93%
Russell® 1000 Value Index***                        5.59%          11.13%           14.13%
Lipper Large Cap Value Funds
  Average****                                       5.98%           8.68%           12.38%
Lipper Multi Cap Value Funds Average****            0.22%           9.81%           11.17%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges. Returns shown are
     for Class I shares only. Returns are not shown for Class II shares, because Class II shares have not yet been in
     existence for a full calendar year (Class II inception date: 5/14/01). Returns for Class II shares would have been
     lower than for Class I due to higher expenses.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of investment management expenses. These returns would have been lower if they included the effect of these
     expenses. Source: Lipper, Inc.
 *** The Russell® 1000 Value Index consists of those securities included in the Russell 1000 Index that have a less-
     than-average growth orientation. These returns do not include the effect of investment management expenses.
     These returns would have been lower if they included the effect of these expenses. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Value Funds Average and Multi Cap Value Funds
     Average are calculated by Lipper Analytical Services, Inc. and reflect the return of certain portfolios underlying
     variable life and annuity products. The returns are net of investment fees and fund expenses but not product
     charges. These returns would have been lower if they included the effect of these charges. Although Lipper
     classifies the Portfolio within the Multi Cap Value Funds Average, the returns for the Large Cap Value Funds
     Average is also shown, because the management of the portfolios included in the Large Cap Value Funds Average
     are more consistent with the management of the Portfolio.




                                                          24
SP Aggressive Growth Asset Allocation Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                   1 YEAR            (9/22/00)
Class I shares                                                       17.92%            18.84%
S&P 500**                                                            11.88%            15.32%
Aggressive Growth AA Custom Blended Index***                         12.46%            16.17%
Lipper Average****                                                   12.94%            15.14%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Aggressive Growth AA Custom Blended Index consists of the Russell® 1000 Value Index (20%), the Russell
     1000 Growth Index (20%), the Russell 2500 Value Index (12.5%), the Russell Mid-Cap Growth Index (12.5%), and
     the MSCI EAFE Index (35%). These returns do not include the effect of any investment management expenses.
     These returns would have been lower if they included the effect of these expenses. The “Since Inception” return
     reflects the closest calendar month-end return. Source:
**** The Lipper Variable Insurance Products (VIP) Multi-Cap Core Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            25
SP AIM Aggressive Growth Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                       SINCE
                                                                                    INCEPTION
                                                                   1 YEAR             (9/22/00)
Class I shares                                                       24.53%            28.74%
Russell 2500® Index**                                                 1.22%             2.00%
Russell 2500™ Growth Index***                                        10.75%            23.14%
Lipper Average****                                                   23.31%            32.40%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Russell 2500® Index measures the performance of the 500 smallest companies in the Russell 1000 Index and
     all 2000 companies included in the Russell 2000 Index. These returns do not include the effect of any investment
     management expenses. These returns would have been lower if they included the effect of these expenses. The
     “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell 2500™ Growth Index measures the performance of the 2,500 smallest companies in the Russell 3000
     Index, which represents approximately 16% of the total market capitalization of the Russell 3000 Index. These
     returns do not include the effect of any investment management expenses. These returns would have been lower
     if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar month-end
     return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Mid-Cap Growth Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            26
SP AIM Core Equity Portfolio (formerly, SP AIM Growth and Income Portfolio)



A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.


Average Annual Returns* (as of 12/31/01)
                                                                                     SINCE
                                                                                  INCEPTION
                                                                  1 YEAR            (9/22/00)
Class I Shares                                                     22.68%             28.53%
S&P 500**                                                          11.88%             15.32%
Russell 1000® Index***                                             12.45%             16.74%
Lipper Large Cap Growth Funds Average****                          21.88%             28.52%
Lipper Large Cap Core Funds Average****                            13.03%             15.58%

   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of investment management expenses. These returns would have been lower if they included the effect of these
     expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell 1000® Index consists of the 1000 largest companies included in the Russell 3000 Index. The Russell
     3000 Index consists of the 3000 largest companies, as determined by market capitalization. These returns do not
     include the effect of investment management expenses. These returns would have been lower if they included the
     effect of these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source:
     Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Growth Funds Average and Large Cap Core Funds
     Average are calculated by Lipper Analytical Services, Inc. and reflects the return of certain portfolios underlying
     variable life and annuity products. The returns are net of investment fees and fund expenses but not product
     charges. These returns would have been lower if they included the effect of these charges. The “Since Inception”
     return reflects the closest calendar month-end return. Although Lipper classifies the Portfolio within the Large Cap
     Growth Funds Average, the returns for the Large Cap Core Funds Average is also shown, because the
     management of the portfolios included in the Large Cap Core Funds Average is more consistent with the
     management of the Portfolio.

                                                           27
SP Alliance Large Cap Growth Portfolio



A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing by showing how the Portfolio’s average annual returns compare with a stock index
and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar results in
the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.


Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                  1 YEAR             (9/22/00)
Class I shares                                                      14.47%            21.71%
Russell 1000® Index**                                               12.45%            16.74%
Russell 1000® Growth Index***                                       20.42%            31.26%
Lipper Large Cap Growth Funds Average****                           21.88%            28.52%
Lipper Multi-Cap Core Funds Average****                             12.94%            15.14%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Russell 1000® Index consists of the 1000 largest companies in the Russell 3000 Index. The Russell 3000
     Index consists of the 3000 largest companies, as determined by market capitalization. These returns do not
     include the effect of investment management expenses. These returns would have been lower if they included the
     effect of these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source:
     Lipper, Inc.
 *** The Russell 1000® Growth Index consists of those securities included in the Russell 1000 Index that have a
     greater-than-average growth orientation. These returns do not include the effect of investment management
     expenses. The returns would have been lower if they included the effect of these expenses. The “Since Inception”
     return reflects the closest calendar month-end return.
**** The Lipper Variable Insurance Products (VIP) Large Cap Growth Funds Average and Multi-Cap Core Funds
     Average are calculated by Lipper Analytical Services, Inc. and reflects the return of certain portfolios underlying
     variable life and annuity products. The returns are net of investment fees and fund expenses but not product
     charges. These returns would have been lower if they included the effect of these charges. The “Since Inception”
     return reflects the closest calendar month-end return. Although Lipper classifies the Portfolio within the Multi-Cap
     Core Funds Average, the returns for the Large Cap Growth Funds Average is also shown, because the
     management of the portfolios included in the Large Cap Growth Funds average is more consistent with the
     management of the Portfolio.

                                                           28
SP Alliance Technology Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                       SINCE
                                                                                    INCEPTION
                                                                   1 YEAR             (9/22/00)
Class I shares                                                      25.07%             35.49%
S&P 500**                                                           11.88%             15.32%
S&P Supercomposite 1500
Technology Index***                                                 22.16%             39.58%
Lipper Average****                                                  21.29%             27.50%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of investment management expenses. These returns would have been lower if they included the effect of these
     expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Standard & Poor’s Supercomposite 1500 Technology Index is a capitalization-weighted index designed to
     measure the performance of the technology component of the S&P 500 Index. These returns do not include the
     effect of investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Specialty/Miscellaneous Funds Average is calculated by Lipper
     Analytical Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity
     products. The returns are net of investment fees and fund expenses but not product charges. These returns would
     have been lower if they included the effect of these charges. The “Since Inception” return reflects the closest
     calendar month-end return. Source: Lipper, Inc.




                                                            29
SP Balanced Asset Allocation Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with
market indexes and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve
similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                 1 YEAR              (9/22/00)
Class I shares                                                       5.99%              5.79%
S&P 500**                                                           11.88%             15.32%
Balanced AA Custom Blended Index***                                  2.97%              5.95%
Lipper Average****                                                   2.87%              2.87%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Balanced AA Custom Blended Index consists of the Russell 1000® Value Index (17.5%), the Russell 1000
     Growth Index (17.5%), the Russell 2500 Value Index (7.5%), the Russell Mid-Cap Growth Index (7.5%), the
     Lehman Brothers Aggregate Bond Index (25%), the Lehman Brothers Intermediate BB Index (15%) and the MSCI
     EAFE Index (10%). These returns do not include the effect of any investment management expenses. These
     returns would have been lower if they included the effect of these expenses. The “Since Inception” return reflects
     the closest calendar month-end return. Source: Prudential Investments LLC.
**** The Lipper Variable Insurance Products (VIP) Balanced Funds Average is calculated by Lipper Analytical Services,
     Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products. The
     returns are net of investment fees and fund expenses but not product charges. These returns would have been
     lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar month-
     end return. Source: Lipper, Inc.




                                                           30
SP Conservative Asset Allocation Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with
market indexes and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve
similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                 1 YEAR              (9/22/00)
Class I shares                                                       0.23%              0.47%
S&P 500**                                                           11.88%             15.32%
Conservative AA Custom Blended Index***                              1.68%              0.63%
Lipper Average****                                                   0.28%              0.70%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Conservative AA Custom Blended Index consists of the Russell 1000® Value Index (15%), the Russell 1000
     Growth Index (15%), the Russell 2500 Value Index (5%), the Lehman Brothers Aggregate Bond Index (40%), the
     Lehman Brothers Intermediate BB Index (20%) and the Russell Mid-Cap Growth Index (5%). These returns do not
     include the effect of any investment management expenses. These returns would have been lower if they included
     the effect of these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source:
     Prudential Investments LLC.
**** The Lipper Variable Insurance Products (VIP) Income Funds Average is calculated by Lipper Analytical Services,
     Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products. The
     returns are net of investment fees and fund expenses but not product charges. These returns would have been
     lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar month-
     end return. Source: Lipper, Inc.




                                                           31
SP Davis Value Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                       SINCE
                                                                                    INCEPTION
                                                                  1 YEAR              (9/22/00)
Class I shares                                                      10.46%              7.08%
Russell 1000® Value Index**                                          5.59%              1.76%
Lipper Average***                                                    5.98%              1.00%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Russell 1000® Value Index consists of those companies in the Russell 1000 Index that have a less-than-
    average growth orientation. These returns do not include the effect of any investment management expenses.
    These returns would have been lower if they included the effect of these expenses. The “Since Inception” return
    reflects the closest calendar month-end return. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) Large-Cap Value Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, Inc.




                                                            32
SP Deutsche International Equity Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                  1 YEAR             (9/22/00)
Class I shares                                                      22.07%            21.12%
MSCI EAFE Index**                                                   21.44%            19.33%
Lipper Average***                                                   21.48%            20.77%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Morgan Stanley Capital International (MSCI) Europe, Australia, Far East (EAFE) Index is a weighted,
    unmanaged index of performance that reflects stock price movements in Europe, Australasia, and the Far East.
    These returns do not include the effect of any investment management expenses. These returns would have been
    lower if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) International Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, Inc.




                                                           33
SP Growth Asset Allocation Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with
market indexes and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve
similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                  1 YEAR             (9/22/00)
Class I shares                                                       11.77%            12.60%
S&P 500**                                                            11.88%            15.32%
Growth AA Custom Blended Index***                                     8.47%            11.50%
Lipper Average****                                                   12.94%            15.14%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Growth AA Custom Blended Index consists of the Russell 1000® Value Index (22.5%), the Russell 1000
     Growth Index (22.5%), the Russell 2500 Value Index (7.5%), the Russell Mid-Cap Growth Index (7.5%), the
     Lehman Brothers Aggregate Bond Index (10%), the Lehman Brothers Intermediate BB Index (10%) and the MSCI
     EAFE Index (20%). These returns do not include the effect of any investment management expenses. These
     returns would have been lower if they included the effect of these expenses. The “Since Inception” return reflects
     the closest calendar month-end return. Source: Prudential Investments LLC.
**** The Lipper Variable Insurance Products (VIP) Multi-Cap Core Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            34
SP INVESCO Small Company Growth Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                       SINCE
                                                                                    INCEPTION
                                                                   1 YEAR             (9/22/00)
Class I shares                                                       17.18%            24.90%
Russell 2000® Index**                                                 2.49%             3.69%
Russell 2000® Growth Index***                                         9.23%            22.74%
Lipper Average****                                                   12.40%            21.64%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index.
     These returns do not include the effect of any investment management expenses. These returns would have been
     lower if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.
 *** The Russell 2000® Growth Index consists of those companies in the Russell 2000 Index that have a greater-than-
     average growth orientation. These returns do not include the effect of any investment management expenses.
     These returns would have been lower if they included the effect of these expenses. The “Since Inception” return
     reflects the closest calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Small-Cap Growth Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            35
SP Jennison International Growth Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                             SINCE               SINCE
                                                                                            CLASS I            CLASS II
                                                                                          INCEPTION           INCEPTION
                                                                         1 YEAR             (9/22/00)           (10/4/00)
Class I shares                                                             35.64%            37.67%               —
Class II shares                                                            35.92%             —                  37.67%
MSCI EAFE Index**                                                          21.44%            19.33%              19.33%
Lipper Average***                                                          21.48%            20.77%              20.77%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Morgan Stanley Capital International (MSCI) Europe, Australia, Far East (EAFE) Index is a weighted,
    unmanaged index of performance that reflects stock price movements in Europe, Australia, and the Far East.
    These returns do not include the effect of any investment management expenses. These returns would have been
    lower if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, inc.
*** The Lipper Variable Insurance Products (VIP) International Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, Inc.




                                                           36
SP Large Cap Value Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                   1 YEAR            (9/22/00)
Class I shares                                                       8.65%              3.34%
Russell 1000® Index**                                               12.45%             16.74%
Russell 1000® Value Index***                                         5.59%              1.76%
Lipper Average****                                                   5.98%              4.97%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Russell 1000® Index measures the performance of the 1000 largest companies in the Russell 3000 Index. The
     Russell 3000 index consists of the 3000 largest U.S. companies, as determined by total market capitalization.
     These returns do not include the effect of any investment management expenses. These returns would have been
     lower if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.
 *** The Russell 1000® Value Index measures the performance of those Russell 1000® companies that have a less-
     than-average growth orientation. These returns do not include the effect of any investment management
     expenses. These returns would have been lower if they included the effect of these expenses. The “Since
     Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Value Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                            37
SP MFS Capital Opportunities Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                        SINCE
                                                                                     INCEPTION
                                                                     1 YEAR            (9/22/00)
Class I Shares                                                        23.28%             24.15%
S&P 500**                                                             11.88%             15.32%
Russell 1000® Index***                                                12.45%             16.74%
Lipper Multi-Cap Core Funds Average****                               12.94%             15.14%
Lipper Large Cap Core Funds Average****                               13.03%             15.58%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of investment management expenses. These returns would have been lower if they included the effect of these
     expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell 1000® Index consists of the 1000 largest companies included in the Russell 3000 Index. The Russell
     3000 Index consists of the 3000 largest companies, as determined by market capitalization. These returns do not
     include the effect of investment management expenses. These returns would have been lower if they included the
     effect of these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source:
     Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Multi-Cap Core Funds Average and Large Cap Core Funds Average
     are calculated by Lipper Analytical Services, Inc. and reflects the return of certain portfolios underlying variable life
     and annuity products. The returns are net of investment fees and fund expenses but not product charges. These
     returns would have been lower if they included the effect of these charges. The “Since Inception” return reflects the
     closest calendar month-end return. Although Lipper classifies the Portfolio within the Multi-Cap Core Funds
     Average, the returns for the Large Cap Core Funds Average is also shown, because the management of the
     portfolios included in the Large Cap Core Funds Average is more consistent with the management of the Portfolio.




                                                             38
SP MFS Mid-Cap Growth Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing by showing how the Portfolio’s average annual returns compare with a stock index
and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar results in
the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                       SINCE
                                                                                    INCEPTION
                                                                   1 YEAR             (9/22/00)
Class I shares                                                       20.93%            18.29%
Russell MidCap® Index**                                               5.62%             7.27%
Russell MidCap Growth® Index***                                      20.15%            32.41%
Lipper Average****                                                   23.31%            31.98%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Russell MidCap® Index consists of the 800 smallest securities in the Russell 1000 Index, as ranked by total
    market capitalization. These returns do not include the effect of investment management expenses. These returns
    would have been lower if they included the effect of these expenses. The “Since Inception” return reflects the
    closest calendar month-end return. Source: Lipper, Inc.
*** The Russell MidCap Growth® Growth Index consists of those securities included in the Russell MidCap Index that
    have a greater-than-average growth orientation. These returns do not include the effect of investment
    management expenses. The returns would have been lower if they included the effect of these expenses. The
    “Since Inception” return reflects the closest calendar month-end return.
****The Lipper Variable Insurance Products (VIP) Mid Cap Growth Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the return of certain portfolios underlying variable life and annuity products. The returns
    are net of investment fees and fund expenses but not product charges. These returns would have been lower if
    they included the effect of these charges. The “Since Inception” return reflects the closest calendar month-end
    return.




                                                            39
SP PIMCO High Yield Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
market index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve
similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                    1 YEAR           (9/22/00)
Class I shares                                                        3.97%             4.66%
Lehman Brothers Intermediate BB Corporate Index**                    10.17%             7.99%
Lipper Average***                                                     1.13%             3.78%
  * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
 ** The Lehman Brothers Intermediate BB Corporate Index is an unmanaged index comprised of various fixed-income
    securities rated BB. These returns do not include the effect of any investment management expenses. These
    returns would have been lower if they included the effect of these expenses. The “Since Inception” return reflects
    the closest calendar month-end return. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) High Current Yield Funds Average is calculated by Lipper Analytical
    Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
    The returns are net of investment fees and fund expenses but not product charges. These returns would have
    been lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar
    month-end return. Source: Lipper, Inc.




                                                           40
SP PIMCO Total Return Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
market index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve
similar results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                        SINCE
                                                                                     INCEPTION
                                                                     1 YEAR            (9/22/00)
Class I shares                                                        8.66%            11.03%
Lehman Brothers Aggregate Bond Index**                                8.44%            10.28%
Lipper Average***                                                     5.76%             5.98%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Lehman Brothers Aggregate Bond Index is an unmanaged index comprised of more than 5,000 government
     and corporate bonds. These returns do not include the effect of any investment management expenses. These
     returns would have been lower if they included the effect of these expenses. The “Since Inception’’ return reflects
     the closest calendar month-end return. Source: Lipper, Inc.
*** The Lipper Variable Insurance Products (VIP) General Bond Funds Average is calculated by Lipper Analytical
     Services, Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products.
     The returns are net of investment fees and fund expenses but not product charges. These returns would have
     been lower if they included the effect of these charges. The “Since Inception’’ return reflects the closest calendar
     month-end return. Source: Lipper, Inc.




                                                             41
SP Prudential U.S. Emerging Growth Portfolio

A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                     CLASS I
                                                                                   INCEPTION
                                                                   1 YEAR            (9/22/00)
Class I Shares                                                      17.78%             25.26%
S&P MidCap 400 Index**                                              0.62%               3.57%
Russell Midcap Growth® Index***                                     20.15%             32.41%
Lipper Multi-Cap Growth Funds Average****                           26.81%             35.76%
Lipper Mid Cap Growth Funds Average****                             23.31%             31.98%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges. Returns shown are
     for Class I shares only. Returns are not shown for Class II shares, because Class II shares have not yet been in
     existence for a full calendar year (Class II inception date: 7/9/01). Returns for Class II shares would have been
     lower than for Class I due to higher expenses.
  ** The Standard & Poor’s MidCap 400 Composite Stock Price Index (S&P MidCap 400) — an unmanaged index of
     400 domestic stocks chosen for market size, liquidity and industry group representation — gives a broad look at
     how mid-cap stock prices have performed. These returns do not include the effect of investment management
     expenses. These returns would have been lower if they included the effect of these expenses. The “Since
     Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell Midcap Growth® Index consists of those securities in the Russell Midcap Index that have a greater-
     than-average growth orientation. The Russell Midcap Index consists of the 800 smallest securities in the Russell
     1000 Index, as ranked by total market capitalization. These returns do not include the effect of investment
     management expenses. These returns would have been lower if they included the effect of these expenses. The
     “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Multi-Cap Growth Funds Average and Mid Cap Growth Funds
     Average are calculated by Lipper Analytical Services, Inc. and reflect the return of certain portfolios underlying
     variable life and annuity products. The returns are net of investment fees and fund expenses but not product
     charges. These returns would have been lower if they included the effect of these charges. The “Since Inception”
     return reflects the closest calendar month-end return. Although Lipper classifies the Portfolio within the Multi-Cap
     Growth Funds Average, the returns for the Mid Cap Growth Fund Average is also shown, because the
     management of the portfolios included in the Mid Cap Growth Funds Average is more consistent with the
     management of the Portfolio.

                                                            42
SP Small/Mid-Cap Value Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                   INCEPTION
                                                                    1 YEAR           (9/22/00)
Class I shares                                                       3.11%            11.42%
Russell 2500® Index**                                                1.22%             2.00%
Russell 2500™ Value Index***                                         9.73%            15.05%
Lipper Average****                                                   7.33%            11.96%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges.
  ** The Russell 2500 Index consists of the smallest 500 securities in the Russell 1000 Index and all 2000 securities in
     the Russell 2000 Index. The Russell 1000 Index consists of the 1000 largest securities in the Russell 3000 Index,
     and the Russell 2000 Index consists of the smallest 2000 securities in the Russell 3000 Index. The Russell 3000
     Index consists of the 3000 largest U.S. companies, as determined by total market capitalization. These returns do
     not include the effect of any investment management expenses. These returns would have been lower if they
     included the effect of these expenses. The “Since Inception” return reflects the closest calendar month-end return.
     Source: Lipper, Inc.
 *** The Russell 2500™ Value Index measures the performance of Russell 2500™ companies with higher price-to-book
     ratios. These returns do not include the effect of any investment management expenses. These returns would
     have been lower if they included the effect of these expenses. The “Since Inception” return reflects the closest
     calendar month-end return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Mid-Cap Value Funds is calculated by Lipper Analytical Services,
     Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products. The
     returns are net of investment fees and fund expenses but not product charges. These returns would have been
     lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar month-
     end return. Source: Lipper, Inc.




                                                           43
SP Strategic Partners Focused Growth Portfolio


A number of factors — including risk — can affect how the Portfolio performs. The bar chart and table below
demonstrate the risk of investing in the Portfolio by showing how the Portfolio’s average annual returns compare with a
stock index and a group of similar mutual funds. Past performance does not mean that the Portfolio will achieve similar
results in the future.




* These annual returns do not include Contract charges. If Contract charges were included, the annual returns would
have been lower than those shown. See the accompanying Contract prospectus.

Average Annual Returns* (as of 12/31/01)
                                                                                      SINCE
                                                                                     CLASS I
                                                                                   INCEPTION
                                                                  1 YEAR             (9/22/00)
Class I shares                                                      15.32%            26.64%
S&P 500**                                                           11.88%            15.32%
Russell 1000® Growth Index***                                       20.42%            31.26%
Lipper Average****                                                  22.94%            28.52%
   * The Portfolio’s returns are after deduction of expenses and do not include Contract charges. Returns shown are
     for Class I shares only. Returns are not shown for Class II shares, because Class II shares have not yet been in
     existence for a full calendar year (Class II inception date: 1/12/01). Returns for Class II shares would have been
     lower than for Class I due to higher expenses.
  ** The Standard & Poor’s 500 Composite Stock Price Index (S&P 500) — an unmanaged index of 500 stocks of large
     U.S. companies — gives a broad look at how stock prices have performed. These returns do not include the effect
     of any investment management expenses. These returns would have been lower if they included the effect of
     these expenses. The “Since Inception” return reflects the closest calendar month-end return. Source: Lipper, Inc.
 *** The Russell 1000® Growth Index consists of those Russell 1000 securities that have a greater-than-average
     growth orientation. The Russell 1000 Index consists of the 1000 largest securities in the Russell 3000 Index. The
     Russell 3000 Index consists of the 3000 largest U.S. securities, as determined by total market capitalization. These
     returns do not include the effect of any investment management expenses. These returns would have been lower
     if they included the effect of these expenses. The “Since Inception” return reflects the closest calendar month-end
     return. Source: Lipper, Inc.
**** The Lipper Variable Insurance Products (VIP) Large Cap Growth Funds is calculated by Lipper Analytical Services,
     Inc. and reflects the investment return of certain portfolios underlying variable life and annuity products. The
     returns are net of investment fees and fund expenses but not product charges. These returns would have been
     lower if they included the effect of these charges. The “Since Inception” return reflects the closest calendar month-
     end return. Source: Lipper, Inc.




                                                           44
HOW THE PORTFOLIOS INVEST

Investment Objectives and Policies

We describe each Portfolio’s investment objective and policies below. We describe certain investment instruments that
appear in bold lettering below in the section entitled Other Investments and Strategies. Although we make every effort
to achieve each Portfolio’s objective, we can’t guarantee success and it is possible that you could lose money. Unless
otherwise stated, each Portfolio’s investment objective is a fundamental policy that cannot be changed without
shareholder approval. The Board of Directors can change investment policies that are not fundamental.

 An investment in a Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
 Corporation or any other government agency.


Conservative Balanced Portfolio


The investment objective of this Portfolio is to seek a total investment return consistent with a conservatively
managed diversified portfolio.

Balanced Portfolio                                                  To achieve our objective, we invest in a mix of equity and
We invest in equity, debt and money market securities in            equity-related securities, debt obligations and money
order to achieve diversification. We seek to maintain a             market instruments. We adjust the percentage of Portfolio
conservative blend of investments that will have strong             assets in each category depending on our expectations
performance in a down market and solid, but not                     regarding the different markets. While we make every
necessarily outstanding, performance in up markets.                 effort to achieve our objective, we can’t guarantee
This Portfolio may be appropriate for an investor looking           success and it is possible that you could lose money.
for diversification with less risk than that of the Flexible
Managed Portfolio, while recognizing that this reduces              We will vary how much of the Portfolio’s assets are
the chances of greater appreciation.                                invested in a particular type of security depending on
                                                                    how we think the different markets will perform.

Under normal conditions, we will invest within the ranges shown below:

                 Asset Type                            Minimum            Normal         Maximum
                   Stocks                                 15%                50%             75%
         Debt obligations and money                       25%                50%             85%
              market securities

The equity portion of the Portfolio is generally managed as an index fund, designed to mirror the holdings of the
Standard & Poor’s 500 Composite Stock Price Index. For more information about the index and index investing, see the
investment summary for Stock Index Portfolio included in this prospectus.

Debt securities in general are basically written promises to repay a debt. There are numerous types of debt securities
which vary as to the terms of repayment and the commitment of other parties to honor the obligations of the issuer.
Most of the securities in the debt portion of this Portfolio will be rated “investment grade.” This means major rating
services, like Standard & Poor’s Ratings Group (S&P) or Moody’s Investors Service, Inc. (Moody’s), have rated the
securities within one of their four highest rating categories. The Portfolio also invests in high quality money market
instruments.

The Portfolio may also invest in lower-rated securities, which are riskier and are considered speculative. These
securities are sometimes referred to as “junk bonds.” We may also invest in instruments that are not rated, but which
we believe are of comparable quality to the instruments described above. The Portfolio’s investment in debt securities
may include investments in mortgage-related securities.

The Portfolio may invest up to 30% of its total assets in foreign equity and debt securities that are not denominated in
the U.S. dollar. Up to 20% of the Portfolio’s total assets may be invested in debt securities that are issued outside the

                                                               45
U.S. by foreign or U.S. issuers, provided the securities are denominated in U.S. dollars. For these purposes, we do not
consider American Depositary Receipts (ADRs) as foreign securities.

In response to adverse market conditions or when restructuring the Portfolio, we may temporarily invest up to 100% of
the Portfolio’s total assets in money market instruments. Investing heavily in these securities limits our ability to achieve
our investment objective, but can help to preserve the value of the Portfolio’s assets when the markets are unstable.

We may also invest in fixed and floating rate loans (secured or unsecured) arranged through private negotiations
between a corporation which is the borrower and one or more financial institutions that are the lenders. Generally,
these types of investments are in the form of loans or assignments.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, debt securities, stock indexes and foreign currencies;
purchase and sell exchange-traded fund shares; purchase and sell stock index, interest rate, interest rate swap and
foreign currency futures contracts and options on those contracts; enter into forward foreign currency exchange
contracts; and purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into short sales. No more than 25% of the Portfolio’s net assets may be used as collateral
or segregated for purposes of securing a short sale obligation. The Portfolio may also enter into short sales against-
the-box.

We may also use interest rate swaps in the management of the fixed-income portion of the Portfolio.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund and other affiliated funds in a joint repurchase account under an order obtained from the SEC. The Portfolio
may invest in equity and/or debt securities issued by Real Estate Investment Trusts (REITs).

We may also invest in reverse repurchase agreements and dollar rolls in the management of the fixed-income
portion of the Portfolio. The Portfolio will not use more than 30% of its net assets in connection with reverse repurchase
transactions and dollar rolls.


Diversified Bond Portfolio


The investment objective of this Portfolio is a high level of income over a longer term while providing reasonable
safety of capital. This means we look for investments that we think will provide a high level of current income, but
which are not expected to involve a substantial risk of loss of capital through default. To achieve our objective, we
normally invest at least 80% of the Portfolio’s investable assets in intermediate and long term debt obligations that are
rated investment grade and high-quality money market investments. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money.

Our Strategy                                                        Debt obligations, in general, are basically written
In general, the value of debt obligations moves in the              promises to repay a debt. The terms of repayment vary
opposite direction as interest rates — if a bond is                 among the different types of debt obligations, as do the
purchased and then interest rates go up, newer bonds                commitments of other parties to honor the obligations of
will be worth more relative to existing bonds because               the issuer of the security. The types of debt obligations
they will have a higher rate of interest. We will adjust the        in which we can invest include U.S. government
mix of the Portfolio’s short-term, intermediate and long            securities, mortgage-related securities and corporate
term debt obligations in an attempt to benefit from price           bonds.
appreciation when interest rates go down and to incur
smaller declines when rates go up.

Usually, at least 80% of the Portfolio’s investable assets will be invested in debt securities that are investment grade.
This means major rating services, like Standard and Poor’s Ratings Group (S&P) or Moody’s Investor Service, Inc.-

                                                               46
(Moody’s), have rated the securities within one of their four highest rating categories. The Portfolio may continue to
hold a debt obligation if it is downgraded below investment grade after it is purchased or if it is no longer rated by a
major rating service. We may also invest up to 20% of the Portfolio’s investable assets in lower rated securities which
are riskier and considered speculative. These securities are sometimes referred to as “junk bonds.” We may also invest
in instruments that are not rated, but which we believe are of comparable quality to the instruments described above.

The Portfolio may invest without limit in debt obligations issued or guaranteed by the U.S. government and
government-related entities. An example of a debt security that is backed by the full faith and credit of the U.S.
government is an obligation of the Government National Mortgage Association (Ginnie Mae). In addition, we may invest
in U.S. government securities issued by other government entities, like the Federal National Mortgage Association
(Fannie Mae) and the Student Loan Marketing Association (Sallie Mae) which are not backed by the full faith and credit
of the U.S. government. Instead, these issuers have the right to borrow from the U.S. Treasury to meet their
obligations. The Portfolio may also invest in the debt securities of other government-related entities, like the Farm
Credit System, which depend entirely upon their own resources to repay their debt.

We may invest up to 20% of the Portfolio’s total assets in debt securities issued outside the U.S. by U.S. or foreign
issuers whether or not such securities are denominated in the U.S. dollar.

The Portfolio may also invest in convertible debt and convertible and preferred stocks and non-convertible
preferred stock of any rating. The Portfolio will not acquire any common stock except by converting a convertible
security or exercising a warrant. No more than 10% of the Portfolio’s total assets will be held in common stocks, and
those will usually be sold as soon as a favorable opportunity arises. The Portfolio may lend its portfolio securities to
brokers, dealers and other financial institutions to earn income.

We may also invest in loans or assignments arranged through private negotiations between a corporation which is the
borrower and one or more financial institutions that are the lenders.

Under normal conditions, the Portfolio may invest a portion of its assets in high-quality money market instruments. In
response to adverse market conditions or when restructuring the Portfolio, we may temporarily invest up to 100% of the
Portfolio’s assets in money market instruments. Investing heavily in these securities limits our ability to achieve our
investment objective, but can help to preserve the value of the Portfolio’s assets when the markets are unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on debt securities; purchase and sell interest rate and interest rate swap futures
contracts and options on those contracts; invest in forward foreign currency exchange contracts; and purchase
securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into short sales. No more than 25% of the Portfolio’s net assets may be used as collateral or
segregated for purposes of securing a short sale obligation. The Portfolio may also enter into short sales against-the-box.

We may also use interest rate swaps in the management of the Portfolio.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC.

The Portfolio may also invest up to 30% of its net assets in reverse repurchase agreements and dollar rolls. The
Portfolio will not use more than 30% of its net assets in connection with reverse repurchase transactions and dollar rolls.

Equity Portfolio


The investment objective of this Portfolio is capital appreciation. This means we seek investments that we believe will
provide investment returns above broadly based market indexes. While we make every effort to achieve our objective,
we can’t guarantee success and it is possible that you could lose money.

                                                             47
Blend Approach                                                        To achieve our investment objective, we normally invest
In deciding which stocks to buy, our portfolio managers               at least 80% of the Portfolio’s investable assets in
use a blend of investment styles. That is, we invest in               common stocks of major established corporations as
stocks that may be undervalued given the company’s                    well as smaller companies.
earnings, assets, cash flow and dividends and also
invest in companies experiencing some or all of the                   20% of the Portfolio’s investable assets may be invested
following: a price/earnings ratio lower than earnings per             in short, intermediate or long-term debt obligations,
share growth, strong market position, improving                       convertible and nonconvertible preferred stock and other
profitability and distinctive attributes such as unique               equity-related securities. Up to 5% of these investable
marketing ability, strong research and development, new               assets may be rated below investment grade. These
product flow, and financial strength.                                 securities are considered speculative and are sometimes
                                                                      referred to as “junk bonds.”

Up to 30% of the Portfolio’s total assets may be invested in foreign securities, including money market instruments,
equity securities and debt obligations. For these purposes, we do not consider American Depositary Receipts (ADRs)
as foreign securities.

Under normal circumstances, the Portfolio may invest a portion of its assets in money market instruments. In addition,
we may temporarily invest up to 100% of the Portfolio’s assets in money market instruments in response to adverse
market conditions or when we are restructuring the portfolio. Investing heavily in these securities limits our ability to
achieve our investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, stock indexes and foreign currencies; purchase and sell stock
index and foreign currency futures contracts and options on these futures contracts; enter into forward foreign
currency exchange contracts; and purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into short sales against-the-box.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC. The Portfolio may invest in equity and/
or debt securities of Real Estate Investment Trusts (REITs).

Jennison Associates LLC is responsible for managing approximately 50% of the Portfolio’s assets. GE Asset
Management Inc. and Salomon Brothers Asset Management Inc. are each responsible for managing approximately
25% of the Portfolio’s assets.


Flexible Managed Portfolio


The investment objective of this Portfolio is to seek a high total return consistent with an aggressively managed
diversified portfolio.

Balanced Portfolio                                                    To achieve our objective, we invest in a mix of equity
We invest in equity, debt and money market                            and equity-related securities, debt obligations and
securities — in order to achieve diversification in a single          money market instruments. We adjust the percentage of
Portfolio. We seek to maintain a more aggressive mix of               Portfolio assets in each category depending on our
investments than the Conservative Balanced Portfolio.                 expectations regarding the different markets. While we
This Portfolio may be appropriate for an investor looking             make every effort to achieve our objective, we can’t
for diversification who is willing to accept a relatively high        guarantee success and it is possible that you could lose
level of loss in an effort to achieve greater appreciation.           money.




                                                                 48
Generally, we will invest within the ranges shown below:

                 Asset Type                            Minimum           Normal          Maximum
                   Stocks                                  25%              60%             100%
           Fixed income securities                          0%              40%              75%

The equity portion of the Fund is generally managed under an “enhanced index style.” Under this style, the portfolio
managers utilize a quantitative approach in seeking to out-perform the Standard & Poor’s 500 Composite Stock Price
Index and to limit the possibility of significantly under-performing that index.

The stock portion of the Portfolio will be invested in a broadly diversified portfolio of stocks generally consisting of large
and mid-size companies, although it may also hold stocks of smaller companies. We will invest in companies and
industries that, in our judgment, will provide either attractive long-term returns, or are desirable to hold in the Portfolio to
manage risk.

Most of the securities in the fixed income portion of this Portfolio will be investment grade. However, we may also
invest up to 25% of this portion of the Portfolio in debt securities rated as low as BB, Ba or lower by a major rating
service at the time they are purchased. These high-yield or “junk bonds” are riskier and considered speculative. We
may also invest in instruments that are not rated, but which we believe are of comparable quality to the instruments
described above. The fixed income portion of the Portfolio may also include loans or assignments in the form of loan
participations and mortgage-related securities.

The Portfolio may also invest up to 30% of its total assets in foreign equity and debt securities that are not denominated
in the U.S. dollar. In addition, up to 20% of the Portfolio’s total assets may be invested in debt securities that are issued
outside of the U.S. by foreign or U.S. issuers provided the securities are denominated in U.S. dollars. For these
purposes, we do not consider American Depositary Receipts (ADRs) as foreign securities.

In response to adverse market conditions or when we are restructuring the Portfolio, we may temporarily invest up to
100% of the Portfolio’s assets in money market instruments. Investing heavily in these securities limits our ability to
achieve our investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

The Portfolio may also invest in Real Estate Investment Trusts (REITs).

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, debt securities, stock indexes, and foreign currencies;
purchase and sell exchange-traded fund shares; purchase and sell stock index, interest rate, interest rate swap and
foreign currency futures contracts and options on those contracts; enter into forward foreign currency exchange
contracts; and purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into short sales. No more than 25% of the Portfolio’s net assets may be used as collateral
or segregated for purposes of securing a short sale obligation. The Portfolio may also enter into short sales against-
the-box.

The Portfolio may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.

We may also use interest rate swaps in the management of the fixed income portion of the Portfolio.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC.

We may also invest in reverse repurchase agreements and dollar rolls in the management of the fixed-income
portion of the Portfolio. The Portfolio will not use more than 30% of its net assets in connection with reverse repurchase
transactions and dollar rolls.

                                                              49
Global Portfolio


The investment objective of this Portfolio is long-term growth of capital. To achieve this objective, we invest primarily
in equity and equity-related securities of foreign and U.S. companies. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money.

Global Investing                                                   When selecting stocks, we use a growth approach which
This Portfolio is intended to provide investors with the           means we look for companies that have above-average
opportunity to invest in companies located throughout              growth prospects. In making our stock picks, we look for
the world. Although we are not required to invest in a             companies that have had growth in earnings and sales,
minimum number of countries, we intend generally to                high returns on equity and assets or other strong
invest in at least three countries, including the U.S.             financial characteristics. Often, the companies we
However, in response to market conditions, we can                  choose have superior management, a unique market
invest up to 35% of the Portfolio’s total assets in any one        niche or a strong new product.
country other than the U.S. (The 35% limitation does not
apply to U.S. investments).


The Portfolio may invest up to 100% of its assets in money market instruments in response to adverse market
conditions or when we are restructuring the Portfolio. Investing heavily in these securities limits our ability to achieve
our investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, stock indexes and foreign currencies; purchase and sell
futures contracts on stock indexes, debt securities, interest rate indexes and foreign currencies and options on these
futures contracts; enter into forward foreign currency exchange contracts; and purchase securities on a when-
issued or delayed delivery basis.

The Portfolio may invest in equity swaps. The Portfolio may also lend its portfolio securities to brokers, dealers and
other financial institutions to earn income.

The Portfolio may also enter into short sales against-the-box.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC. The portfolio may invest in equity and/
or debt securities issued by Real Estate Investment Trusts (REITs).


High Yield Bond Portfolio


The investment objective of this Portfolio is a high total return. In pursuing our objective, we invest in high yield/high
risk debt securities. While we make every effort to achieve our objective, we can’t guarantee success and it is possible
that you could lose money.




                                                              50
High Yield/High Risk
Lower rated and comparable unrated securities tend to            Normally, we will invest at least 80% of the Portfolio’s
offer better yields than higher rated securities with the        investable assets in medium to lower rated debt
same maturities because the issuer’s financial condition         securities. These high-yield or “junk bonds” are riskier
may not have been as strong as that of higher rated              than higher rated bonds and are considered speculative.
issuers. Changes in the perception of the                        The Portfolio may invest up to 20% of its total assets in
creditworthiness of the issuers of lower rated securities        U.S. dollar denominated debt securities issued outside
tend to occur more frequently and in a more pronounced           the U.S. by foreign and U.S. issuers.
manner than for issuers of higher rated securities.


The Portfolio may also acquire common and preferred stock, debt securities and convertible debt and preferred stock.

We may also invest in loans or assignments arranged through private negotiations between a corporation which is the
borrower and one or more financial institutions that are the lenders.

Under normal circumstances, the Portfolio may invest in money market instruments. In response to adverse market
conditions or when we are restructuring the Portfolio, we may temporarily invest up to 100% of the Portfolio’s assets in
money market instruments. Investing heavily in these securities limits our ability to achieve our investment objective,
but can help to preserve the Portfolio’s assets when the markets are unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on debt securities; purchase and sell interest rate and interest rate swap futures
contracts and options on these futures contracts; and purchase securities on a when-issued or delayed delivery
basis. The Portfolio may invest in PIK bonds.

The Portfolio may also enter into short sales. No more than 25% of the Portfolio’s net assets may be used as collateral
or segregated for purposes of securing a short sale obligation. The Portfolio may also enter into short sales against-
the-box.

We may also use interest rate swaps in the management of the Portfolio.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC.

The Portfolio may use up to 30% of its net assets in connection with reverse repurchase agreements and dollar rolls.

Jennison Portfolio (formerly, Prudential Jennison Portfolio)


The investment objective of this Portfolio is to achieve long-term growth of capital. This means we seek investments
whose price will increase over several years. While we make every effort to achieve our objective, we can’t guarantee
success and it is possible that you could lose money.

Investment Strategy                                              In pursuing our objective, we normally invest 65% of the
We seek to invest in equity securities of established            Portfolio’s total assets in common stocks and preferred
companies with above-average growth prospects. We                stocks of companies with capitalization in excess of $1
select stocks on a company-by-company basis using                billion.
fundamental analysis. In making our stock picks, we look
for companies that have had growth in earnings and               For the balance of the Portfolio, we may invest in
sales, high returns on equity and assets or other strong         common stocks, preferred stocks and other equity-
financial characteristics. Often, the companies we               related securities of companies that are undergoing
choose have superior management, a unique market                 changes in management, product and/or marketing
niche or a strong new product.                                   dynamics which we believe have not yet been reflected
                                                                 in reported earnings or recognized by investors.

                                                            51
In addition, we may invest in debt securities and mortgage-related securities. These securities may be rated as low
as Baa by Moody’s or BBB by S&P (or if unrated, of comparable quality in our judgment).

The Portfolio may also invest in obligations issued or guaranteed by the U.S. government, its agencies and
instrumentalities. Up to 30% of the Portfolio’s assets may be invested in foreign equity and equity-related securities.
For these purposes, we do not consider American Depositary Receipts (ADRs) as foreign securities.

In response to adverse market conditions or when restructuring the Portfolio, we may invest up to 100% of the
Portfolio’s assets in money market instruments. Investing heavily in these securities limits our ability to achieve our
investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, stock indexes and foreign currencies; purchase and sell stock
index and foreign currency futures contracts and options on those futures contracts; enter into forward foreign
currency exchange contracts; and purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also lend its portfolio securities to brokers, dealers and other financial institutions to earn income.

The Portfolio may also enter into short sales against-the-box.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC. The Portfolio may invest in equity and/
or debt securities issued by Real Estate Investment Trusts (REITs).

Money Market Portfolio


The investment objective of this Portfolio is to seek the maximum current income that is consistent with stability
of capital and maintenance of liquidity. This means we seek investments that we think will provide a high level of
current income. While we make every effort to achieve our objective, we can’t guarantee success.

Steady Net Asset Value                                              We invest in a diversified portfolio of short-term debt
The net asset value for the Portfolio will ordinarily remain        obligations of the U.S. government, its agencies and
issued at $10 per share because dividends are declared              instrumentalities, as well as commercial paper, asset
and reinvested daily. The price of each share remains               backed securities, funding agreements, certificates of
the same, but when dividends are declared the value of              deposit, floating and variable rate demand notes, notes
your investment grows.                                              and other obligations issued by banks, corporations and
                                                                    other companies (including trust structures), and
                                                                    obligations issued by foreign banks, companies or
                                                                    foreign governments.

We make investments that meet the requirements of specific rules for money market mutual funds, such as Investment
Company Act Rule 2a-7. As such, we will not acquire any security with a remaining maturity exceeding thirteen months,
and we will maintain a dollar-weighted average portfolio maturity of 90 days or less. In addition, we will comply with the
diversification, quality and other requirements of Rule 2a-7. This means, generally, that the instruments that we
purchase present “minimal credit risk” and are of “eligible quality.” “Eligible quality” for this purpose means a security is:
(i) rated in one of the two highest short-term rating categories by at least two major rating services (or if only one major
rating service has rated the security, as rated by that service); or (ii) if unrated, of comparable quality in our judgment.
All securities that we purchase will be denominated in U.S. dollars.

Commercial paper is short-term debt obligations of banks, corporations and other borrowers. The obligations are
usually issued by financially strong businesses and often include a line of credit to protect purchasers of the obligations.
An asset-backed security is a loan or note that pays interest based upon the cash flow of a pool of assets, such as
mortgages, loans and credit card receivables. Funding agreements are contracts issued by insurance companies that

                                                               52
guarantee a return of principal, plus some amount of interest. When purchased by money market funds, funding
agreements will typically be short-term and will provide an adjustable rate of interest.

Certificates of deposit, time deposits and bankers’ acceptances are obligations issued by or through a bank. These
instruments depend upon the strength of the bank involved in the borrowing to give investors comfort that the
borrowing will be repaid when promised.

We may purchase debt securities that include demand features, which allow us to demand repayment of a debt
obligation before the obligation is due or “matures.” This means that longer term securities can be purchased because
of our expectation that we can demand repayment of the obligation at a set price within a relatively short period of time,
in compliance with the rules applicable to money market mutual funds.

The Portfolio may also purchase floating rate and variable rate securities. These securities pay interest at rates that
change periodically to reflect changes in market interest rates. Because these securities adjust the interest they pay,
they may be beneficial when interest rates are rising because of the additional return the Portfolio will receive, and they
may be detrimental when interest rates are falling because of the reduction in interest payments to the Portfolio.

The securities that we may purchase may change over time as new types of money market instruments are developed.
We will purchase these new instruments, however, only if their characteristics and features follow the rules governing
money market mutual funds.

We may also use alternative investment strategies to try to improve the Portfolio’s returns, protect its assets or for
short-term cash management. There is no guarantee that these strategies will work, that the instruments necessary to
implement these strategies will be available or that the Portfolio will not lose money.

We may purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC.

The Portfolio may use up to 10% of its net assets in connection with reverse repurchase agreements.

 An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal Deposit
 Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the value of an
 investment at $10 per share, it is possible to lose money by investing in the Portfolio.


Stock Index Portfolio


The investment objective of this Portfolio is to achieve investment results that generally correspond to the
performance of publicly-traded common stocks. To achieve this goal, we attempt to duplicate the performance of
the Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index). While we make every effort to achieve our
objective, we can’t guarantee success and it is possible that you could lose money.

S&P 500 Index                                                    Under normal conditions, we attempt to invest in all 500
We attempt to duplicate the performance of the S&P 500           stocks represented in the S&P 500 Index in proportion to
Index, a market-weighted index which represents more             their weighting in the S&P 500 Index. We will normally
than 70% of the market value of all publicly-traded              invest at least 80% of the Portfolio’s investable assets in
common stocks.                                                   S&P 500 Index stocks, but we will attempt to remain as
                                                                 fully invested in the S&P 500 Index stocks as possible in
                                                                 light of cash flow into and out of the Portfolio.

To manage investments and redemptions in the Portfolio, we may temporarily hold cash or invest in high-quality money
market instruments. To the extent we do so, the Portfolio’s performance will differ from that of the S&P 500 Index. We

                                                            53
attempt to minimize differences in the performance of the Portfolio and the S&P 500 Index by using stock index futures
contracts, options on stock indexes and options on stock index futures contracts. The Portfolio will not use these
derivative securities for speculative purposes or to hedge against a decline in the value of the Portfolio’s holdings.

We may also use alternative investment strategies to try to improve the Portfolio’s returns or for short-term cash
management. The Portfolio may lend its portfolio securities to brokers, dealers and other financial institutions to earn
income. There is no guarantee that these strategies will work, that the instruments necessary to implement these
strategies will be available or that the Portfolio will not lose money.

We may: purchase and sell options on stock indexes; purchase and sell stock futures contracts and options on those
futures contracts; and purchase and sell exchange-traded fund shares.

The Portfolio may also enter into short sales and short sales against-the-box. No more than 5% of the Portfolio’s
total assets may be used as collateral or segregated for purposes of securing a short sale obligation.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC. The Portfolio may invest in equity and/
or debt securities issued by Real Estate Investment Trusts (REITs).

 A stock’s inclusion in the S&P 500 Index in no way implies S&P’s opinion as to the stock’s attractiveness as an
 investment. The portfolio is not sponsored, endorsed, sold or promoted by S&P. S&P makes no representations
 regarding the advisability of investing in the portfolio. “Standard & Poor’s,” “Standard & Poor’s 500” and “500” are
 trademarks of McGraw Hill.


Value Portfolio


The investment objective of this Portfolio is to seek capital appreciation. This means we focus on stocks that are
undervalued — those stocks that are trading below their underlying asset value, cash generating ability, and overall
earnings and earnings growth. While we make every effort to achieve our objective, we can’t guarantee success and it
is possible that you could lose money.

Contrarian Approach                                              We will normally invest at least 65% of the Portfolio’s
To achieve our value investment strategy, we generally           total assets in equity and equity-related securities. Most
take a strong contrarian approach to investing. In other         of our investments will be securities of large
words, we usually buy stocks that are out of favor and           capitalization companies. When deciding which stocks to
that many other investors are selling, and we attempt to         buy, we look at a company’s earnings, balance sheet
invest in companies and industries before other                  and cash flow and then at how these factors impact the
investors recognize their true value. Using these                stock’s price and return. We also buy equity-related
guidelines, we focus on long-term performance, not               securities — like bonds, corporate notes and preferred
short-term gain.                                                 stock — that can be converted into a company’s
                                                                 common stock or other equity security.

Up to 35% of the Portfolio’s total assets may be invested in other debt obligations including non-convertible preferred
stock. When acquiring these types of securities, we usually invest in obligations rated A or better by Moody’s or S&P.
We may also invest in obligations rated as low as CC by Moody’s or Ca by S&P. These securities are considered
speculative and are sometimes referred to as “junk bonds.” We may also invest in instruments that are not rated, but
which we believe are of comparable quality to the instruments described above.

Up to 30% of the Portfolio’s total assets may be invested in foreign securities, including money market instruments,
equity securities and debt obligations. For these purposes, we do not consider American Depositary Receipts (ADRs)
as foreign securities.

Under normal circumstances, the Portfolio may invest up to 35% of its total assets in high-quality money market
instruments. In response to adverse market conditions or when we are restructuring the Portfolio, we may temporarily

                                                            54
invest up to 100% of the Portfolio’s assets in money market instruments. Investing heavily in these securities limits our
ability to achieve our investment objective, but can help to preserve the Portfolio’s assets when the markets are
unstable.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management. The Portfolio may lend its portfolio securities to brokers, dealers
and other financial institutions to earn income.

We may: purchase and sell options on equity securities, stock indexes and foreign currencies; purchase and sell stock
index and foreign currency futures contracts and options on these futures contracts; enter into forward foreign
currency exchange contracts; and purchase securities on a when-issued or delayed delivery basis.

The Portfolio may also enter into short sales against-the-box.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC. The Portfolio may invest in equity and/
or debt securities issued by Real Estate Investment Trusts (REITs).

Jennison Associates LLC is responsible for managing approximately 50% of the Portfolio’s assets. Victory Capital
Management Inc. (formerly, Key Asset Management Inc.) and Deutsche Asset Management, Inc. (DAMI) are each
responsible for managing approximately 25% of the Portfolio’s assets.


SP AIM Aggressive Growth Portfolio


The Portfolio’s investment objective is to achieve long-term growth of capital. This investment objective is non-
fundamental, meaning that we can change the objective without seeking a vote of contractholders. The Portfolio seeks
to meet this objective by investing principally in securities of companies whose earnings the portfolio managers expect
to grow more than 15% per year. While we make every effort to achieve our objective, we can’t guarantee success and
it is possible that you could lose money.

Aggressive Growth Stock Investing                                The Portfolio will invest in small- and medium-sized
The Portfolio invests primarily in the common stock of           growth companies. The portfolio managers focus on
small and medium-sized companies that are anticipated            companies they believe are likely to benefit from new or
to have excellent prospects for long-term growth of              innovative products, services or processes as well as
earnings.                                                        those that have experienced above-average, long-term
                                                                 growth in earnings and have excellent prospects for
                                                                 future growth. The portfolio managers consider whether
                                                                 to sell a particular security when any of those factors
                                                                 materially changes.

The Portfolio may invest up to 25% of its total assets in foreign securities. In anticipation of or in response to adverse
market conditions, for cash management purposes, or for defensive purposes, the Portfolio may temporarily hold all or
a portion of its assets in cash, money market instruments, shares of affiliated money market funds, bonds or other debt
securities. The Portfolio may borrow for emergency or temporary purposes. As a result, the Portfolio may not achieve
its investment objective.

The Portfolio may purchase and sell stock index futures contracts and related options on stock index futures, and
may purchase and sell futures contracts on foreign currencies and related options on foreign currency futures
contracts. The Portfolio may invest up to 25% of its total assets in Real Estate Investment Trusts (REITs), and the
Portfolio may invest in the securities of other investment companies to the extent otherwise permissible under the
Investment Company Act of 1940, and the rules, regulations and orders promulgated thereunder. The Portfolio also
may invest in preferred stock, convertible debt, convertible preferred stock, forward foreign currency exchange
contracts, restricted securities, repurchase agreements, reverse repurchase agreements and dollar rolls, warrants,
when-issued and delayed delivery securities, options on stock and debt securities, options on stock indexes,


                                                            55
options on foreign currencies, and may loan portfolio securities. The Portfolio may also invest in equity-linked derivative
products designed to replicate the composition and performance of particular indices. Examples of such products
include S&P Depositary Receipts, World Equity Benchmark Series, NASDAQ 100 tracking shares, Dow Jones
Industrial Average Instruments and Optimised Portfolios as Listed Securities. Investments in equity-linked derivatives
involve the same risks associated with a direct investment in the types of securities included in the indices such
products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives will
equal the underlying value of the basket of securities purchased to replicate a particular index or that such basket will
replicate the index. Investments in equity-linked derivatives may constitute investment in other investment companies.
The Portfolio may invest in U.S. Government securities and may make short sales against-the-box (no more than
10% of the Portfolio’s total assets may be deposited or pledged as collateral for short sales at any one time).

The Portfolio is managed by A I M Capital Management, Inc.


SP AIM Core Equity Portfolio (formerly, SP AIM Growth and Income Portfolio)


The Portfolio’s investment objective is growth of capital with a secondary objective of current income. This investment
objective is non-fundamental, meaning that we can change the objective without seeking a vote of contractholders. The
Portfolio seeks to meet its objective by investing, normally, at least 80% of investible assets in equity securities,
including convertible securities, of established companies that have long-term above-average growth in earnings and
dividends, and growth companies that the portfolio managers believe have the potential for above-average growth in
earnings and dividends. In complying with this 80% requirement, the Portfolio’s investments may include synthetic
instruments. Synthetic instruments are investments that have economic characteristics similar to the Portfolio’s direct
investments, and may include warrants, futures, options, exchange-traded funds and ADRs. While we make every
effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

Growth And Income Investing                                            The Portfolio may invest in corporate debt
This Portfolio invests in a wide variety of equity                     securities. Corporations issue debt securities of
securities and debt securities in an effort to achieve both            various types, including bonds and debentures
capital appreciation as well as current income.                        (which are long-term), notes (which may be short-
                                                                       or long-term), bankers acceptances (indirectly
                                                                       secured borrowings to facilitate commercial
                                                                       transactions) and commercial paper (short-term
                                                                       unsecured notes).

The Portfolio may also invest in convertible securities whose values will be affected by market interest rates, the risk
that the issuer may default on interest or principal payments and the value of the underlying common stock into which
these securities may be converted. Specifically, since these types of convertible securities pay fixed interest and
dividends, their values may fall if interest rates rise and rise if market interest rates fall. Additionally, an issuer may
have the right to buy back certain of the convertible securities at a time and price that is unfavorable to the Portfolio.

The values of fixed rate income securities tend to vary inversely with changes in interest rates, with longer-term
securities generally being more volatile than shorter-term securities. Corporate securities frequently are subject to call
provisions that entitle the issuer to repurchase such securities at a predetermined price prior to their stated maturity. In
the event that a security is called during a period of declining interest rates, the Portfolio may be required to reinvest
the proceeds in securities having a lower yield. In addition, in the event that a security was purchased at a premium
over the call price, the Portfolio will experience a capital loss if the security is called. Adjustable rate corporate debt
securities may have interest rate caps and floors.

The Portfolio may invest in securities issued or guaranteed by the United States government or its agencies or
instrumentalities. These include Treasury securities (bills, notes, bonds and other debt securities) which differ only in
their interest rates, maturities and times of issuance. U.S. Government agency and instrumentality securities include
securities which are supported by the full faith and credit of the U.S., securities that are supported by the right of the
agency to borrow from the U.S. Treasury, securities that are supported by the discretionary authority of the U.S.
Government to purchase certain obligations of the agency or instrumentality and securities that are supported only by


                                                              56
the credit of such agencies. While the U.S. Government may provide financial support to such U.S. government-
sponsored agencies or instrumentalities, no assurance can be given that it always will do so. The U.S. government, its
agencies and instrumentalities do not guarantee the market value of their securities. The values of such securities
fluctuate inversely to interest rates.

To the extent consistent with its investment objective and policies, the Portfolio may invest in equity and/or debt
securities issued by Real Estate Investment Trusts (REITs). Such investments will not exceed 25% of the total assets
of the Portfolio. To the extent that the Portfolio has the ability to invest in REITs, it could conceivably own real estate
directly as a result of a default on the securities it owns. The Portfolio, therefore, may be subject to certain risks
associated with the direct ownership of real estate including difficulties in valuing and trading real estate, declines in the
value of real estate, risks related to general and local economic condition, adverse change in the climate for real estate,
environmental liability risks, increases in property taxes and operating expense, changes in zoning laws, casualty or
condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants, and
increases in interest rates.

The Portfolio may hold up to 20% of its assets in foreign securities. Such investments may include American
Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and other securities representing underlying
securities of foreign issuers. These securities may not necessarily be denominated in the same currency as the
securities into which they may be converted.

The Portfolio has authority to deal in foreign exchange between currencies of the different countries in which it will
invest either for the settlement of transactions or as a hedge against possible variations in the foreign exchange rates
between those currencies. This may be accomplished through direct purchases or sales of foreign currency, purchases
of futures contracts with respect to foreign currency (and options thereon), and contractual agreements to purchase or
sell a specified currency at a specified future date (up to one year) at a price set at the time of the contract. Such
contractual commitments may be forward contracts entered into directly with another party or exchange-traded futures
contracts. The Portfolio may purchase and sell options on futures contracts or forward contracts which are
denominated in a particular foreign currency to hedge the risk of fluctuations in the value of another currency.

For the purpose of realizing additional income, the Portfolio may make secured loans of portfolio securities amounting
to not more than 33 1⁄ 3% of its total assets.

The Portfolio may invest in reverse repurchase agreements with banks. The Portfolio may employ reverse
repurchase agreements (i) for temporary emergency purposes, such as to meet unanticipated net redemptions so as to
avoid liquidating other portfolio securities during unfavorable market conditions; (ii) to cover short-term cash
requirements resulting from the timing of trade settlements; or (iii) to take advantage of market situations where the
interest income to be earned from the investment of the proceeds of the transaction is greater than the interest
expense of the transaction.

The Portfolio may purchase securities of unseasoned issuers. Securities in such issuers may provide opportunities for
long term capital growth. Greater risks are associated with investments in securities of unseasoned issuers than in the
securities of more established companies because unseasoned issuers have only a brief operating history and may
have more limited markets and financial resources. As a result, securities of unseasoned issuers tend to be more
volatile than securities of more established companies.

The Portfolio may invest in other investment companies to the extent permitted by the Investment Company Act, and
rules and regulations thereunder, and if applicable, exemptive orders granted by the SEC.

The Portfolio may purchase and sell stock index futures contracts and related options on stock index futures, and
may purchase and sell futures contracts on foreign currencies and related options on foreign currency futures
contracts. The Portfolio may invest in the securities of other investment companies to the extent otherwise permissible
under the Investment Company Act of 1940, and the rules, regulations and orders promulgated thereunder. The
Portfolio also may invest in preferred stock, convertible debt, convertible preferred stock, forward foreign currency
exchange contracts, restricted securities, repurchase agreements, reverse repurchase agreements and dollar
rolls, warrants, when-issued and delayed delivery securities, options on stock and debt securities, options on
stock indexes, options on foreign currencies, and may loan portfolio securities. The Portfolio may also invest in equity-

                                                             57
linked derivative products designed to replicate the composition and performance of particular indices. Examples of
such products include S&P Depositary Receipts, World Equity Benchmark Series, NASDAQ 100 tracking shares, Dow
Jones Industrial Average Instruments and Optimised Portfolios as Listed Securities. Investments in equity-linked
derivatives involve the same risk associated with a direct investment in the types of securities included in the indices
such products are designed to track. There can be no assurance that the trading price of the equity-linked derivatives
will equal the underlying value of the basket of securities purchased to replicate a particular index or that such basket
will replicate the index. Investments in equity-linked derivatives may constitute investment in other investment
companies. This Portfolio may invest in U.S. Government securities, and short sales “against-the-box” (no more
than 10% of the Portfolio’s total assets may be deposited or pledged as collateral for short sales at any one time).

In anticipation of or in response to adverse market conditions, for cash management purposes, or for defensive
purposes, the Portfolio may temporarily hold all or a portion of its assets in cash, money market instruments, shares of
affiliated money market funds, bonds or other debt securities. The Portfolio may borrow for emergency or temporary
purposes. As a result, the Portfolio may not achieve its investment objective.

The Portfolio is managed by A I M Capital Management, Inc.


SP Alliance Large Cap Growth Portfolio


The investment objective of this Portfolio is growth of capital by pursuing aggressive investment policies. While
we make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose
money.

Large Cap Growth                                                        During market declines, while adding to positions in
The Portfolio usually invests in about 40-60 companies,                 favored stocks, the Portfolio becomes somewhat
with the 25 most highly regarded of these companies                     more aggressive, gradually reducing the number of
generally constituting approximately 80% of the                         companies represented in its portfolio. Conversely,
Portfolio’s investable assets. Alliance seeks to gain                   in rising markets, while reducing or eliminating
positive returns in good markets while providing some                   fully-valued positions, the Portfolio becomes
measure of protection in poor markets.                                  somewhat more conservative, gradually increasing
                                                                        the number of companies represented in the
                                                                        portfolio. Through this approach, Alliance seeks to
                                                                        gain positive returns in good markets while
                                                                        providing some measure of protection in poor
                                                                        markets. The Portfolio also may invest up to 20%
                                                                        of its investable assets in convertible debt and
                                                                        convertible preferred stock and up to 15% of its
                                                                        total assets in equity securities of non-U.S.
                                                                        companies.

The Portfolio will invest in special situations from time to time. A special situation arises when, in the opinion of Alliance,
the securities of a particular company will, within a reasonably estimable period of time, be accorded market recognition
at an appreciated value solely by reason of a development particularly or uniquely applicable to that company, and
regardless of general business conditions or movements of the market as a whole. Developments creating special
situations might include, among other, liquidations, reorganizations, recapitalizations or mergers, material litigation,
technological breakthroughs and new management or management policies. Although large and well-known
companies may be involved, special situations often involve much greater risk than is inherent in ordinary investment
securities.

Among the principal risks of investing in the Portfolio is market risk. Because the Portfolio invests in a smaller number
of securities than many other equity funds, your investment has the risk that changes in the value of a single security
may have a more significant effect, either negative or positive, on the Portfolio’s net asset value.




                                                              58
The Portfolio seeks long-term growth of capital by investing predominantly in the equity securities of a limited number of
large, carefully selected, high-quality U.S. companies that are judged likely to achieve superior earnings growth. As a
matter of fundamental policy, the Portfolio normally invests at least 85% of its total assets in the equity securities of
U.S. companies. The Portfolio is thus atypical from most equity mutual funds in its focus on a relatively small number of
intensively researched companies. The Portfolio is designed for those seeking to accumulate capital over time with less
volatility than that associated with investment in smaller companies.

Alliance’s investment strategy for the Portfolio emphasizes stock selection and investment in the securities of a limited
number of issuers. Alliance relies heavily upon the fundamental analysis and research of its large internal research
staff, which generally follows a primary research universe of more than 500 companies that have strong management,
superior industry positions, excellent balance sheets and superior earnings growth prospects. An emphasis is placed
on identifying companies whose substantially above average prospective earnings growth is not fully reflected in
current market valuations.

In managing the Portfolio, Alliance seeks to utilize market volatility judiciously (assuming no change in company
fundamentals), striving to capitalize on apparently unwarranted price fluctuations, both to purchase or increase
positions on weakness and to sell or reduce overpriced holdings. The Portfolio normally remains nearly fully invested
and does not take significant cash positions for market timing purposes.

Alliance normally invests at least 80% of the Portfolio’s investable assets in stocks of companies considered to have
large capitalizations (i.e., similar to companies included in the S&P 500 Index).

The Portfolio also may:

    ‰    invest up to 15% of its total assets in foreign securities;
    ‰    purchase and sell exchange-traded index options and stock index futures contracts;
    ‰    write covered exchange-traded call options on its securities of up to 15% of its total assets, and purchase and
         sell exchange-traded call and put options on common stocks written by others of up to, for all options, 10% of
         its total assets;
    ‰    make short sales “against-the-box” of up to 15% of its net assets; and
    ‰    invest up to 10% of its total assets in illiquid securities.

The Portfolio may invest in a wide variety of equity securities including large cap stocks, convertible and preferred
securities, warrants and rights. The Portfolio may also invest in foreign securities, including foreign equity securities,
and other securities that represent interests in foreign equity securities, such as European Depositary Receipts (EDRs)
and Global Depositary Receipts (GDRs). The Portfolio may invest in American Depositary Receipts (ADRs), which are
not subject to the 15% limitation on foreign securities. The Portfolio may also invest in derivatives and in short term
investments, including money market securities, short term U.S. government obligations, repurchase agreements,
commercial paper, banker’s acceptances and certificates of deposit.

In response to adverse market conditions or when restructuring the Portfolio, Alliance may invest up to 100% of the
Portfolio’s assets in money market instruments. Investing heavily in these securities limits the ability to achieve the
investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

The Portfolio is managed by Alliance Capital Management, L.P.


SP Alliance Technology Portfolio


The Portfolio emphasizes growth of capital and invests for capital appreciation. Current income is only an
incidental consideration. While we make every effort to achieve our objective, we can’t guarantee success and it is
possible that you could lose money.



                                                               59
A Technology Focus                                                 The Portfolio invests primarily in securities of companies
This Portfolio normally invests at least 80% of its                expected to benefit from technological advances and
investable assets in technology.                                   improvements (i.e., companies that use technology
                                                                   extensively in the development of new or improved
                                                                   products or processes). The Portfolio will normally have
                                                                   at least 80% of its investable assets invested in the
                                                                   securities of these companies.

The Portfolio normally will have substantially all of its assets invested in equity securities, but it also invests in debt
securities offering an opportunity for price appreciation. The Portfolio will invest in listed and unlisted securities, in U.S.
securities, and up to 25% of its total assets in foreign securities. The Portfolio may seek income by writing listed call
options.

The Portfolio’s policy is to invest in any company and industry and in any type of security with potential for capital
appreciation. It invests in well-known and established companies and in new and unseasoned companies.

The Portfolio also may:

    ‰    write covered call options on its securities of up to 15% of its total assets and purchase exchange-listed call
         and put options, including exchange-traded index put options of up to, for all options, 10% of its total assets;
    ‰    invest up to 10% of its total assets in warrants;
    ‰    invest up to 15% of its net assets in illiquid securities; and
    ‰    make loans of portfolio securities of up to 30% of its total assets.

Because the Portfolio invests primarily in technology companies, factors affecting those types of companies could have
a significant effect on the Portfolio’s net asset value. In addition, the Portfolio’s investments in technology stocks,
especially those of small, less-seasoned companies, tend to be more volatile than the overall market. The Portfolio’s
investments in debt and foreign securities have credit risk and foreign risk.

In response to adverse market conditions or when restructuring the Portfolio, Alliance may invest up to 100% of the
Portfolio’s assets in money market instruments. Investing heavily in these securities limits the ability to achieve the
investment objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

The Portfolio is managed by Alliance Capital Management, L.P.


SP Asset Allocation Portfolios


There are four Asset Allocation Portfolios, entitled SP Aggressive Growth Asset Allocation Portfolio, SP Balanced Asset
Allocation Portfolio, SP Conservative Asset Allocation Portfolio, and SP Growth Asset Allocation Portfolio. The
investment objective of each of the Portfolios is to obtain the highest potential total return consistent with the
specified level of risk tolerance. The definition of risk tolerance level is not a fundamental policy and, therefore, can
be changed by the Fund’s Board of Directors at any time. While each Portfolio will try to achieve its objective, we can’t
guarantee success and it is possible that you could lose money. The Asset Allocation Portfolios are designed for:

    ‰    the investor who wants to maximize total return potential, but lacks the time, or expertise to do so effectively;
    ‰    the investor who does not want to watch the financial markets in order to make periodic exchanges among
         Portfolios; and
    ‰    the investor who wants to take advantage of the risk management features of an asset allocation program.

The investor chooses an Asset Allocation Portfolio by determining which risk tolerance level most closely corresponds
to the investor’s individual planning needs, objectives and comfort.

                                                              60
Each Asset Allocation Portfolio invests its assets in shares of underlying Portfolios according to the target percentages
indicated in the Portfolio descriptions below. Periodically, we will rebalance each Asset Allocation Portfolio to bring the
Portfolio’s holdings in line with those target percentages. The manager expects that the rebalancing will occur on a
monthly basis, although the rebalancing may occur less frequently. In addition, the manager will review the target
percentages annually. Based on its evaluation the target percentages may be adjusted. Such adjustments will be
reflected in the annual update to this prospectus. With respect to each of the four Asset Allocation Portfolios, Prudential
Investments LLC reserves the right to alter the percentage allocations indicated below and/or the underlying Fund
Portfolios in which the Asset Allocation Portfolio invests if market conditions warrant. Although we will make every effort
to meet each Asset Allocation Portfolio’s investment objective, we can’t guarantee success.

The performance of each Asset Allocation Portfolio depends on how its assets are allocated and reallocated between
the underlying Portfolios. A principal risk of investing in each Asset Allocation Portfolio is that Prudential Investments
LLC will make less than optimal decisions regarding allocation of assets in the underlying Portfolios. Because each of
the Asset Allocation Portfolios invests all of its assets in underlying Portfolios, the risks associated with each Asset
Allocation Portfolio are closely related to the risks associated with the securities and other investments held by the
underlying Portfolios. The ability of each Asset Allocation Portfolio to achieve its investment objective will depend on
the ability of the underlying Portfolios to achieve their investment objectives.

Each Asset Allocation Portfolio is managed by Prudential Investments LLC.


SP Aggressive Growth Asset Allocation Portfolio


An Asset Allocation Portfolio Investing Fully in                 The SP Aggressive Growth Asset Allocation Portfolio
Equity Portfolios                                                invests in shares of the following Fund Portfolios:
This Portfolio aggressively seeks capital appreciation by            ‰    a large capitalization equity component
investing in large cap equity Portfolios, international                   (approximately 40% of the Portfolio, invested in
Portfolios, and small/mid-cap equity Portfolios.                          shares of the SP Davis Value Portfolio (20% of
                                                                          Portfolio), the SP Alliance Large Cap Growth
                                                                          Portfolio (10% of Portfolio), and the Jennison
                                                                          Portfolio (10% of Portfolio)); and
                                                                     ‰    an international component (approximately 35%
                                                                          of the Portfolio, invested in shares of the SP
                                                                          Jennison International Growth Portfolio (17.5%
                                                                          of Portfolio) and the SP Deutsche International
                                                                          Equity Portfolio (17.5% of Portfolio)); and
                                                                     ‰    a small/mid capitalization equity component
                                                                          (approximately 25% of the Portfolio, invested in
                                                                          shares of the SP Small/Mid-Cap Value Portfolio
                                                                          (12.5% of Portfolio) and the SP Prudential U.S.
                                                                          Emerging Growth Portfolio (12.5% of Portfolio)).

For more information on the underlying Portfolios, please refer to the descriptions of each Portfolio’s investment
objectives and policies included in this prospectus.




                                                            61
SP Balanced Asset Allocation Portfolio

A Balance Between Current Income And Capital                      The SP Balanced Asset Allocation Portfolio invests in
Appreciation                                                      shares of the following Portfolios:
This Portfolio seeks to balance current income and                    ‰    a fixed income component (approximately 40%
growth of capital by investing in fixed income Portfolios,                 of the Portfolio, invested in shares of the SP
large cap equity Portfolios, small/mid-cap equity                          PIMCO Total Return Portfolio (25% of Portfolio)
Portfolios, and international equity Portfolios.                           and the SP PIMCO High Yield Portfolio (15% of
                                                                           Portfolio)); and
                                                                      ‰    a large capitalization equity component
                                                                           (approximately 35% of the Portfolio, invested in
                                                                           shares of the SP Davis Value Portfolio (17.5%
                                                                           of Portfolio), the SP Alliance Large Cap Growth
                                                                           Portfolio (8.75% of Portfolio), and the Jennison
                                                                           Portfolio (8.75% of Portfolio)); and
                                                                      ‰    a small/mid capitalization equity component
                                                                           (approximately 15% of the Portfolio, invested in
                                                                           shares of the SP Small/Mid-Cap Value Portfolio
                                                                           (7.5% of Portfolio) and the SP Prudential U.S.
                                                                           Emerging Growth Portfolio (7.5% of Portfolio));
                                                                           and
                                                                      ‰    an international component (approximately 10%
                                                                           of the Portfolio, invested in shares of the SP
                                                                           Jennison International Growth Portfolio (5% of
                                                                           Portfolio) and the SP Deutsche International
                                                                           Equity Portfolio (5% of Portfolio)).
For more information on the underlying Portfolios, please refer to the description of each Portfolio’s investment
objectives and policies included in this prospectus.

SP Conservative Asset Allocation Portfolio

An Asset Allocation Portfolio Investing Primarily In              The SP Conservative Asset Allocation Portfolio invests
Fixed Income Portfolios                                           in shares of the following Portfolios:
This Portfolio is invested in fixed income, large cap                 ‰    a fixed income component (approximately 60%
equity, and small/mid-cap equity Portfolios.                               of the Portfolio, invested in shares of the SP
                                                                           PIMCO Total Return Portfolio (40% of Portfolio)
                                                                           and the SP PIMCO High Yield Portfolio (20% of
                                                                           Portfolio)); and
                                                                      ‰    a large capitalization equity component
                                                                           (approximately 30% of the Portfolio, invested in
                                                                           shares of the SP Davis Value Portfolio (15% of
                                                                           Portfolio), the SP Alliance Large Cap Growth
                                                                           Portfolio (7.5% of Portfolio), and the Jennison
                                                                           Portfolio (7.5% of Portfolio)); and
                                                                      ‰    a small/mid capitalization equity component
                                                                           (approximately 10% of the Portfolio, invested in
                                                                           shares of the SP Small/Mid-Cap Value Portfolio
                                                                           (5% of Portfolio) and the SP Prudential U.S.
                                                                           Emerging Growth Portfolio (5% of Portfolio)).
For more information on the underlying Portfolios, please refer to the description of each Portfolio’s investment
objectives and policies included in this prospectus.

                                                             62
SP Growth Asset Allocation Portfolio


An Asset Allocation Portfolio Investing                         The Growth Asset Allocation Portfolio invests in shares
Primarily In Equity Portfolios                                  of the following Portfolios:
This Portfolio seeks to provide long-term growth of                 ‰    a large capitalization equity component
capital with consideration also given to current income.                 (approximately 45% of the Portfolio, invested in
                                                                         shares of the SP Davis Value Portfolio (22.5%
                                                                         of Portfolio), the SP Alliance Large Cap Growth
                                                                         Portfolio (11.25% of Portfolio), and the
                                                                         Jennison Portfolio (11.25% of Portfolio)); and
                                                                    ‰    a fixed income component (approximately 20%
                                                                         of the Portfolio, invested in shares of the SP
                                                                         PIMCO High Yield Portfolio (10% of Portfolio)
                                                                         and the SP PIMCO Total Return Portfolio (10%
                                                                         of Portfolio)); and
                                                                    ‰    an international component (approximately 20%
                                                                         of the Portfolio, invested in shares of the SP
                                                                         Jennison International Growth Portfolio (10% of
                                                                         Portfolio) and the SP Deutsche International
                                                                         Equity Portfolio (10% of Portfolio)); and
                                                                    ‰    a small/mid-capitalization equity component
                                                                         (approximately 15% of the Portfolio, invested in
                                                                         shares of the SP Small/Mid-Cap Value Portfolio
                                                                         (7.5% of Portfolio) and the SP Prudential U.S.
                                                                         Emerging Growth Portfolio (7.5% of Portfolio)).

For more information on the underlying Portfolios, please refer to the descriptions of each Portfolio’s investment
objectives and policies included in this prospectus.

SP Davis Value Portfolio

SP Davis Value Portfolio’s investment objective is growth of capital. In keeping with the Davis investment philosophy,
the portfolio managers select common stocks that offer the potential for capital growth over the long-term. While we will
try to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

The Davis Back-to-Basics Approach                               The Portfolio invests primarily in common stocks of U.S.
Under the Davis philosophy, Davis seeks to identify             companies with market capitalizations of at least $5
companies possessing ten basic characteristics, which           billion, but it may also invest in foreign companies and
Davis believes will foster sustainable long-term growth.        U.S. companies with smaller capitalizations.


COMMON STOCKS

What They Are. Common stock represents ownership of a company.

How They Pick Them. The Davis investment philosophy stresses a back-to-basics approach: they use extensive
research to buy growing companies at value prices and hold on to them for the long-term. Over the years, Davis
Selected Advisers has developed a list of ten characteristics that they believe foster sustainable long-term growth,
minimize risk and enhance the potential for superior long-term returns. While very few companies have all ten, Davis
searches for those possessing several of the characteristics that are listed below.

Why They Buy Them. SP Davis Value Portfolio buys common stock to take an ownership position in companies with
growth potential, and then holds that position long enough to realize the benefits of growth.

                                                           63
The Portfolio may also invest in foreign securities, primarily as a way of providing additional opportunities to invest in
quality overlooked growth stocks. Investment in foreign securities can also offer the Portfolio the potential for economic
diversification.


WHAT DAVIS LOOKS FOR IN A COMPANY

1.   First-Class Management. The Davis investment philosophy believes that great companies are created by great
     managers. In visiting companies, they look for managers with a record of doing what they say they are going to do.
2.   Management Ownership. Just as they invest heavily in their own portfolios, they look for companies where
     individual managers own a significant stake.
3.   Strong Returns on Capital. They want companies that invest their capital wisely and reap superior returns on
     those investments.
4.   Lean Expense Structure. Companies that can keep costs low are able to compete better, especially in difficult
     times. A low cost structure sharply reduces the risk of owning a company’s shares.
5.   Dominant or Growing Market Share in a Growing Market. A company that is increasing its share of a growing
     market has the best of both worlds.
6.   Proven Record as an Acquirer. When an industry or market downturn occurs, it is a good idea to own companies
     that can take advantage of attractive prices to expand operations through inexpensive acquisitions.
7.   Strong Balance Sheet. Strong finances give a company staying power to weather difficult economic cycles.
8.   Competitive Products or Services. Davis invests in companies with products that are not vulnerable to
     obsolescence.
9.   Successful International Operations. A proven ability to expand internationally reduces the risk of being tied too
     closely to the U.S. economic cycle.
10. Innovation. The savvy use of technology in any business, from a food company to an investment bank, can help
    reduce costs and increase sales.


Other Securities and Investment Strategies

The Portfolio invests primarily in the common stock of large capitalization domestic companies. There are other
securities in which the Portfolio may invest, and investment strategies which the Portfolio may employ, but they are not
principal investment strategies. The Portfolio may invest in equity and/or debt securities issued by Real Estate
Investment Trusts (REITs).

The Portfolio uses short-term investments to maintain flexibility while evaluating long-term opportunities. The Portfolio
also may use short-term investments for temporary defensive purposes; in the event the portfolio managers anticipate
a decline in the market values of common stock of large capitalization domestic companies, they may reduce the risk
by investing in short-term securities until market conditions improve. Unlike common stocks, these investments will not
appreciate in value when the market advances. In such a circumstance, the short-term investments will not contribute
to the Portfolio’s investment objective.

The Portfolio is managed by Davis Selected Advisers, L.P.


SP Deutsche International Equity Portfolio


The Portfolio seeks long-term capital appreciation. Under normal circumstances, the Portfolio invests at least 80% of
its investable assets in the stocks and other securities with equity characteristics of companies in developed countries
outside the United States. While we make every effort to achieve our objective, we can’t guarantee success and it is
possible that you could lose money.

                                                            64
International Equities From Developed Countries                     The Portfolio invests for capital appreciation, not income;
The Portfolio invests primarily in the stocks of companies          any dividend or interest income is incidental to the
located in developed foreign countries that make up the             pursuit of that goal.
MSCI EAFE Index, plus Canada. The Portfolio also may
invest in emerging markets securities.


The Portfolio invests for the long term. The Portfolio employs a strategy of growth at a reasonable price. The Portfolio
seeks to identify companies outside the United States that combine strong potential for earnings growth with
reasonable investment value. Such companies typically exhibit increasing rates of profitability and cash flow, yet their
share prices compare favorably to other stocks in a given market and to their global peers. In evaluating stocks, the
Portfolio considers factors such as sales, earnings, cash flow and enterprise value. Enterprise value is a company’s
market capitalization plus the value of its net debt. The Portfolio further considers the relationship between these and
other quantitative factors. Together, these indicators of growth and value may identify companies with improving
prospects before the market in general has taken notice.

Principal Investments

Almost all the companies in which the Portfolio invests are based in the developed foreign countries that make up the
MSCI EAFE Index, plus Canada. The Portfolio may also invest a portion of its assets in companies based in the
emerging markets of Latin America, the Middle East, Europe, Asia and Africa if it believes that its return potential more
than compensates for the extra risks associated with these markets. Under normal market conditions investment in
emerging markets is not considered to be a central element of the Portfolio’s strategy. Typically, the Portfolio will not
hold more than 15% of its net assets in emerging markets. The Portfolio may invest in a variety of debt securities,
equity securities, and other instruments, including convertible securities, warrants, foreign securities, options (on
stock, debt, stock indices, foreign currencies, and futures), futures contracts, forward foreign currency exchange
contracts, interest rate swaps, loan participations, reverse repurchase agreements, dollar rolls, when-issued
and delayed delivery securities, short sales, and illiquid securities. We explain each of these instruments in detail in
the Statement of Additional Information.

Investment Process

Company research lies at the heart of Deutsche Asset Management Inc.’s (DAMI’s) investment process, as it does with
many stock mutual fund portfolios. Several thousand companies are tracked to arrive at the approximately 100 stocks
the Portfolio normally holds. But the process brings an added dimension to this fundamental research. It draws on the
insight of experts from a range of financial disciplines — regional stock market specialists, global industry specialists,
economists and quantitative analysts. They challenge, refine and amplify each other’s ideas. Their close collaboration
is a critical element of the investment process.

Temporary Defensive Position. The Portfolio may from time to time adopt a temporary defensive position in response
to extraordinary adverse political, economic or stock market events. The Portfolio may invest up to 100% of its assets
in U.S. or foreign government money market investments, or other short-term bonds that offer comparable safety, if the
situation warranted. To the extent the Portfolio might adopt such a position over the course of its duration, the Portfolio
may not meet its goal of long-term capital appreciation.

Primary Risks

Market Risk. Although individual stocks can outperform their local markets, deteriorating market conditions might
cause an overall weakness in the stock prices of the entire market.

Stock Selection Risk. A risk that pervades all investing is the risk that the securities an investor has selected will not
perform to expectations. To minimize this risk, DAMI monitors each of the stocks in the Portfolio according to three
basic quantitative criteria. They subject a stock to intensive review if:

    ‰    its rate of price appreciation begins to trail that of its national stock index;

                                                               65
    ‰    the financial analysts who follow the stock, both within DAMI and outside, cut their estimates of the stock’s
         future earnings; or
    ‰    the stock’s price approaches the downside target set when they first bought the stock (and may since have
         modified to reflect changes in market and economic conditions).

In this review, DAMI seeks to learn if the deteriorating performance accurately reflects deteriorating prospects or if it
merely reflects investor overreaction to temporary circumstances.

Foreign Stock Market Risk. From time to time, foreign capital markets have exhibited more volatility than those in the
United States. Trading stocks on some foreign exchanges is inherently more difficult than trading in the United States
for reasons including:

    ‰    Political Risk. Some foreign governments have limited the outflow of profits to investors abroad, extended
         diplomatic disputes to include trade and financial relations, and imposed high taxes on corporate profits. While
         these political risks have not occurred recently in the major countries in which the Portfolio invests, DAMI
         analyzes countries and regions to try to anticipate these risks.
    ‰    Information Risk. Financial reporting standards for companies based in foreign markets differ from those in
         the United States. Since the “numbers” themselves sometimes mean different things, DAMI devotes much of
         its research effort to understanding and assessing the impact of these differences upon a company’s financial
         conditions and prospects.
    ‰    Liquidity Risk. Stocks that trade less can be more difficult or more costly to buy, or to sell, than more liquid or
         active stocks. This liquidity risk is a factor of the trading volume of a particular stock, as well as the size and
         liquidity of the entire local market. On the whole, foreign exchanges are smaller and less liquid than the U.S.
         market. This can make buying and selling certain shares more difficult and costly. Relatively small
         transactions in some instances can have a disproportionately large effect on the price and supply of shares. In
         certain situations, it may become virtually impossible to sell a stock in an orderly fashion at a price that
         approaches an estimate of its value.
    ‰    Regulatory Risk. Some foreign governments regulate their exchanges less stringently, and the rights of
         shareholders may not be as firmly established.

In an effort to reduce these foreign stock market risks, the Portfolio diversifies its investments, just as you may spread
your investments among a range of securities so that a setback in one does not overwhelm your entire strategy. In this
way, a reversal in one market or stock need not undermine the pursuit of long-term capital appreciation.

Currency Risk. The Portfolio invests in foreign securities denominated in foreign currencies. This creates the
possibility that changes in foreign exchange rates will affect the value of foreign securities or the U.S. dollar amount of
income or gain received on these securities. DAMI seeks to minimize this risk by actively managing the currency
exposure of the Portfolio.

Emerging Market Risk. To the extent that the Portfolio does invest in emerging markets to enhance overall returns, it
may face higher political, information, and stock market risks. In addition, profound social changes and business
practices that depart from norms in developed countries’ economies have hindered the orderly growth of emerging
economies and their stock markets in the past. High levels of debt tend to make emerging economies heavily reliant on
foreign capital and vulnerable to capital flight. For all these reasons, the Portfolio carefully limits and balances its
commitment to these markets.

Secondary Risks

Small Company Risk. Although the Portfolio generally invests in the shares of large, well-established companies, it
may occasionally take advantage of exceptional opportunities presented by small companies. Such opportunities pose
unique risks. Small company stocks tend to experience steeper price fluctuations — down as well as up — than the
stocks of larger companies. A shortage of reliable information — the same information gap that creates opportunity in
small company investing — can also pose added risk. Industrywide reversals have had a greater impact on small
companies, since they lack a large company’s financial resources. Finally, small company stocks are typically less liquid
than large company stocks; when things are going poorly, it is harder to find a buyer for a small company’s shares.

                                                             66
Pricing Risk. When price quotations for securities are not readily available, they are valued by the method that most
accurately reflects their current worth in the judgment of the Board. This procedure implies an unavoidable risk, the risk
that our prices are higher or lower than the prices that the securities might actually command if we sold them.

The Portfolio is managed by Deutsche Asset Management, Inc. (DAMI).


SP INVESCO Small Company Growth Portfolio


The Portfolio seeks long-term capital growth. Most holdings are in small-capitalization companies. While we make
every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

A Small-Cap Stock Portfolio                                        INVESCO is primarily looking for companies in the
The Portfolio generally invests primarily in the stocks of         accelerated developing stages of their life cycles,
companies with small market capitalizations.                       which are currently priced below INVESCO’s
                                                                   estimation of their potential, have earnings which may
                                                                   be expected to grow faster than the U.S. economy in
                                                                   general, and/or offer earnings growth of sales, new
                                                                   products, management changes, or structural
                                                                   changes in the economy. The Portfolio may invest up
                                                                   to 25% of its assets in securities of non-U.S. issuers.
                                                                   Securities of Canadian issuers and ADRs are not
                                                                   subject to this 25% limitation.

Under normal circumstances, the Portfolio will invest at least 80% of its investable assets in small-capitalization
companies — those which are included in the Russell 2000 Growth Index at the time of purchase, or if not included in
that index, have market capitalizations of $2.5 billion or below at the time of purchase. Although not a principal
investment, the Portfolio may use derivatives. A derivative is a financial instrument whose value is “derived,” in some
manner, from the price of another security, index, asset or rate. Derivatives include options and futures contracts,
among a wide range of other instruments.

Although not a principal investment, the Portfolio may invest in options and futures contracts. Options and futures
contracts are common types of derivatives that the Portfolio may occasionally use to hedge its investments. An option
is the right to buy or sell a security or other instrument, index or commodity at a specific price on or before a specific
date. A futures contract is an agreement to buy or sell a security or other instrument, index or commodity at a specific
price on a specific date.

Although not a principal investment, the Portfolio may invest in repurchase agreements. In addition, the Portfolio may
invest in debt securities, ADRs, convertible securities, junk bonds, warrants, forward foreign currency exchange
contracts, interest rate swaps, when-issued and delayed delivery securities, short sales against-the-box, U.S.
government securities, Brady Bonds, and illiquid securities. The Portfolio may lend its portfolio securities. In response
to adverse market conditions or when restructuring the Portfolio, INVESCO may invest up to 100% of the Portfolio’s
assets in money market instruments. Investing heavily in these securities limits the ability to achieve the investment
objective, but can help to preserve the Portfolio’s assets when the markets are unstable.

The Portfolio is managed by INVESCO Funds Group, Inc.


SP Jennison International Growth Portfolio


The investment objective of the Portfolio is to seek long-term growth of capital. The Portfolio seeks to achieve its
objective through investment in equity-related securities of foreign companies. While we make every effort to achieve
our objective, we can’t guarantee success and it is possible that you could lose money.




                                                             67
A Foreign Stock Growth Portfolio                                  This means the Portfolio seeks investments — primarily
The Portfolio seeks long-term growth by investing in the          the common stock of foreign companies — that will
common stock of foreign companies. The Portfolio                  increase in value over a period of years. A company is
generally invests in about 60 securities of issuers               considered to be a foreign company if it satisfies at least
located in at least five different foreign countries.             one of the following criteria: its securities are traded
                                                                  principally on stock exchanges in one or more foreign
                                                                  countries; it derives 50% or more of its total revenue
                                                                  from goods produced, sales made or services performed
                                                                  in one or more foreign countries; it maintains 50% or
                                                                  more of its assets in one or more foreign countries; it is
                                                                  organized under the laws of a foreign country; or its
                                                                  principal executive office is located in a foreign country.

The Portfolio invests in about 60 securities of primarily non-U.S. growth companies whose shares appear attractively
valued on a relative and absolute basis. The Portfolio looks for companies that have above-average actual and
potential earnings growth over the long term and strong financial and operational characteristics. The Portfolio selects
stocks on the basis of individual company research. Thus, country, currency and industry weightings are primarily the
result of individual stock selections. Although the Portfolio may invest in companies of all sizes, the Portfolio typically
focuses on large and medium sized companies. Under normal conditions, the Portfolio intends to invest at least 65% of
its total assets in the equity-related securities of foreign companies in at least five foreign countries. The Portfolio may
invest anywhere in the world, including North America, Western Europe, the United Kingdom and the Pacific Basin, but
generally not the U.S.

The principal type of equity-related security in which the Portfolio invests is common stock. In addition to common
stock, the Portfolio may invest in other equity-related securities that include, but are not limited to, preferred stock,
rights that can be exercised to obtain stock, warrants and debt securities or preferred stock convertible or
exchangeable for common or preferred stock and master limited partnerships. The Portfolio may also invest in ADRs,
which we consider to be equity-related securities.

In deciding which stocks to purchase for the Portfolio, Jennison looks for growth companies that have both strong
fundamentals and appear to be attractively valued relative to their growth potential. Jennison uses a bottom-up
approach in selecting securities for the Portfolio, which means that they select stocks based on individual company
research, rather than allocating by country or sector. In researching which stocks to buy, Jennison looks at a
company’s basic financial and operational characteristics as well as compare the company’s stock price to the price of
stocks of other companies that are its competitors, absolute historic valuation levels for that company’s stock, its
earnings growth and the price of existing portfolio holdings. Another important part of Jennison’s research process is to
have regular contact with management of the companies that they purchase in order to confirm earnings expectations
and to assess management’s ability to meet its stated goals. Although the Portfolio may invest in companies of all
sizes, it typically focuses on large and medium sized companies.

Generally, Jennison looks for companies that have one or more of the following characteristics: actual and potential
growth in earnings and cash flow; actual and improving profitability; strong balance sheets; management strength; and
strong market share for the company’s products.

In addition, Jennison looks for companies whose securities appear to be attractively valued relative to: each company’s
peer group; absolute historic valuations; and existing holdings of the Portfolio. Generally, they consider selling a
security when there is an identifiable change in a company’s fundamentals or when expectations of future earnings
growth become fully reflected in the price of that security.

The Portfolio may invest in bonds, money market instruments and other fixed income obligations. Generally, the
Portfolio will purchase only “Investment-Grade” fixed income investments. This means the obligations have received
one of the four highest quality ratings determined by Moody’s Investors Service, Inc. (Moody’s), or Standard & Poor’s
Ratings Group (S&P), or one of the other nationally recognized statistical rating organizations (NRSROs). Obligations
rated in the fourth category (Baa for Moody’s or BBB for S&P) have speculative characteristics and are subject to a
greater risk of loss of principal and interest. On occasion, the Portfolio may buy instruments that are not rated, but that
are of comparable quality to the investment-grade bonds described above.

                                                             68
In response to adverse market, economic or political conditions, the portfolio may temporarily invest up to 100% of its
assets in money market instruments or in the stock and other equity-related securities of U.S. companies. Investing
heavily in money market instruments limits the ability to achieve capital appreciation, but may help to preserve the
portfolio’s assets when global or international markets are unstable. When the portfolio is temporarily invested in equity-
related securities of U.S. companies, the portfolio may achieve capital appreciation, although not through investment in
foreign companies.

We may also use alternative investment strategies — including derivatives — to try to improve the Portfolio’s returns,
protect its assets or for short-term cash management.

We may: purchase and sell options on equity securities, stock indexes and foreign currencies; purchase and sell
futures contracts on stock indexes, debt securities, interest rate indexes and foreign currencies and options on these
futures contracts; enter into forward foreign currency exchange contracts; purchase securities on a when-issued
or delayed delivery basis; and borrow up to 33-1/3% of the value of the Portfolio’s total assets.

The Portfolio may also enter into short sales against-the-box.

The Portfolio may also enter into repurchase agreements. The Portfolio may participate with certain other Portfolios of
the Fund in a joint repurchase account under an order obtained from the SEC.

This Portfolio is managed by Jennison Associates LLC.


SP Large Cap Value Portfolio


The investment objective of the SP Large Cap Value Portfolio is long-term growth of capital. The Portfolio is
managed by Fidelity Management & Research Company (FMR). The Portfolio normally invests at least 80% of the
Portfolio’s investable assets in securities of companies with large market capitalizations. The Portfolio normally invests
its assets primarily in common stocks.

A Large-Cap Value Portfolio                                      Although a universal definition of large market
The Portfolio is managed by Fidelity Management and              capitalization companies does not exist, FMR generally
Research Company. The Portfolio normally invests at              defines large market capitalization companies as those
least 80% of its investable assets in securities of              whose market capitalization is similar to the market
companies with large market capitalizations. The                 capitalization of companies in the S&P 500 or the
Portfolio normally invests its assets primarily in common        Russell 1000. A company’s market capitalization is
stocks.                                                          based on its current market capitalization or its market
                                                                 capitalization at the time of the Portfolio’s investment.
                                                                 Companies whose capitalization is below this level after
                                                                 purchase continue to be considered to have large
                                                                 market capitalizations for purposes of the 80% policy.

FMR invests the Portfolio’s assets in companies that it believes are undervalued in the marketplace in relation to
factors such as the company’s assets, earnings, growth potential, or cash flow, or in relation to securities of other
companies in the same industry. Companies with these characteristics tend to have lower than average price/earnings
(P/E) or price/book (P/B) ratios. The stocks of these companies are often called “value” stocks.

FMR may invest the Portfolio’s assets in securities of foreign issuers in addition to securities of domestic issuers.

FMR relies on fundamental analysis of each issuer and its potential for success in light of its current financial condition,
its industry position, and economic and market factors. Factors considered include growth potential, earnings
estimates, and management. These securities may then be analyzed using statistical models to further evaluate growth
potential, valuation, liquidity and investment risk. In buying and selling securities for the Portfolio, FMR invests for the
long term and selects those securities it believes offer strong opportunities for the long-term growth of capital and are
attractively valued.

                                                            69
The Portfolio primarily invests in equity securities which represent an ownership interest, or the right to acquire an
ownership interest, in an issuer. Different types of equity securities provide different voting and dividend rights and
priority in the event of the bankruptcy of the issuer. Equity securities include common stocks, preferred stocks,
convertible securities, and warrants.

FMR may use various techniques, such as buying and selling futures contracts, and exchange traded funds to
increase or decrease the Portfolio’s exposure to changing security prices or other factors that affect security values. If
FMR’s strategies do not work as intended, the Portfolio may not achieve its objective. While we make every effort to
achieve our objective, we can’t guarantee success and it is possible that you could lose money.

Many factors affect the Portfolio’s performance. The Portfolio’s share price changes daily based on changes in market
conditions and interest rates and in response to other economic, political or financial developments. The Portfolio’s
reaction to these developments will be affected by the types of the securities in which the Portfolio invests, the financial
condition, industry and economic sector, and geographic location of an issuer, and the Portfolio’s level of investment in
the securities of that issuer. When you sell units corresponding to shares of the Portfolio, they could be worth more or
less than what you paid for them.

In addition to company risk, derivatives risk, foreign investment risk, leveraging risk, liquidity risk, management risk,
and market risk, the following factor can significantly affect the Portfolio’s performance:

“Value” stocks can react differently to issuer, political, market and economic developments than the market as a whole
and other types of stocks. “Value” stocks tend to be inexpensive relative to their earnings or assets compared to other
types of stocks. However, “value” stocks can continue to be inexpensive for long periods of time and may not ever
realize their full value.

In response to market, economic, political or other conditions, FMR may temporarily use a different investment strategy
for defensive purposes. If FMR does so, different factors could affect the Portfolio’s performance and the Portfolio may
not achieve its investment objective.

The Portfolio is managed by Fidelity Management and Research Company.


SP MFS Capital Opportunities Portfolio


The Portfolio invests, under normal market conditions, at least 65% of its total assets in common stocks and related
securities, such as preferred stocks, convertible securities and depositary receipts for those securities. While we make
every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

Capital Opportunities In Both U.S. and Foreign                    The portfolio focuses on companies which
Stocks                                                            Massachusetts Financial Services Company (MFS)
The Portfolio invests primarily in stocks, convertible            believes have favorable growth prospects and attractive
securities, and depositary receipts of companies in both          valuations based on current and expected earnings or
the United States and in foreign countries.                       cash flow. The Portfolio’s investments may include
                                                                  securities listed on a securities exchange or traded in the
                                                                  over-the-counter markets.

MFS uses a bottom-up, as opposed to a top-down, investment style in managing the Portfolio. This means that
securities are selected based upon fundamental analysis (such as an analysis of earnings, cash flows, competitive
position and management’s abilities) performed by the portfolio manager and MFS’ large group of equity research
analysts. The Portfolio may invest in foreign securities (including emerging market securities), through which it
may have exposure to foreign currencies. The Portfolio may engage in active and frequent trading to achieve its
principal investment strategies. Generally, the Portfolio will invest no more than (i) 35% of its net assets in foreign
securities and (ii) 15% in lower rated bonds, and the Portfolio will not lend more than 30% of the value of its securities.

The Portfolio can invest in a wide variety of debt and equity securities, including corporate debt, lower-rated bonds,
U.S. Government securities, variable and floating rate obligations, zero coupon bonds, deferred interest bonds, PIK

                                                             70
bonds, Brady Bonds, depositary receipts, forward contracts, futures contracts, investment company securities,
options (on currencies, futures, securities and stock indices), repurchase agreements, mortgage dollar rolls,
restricted securities, short sales, short sales against-the-box, warrants, and when-issued and delayed delivery
securities. The Portfolio may lend its securities. The Portfolio may invest in equity and/or debt securities issued by
Real Estate Investment Trusts (REITs).

The Portfolio also may assume a temporary defensive position. In response to adverse market conditions or when
restructuring the Portfolio, MFS may invest up to 100% of the Portfolio’s assets in money market instruments. Investing
heavily in these securities limits the ability to achieve the investment objective, but can help to preserve the Portfolio’s
assets when the markets are unstable.

The Portfolio is managed by Massachusetts Financial Services Company (MFS).


SP MFS Mid-Cap Growth Portfolio


The Portfolio’s investment objective is long-term growth of capital. While we make every effort to achieve our
objective, we can’t guarantee success and it is possible you could lose money.

A Mid-Cap Growth Stock Portfolio                                  The Portfolio invests, under normal market conditions, at
The Portfolio invests primarily in companies with market          least 80% of its investable assets in common stocks and
capitalizations equaling or exceeding $250 million but            related securities, such as preferred stocks, convertible
not exceeding the top of the Russell Midcap™ Growth               securities and depositary receipts for those securities, of
Index range at the time of purchase.                              companies with medium market capitalization which
                                                                  Massachusetts Financial Services Company (MFS)
                                                                  believes have above-average growth potential.

Medium market capitalization companies are defined by the Portfolio as companies with market capitalizations equaling
or exceeding $250 million but not exceeding the top of the Russell Midcap™ Growth Index range at the time of the
Portfolio’s investment. This Index is a widely recognized, unmanaged index of mid-cap common stock prices.
Companies whose market capitalizations fall below $250 million or exceed the top of the Russell Midcap™ Growth
Index range after purchase continue to be considered medium-capitalization companies for purposes of the fund’s 80%
investment policy. As of December 28, 2001, the top of the Russell Midcap™ Growth Index range was approximately
$15.7 billion. The Portfolio’s investments may include securities listed on a securities exchange or traded in the over-
the-counter markets. MFS uses a bottom-up, as opposed to a top-down, investment style in managing the Portfolio.
This means that securities are selected based upon fundamental analysis (such as an analysis of earnings, cash flows,
competitive position and management’s abilities) performed by the portfolio manager and MFS’s large group of equity
research analysts.

The Portfolio is a non-diversified mutual fund portfolio. This means that the Portfolio may invest a relatively high
percentage of its assets in a small number of issuers. As a result, the Portfolio’s performance may be tied more closely
to the success or failure of a smaller group of Portfolio holdings. The Portfolio may invest in foreign securities (including
emerging markets securities) through which it may have exposure to foreign currencies. The Portfolio is expected to
engage in active and frequent trading to achieve its principal investment strategies. Generally, the Portfolio will invest no
more than (i) 20% of its net assets in foreign securities and (ii) 10% in lower rated bonds, and the Portfolio will not lend
more than 30% of the value of its securities. The Portfolio may invest in a variety of debt securities, equity securities, and
other instruments, including corporate debt, lower-rated bonds, U.S. government securities, variable and floating rate
obligations, zero coupon bonds, deferred interest bonds, PIK bonds, depository receipts, emerging markets equity
securities, forward contracts, futures contracts, investment company securities, options (on currencies, futures,
securities, and stock indices), repurchase agreements, restricted securities, short sales, short sales against-the-box,
short-term debt, warrants, and when-issued and delayed delivery securities. The Portfolio may borrow for temporary
purposes, and lend its portfolio securities.

In response to adverse market conditions or when restructuring the Portfolio, MFS may invest up to 100% of the
Portfolio’s assets in money market instruments. Investing heavily in the securities limits the ability to achieve the
investment objective, but can help to preserve the Portfolio’s assets when markets are unstable.

                                                             71
The Portfolio is managed by Massachusetts Financial Services Company (MFS).


SP PIMCO High Yield Portfolio


The investment objective of the Portfolio is a high total return. Under normal circumstances, the Portfolio invests at
least 80% of its investable assets in high yield/high risk bonds.

A High-Yield, High-Risk Bond Portfolio                            The Portfolio may invest up to 15% of its assets in
The Portfolio invests primarily in high-yield, high-risk          derivative instruments, such as options, futures
bonds, also known as “junk bonds.”                                contracts or swap agreements. The Portfolio may also
                                                                  invest in mortgage-related securities or asset-backed
                                                                  securities.

The Portfolio may seek to obtain market exposure to the securities in which it primarily invests by entering into a series
of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls). The “total
return” sought by the Portfolio consists of income earned on the Portfolio’s investments, plus capital appreciation, if
any, which generally arises from decreases in interest rates or improving credit fundamentals for a particular sector or
security.

In selecting securities for the Portfolio, PIMCO develops an outlook for interest rates, currency exchange rates and the
economy; analyzes credit and call risks, and uses other security selection techniques. The proportion of a Portfolio’s
assets committed to investment in securities with particular characteristics (such as quality, sector, interest rate or
maturity) varies based on PIMCO’s outlook for the U.S. economy and the economies of other countries in the world, the
financial markets and other factors.

PIMCO attempts to identify areas of the bond market that are undervalued relative to the rest of the market. PIMCO
identifies these areas by grouping bonds into the following sectors: money markets, governments, corporates,
mortgages, asset-backed and international. Sophisticated proprietary software then assists in evaluating sectors and
pricing specific securities. Once investment opportunities are identified, PIMCO will shift assets among sectors
depending upon changes in relative valuations and credit spreads. There is no guarantee that PIMCO’s security
selection techniques will produce the desired results. While we make every effort to achieve our objective, we can’t
guarantee success and it is possible that you could lose money.

The Portfolio may also invest in Brady Bonds, which are described below in the section on the SP PIMCO Total Return
Portfolio.

Securities rated lower than Baa by Moody’s Investors Service, Inc. (Moody’s) or lower than BBB by Standard & Poor’s
Ratings Services (“S&P”) are sometimes referred to as “high yield” or “junk” bonds. Investing in high yield securities
involves special risks in addition to the risks associated with investments in higher-rated fixed income securities. While
offering a greater potential opportunity for capital appreciation and higher yields, high yield securities typically entail
greater potential price volatility and may be less liquid than higher-rated securities. High yield securities may be
regarded as predominantly speculative with respect to the issuer’s continuing ability to meet principal and interest
payments. They may also be more susceptible to real or perceived adverse economic and competitive industry
conditions than higher-rated securities.

The Portfolio may invest in inflation-indexed bonds, which are described below in the section on the SP PIMCO Total
Return Portfolio.

The Portfolio may invest in convertible debt and convertible preferred stock securities.

The Portfolio may also enter into, or acquire participations in, delayed funding loans and revolving credit facilities, which
are described in the section on SP PIMCO Total Return Portfolio.

For the purpose of achieving income, each Portfolio may lend its portfolio securities to brokers, dealers, and other
financial institutions provided a number of conditions are satisfied, including that the loan is fully collateralized.

                                                             72
The Portfolio may make short sales as part of its overall portfolio management strategies or to offset a potential
decline in value of a security.

The Portfolio may purchase securities which it is eligible to purchase on a when-issued or delayed delivery basis,
and may make contracts to purchase such securities for a fixed price at a future date beyond normal settlement time
(forward commitments).

The Portfolio may enter into repurchase agreements.

The Portfolio may enter into reverse repurchase agreements and dollar rolls, subject to a Portfolio’s limitations on
borrowings.

The Portfolio may invest in “event-linked bonds,” which are described in the section below on the SP PIMCO Total
Return Portfolio.

The Portfolio may invest up to 15% of its net assets in illiquid securities.

The Portfolio may invest up to 10% of its assets in securities of other investment companies, such as closed-end
management investment companies, or in pooled accounts or other investment vehicles which invest in foreign
markets. As a shareholder of an investment company, a Portfolio may indirectly bear service and other fees which are
in addition to the fees the Portfolio pays its service providers.

For temporary or defensive purposes, the Portfolio may invest without limit in U.S. debt securities, including taxable
securities and short-term money market securities, when PIMCO deems it appropriate to do so. When the Portfolio
engages in such strategies, it may not achieve its investment objective.

The Portfolio is managed by Pacific Investment Management Company LLC (PIMCO).


SP PIMCO Total Return Portfolio


The Portfolio invests primarily in investment grade debt securities. It may also invest up to 10% of its assets in high
yield/high risk securities (also known as “junk bonds”) rated B or higher by Moody’s or S&P or, if unrated, determined
by PIMCO to be of comparable quality.

An Investment Grade Bond Portfolio                                 The Portfolio may invest up to 20% of its assets in
The Portfolio invests primarily in investment grade debt           securities denominated in foreign currencies, and may
securities, including foreign debt securities, but may             invest beyond this limit in U.S. dollar-denominated
invest some of its assets in high yield bonds.                     securities of foreign issuers. The Portfolio will normally
                                                                   hedge at least 75% of its exposure to foreign currency to
                                                                   reduce the risk of loss due to fluctuations in currency
                                                                   exchange rates.

The Portfolio may invest all of its assets in derivative instruments, such as options, futures contracts or swap
agreements, or in mortgage- or asset-backed securities. The Portfolio may lend its portfolio securities to brokers,
dealers and other financial institutions to earn income. The Portfolio may seek to obtain market exposure to the
securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other
investment techniques (such as buy backs or dollar rolls). The “total return” sought by the Portfolio consists of income
earned on the Portfolio’s investments, plus capital appreciation, if any, which generally arises from decreases in
interest rates or improving credit fundamentals for a particular sector or security.

In selecting securities for a Portfolio, PIMCO develops an outlook for interest rates, currency exchange rates and the
economy; analyzes credit and call risks, and uses other security selection techniques. The proportion of a Portfolio’s
assets committed to investment in securities with particular characteristics (such as quality, sector, interest rate or
maturity) varies based on PIMCO’s outlook for the U.S. economy and the economies of other countries in the world, the
financial markets and other factors.

                                                              73
PIMCO attempts to identify areas of the bond market that are undervalued relative to the rest of the market. PIMCO
identifies these areas by grouping bonds into the following sectors: money markets, governments, corporates,
mortgages, asset-backed and international. Sophisticated proprietary software then assists in evaluating sectors and
pricing specific securities. Once investment opportunities are identified, PIMCO will shift assets among sectors
depending upon changes in relative valuations and credit spreads. There is no guarantee that PIMCO’s security
selection techniques will produce the desired results. While we make every effort to achieve our objective, we can’t
guarantee success and it is possible that you could lose money.

The Portfolio may invest in Brady Bonds, which are securities created through the exchange of existing commercial
bank loans to sovereign entities for new obligations in connection with a debt restructuring. Investments in Brady Bonds
may be viewed as speculative. Brady Bonds acquired by the Portfolio may be subject to restructuring arrangements or
to requests for new credit, which may cause the Portfolio to suffer a loss of interest or principal on any of its holdings.

The Portfolio may invest in inflation-indexed bonds, which are fixed income securities whose principal value is
periodically adjusted according to the rate of inflation. If the index measuring inflation falls, the principal value of
inflation-indexed bonds will be adjusted downward, and consequently the interest payable on these securities
(calculated with respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon
maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do
not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original
principal. The value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real
interest rates are tied to the relationship between nominal interest rates and the rate of inflation. If nominal interest
rates increase at a faster rate than inflation, real interest rates may rise, leading to a decrease in value of inflation-
indexed bonds. Short-term increases in inflation may lead to a decline in value. Any increase in the principal amount of
an inflation-indexed bond will be considered taxable ordinary income, even though investors do not receive their
principal until maturity.

The Portfolio may invest in convertible debt and convertible preferred stock.

The Portfolio may invest in mortgage-related securities or other asset-backed securities.

The Portfolio may also enter into, or acquire participations in, delayed funding loans and revolving credit facilities, in
which a lender agrees to make loans up to a maximum amount upon demand by the borrower during a specified term.
These commitments may have the effect of requiring a Portfolio to increase its investment in a company at a time when
it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that
such amounts will be repaid). To the extent that a Portfolio is committed to advance additional Portfolios, it will
segregate assets determined to be liquid by PIMCO in accordance with procedures established by the Board of
Directors in an amount sufficient to meet such commitments. Delayed loans and revolving credit facilities are subject to
credit, interest rate and liquidity risk and the risks of being a lender.

For the purpose of achieving income, each Portfolio may lend its portfolio securities to brokers, dealers, and other
financial institutions provided a number of conditions are satisfied, including that the loan is fully collateralized.

The Portfolio may make short sales as part of its overall portfolio management strategies or to offset a potential
decline in value of a security. The Portfolio may use interest rate swaps in the management of the Portfolio.

The Portfolio may purchase securities which it is eligible to purchase on a when-issued or delayed delivery basis,
and may make contracts to purchase such securities for a fixed price at a future date beyond normal settlement time
(forward commitments).

The Portfolio may enter into repurchase agreements.

The Portfolio may enter into reverse repurchase agreements and dollar rolls.

The Portfolio may invest in “event-linked bonds,” which are fixed income securities for which the return of principal and
payment of interest is contingent on the non-occurrence of a specific “trigger” event, such as a hurricane, earthquake,
or other physical or weather-related phenomenon. If a trigger event occurs, a Portfolio may lose a portion or all of its

                                                            74
principal invested in the bond. Event-linked bonds often provide for an extension of maturity to process and audit loss
claims where a trigger event has, or possibly has, occurred. An extension of maturity may increase volatility. Event-
linked bonds may also expose the Portfolio to certain unanticipated risks including credit risk, adverse regulatory or
jurisdictional interpretations, and adverse tax consequences. Event-linked bonds may also be subject to liquidity risk.

The Portfolio may invest up to 15% of its net assets in illiquid securities.

The Portfolio may invest up to 10% of its assets in securities of other investment companies, such as closed-end
management investment companies, or in pooled accounts or other investment vehicles which invest in foreign
markets. As a shareholder of an investment company, the Portfolio may indirectly bear service and other fees which
are in addition to the fees the Portfolio pays its service providers.

For temporary or defensive purposes, the Portfolio may invest without limit in U.S. debt securities, including taxable
securities and short-term money market securities, when PIMCO deems it appropriate to do so. When the Portfolio
engages in such strategies, it may not achieve its investment objective.

The Portfolio is managed by Pacific Investment Management Company LLC (PIMCO).


SP Prudential U.S. Emerging Growth Portfolio


The Portfolio’s investment objective is long-term capital appreciation. This means the Portfolio seeks investments
whose price will increase over several years. While we make every effort to achieve its objective, we can’t guarantee
success and it is possible that you could lose money.

A Small/Medium-Sized Stock Portfolio                               In deciding which equities to buy, the Portfolio uses what
The Portfolio invests primarily in the stocks of small and         is known as a growth investment style. This means the
medium-sized companies with the potential for above-               Portfolio invests in companies that it believes could
average growth.                                                    experience superior sales or earnings growth. In
                                                                   pursuing this objective, the Portfolio normally invests at
                                                                   least 80% of the Portfolio’s investable assets in equity
                                                                   securities of small and medium-sized U.S. companies
                                                                   with the potential for above-average growth.

The Portfolio considers small and medium-sized companies to be those with market capitalizations that are less than
the largest capitalization of the Standard and Poor’s Mid-Cap 400 Stock Index as of the end of a calendar quarter. As
of December 31, 2001, this number was $10.5 billion. We use the market capitalization measurements used by S&P at
time of purchase.

In addition to buying equities, the Portfolio may invest in other equity-related securities. Equity-related securities include
American Depositary Receipts (ADRs); common stocks; nonconvertible preferred stocks; warrants and rights that can
be exercised to obtain stock; investments in various types of business ventures, including partnerships and joint
ventures; Real Estate Investment Trusts (REITs); and similar securities.

The Portfolio also may buy convertible debt securities and convertible preferred stock. These are securities that the
Portfolio can convert into the company’s common stock or some other equity security. The Portfolio will only invest in
investment-grade convertible securities. Generally, the Portfolio considers selling a security when, in the opinion of the
investment adviser, the stock has experienced a fundamental disappointment in earnings; it has reached an
intermediate-term price objective and its outlook no longer seems sufficiently promising; a relatively more attractive
stock emerges; or the stock has experienced adverse price movements.

The Portfolio can invest up to 20% of investable assets in equity securities of companies with larger or smaller market
capitalizations than previously noted. The Portfolio may participate in the initial public offering (IPO) market. IPO
investments may increase the Portfolio’s total returns. As the Portfolio’s assets grow, the impact of IPO investments will
decline, which may reduce the Portfolio’s total returns.

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The Portfolio can invest up to 35% of total assets in foreign securities, including stocks and other equity-related
securities, money market instruments and other investment-grade fixed-income securities of foreign issuers, including
those in developing countries. For purposes of the 35% limit, the Portfolio does not consider ADRs and other similar
receipts or shares to be foreign securities.

The Portfolio can invest up to 20% of investable assets in investment-grade corporate or government obligations.
Investment-grade obligations are rated in one of the top four long-term quality ratings by a major rating service (such as
Baa/BBB or better by Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Group, respectively). The Portfolio
also may invest in obligations that are not rated, but which it believes to be of comparable quality. Obligations rated in the
fourth category (Baa/BBB) have speculative characteristics. These lower-rated obligations are subject to a greater risk of
loss of principal and interest. Generally, fixed-income securities provide a fixed rate of return, but provide less opportunity
for capital appreciation than investing in stocks. The Portfolio will purchase money market instruments only in one of the
two highest short-term quality ratings of a major rating service.

In response to adverse market, economic or political conditions, the Portfolio may temporarily invest up to 100% of the
Portfolio’s assets in cash or money market instruments. Investing heavily in these securities limits the Portfolio’s ability
to achieve capital appreciation, but can help to preserve its assets when the equity markets are unstable.

The Portfolio may also use repurchase agreements.

The Portfolio may enter into foreign currency forward contracts to protect the value of its portfolio against future
changes in the level of currency exchange rates. The Portfolio may enter into such contracts on a spot, that is, cash,
basis at the rate then prevailing in the currency exchange market or on a forward basis, by entering into a forward
contract to purchase or sell currency.

The Portfolio may use various derivative strategies to try to improve its returns or protect its assets. The Portfolio
cannot guarantee that these strategies will work, that the instruments necessary to implement these strategies will be
available or that the Portfolio will not lose money.

The Portfolio may invest in securities issued by agencies of the U.S. Government or instrumentalities of the U.S.
Government. These obligations, including those which are guaranteed by Federal agencies or instrumentalities, may or
may not be backed by the full faith and credit of the United States. Obligations of the Government National Mortgage
Association (GNMA), the Farmers Home Administration and the Small Business Administration are backed by the full
faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States,
the Portfolio must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment and may
not be able to assert a claim against the United States if the agency or instrumentality does not meet its commitments.
Securities in which the Portfolio may invest which are not backed by the full faith and credit of the United States include
obligations such as those issued by the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation
(FHLMC), the Federal National Mortgage Association, the Student Loan Marketing Association, Resolution Funding
Corporation and the Tennessee Valley Authority, each of which has the right to borrow from the U.S. Treasury to meet
its obligations, and obligations of the Farm Credit System, the obligations of which may be satisfied only by the
individual credit of the issuing agency. FHLMC investments may include collateralized mortgage obligations.

The Portfolio may invest in mortgage-backed securities, including those which represent undivided ownership interests
in pools of mortgages. The U.S. Government or the issuing agency or instrumentality guarantees the payment of
interest on and principal of these securities. However, the guarantees do not extend to the yield or value of the
securities nor do the guarantees extend to the yield or value of the Portfolio’s shares. These securities are in most
cases “pass-through” instruments, through which the holders receive a share of all interest and principal payments from
the mortgages underlying the securities, net of certain fees.

The Portfolio may purchase and write (that is, sell) put and call options on securities, stock indexes and currencies that
are traded on U.S. or foreign securities exchanges or in the over-the-counter market to seek to enhance return or to
protect against adverse price fluctuations in securities in the Portfolio’s portfolio. These options will be on equity
securities, financial indexes (for example, S&P 500 Composite Stock Price Index) and foreign currencies. The Portfolio
may write put and call options to generate additional income through the receipt of premiums, purchase put options in
an effort to protect the value of securities (or currencies) that it owns against a decline in market value and purchase
call options in an effort to protect against an increase in the price of securities (or currencies) it intends to purchase.

                                                              76
The Portfolio may purchase and sell financial futures contracts and options thereon which are traded on a
commodities exchange or board of trade to reduce certain risks of its investments and to attempt to enhance return in
accordance with regulations of the Commodity Futures Trading Commission (CFTC).

The Portfolio also follows certain policies when it borrows money (the Portfolio can borrow up to 20% of the value of its
total assets); lends its securities to others (the Portfolio can lend up to 33 1⁄ 3% of the value of its total assets, including
collateral received in the transaction); and holds illiquid securities (the Portfolio may hold up to 15% of its net assets in
illiquid securities, including securities with legal or contractual restrictions on resale, those without a readily available
market and repurchase agreements with maturities longer than seven days).

Portfolio Turnover
As a result of the strategies described above, the Portfolio may have an annual portfolio turnover rate of up to 200%.
Portfolio turnover is generally the percentage found by dividing the lesser of portfolio purchases or sales by the monthly
average value of the portfolio. High portfolio turnover (100% or more) results in higher brokerage commissions and
other transaction costs and can affect the Portfolio’s performance.

The Portfolio is managed by Jennison Associates LLC.

SP Small/Mid-Cap Value Portfolio

The investment objective of the SP Small/Mid-Cap Value Portfolio is long-term growth of capital. The Portfolio is
managed by Fidelity Management & Research Company (FMR). The Portfolio normally invests at least 80% of its
investable assets in securities of companies with small to medium market capitalizations.

A Small/Mid-Cap Value Portfolio                                     The Portfolio normally invests its assets primarily in
The Portfolio normally invests at least 80% of its                  common stocks. Although universal definitions of small
investable assets in companies with small to medium                 and medium market capitalization does not exist, FMR
market capitalizations.                                             generally defines small and medium market
                                                                    capitalization companies as those whose market
                                                                    capitalizations is similar to the market capitalization of
                                                                    companies in the S&P Small Cap 600 or the Russell
                                                                    2000, and the S&P MidCap 400 or the Russell Midcap,
                                                                    respectively. A company’s market capitalization is based
                                                                    on its current market capitalization or its market
                                                                    capitalization at the time of the Portfolio’s investment.
                                                                    Companies whose capitalization is above this level after
                                                                    purchase continue to have a small or medium market
                                                                    capitalization for purposes of the 80% policy. The size of
                                                                    companies in each index changes with market
                                                                    conditions, and the composition of each index. FMR may
                                                                    also invest the Portfolio’s assets in companies with
                                                                    larger market capitalizations.

FMR invests the Portfolio’s assets in companies that it believes are undervalued in the marketplace in relation to
factors such as the company’s assets, earnings, or growth potential, or cash flow, or in relation to securities of other
companies in the same industry. Companies with these characteristics tend to have lower than average price/earnings
(P/E) or price/book (P/B) ratios. The stocks of these companies are often called “value” stocks.

FMR may invest the Portfolio’s assets in securities of foreign issuers in addition to securities of domestic issuers.

FMR relies on fundamental analysis of each issuer and its potential for success in light of its current financial condition,
its industry position, and economic and market factors. Factors considered include growth potential, earnings estimates
and management. These securities may then be analyzed using statistical models to further evaluate growth potential,
valuation, liquidity and investment risk. In buying and selling securities for the Portfolio, FMR invests for the long term
and selects those securities it believes offer strong opportunities for the long-term growth of capital and are attractively
valued.

                                                               77
The Portfolio invests primarily in equity securities, which represent an ownership interest, or the right to acquire an
ownership interest, in an issuer. Different types of equity securities provide different voting and dividend rights and
priority in the event of the bankruptcy of the issuer. Equity securities include common stocks, preferred stocks,
convertible securities, and warrants.

FMR may use various techniques, such as buying and selling futures contracts and exchange traded funds, to increase
or decrease the Portfolio’s exposure to changing security prices or other factors that affect security values. The
Portfolio may invest in equity and/or debt securities issued by Real Estate Investment Trusts (REITs). If FMR’s
strategies do not work as intended, the Portfolio may not achieve its objective. While we make every effort to achieve
our objective, we can’t guarantee success and it is possible that you could lose money.

Many factors affect the Portfolio’s performance. The Portfolio’s share price changes daily based on changes in market
conditions and interest rates and in response to other economic, political, or financial developments. The Portfolio’s
reaction to these developments will be affected by the types of securities in which the Portfolio invests, the financial
condition, industry and economic sector, and geographic location of an issuer, and the Portfolio’s level of investment in
the securities of that issuer. When you sell units corresponding to shares of the Portfolio, they could be worth more or
less than what you paid for them.

In addition to company risk, derivatives risk, foreign investment risk, leveraging risk, liquidity risk, management risk,
and market risk, the following factors can significantly affect the Portfolio’s performance:

The value of securities of smaller, less well-known issuers can be more volatile than that of larger issuers and can react
differently to issuer, political, market and economic developments than the market as a whole and other types of
stocks. Smaller issuers can have more limited product lines, markets and financial resources.

“Value” stocks can react differently to issuer, political, market and economic developments than the market as a whole
and other types of stocks. “Value” stocks tend to be inexpensive relative to their earnings or assets compared to other
types of stocks. However, “value” stocks can continue to be inexpensive for long periods of time and may not ever
realize their full value.

In response to market, economic, political or other conditions, FMR may temporarily use a different investment strategy
for defensive purposes. If FMR does so, different factors could affect the Portfolio’s performance and the Portfolio may
not achieve its investment objective.


SP Strategic Partners Focused Growth Portfolio


In pursuing its objective of long-term growth of capital, the Portfolio normally invests at least 65% of its total assets in
equity-related securities of U.S. companies that are believed to have strong capital appreciation potential. While we
make every effort to achieve our objective, we can’t guarantee success and it is possible that you could lose money.

A Growth Stock Portfolio                                          The Portfolio’s strategy is to combine the efforts of two
The Portfolio normally invests at least 65% of its total          investment advisers and to invest in the favorite stock
assets in the equity-related securities of U.S. companies         selection ideas of three portfolio managers (two of whom
that are believed to have strong capital appreciation             invest as a team). Each investment adviser to the
potential. The Portfolio is managed according to a                Portfolio utilizes a growth style to select approximately
growth investment style.                                          20 securities. The portfolio managers build a portfolio
                                                                  with stocks in which they have the highest confidence
                                                                  and may invest more than 5% of the Portfolio’s assets in
                                                                  any one issuer.

The Portfolio may actively and frequently trade its portfolio securities. The Portfolio is a non-diversified mutual fund
portfolio. This means that the Portfolio may invest in a relatively high percentage of net assets in a small number of
issuers. Investing in a nondiversified mutual fund, particularly a fund investing in approximately 40 equity-related
securities, involves greater risk than investing in a diversified fund because a loss resulting from the decline in the value
of one security may represent a greater portion of the total assets of a nondiversified fund.

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The primary equity-related securities in which the Portfolio invests are common stocks. Generally, each investment
adviser will consider selling or reducing a stock position when, in their opinion, the stock has experienced a
fundamental disappointment in earnings; it has reached an intermediate-term price objective and its outlook no longer
seems sufficiently promising; a relatively more attractive stock emerges; or the stock has experienced adverse price
movement. A price decline of a stock does not necessarily mean that an investment adviser will sell the stock at that
time. During market declines, either investment adviser may add to positions in favored stocks, which can result in a
somewhat more aggressive strategy, with a gradual reduction of the number of companies in which the adviser invests.
Conversely, in rising markets, either investment adviser may reduce or eliminate fully valued positions, which can result
in a more conservative investment strategy, with a gradual increase in the number of companies represented in the
adviser’s portfolio segment.

In deciding which stocks to buy, each investment adviser uses what is known as a growth investment style. This means
that each adviser will invest in stocks they believe could experience superior sales or earnings growth.

In addition to common stocks in which the Portfolio primarily invests, equity-related securities include nonconvertible
preferred stocks; convertible debt and convertible preferred stock; American Depository Receipts (ADRs); warrants
and rights that can be exercised to obtain stock; investments in various types of business ventures, including
partnerships and joint ventures; Real Estate Investment Trusts (REITs); and similar securities.

The Portfolio may buy common stocks of companies of every size — small-, medium- and large-capitalization —
although its investments are mostly in medium- and large-capitalization stocks. The Portfolio intends to be fully
invested, holding less than 5% of its total assets in cash under normal market conditions.

Under normal conditions, there will be an approximately equal division of the Portfolio’s assets between the two
investment advisers. All daily cash inflows (that is, purchases and reinvested distributions) and outflows (that is,
redemptions and expense items) will usually be divided between the two investment advisers as the portfolio manager
deems appropriate. There will be a periodic rebalancing of each segment’s assets to take account of market
fluctuations in order to maintain the approximately equal allocation. As a consequence, the manager may allocate
assets from the portfolio segment that has appreciated more to the other.

Alliance Capital Management’s portfolio manager, Alfred Harrison, utilizes the fundamental analysis and research of
Alliance’s large internal research staff. In selecting stocks for the Portfolio, he emphasizes stock selection and
investment in a limited number of companies that have strong management, superior industry positions, excellent
balance sheets and the ability to demonstrate superior earnings growth.

Jennison Associates’ portfolio managers, Spiros Segalas and Kathleen McCarragher, invest in mid-size and large
companies experiencing some or all of the following: high sales growth, high unit growth, high or improving returns on
assets and equity and a strong balance sheet. These companies generally trade at high prices relative to their current
earnings.

Reallocations may result in additional costs since sales of securities may result in higher portfolio turnover. Also,
because each investment adviser selects portfolio securities independently, it is possible that a security held by one
portfolio segment may also be held by the other portfolio segment of the Portfolio or that the two advisers may
simultaneously favor the same industry. Prudential Investments LLC will monitor the overall portfolio to ensure that any
such overlaps do not create an unintended industry concentration. In addition, if one investment adviser buys a security
as the other adviser sells it, the net position of the Portfolio in the security may be approximately the same as it would
have been with a single portfolio and no such sale and purchase, but the Portfolio will have incurred additional costs.
The portfolio manager will consider these costs in determining the allocation of assets. The portfolio manager will
consider the timing of reallocation based upon the best interests of the Portfolio and its shareholders. To maintain the
Portfolio’s federal income tax status as a regulated investment company, Jennison Associates also may have to sell
securities on a periodic basis.

The Portfolio may invest up to 20% of its total assets in foreign securities, including stocks and other equity-related
securities, money market instruments and other fixed-income securities of foreign issuers. The Portfolio does not
consider ADRs and other similar receipts or shares to be foreign securities.

                                                            79
The Portfolio may temporarily hold cash or invest in high-quality foreign or domestic money market instruments pending
investment of proceeds from new sales of Portfolio shares or to meet ordinary daily cash needs subject to the policy of
normally investing at least 65% of the Portfolio’s assets in equity-related securities. In response to adverse market,
economic, political or other conditions, the Portfolio may temporarily invest up to 100% of its assets in money market
instruments. Investing heavily in these securities limits the ability to achieve the investment objective, but can help to
preserve the Portfolio’s assets when the equity markets are unstable.

The Portfolio may use repurchase agreements.

The Portfolio may purchase and write (that is, sell) put and call options on securities indexes that are traded on U.S. or
foreign securities exchanges or in the over-the-counter market to try to enhance return or to hedge the Portfolio’s
portfolio. The Portfolio may write covered put and call options to generate additional income through the receipt of
premiums, purchase put options in an effort to protect the value of a security that it owns against a decline in market
value and purchase call options in an effort to protect against an increase in the price of securities it intends to
purchase. The Portfolio also may purchase put and call options to offset previously written put and call options of the
same series. The Portfolio will write only “covered” options. The Portfolio may purchase and sell stock index futures
contracts and related options on stock index futures. The Portfolio may purchase and sell futures contracts on foreign
currencies and related options on foreign currency futures contracts.

The Portfolio may invest in securities issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of
the U.S. government. Not all U.S. government securities are backed by the full faith and credit of the United States.
Some are supported only by the credit of the issuing agency.

The Portfolio will also use futures contracts and options on futures contracts for certain bona fide hedging, return
enhancement and risk management purposes. The Portfolio may purchase put and call options and write (that is, sell)
“covered” put and call options on futures contracts that are traded on U.S. and foreign exchanges.

The Portfolio may use short sales.

The Portfolio may use various derivatives to try to improve the Portfolio’s returns. The Portfolio may use hedging
techniques to try to protect the Portfolio’s assets. We cannot guarantee that these strategies will work, that the
instruments necessary to implement these strategies will be available, or that the Portfolio will not lose money.

The Portfolio also follows certain policies when it borrows money (the Portfolio can borrow up to 33 1⁄ 3% of the value of
its total assets); lends its securities to others for cash management purposes (the Portfolio can lend up to 33 1⁄ 3% of the
value of its total assets including collateral received in the transaction); and holds illiquid securities (the Portfolio may
hold up to 15% of its net assets in illiquid securities, including securities with legal or contractual restrictions on resale,
those without a readily available market and repurchase agreements with maturities longer than seven days). The
Portfolio is subject to certain investment restrictions that are fundamental policies, which means they cannot be
changed without shareholder approval. For more information about these restrictions, see the SAI.

It is not a principal strategy of the Portfolio to actively and frequently trade its portfolio securities to achieve its
investment objective. Nevertheless, the Portfolio may have an annual portfolio turnover rate of up to 200%. Portfolio
turnover is generally the percentage found by dividing the lesser of portfolio purchases and sales by the monthly
average value of the portfolio. High portfolio turnover (100% or more) results in higher brokerage commissions and
other costs and can affect the Portfolio’s performance.

The Portfolio is managed by Jennison Associates LLC and Alliance Capital Management, L.P.

                                                           *   *    *

The Statement of Additional Information — which we refer to as the SAI — contains additional information about the
Portfolios. To obtain a copy, see the back cover page of this prospectus.

                                                           *   *    *


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OTHER INVESTMENTS AND STRATEGIES

As indicated in the description of the Portfolios above, we may use the following investment strategies to increase a
Portfolio’s return or protect its assets if market conditions warrant.

ADRs are certificates representing the right to receive foreign securities that have been deposited with a U.S. bank or a
foreign branch of a U.S. bank.

Convertible Debt and Convertible Preferred Stock — A convertible security is a security — for example, a bond or
preferred stock — that may be converted into common stock of the same or different issuer. The convertible security
sets the price, quantity of shares and time period in which it may be so converted. Convertible stock is senior to a
company’s common stock but is usually subordinated to debt obligations of the company. Convertible securities provide
a steady stream of income which is generally at a higher rate than the income on the company’s common stock but
lower than the rate on the company’s debt obligations. At the same time, they offer — through their conversion
mechanism — the chance to participate in the capital appreciation of the underlying common stock. The price of a
convertible security tends to increase and decrease with the market value of the underlying common stock.

Derivatives — A derivative is an investment instrument that derives its price, performance, value, or cash flow from
one or more underlying securities or other interests. Derivatives involve costs and can be volatile. With derivatives, the
investment adviser tries to predict whether the underlying investment — a security, market index, currency, interest rate
or some other benchmark — will go up or down at some future date. We may use derivatives to try to reduce risk or to
increase return consistent with a Portfolio’s overall investment objective. The investment adviser will consider other
factors (such as cost) in deciding whether to employ any particular strategy, or use any particular instrument. Any
derivatives we use may not fully offset a Portfolio’s underlying positions and this could result in losses to the Portfolio
that would not otherwise have occurred.

Dollar Rolls — Dollar rolls involve the sale by the Portfolio of a security for delivery in the current month with a promise
to repurchase from the buyer a substantially similar — but not necessarily the same — security at a set price and date
in the future. During the “roll period,” the Portfolio does not receive any principal or interest on the security. Instead, it is
compensated by the difference between the current sales price and the price of the future purchase, as well as any
interest earned on the cash proceeds from the original sale.

Equity Swaps — In an equity swap, the Portfolio and another party agree to exchange cash flow payments that are
based on the performance of equities or an equity index.

Forward Foreign Currency Exchange Contracts — A foreign currency forward contract is an obligation to buy or sell
a given currency on a future date at a set price. When a Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when a Portfolio anticipates the receipt in a foreign currency of dividends
or interest payments on a security which it holds, the Portfolio may desire to “lock-in” the U.S. dollar price of the
security or the U.S. dollar equivalent of such dividend or interest payment, as the case may be. By entering into a
forward contract for a fixed amount of dollars, for the purchase or sale of the amount of foreign currency involved in the
underlying transactions, the Portfolio will be able to protect itself against a possible loss resulting from an adverse
change in the relationship between the U.S. dollar and the foreign currency during the period between the date on
which the security is purchased or sold, or on which the dividend or interest payment is declared, and the date on which
such payments are made or received. At the maturity of a forward contract, a Portfolio may either sell the security and
make delivery of the foreign currency or it may retain the security and terminate its contractual obligation to deliver the
foreign currency by purchasing an “offsetting” contract with the same currency trader obligating it to purchase, on the
same maturity date, the same amount of the foreign currency.

Futures Contracts — A futures contract is an agreement to buy or sell a set quantity of an underlying product at a
future date, or to make or receive a cash payment based on the value of a securities index. When a futures contract is
entered into, each party deposits with a futures commission merchant (or in a segregated account) approximately 5% of
the contract amount. This is known as the “initial margin.” Every day during the futures contract, either the buyer or the
futures commission merchant will make payments of “variation margin.” In other words, if the value of the underlying
security, index or interest rate increases, then the buyer will have to add to the margin account so that the account

                                                               81
balance equals approximately 5% of the value of the contract on that day. The next day, the value of the underlying
security, index or interest rate may decrease, in which case the borrower would receive money from the account equal to
the amount by which the account balance exceeds 5% of the value of the contract on that day. A stock index futures
contract is an agreement between the buyer and the seller of the contract to transfer an amount of cash equal to the
daily variation margin of the contract. No physical delivery of the underlying stocks in the index is made.

Interest Rate Swaps — In an interest rate swap, the Portfolio and another party agree to exchange interest payments.
For example, the Portfolio may wish to exchange a floating rate of interest for a fixed rate. We would enter into that
type of a swap if we think interest rates are going down.

Joint Repurchase Account — In a joint repurchase transaction, uninvested cash balances of various Portfolios are
added together and invested in one or more repurchase agreements. Each of the participating Portfolios receives a
portion of the income earned in the joint account based on the percentage of its investment.

Loans and Assignments — Loans are privately negotiated between a corporate borrower and one or more financial
institutions. The Portfolio acquires interests in loans directly (by way of assignment from the selling institution) or
indirectly (by way of the purchase of a participation interest from the selling institution. Purchasers of loans depend
primarily upon the creditworthiness of the borrower for payment of interest and repayment of principal. If scheduled
interest or principal payments are not made, the value of the instrument may be adversely affected. Interests in loans
are also subject to additional liquidity risks. Loans are not generally traded in organized exchange markets but are
traded by banks and other institutional investors engaged in loan syndications. Consequently, the liquidity of a loan will
depend on the liquidity of these trading markets at the time that the Portfolio sells the loan.

In assignments, the Portfolio will have no recourse against the selling institution, and the selling institution generally
makes no representations about the underlying loan, the borrowers, the documentation or the collateral. In addition, the
rights against the borrower that are acquired by the Portfolio may be more limited than those held by the assigning
lender.

Mortgage-related Securities are usually pass-through instruments that pay investors a share of all interest and
principal payments from an underlying pool of fixed or adjustable rate mortgages. We may invest in mortgage-related
securities issued and guaranteed by the U.S. government or its agencies like the Federal National Mortgage
Association (Fannie Maes) and the Government National Mortgage Association (Ginnie Maes) and debt securities
issued (but not guaranteed) by the Federal Home Loan Mortgage Company (Freddie Macs). Private mortgage-related
securities that are not guaranteed by U.S. governmental entities generally have one or more types of credit
enhancement to ensure timely receipt of payments and to protect against default.

Mortgage-related securities include collateralized mortgage obligations, multi-class pass through securities and
stripped mortgage-backed securities. A collateralized mortgage-backed obligation (CMO) is a security backed by an
underlying portfolio of mortgages or mortgage-backed securities that may be issued or guaranteed by entities such as
banks, U.S. governmental entities or broker-dealers. A multi-class pass-through security is an equity interest in a trust
composed of underlying mortgage assets. Payments of principal and interest on the mortgage assets and any
reinvestment income provide the money to pay debt service on the CMO or to make scheduled distributions on the
multi-class pass-through security. A stripped mortgage-backed security (MBS strip) may be issued by U.S.
governmental entities or by private institutions. MBS strips take the pieces of a debt security (principal and interest) and
break them apart. The resulting securities may be sold separately and may perform differently. MBS strips are highly
sensitive to changes in prepayment and interest rates.

Options — A call option on stock is a short-term contract that gives the option purchaser or “holder” the right to acquire
a particular equity security for a specified price at any time during a specified period. For this right, the option purchaser
pays the option seller a certain amount of money or “premium” which is set before the option contract is entered into.
The seller or “writer” of the option is obligated to deliver the particular security if the option purchaser exercises the
option. A put option on stock is a similar contract. In a put option, the option purchaser has the right to sell a particular
security to the option seller for a specified price at any time during a specified period. In exchange for this right, the
option purchaser pays the option seller a premium. Options on debt securities are similar to stock options except that
the option holder has the right to acquire or sell a debt security rather than an equity security. Options on stock indexes

                                                             82
are similar to options on stocks, except that instead of giving the option holder the right to receive or sell a stock, it
gives the holder the right to receive an amount of cash if the closing level of the stock index is greater than (in the case
of a call) or less than (in the case of a put) the exercise price of the option. The amount of cash the holder will receive
is determined by multiplying the difference between the index’s closing price and the option’s exercise price, expressed
in dollars, by a specified “multiplier”. Unlike stock options, stock index options are always settled in cash, and gain or
loss depends on price movements in the stock market generally (or a particular market segment, depending on the
index) rather than the price movement of an individual stock.

Real Estate Investment Trusts (REITs) — A REIT is a company that manages a portfolio of real estate to earn profits
for its shareholders. Some REITs acquire equity interests in real estate and then receive income from rents and capital
gains when the buildings are sold. Other REITs lend money to real estate developers and receive interest income from
the mortgages. Some REITs invest in both types of interests.

Repurchase Agreements — In a repurchase transaction, the Portfolio agrees to purchase certain securities and the
seller agrees to repurchase the same securities at an agreed upon price on a specified date. This creates a fixed return
for the Portfolio.

Reverse Repurchase Agreements — In a reverse repurchase transaction, the Portfolio sells a security it owns and
agrees to buy it back at a set price and date. During the period the security is held by the other party, the Portfolio may
continue to receive principal and interest payments on the security.

Short Sales — In a short sale, we sell a security we do not own to take advantage of an anticipated decline in the
stock’s price. The Portfolio borrows the stock for delivery and if it can buy the stock later at a lower price, a profit
results.

Short Sales Against-the-Box — A short sale against-the-box means the Portfolio owns securities identical to those
sold short.

When-Issued and Delayed Delivery Securities — With when-issued or delayed delivery securities, the delivery and
payment can take place a month or more after the date of the transaction. A Portfolio will make commitments for when-
98 issued transactions only with the intention of actually acquiring the securities. A Portfolio’s custodian will maintain in
a segregated account, liquid assets having a value equal to or greater than such commitments. If the Portfolio chooses
to dispose of the right to acquire a when-issued security prior to its acquisition, it could, as with the disposition of any
other security, incur a gain or loss.

                                                           *   *    *

Except for the Money Market Portfolio, each Portfolio also follows certain policies when it borrows money (each
Portfolio may borrow up to 5% of the value of its total assets, except that SP Large Cap Value Portfolio and SP Small/
Mid-Cap Value Portfolio may each borrow up to 33 1⁄ 3% of their total assets); lends its securities; and holds illiquid
securities (a Portfolio may hold up to 15% of its net assets in illiquid securities, including securities with legal or
contractual restrictions on resale, those without a readily available market and repurchase agreements with maturities
longer than seven days). If the Portfolio were to exceed this limit, the investment adviser would take prompt action to
reduce a Portfolio’s holdings in illiquid securities to no more than 15% of its net assets, as required by applicable law. A
Portfolio is subject to certain investment restrictions that are fundamental policies, which means they cannot be
changed without shareholder approval. For more information about these restrictions, see the SAI.

The Money Market Portfolio also follows certain policies when it borrows money (the Portfolio may borrow up to 5% of
the value of its total assets) and holds illiquid securities (the Portfolio may hold up to 10% of its net assets in illiquid
securities, including securities with legal or contractual restrictions on resale, those without a readily available market
and repurchase agreements with maturities longer than seven days). If the Portfolio were to exceed this limit, the
investment adviser would take prompt action to reduce the Portfolio’s holdings in illiquid securities to no more than 10%
of its net assets, as required by applicable law. The Portfolio is subject to certain investment restrictions that are
fundamental policies, which means they cannot be changed without shareholder approval. For more information about
these restrictions, see the SAI.

                                                               83
We will consider other factors (such as cost) in deciding whether to employ any particular strategy or use any particular
instrument. For more information about these strategies, see the SAI, “Investment Objectives and Policies of the
Portfolios.”


HOW THE FUND IS MANAGED

Board Of Directors


The Board of Directors oversees the actions of the Investment Adviser, the sub-advisers and the Distributor and
decides on general policies. The Board also oversees the Fund’s officers who conduct and supervise the daily business
operations of the Fund.


Investment Adviser


Prudential Investments LLC (“PI”), a wholly-owned subsidiary of Prudential Financial, Inc., serves as the overall
investment adviser for the Fund. PI is located at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102-4077. PI and its predecessors have served as manager and administrator to investment companies since 1987.
As of December 31, 2001, PI served as the investment manager to all of the Prudential U.S. and offshore investment
companies, and as manager or administrator to closed-end investment companies, with aggregate assets of
approximately $100.8 billion.

The Fund uses a “manager-of-managers” structure. Under this structure, PI is authorized to select (with approval of the
Fund’s independent directors) one or more sub-advisers to handle the actual day-to-day investment management of
each Portfolio. PI monitors each sub-adviser’s performance through quantitative and qualitative analysis, and
periodically reports to the Fund’s board of directors as to whether each sub-adviser’s agreement should be renewed,
terminated or modified. PI also is responsible for allocating assets among the sub-advisers if a Portfolio has more than
one sub-adviser. In those circumstances, the allocation for each sub-adviser can range from 0% to 100% of a
Portfolio’s assets, and PI can change the allocations without board or shareholder approval. The Fund will notify
shareholders of any new sub-adviser or any material changes to any existing sub-advisory agreement.




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The following chart lists the total annualized investment advisory fees paid in 2001 with respect to each of the Fund’s
Portfolios.

                                                                                                                 Total advisory fees as %
Portfolio                                                                                                         of average net assets
Conservative Balanced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               0.55
Diversified Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        0.40
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.45
Flexible Managed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.60
Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.75
High Yield Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         0.55
Jennison (formerly, Prudential Jennison) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        0.60
Money Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        0.40
Stock Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     0.35
Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40
SP Aggressive Growth Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         0.84*
SP AIM Aggressive Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.95
SP AIM Core Equity (formerly, SP AIM Growth and Income) . . . . . . . . . . . . . . . . . . . . . .                                         0.85
SP Alliance Large Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.90
SP Alliance Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              1.15
SP Balanced Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.75*
SP Conservative Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.71*
SP Davis Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.75
SP Deutsche International Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.90
SP Growth Asset Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.80*
SP INVESCO Small Company Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             0.95
SP Jennison International Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      0.85
SP Large Cap Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.80
SP MFS Capital Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.75
SP MFS Mid-Cap Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   0.80
SP PIMCO High Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               0.60
SP PIMCO Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0.60
SP Prudential U.S. Emerging Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        0.60
SP Small/Mid-Cap Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                0.90
SP Strategic Partners Focused Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          0.90
*   Each Asset Allocation Portfolio invests only in shares of other underlying Fund Portfolios. The advisory fees for the
    Asset Allocation Portfolios are the product of a blend of the advisory fees of the underlying Fund Portfolios, plus a
    0.05% annual advisory fee paid to PI. The only advisory fee directly paid by the Asset Allocation Portfolios is the
    0.05% fee paid to PI.


Investment Sub-Advisers


Each Portfolio has one or more sub-advisers providing the day-to-day investment management. PI pays each sub-
adviser out of the fee that PI receives from the Fund.

Jennison Associates LLC (Jennison) serves as the sole sub-adviser for the Global Portfolio, the Jennison Portfolio,
the SP Jennison International Growth Portfolio, and the SP Prudential U.S. Emerging Growth Portfolio. Jennison serves
as a sub-adviser for a portion of the assets of the Equity Portfolio, the Value Portfolio and the SP Strategic Partners
Focused Growth Portfolio. Jennison’s address is 466 Lexington Avenue, New York, New York 10017. Jennison is a
wholly owned subsidiary of Prudential Financial, Inc. As of December 31, 2001, Jennison had over $62 billion in assets
under management for institutional and mutual fund clients.

Prudential Investment Management, Inc. (PIM) serves as the sole sub-adviser for the Conservative Balanced
Portfolio, the Diversified Bond Portfolio, the Flexible Managed Portfolio, the High Yield Bond Portfolio, the Money

                                                                       85
Market Portfolio, and the Stock Index Portfolio. PIM is a wholly owned subsidiary of Prudential Financial, Inc. PIM’s
address is Gateway Center Two, 100 Mulberry Street, Newark, New Jersey 07102.

A I M Capital Management, Inc. (A I M Capital) serves as sub-adviser to the SP AIM Aggressive Growth Portfolio and
the SP AIM Core Equity Portfolio. The firm is located at 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173.
The sub-adviser provides investment advisory services to each Portfolio by obtaining and evaluating economic,
statistical and financial information and formulating and implementing investment programs. A I M Capital, together with
its affiliates, advises or manages approximately 150 investment portfolios as of December 31, 2001, encompassing a
broad range of investment objectives. A I M Capital uses a team approach to investment management. As of
December 31, 2001, A I M and its affiliates managed approximately $158 billion in assets.

Alliance Capital Management, L.P. (Alliance) serves as the sub-adviser to the SP Alliance Technology Portfolio, SP
Alliance Large Cap Growth Portfolio and a portion of the SP Strategic Partners Focused Growth Portfolio. The sub-
adviser is located at 1345 Avenue of the Americas, New York, New York 10105. Alliance is a leading international
investment manager. Alliance’s clients are primarily major corporate employee benefit funds, public employee
retirement systems, investment companies, foundations and endowment funds. As of December 31, 2001, Alliance
managed $455 billion in assets.

Davis Selected Advisers, L.P. (Davis) serves as the sub-adviser to the SP Davis Value Portfolio. Davis is located at
2429 East Elvira Road, Suite 101, Tucson, Arizona 85706. As of December 31, 2001, Davis managed approximately
$41.8 billion in assets.

Deutsche Asset Management, Inc. (DAMI) serves as a sub-adviser to the SP Deutsche International Equity Portfolio
and as subadviser for approximately 25% of the assets of the Value Portfolio. DAMI is a wholly-owned subsidiary of
Deutsche Bank AG. As of December 31, 2001 DAMI’s total assets under management exceeded $96.1 billion. DAMI’s
address is 280 Park Avenue, New York, New York 10017.

Fidelity Management & Research Company (FMR) is the sub-adviser to the SP Large Cap Value Portfolio and the
SP Small/Mid-Cap Value Portfolio. As of December 31, 2001, FMR and its wholly-owned subsidiaries had
approximately $912 billion in assets under management. The address of FMR is 82 Devonshire Street, Boston,
Massachusetts 02109.

GE Asset Management, Incorporated (GEAM) serves as a sub-adviser to approximately 25% of the Equity Portfolio.
GEAM’s ultimate parent is General Electric Company. Its address is 3003 Summer Street, Stamford, Connecticut
06904. As of December 31, 2001, GEAM oversees in excess of $112.2 billion under management.

INVESCO Funds Group, Inc. (INVESCO), located at 4350 South Monaco Street, Denver, Colorado 80237, is the sub-
adviser of the SP INVESCO Small Company Growth Portfolio. INVESCO was founded in 1932 and as of December 31,
2001, managed almost $35 billion in assets. INVESCO is a subsidiary of AMVESCAP PLC, an international investment
management company based in London, with money managers in Europe, North and South America and the Far East.

Massachusetts Financial Services Company (MFS), located at 500 Boylston Street, Boston, Massachusetts, acts as
the sub-adviser for the SP MFS Capital Opportunities Portfolio and the SP MFS Mid-Cap Growth Portfolio. MFS and its
predecessor organizations have a history of money management dating from 1924. MFS is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada. As of November 30, 2001, MFS managed over $135.3 billion in
assets.

Pacific Investment Management Company LLC (PIMCO) acts as the sole sub-adviser for the SP PIMCO Total
Return Portfolio and the SP PIMCO High Yield Portfolio. PIMCO is located at 840 Newport Center Drive, Newport
Beach, California 92660 and is a subsidiary of Allianz Dresdner Asset Management of America L.P., formerly PIMCO
Advisors L.P. As of December 31, 2001, PIMCO managed over $241 billion in assets.

Salomon Brothers Asset Management Inc. (Salomon) serves as sub-adviser for a portion of the assets of the Equity
Portfolio. Salomon is part of the global asset management arm of Citigroup Inc., which was formed in 1998 as a result
of the merger of Travelers Group and Citicorp Inc. As of December 31, 2001, Salomon managed more than $30 billion
in total assets. Salomon’s address is 125 Broad Street, New York, New York 10004.

                                                           86
Victory Capital Management Inc. (Victory) (formerly, Key Asset Management Inc.) serves as a sub-adviser for a
portion of the assets of the Value Portfolio. Victory is a wholly-owned subsidiary of KeyCorp, Inc. As of December 31,
2001, Victory’s total assets under management exceeded $72 billion. Victory’s address is 127 Public Square,
Cleveland, Ohio 44114.


Portfolio Managers


An Introductory Note About Prudential Investment Management’s Fixed Income Group

PIM’s Fixed Income Group, which provides portfolio management services to the Conservative Balanced, Diversified
Bond, Flexible Managed, High Yield Bond and Money Market Portfolios, manages more than $135 billion for
Prudential’s retail investors, institutional investors, and policyholders. Senior Managing Director James J. Sullivan
heads the Group, which is organized into teams specializing in different market sectors. Top-down, broad investment
decisions are made by the Fixed Income Policy Committee, whereas bottom-up security selection is made by the
sector teams.

Prior to joining PIM in 1998, Mr. Sullivan was a Managing Director in Prudential’s Capital Management Group, where
he oversaw portfolio management and credit research for Prudential’s General Account and subsidiary fixed-income
portfolios. He has more than 18 years of experience in risk management, arbitrage trading and corporate bond
investing.

The Fixed Income Investment Policy Committee is comprised of key senior investment managers, including Fixed
Income’s Chief Investment Officer and the head of risk management. The Committee uses a top-down approach to
investment strategy, asset allocation and general risk management, identifying sectors in which to invest.

Conservative Balanced Portfolio and Flexible Managed Portfolio

These Portfolios are managed by a team of portfolio managers. M. Stumpp, Ph.D., Senior Managing Director of PIM,
has been the lead portfolio manager of the Portfolios since 1994 and is responsible for the overall asset allocation
decisions.

The Fixed Income segments are managed by the Fixed Income Group of PIM. This Group uses a bottom-up approach,
which focuses on individual securities, while staying within the guidelines of the Investment Policy Committee and the
Portfolios’ investment restrictions and policies. In addition, the Credit Research team of analysts supports the sector
teams using bottom-up fundamentals, as well as economic and industry trends. Other sector teams may contribute to
securities selection when appropriate.

The equity portion of the Conservative Balanced Portfolio is managed by M. Stumpp, John Moschberger, and Michael
Lenarcic. M. Stumpp’s background is discussed above. Mr. Lenarcic is a Managing Director within PIM’s Quantitative
Management team. Prior to joining the Quantitative Management team in 1985, Mr. Lenarcic was a Vice President at
Wilshire Associates, where he was head of the Asset Allocation Division. Mr. Lenarcic holds a B.A. degree from Kent
State University and A.M. and Ph.D. degrees in Business Economics from Harvard University. John Moschberger,
CFA, is a Vice President of Prudential Investments. Mr. Moschberger joined Prudential in 1980 and has been a portfolio
manager since 1986.

The equity portion of the Flexible Managed Portfolio is managed by M. Stumpp, and James Scott. The background of
M. Stumpp is discussed above. James Scott is a Senior Managing Director of PIM’s Quantitative Management Group.
Mr. Scott has managed balanced and equity portfolios for Prudential’s pension plans and several institutional clients
since 1987. Mr. Scott received a B.A. from Rice University and an M.S. and a Ph.D. from Carnegie Mellon University.

Diversified Bond Portfolio

The Corporate Team of PIM, headed by Steven Kellner, is primarily responsible for overseeing the day-to-day
management of the Portfolio. This team uses a bottom-up approach, which focuses on individual securities, while

                                                          87
staying within the guidelines of the Investment Policy Committee and the Portfolios’ investment restrictions and policies.
In addition, the Credit Research team of analysts supports the sector teams using bottom-up fundamentals, as well as
economic and industry trends. Other sector teams may contribute to securities selection when appropriate.


Corporate Team

    Assets Under Management (as of December 31, 2001):           $42 billion.

    Team Leader: Steven Kellner, CFA. General Investment Experience: 16 years.

    Portfolio Managers: 7. Average General Investment Experience: 12 years, which includes team members with
    significant mutual fund experience.

    Sector:   U.S. investment-grade corporate securities.

    Investment Strategy: Focus is on identifying spread, credit quality and liquidity trends to capitalize on changing
    opportunities in the market. Ultimately, they seek the highest expected return with the least risk.


Equity Portfolio

Jeffrey Siegel, Bradley Goldberg and David Kiefer are co-managers of the portion of the Portfolio assigned to Jennison.
Mr. Siegel has been an Executive Vice President of Jennison since June 1999. Previously he was at TIAA-CREF from
1988-1999, where he held positions as a portfolio manager and analyst. Prior to joining TIAA-CREF, Mr. Siegel was an
analyst for Equitable Capital Management and held positions at Chase Manhattan Bank and First Fidelity Bank. Mr.
Siegel earned a B.A. from Rutgers University. Mr. Goldberg is an Executive Vice President of Jennison, where he also
serves as Chairman of the Asset Allocation Committee. Prior to joining Jennison in 1974 he served as Vice President
and Group Head in the Investment Research Division of Bankers Trust Company. He earned a B.S. from the University
of Illinois and an M.B.A. from New York University. Mr. Goldberg holds a Chartered Financial Analyst (C.F.A.)
designation. Mr. Kiefer has been a Senior Vice President of Jennison since September 2000. Previously, he was a
Managing Director of Prudential Global Asset Management and has been with Prudential since 1986. Mr. Kiefer earned
a B.S. from Princeton University and an M.B.A. from Harvard Business School. He holds a Chartered Financial Analyst
(C.F.A.) designation.

Richard Sanderson, Senior Vice President and Director of Investment Research, Domestic Equities, for GEAM,
manages the portion of the Equity Portfolio assigned to GEAM. Mr. Sanderson, a Chartered Financial Analyst, has 29
years of asset management experience and has been employed with GEAM for over 5 years, and holds B.A. and
M.B.A. degrees from the University of Michigan.

Michael Kagan, a Director of Salomon, manages the portion of the Equity Portfolio assigned to Salomon. Mr. Kagan
has over 15 years of asset management experience, including experience as an analyst covering the consumer
products, aerospace, chemicals, and housing industries. Mr. Kagan received his B.A. from Harvard College and
attended the MIT Sloan School of Management.


Global Portfolio

Daniel Duane and Michelle Picker manage this Portfolio. Mr. Duane has been an Executive Vice President of Jennison
since October 2000 and was previously a Managing Director of Prudential Global Asset Management. He has been
managing the Portfolio since 1991. Prior to joining Prudential, he was with First Investors Asset Management where he
was in charge of all global equity investments. He earned a B.A. from Boston College, a Ph.D. from Yale University and
an M.B.A. from New York University. He holds a Chartered Financial Analyst (C.F.A.) designation. Michelle Picker has
been a Vice President of Jennison since October 2000 and was previously a Vice President of Prudential Investment
Management, Inc. Ms. Picker joined Prudential in 1992 and has co-managed the Portfolio since October 1997.
Ms. Picker earned a B.A. from the University of Pennsylvania and an M.B.A. from New York University. She holds a
Chartered Financial Analyst (C.F.A.) designation.

                                                            88
High Yield Bond Portfolio

The High Yield Team of PIM, headed by Paul Appleby, is primarily responsible for overseeing the day-to-day
management of the fixed income portfolio of the Portfolio. This Team uses a bottom-up approach, which focuses on
individual securities, while staying within the guidelines of the Investment Policy Committee and the Portfolio’s
investment restrictions and policies. In addition, the Credit Research team of analysts supports the sector teams using
bottom-up fundamentals, as well as economic and industry trends. Other sector teams may contribute to securities
selection when appropriate.


High Yield Team

    Assets Under Management (as of December 31, 2001):          $8 billion.

    Team Leader: Paul Appleby. General Investment Experience: 15 years.

    Portfolio Managers: 6. Average General Investment Experience: 18 years, which includes team members with
    significant mutual fund experience.

    Sector:   Below-investment-grade corporate securities.

    Investment Strategy: The High Yield Team of PIM, headed by Paul Appleby, is primarily responsible for
    overseeing the day-to-day management of the fixed income portion of the Portfolio assigned to Prudential
    Investment Management. Focus is generally on bonds with high total return potential, given existing risk
    parameters. They also seek securities with high current income, as appropriate. The Team uses a relative value
    approach while staying within the guidelines of the Investment Policy Committee and the Portfolio’s investment
    restrictions and policies. In addition, the Credit Research team of analysts supports the sector teams using bottom-
    up fundamentals, as well as economic and industry trends. Other sector trends may contribute to securities
    selection when appropriate.


Jennison Portfolio

This Portfolio has been managed by Spiros Segalas, Michael Del Balso and Kathleen McCarragher of Jennison since
1999. Mr. Segalas is a founding member and a Director, President and Chief Investment Officer of Jennison. He has
been in the investment business for over 41 years. Mr. Del Balso, a Director and Executive Vice President of Jennison,
is also Jennison’s Director of Equity Research. He has been part of the Jennison team since 1972 when he joined the
firm from White, Weld & Company. Mr. Del Balso is a member of the New York Society of Security Analysts. Ms.
McCarragher, Director and Executive Vice President of Jennison, is also Jennison’s Domestic Equity Investment
Strategist. Prior to joining Jennison in 1998, she was a Managing Director and Director of Large Cap Growth Equities at
Weiss, Peck & Greer L.L.C. Prior to 1992, Ms. McCarragher served as an analyst, portfolio manager and member of
the Investment Committee for State Street Research & Management Company.


Money Market Portfolio

The Money Market Team of PIM, headed by Joseph Tully, is primarily responsible for overseeing the day-to-day
management of the Portfolio. This team uses a bottom-up approach, which focuses on individual securities, while
staying within the guidelines of the Investment Policy Committee and the Portfolio’s investment restrictions and policies.


Money Market Team

    Assets Under Management (as of December 31, 2001): $52 billion.

    Team Leader: Joseph Tully. General Investment Experience: 18 years.

                                                           89
    Portfolio Managers: 8. Average General Investment Experience: 12 years, which includes team members with
    significant mutual fund experience.

    Sector:   High-quality short-term debt securities, including both taxable and tax-exempt instruments.

    Investment Strategy: Focus is on safety of principal, liquidity and controlled risk.


Stock Index Portfolio

John Moschberger, CFA, Vice President of PIM, has managed this Portfolio since 1990. Mr. Moschberger joined
Prudential in 1980 and has been a portfolio manager since 1986.


Value Portfolio

Tom Kolefas and Bradley Goldberg are the co-portfolio managers of the portion of the Portfolio assigned to Jennison.
Mr. Kolefas has been a Senior Vice President of Jennison since September 2000. Previously, he was a Managing
Director and Senior Portfolio Manager of Prudential Global Asset Management. He joined Prudential in May 2000 from
Loomis Sayles and Company, L.P., where he headed the Large/Mid-Cap Value Team. Prior to 1996, Mr. Kolefas was
employed by Mackay Shields Financial as a portfolio manager for five years. Mr. Kolefas earned a B.S. from the
Cooper Union School of Engineering and an M.B.A. from New York University and holds the Chartered Financial
Analyst (C.F.A.) designation. Mr. Goldberg is an Executive Vice President of Jennison, and also serves as Chairman of
the Asset Allocation Committee. He joined Jennison in 1974. Prior to joining Jennison, he served as Vice President and
Group Head in the Investment Research Division of Bankers Trust Company. He earned a B.S. from the University of
Illinois and an M.B.A from the New York University. Mr. Goldberg holds the Chartered Financial Analyst (C.F.A.)
designation.

James Giblin, a Chartered Financial Analyst, manages the portion of the Portfolio assigned to DAMI. Mr. Giblin joined
DAMI in 1995 with 22 years of investment experience, including 15 years as a portfolio manager for Cigna Equity
Advisors. He received his B.S. from Pennsylvania State University and an M.B.A. from the Wharton School, University
of Pennsylvania.

Neil A. Kilbane manages the portion of the Portfolio assigned to Victory. Mr. Kilbane is a Senior Portfolio and Managing
Director for Victory, and is a Chartered Financial Analyst. Mr. Kilbane began his investment career with Victory in 1995,
and prior to that was employed by Duff & Phelps Investment Management Company and National City Bank. Mr.
Kilbane holds a B.S. from Cleveland State University, an M.S. from Kansas State University, and an M.B.A. from Tulsa
University.


SP AIM Aggressive Growth Portfolio

A I M Capital Management, Inc. (A I M Capital) uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management of the Portfolio are Ryan E. Crane,
Portfolio Manager, who has been responsible for the Portfolio since 2000 and has been associated with A I M Capital
and/or its affiliates since 1994, Jay K. Rushin, CFA, Portfolio Manager, who has been responsible for the Portfolio since
2001 and has been associated with A I M Capital and/or its affiliates since 1994, and Robert M. Kippes, Senior Portfolio
Manager, who has been associated with A I M Capital and/or its affiliates since 1989.


SP AIM Core Equity Portfolio

A I M Capital Management, Inc. (A I M Capital) uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management of the Portfolio are:

Ronald Sloan, Senior Portfolio Manager, joined AIM Capital in 1998 from Verissimo Research and Management, where
he served as president since 1993. Prior to Verissimo Research and Management, he was partner and executive vice
president at Wood Island Associates, Inc./Siebel Capital Management, Inc. from 1981 to 1993. Mr. Sloan has been in

                                                            90
the investment industry since 1971. Mr. Sloan holds a B.S. in business administration as well as an M.B.A. from the
University of Missouri. He is a Chartered Financial Analyst.

Michael Yellen, Portfolio Manager, joined AIM Capital in 1994 from INVESCO (NY), Inc., formerly known as Chancellor
LGT Asset Management, Inc., as an investment analyst for health care industries. He also had primary responsibility
for the GT Applied Science Fund and the GT Healthcare Fund, both offshore funds, until assuming his present
responsibilities with AIM Capital. Mr. Yellen began his career at Franklin Resources, Inc. as a senior securities analyst.
Mr. Yellen holds a B.A. from Stanford University.


SP Alliance Large Cap Growth Portfolio

Alfred Harrison, Director and Vice Chairman of Alliance Capital Management Corporation (ACMC) leads the team
managing this Portfolio, with Syed Hasnain, a Senior Portfolio Manager, also being directly involved.

Mr. Hasnain joined ACMC after working as a strategist with Merrill Lynch Capital Markets. Previously he was an
international economist with Citicorp and a financial analyst at Goldman Sachs & Co. He holds a M. Phil in Finance
from Cambridge University, and Sc.B. from Brown University, and studied towards a doctorate at Stanford Business
School. Investment experience: 12 years.


SP Alliance Technology Portfolio

Gerald T. Malone manages the SP Alliance Technology Portfolio. Mr. Malone is a Senior Vice President of Alliance
Capital Management Corporation (ACMC) and has been associated with ACMC for more than five years.


SP Asset Allocation Portfolios

For the four Asset Allocation Portfolios, PI invests in shares of other Fund Portfolios according to the percentage
allocations discussed in this prospectus.


SP Davis Value Portfolio

The following individuals provide day-to-day management of the SP Davis Value Portfolio.


Christopher C. Davis

Responsibilities:
    ‰    President of Davis New York Venture Fund, Inc.
    ‰    Also manages or co-manages other equity funds advised by Davis Selected Advisers.

Other Experience:
    ‰    Portfolio Manager of Davis New York Venture Fund since October 1995.
    ‰    Assistant Portfolio Manager and research analyst working with Shelby M.C. Davis from September 1989 to
         September 1995.


Kenneth Charles Feinberg

Responsibilities:
    ‰    Co-Portfolio Manager of Davis New York Venture Fund with Christopher C. Davis since May 1998.
    ‰    Also co-manages other equity funds advised by Davis Selected Advisers.




                                                            91
Other Experience:
    ‰    Research analyst at Davis Selected Advisers since December 1994.
    ‰    Assistant Vice President of Investor Relations for Continental Corp. from 1988 to 1994.


SP Deutsche International Equity Portfolio

The following portfolio managers are responsible for the day-to-day management of the Portfolio’s investments:


Irene Cheng, Manager Director
    ‰    Head of EAFE Portfolio Selection Team
    ‰    Joined firm in 1993 after 10 years of experience as portfolio manager at Blackstone Group and an equity
         analyst at Sanford C. Bernstein & Co., Inc.
    ‰    BA from Harvard / Radcliffe (1976), MS from MIT (1978) and MBA from Harvard Business School (1980)


Alex Tedder, Director
    ‰    Portfolio Manager, EAFE Portfolio Selection Team; Head of International Select Equity strategy
    ‰    Joined the Company in 1994, previously managing European equities and responsible for insurance sector
         with 4 years of experience at Schroder Investment Management
    ‰    MA from Freiburg University


Marc Slendebroek, Vice President
    ‰    Portfolio Manager, EAFE Portfolio Selection Team
    ‰    Joined the Company in 1994 after 5 years of experience as an equity analyst at Kleinwort Benson Securities
         and at Enskilda Securities
    ‰    MA from University of Leiden, Netherlands


Clare Brody, CFA, Director
    ‰    Portfolio Manager, EAFE Portfolio Selection Team
    ‰    Joined the Company in 1993 after 3 years of experience in international investments and corporate finance
         with Citicorp Securities
    ‰    BSc from Cornell University


Stuart Kirk, Associate Director
    ‰    Portfolio Manager, EAFE Portfolio Selection Team
    ‰    Joined the Company in 1995 as analyst and fund manager
    ‰    MA from Cambridge University




                                                          92
SP INVESCO Small Company Growth Portfolio

The following individual is primarily responsible for the day-to-day management of the Portfolio’s holdings:

Stacie Cowell is the lead portfolio manager of the SP INVESCO Small Company Growth Portfolio and a Chartered
Financial Analyst (CFA) who joined INVESCO in 1997. She is also a vice president of INVESCO. Before joining the
company, she was senior equity analyst with Founders Asset Management and capital markets and trading analyst
with Chase Manhattan Bank in New York. She holds a B.A. in Economics from Colgate University and an M.S from the
University of Colorado (Boulder).


SP Jennison International Growth Portfolio

The Portfolio is co-managed by Blair Boyer and Daniel Duane. Mr. Boyer, Executive Vice President of Jennison, has
been in the investment business for over 18 years. Prior to joining Jennison in March 1993, he managed international
equity portfolios at Arnhold and S. Bleichroeder, Inc. Previously, he was a research analyst and senior portfolio
manager at Verus Capital. He earned a B.A. from Bucknell University in 1983 and an M.B.A. from New York University
in 1988. Mr. Duane has been an Executive Vice President of Jennison since October 2000 and was previously a
Managing Director of Prudential Global Asset Management. Prior to joining Prudential, he was in charge of all global
equity investments at First Investors Asset Management, managed a portion of TIAA-CREF’s global portfolio and was a
research analyst at Value Line. He earned a dual A.B. from Boston College, a Ph.D. from Yale University and an
M.B.A. from New York University. Mr. Duane also was Fulbright Scholar at the University of Tubingen in Germany. He
holds a Chartered Financial Analyst (C.F.A.) designation.


SP Large Cap Value Portfolio And SP Small/Mid-Cap Value Portfolio

Fidelity Management & Research Company (FMR) is the Portfolios’ sub-adviser. Robert Macdonald is portfolio
manager of the SP Large Cap Value Portfolio and the SP Small/Mid-Cap Value Portfolio. Mr. Macdonald is a senior
vice president and portfolio manager for other accounts managed by FMR and its affiliates. He joined FMR in 1985.


SP MFS Capital Opportunities Portfolio

The Portfolio is managed by Maura A. Shaughnessy, a Senior Vice President of Massachusetts Financial Services
Company (MFS), who has been employed in the investment management area of MFS since 1991.


SP MFS Mid-Cap Growth Portfolio

The Portfolio is managed by Mark Regan, a Senior Vice President of MFS, who has been employed in the investment
management area of MFS since 1989 and David E. Sette-Ducati, a Vice President of MFS, has been employed in the
investment management area of MFS since 1995.




                                                           93
MFS and its predecessor organizations have a history of money management dating from 1924. MFS is an indirect
wholly-owned subsidiary of Sun Life Assurance Company of Canada.


SP PIMCO High Yield Portfolio

The Portfolio is managed by Benjamin L. Trosky. Mr. Trosky, Managing Director of PIMCO, joined PIMCO as a portfolio
manager in 1990, and has managed fixed income accounts for various institutional clients and funds since that time.


SP PIMCO Total Return Portfolio

The Portfolio is managed by a portfolio management team led by William H. Gross, Managing Director, Chief
Investment Officer and a founding partner of PIMCO. The portfolio management team develops and implements
strategy for the Portfolio.


SP Prudential U.S. Emerging Growth Portfolio

Susan Hirsch, Executive Vice President of Jennison, has managed the retail fund counterpart of this Portfolio since it
began. Prior to joining Jennison, Ms. Hirsch was a Managing Director of Prudential Investments, which she joined in
July 1996. Before that she was employed by Lehman Brothers Global Asset Management from 1986 to 1996 and
Delphi Asset Management in 1996. She managed growth stock portfolios at both firms. Ms. Hirsch holds a B.S. from
Brooklyn College and is a member of the Financial Analysts Federation and the New York Society of Security Analysts.


SP Strategic Partners Focused Growth Portfolio

Alfred Harrison is portfolio manager for the portion of the Portfolio’s assets advised by Alliance. Mr. Harrison joined
Alliance in 1978 and is manager of the firm’s Minneapolis office. He is Vice Chairman of Alliance Capital Management
Corporation.

Spiros Segalas and Kathleen McCarragher are co-portfolio managers for the portion of the Portfolio’s assets advised by
Jennison. Mr. Segalas is a Director, founding member and President and Chief Investment Officer of Jennison. He has
been in the investment business for over 41 years. Ms. McCarragher, Director and Executive Vice President of
Jennison, is also Jennison’s Domestic Equity Investment Strategist. Prior to joining Jennison in 1998, she was a
Managing Director and Director of Large Cap Growth Equities at Weiss, Peck & Greer LLC. Prior to 1992, Ms.
McCarragher served as an analyst portfolio manager and member of the Investment Committee for State Street
Research and Management Company.


HOW TO BUY AND SELL SHARES OF THE FUND

The Fund offers two classes of shares in each Portfolio — Class I and Class II. Each Class participates in the same
investments within a given Portfolio, but the Classes differ as far as their charges. Class I shares are sold only to
separate accounts of Prudential Insurance Company of America and its affiliates as investment options under certain
Contracts. Class II is offered only to separate accounts of non-Prudential insurance companies as investment options
under certain of their Contracts. Please refer to the accompanying Contract prospectus to see which Portfolios are
available through your Contract.

The Fund sells its shares to separate accounts issuing variable annuity contracts and variable life insurance policies.
To the extent dictated by its agreement with a separate account, the Fund will cooperate with the separate account in
monitoring for transactions that are indicative of market timing. In addition, to the extent permitted by applicable laws and
agreements, the Fund may cease selling its shares to a separate account to prevent market timing transactions.

The way to invest in the Portfolios is through certain variable life insurance and variable annuity contracts. Together
with this prospectus, you should have received a prospectus for such a Contract. You should refer to that prospectus
for further information on investing in the Portfolios.

                                                             94
Both Class I and Class II shares of a Portfolio are sold without any sales charge at the net asset value of the Portfolio.
Class II shares, however, are subject to an annual distribution or “12b-1” fee of 0.25% and an administration fee of
0.15% of the average daily net assets of Class II. Class I shares do not have a distribution or administration fee.

Shares are redeemed for cash within seven days of receipt of a proper notice of redemption or sooner if required by
law. There is no redemption charge. We may suspend the right to redeem shares or receive payment when the New
York Stock Exchange is closed (other than weekends or holidays), when trading on the New York Stock Exchange is
restricted, or as permitted by the SEC.

Net Asset Value

Any purchase or sale of Portfolio shares is made at the net asset value, or NAV, of such shares. The price at which a
purchase or redemption is made is based on the next calculation of the NAV after the order is received in good order.
The NAV of each share class of each Portfolio is determined on each day the New York Stock Exchange is open for
trading as of the close of the exchange’s regular trading session (which is generally 4:00 p.m. New York time). The
NYSE is closed on most national holidays and Good Friday. The Fund does not price, and shareholders will not be able
to purchase or redeem, the Fund’s shares on days when the NYSE is closed but the primary markets for the Fund’s
foreign securities are open, even though the value of these securities may have changed. Conversely, the Fund will
ordinarily price its shares, and shareholders may purchase and redeem shares, on days that the NYSE is open but
foreign securities markets are closed.

The NAV for each of the Portfolios other than the Money Market Portfolio is determined by a simple calculation. It’s the
total value of a Portfolio (assets minus liabilities) divided by the total number of shares outstanding. The NAV for the
Money Market Portfolio will ordinarily remain at $10 per share. (The price of each share remains the same but you will
have more shares when dividends are declared.)

To determine a Portfolio’s NAV, its holdings are valued as follows:

Equity Securities are generally valued at the last sale price on an exchange or NASDAQ, or if there is not a sale on
that day, at the mean between the most recent bid and asked prices on that day. If there is no asked price, the security
will be valued at the bid price. Equity securities that are not sold on an exchange or NASDAQ are generally valued by
an independent pricing agent or principal market maker.

A Portfolio may own securities that are primarily listed on foreign exchanges that trade on weekends or other days
when the Portfolios do not price their shares. Therefore, the value of a Portfolio’s assets may change on days when
shareholders cannot purchase or redeem Portfolio shares.

All Short-term Debt Securities held by the Money Market Portfolio are valued at amortized cost. Short-term debt
securities with remaining maturities of 12 months or less held by the Conservative Balanced and Flexible Managed
Portfolios are valued on an amortized cost basis. The amortized cost valuation method is widely used by mutual funds.
It means that the security is valued initially at its purchase price and then decreases in value by equal amounts each
day until the security matures. It almost always results in a value that is extremely close to the actual market value. The
Fund’s Board of Directors has established procedures to monitor whether any material deviation between valuation and
market value occurs and if so, will promptly consider what action, if any, should be taken to prevent unfair results to
Contract owners.

For each Portfolio other than the Money Market Portfolio, and except as discussed above for the Conservative
Balanced and Flexible Managed Portfolios, short-term debt securities, including bonds, notes, debentures and other
debt securities, and money market instruments such as certificates of deposit, commercial paper, bankers’
acceptances and obligations of domestic and foreign banks, with remaining maturities of more than 60 days, for which
market quotations are readily available, are valued by an independent pricing agent or principal market maker (if
available, otherwise a primary market dealer).

Short-term Debt Securities with remaining maturities of 60 days or less are valued at cost with interest accrued or
discount amortized to the date of maturity, unless such valuation, in the judgment of PI or a sub-adviser, does not
represent fair value.

                                                            95
Convertible debt securities that are traded in the over-the-counter market, including listed convertible debt securities
for which the primary market is believed by PI or a sub-adviser to be over-the-counter, are valued at the mean between
the last bid and asked prices provided by a principal market maker (if available, otherwise a primary market dealer).

Other debt securities — those that are not valued on an amortized cost basis — are valued using an independent
pricing service.

Options on stock and stock indexes that are traded on a national securities exchange are valued at the last sale
price on such exchange on the day of valuation or, if there was no such sale on such day, at the mean between the
most recently quoted bid and asked prices on such exchange.

Futures contracts and options on futures contracts are valued at the last sale price at the close of the commodities
exchange or board of trade on which they are traded. If there has been no sale that day, the securities will be valued at
the mean between the most recently quoted bid and asked prices on that exchange or board of trade.

Forward currency exchange contracts are valued at the cost of covering or offsetting such contracts calculated on
the day of valuation. Securities which are valued in accordance herewith in a currency other than U.S. dollars shall be
converted to U.S. dollar equivalents at a rate obtained from a recognized bank, dealer or independent service on the
day of valuation.

Over-the-counter (OTC) options are valued at the mean between bid and asked prices provided by a dealer (which
may be the counterparty). A sub-adviser will monitor the market prices of the securities underlying the OTC options
with a view to determining the necessity of obtaining additional bid and ask quotations from other dealers to assess the
validity of the prices received from the primary pricing dealer.

Securities for which no market quotations are available will be valued at fair value by PI under the direction of the
Fund’s Board of Directors. The Fund also may use fair value pricing if it determines that a market quotation is not
reliable based among other things, on events that occur after the quotation is derived or after the close of the primary
market on which the security is traded, but before the time that the Fund’s NAV is determined. This use of fair value
pricing most commonly occurs with securities that are primarily traded outside the U.S., but also may occur with U.S.-
traded securities. The fair value of a portfolio security that the Fund uses to determine its NAV may differ from the
security’s quoted or published price. For purposes of computing the Fund’s NAV, we will value the Fund’s futures
contracts 15 minutes after the close of regular trading on the New York Stock Exchange (NYSE). Except when we fair
value securities, we normally value each foreign security held by the Fund as of the close of the security’s primary
market.

Distributor

Prudential Investment Management Services LLC (PIMS) distributes the Fund’s shares under a Distribution Agreement
with the Fund. PIMS’ principal business address is Gateway Center Three, 100 Mulberry Street, Newark, New Jersey
07102-3777. The Fund has adopted a distribution plan under Rule 12b-1 of the Investment Company Act of 1940
covering Class II shares. Under that plan, Class II of each Portfolio pays to PIMS a distribution or “12b-1” fee at the
annual rate of 0.25% of the average daily net assets of Class II. This fee pays for distribution services for Class II
shares. Because these fees are paid out of the Portfolio’s assets on an on-going basis, over time these fees will
increase the cost of your investment in Class II shares and may cost you more than paying other types of sales
charges. These 12b-1 fees do not apply to Class I.

OTHER INFORMATION

Federal Income Taxes

If you own or are considering purchasing a variable contract, you should consult the prospectus for the variable
contract for tax information about that variable contract. You should also consult with a qualified tax adviser for
information and advice.

The SAI provides information about certain tax laws applicable to the Fund.

                                                            96
Monitoring For Possible Conflicts

The Fund sells its shares to fund variable life insurance contracts and variable annuity contracts and is authorized to
offer its shares to qualified retirement plans. Because of differences in tax treatment and other considerations, it is
possible that the interest of variable life insurance contract owners, variable annuity contract owners and participants in
qualified retirement plans could conflict. The Fund will monitor the situation and in the event that a material conflict did
develop, the Fund would determine what action, if any, to take in response.


Financial Highlights

The financial highlights which follow will help you evaluate the financial performance of each Portfolio available under
your Contract. The total return in each chart represents the rate that a shareholder earned on an investment in that
share class of the Portfolio, assuming reinvestment of all dividends and other distributions. The charts do not reflect
any charges under any variable contract. The information is for Class I shares for the periods indicated, unless
otherwise indicated.

The information has been audited by PricewaterhouseCoopers LLP, whose unqualified report, along with the
financial statements, appears in the annual report, which is available upon request.




                                                             97
Financial Highlights
                                                                                                                                                         Conservative Balanced Portfolio
                                                                                                                                                                  Year Ended
                                                                                                                                                                 December 31,
                                                                                                                                              2001         2000       1999      1998             1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 14.63      $ 15.36      $ 15.08      $ 14.97     $ 15.52
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.44         0.59        0.62         0.66        0.76
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . .                                     (0.75)       (0.65)       0.37         1.05        1.26
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (0.31)       (0.06)       0.99         1.71        2.02
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (0.48)       (0.56)       (0.62)       (0.66)      (0.76)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (0.15)       (0.11)       (0.06)       (0.94)      (1.81)
Distributions in excess of net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            —            —         (0.03)          —           —
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (0.63)       (0.67)       (0.71)       (1.60)      (2.57)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             $ 13.69      $ 14.63      $ 15.36      $ 15.08     $ 14.97
Total Investment Return:(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (2.02)%      (0.48)%      6.69%       11.74%      13.45%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                $3,259.7     $3,714.3     $4,387.1     $4,796.0    $4,744.2
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      0.58%         0.60%       0.57%        0.57%       0.56%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               3.05%         3.79%       4.02%        4.19%       4.48%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         239%            85%       109%         167%        295%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions.


                                                                                                                                                           Diversified Bond Portfolio
                                                                                                                                                                  Year Ended
                                                                                                                                                                 December 31,
                                                                                                                                              2001         2000       1999      1998             1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 11.28      $ 10.95      $ 11.06      $ 11.02      $11.07
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             0.67          0.77         0.67        0.69        0.80
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . .                                     0.12          0.26        (0.75)       0.08        0.11
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     0.79          1.03        (0.08)       0.77        0.91
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (0.71)       (0.70)          —         (0.69)      (0.83)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      —            —(b)      (0.03)       (0.04)      (0.13)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (0.71)       (0.70)       (0.03)       (0.73)      (0.96)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             $ 11.36      $ 11.28      $ 10.95      $ 11.06      $11.02
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  6.98%         9.72%       (0.74)%      7.15%       8.57%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                $1,400.7     $1,269.8     $1,253.8     $1,122.6     $816.7
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      0.44%         0.45%       0.43%        0.42%       0.43%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               6.35%         6.83%       6.25%        6.40%       7.18%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         257%          139%        171%         199%        224%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported includes
    reinvestment of dividends and distributions.

(b) Less than $0.005 per share.




                                                                                                                 F1
Financial Highlights
                                                                                                                                    Equity Portfolio
                                                                                                                    Class I                                                      Class II
                                                                                                                                                                                        May 3, 1999(c)
                                                                                                            Year Ended                                           Year Ended               through
                                                                                                           December 31,                                         December 31,            December 31,
                                                                                    2001              2000     1999     1998                  1997              2001    2000                1999
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . .                       $ 24.50           $ 28.90          $ 29.64     $ 31.07      $ 26.96        $24.51         $28.92           $32.79
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . .                     0.18              0.51          0.54       0.60          0.69            0.09           0.39            0.28
Net realized and unrealized gains (losses) on
  investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (2.83)             0.26          3.02       2.21          5.88            (2.83)         0.26            (0.60)
      Total from investment operations . . . . . . . . . . .                           (2.65)             0.77          3.56       2.81          6.57            (2.74)         0.65            (0.32)
Less Distributions:
Dividends from net investment income . . . . . . . . . .                               (0.18)           (0.51)         (0.53)      (0.60)       (0.70)           (0.10)        (0.40)           (0.34)
Distributions in excess of net investment
  income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              —             (0.02)            —           —            —                —          (0.02)              —
Distributions from net realized gains . . . . . . . . . . . .                          (1.18)           (4.64)         (3.77)      (3.64)       (1.76)           (1.18)        (4.64)           (3.21)
      Total distributions . . . . . . . . . . . . . . . . . . . . . . .                (1.36)           (5.17)         (4.30)      (4.24)       (2.46)           (1.28)        (5.06)           (3.55)
Net Asset Value, end of period . . . . . . . . . . . . . . . .                   $ 20.49           $ 24.50          $ 28.90     $ 29.64      $ 31.07        $20.49         $24.51           $28.92
Total Investment Return(a) . . . . . . . . . . . . . . . . . .                       (11.18)%             3.28%       12.49%       9.34%       24.66%           (11.57)%        2.83%           (0.68)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . .                    $4,615.9          $5,652.7         $6,235.0    $6,247.0     $6,024.0       $      1.1     $     1.8        $     0.3
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.49%             0.49%         0.47%       0.47%        0.46%           0.89%          0.91%           0.87%(b)
  Net investment income . . . . . . . . . . . . . . . . . . . . .                       0.84%             1.75%         1.72%       1.81%        2.27%           0.45%          1.26%           1.33%(b)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . .                 153%                78%            9%         25%          13%           153%             78%              9%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for less than a full year are not annualized.

(b) Annualized.

(c) Commencement of offering of Class II shares.



                                                                                                                                     Flexible Managed Portfolio
                                                                                                                                             Year Ended
                                                                                                                                            December 31,
                                                                                                                 2001             2000          1999           1998                             1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 16.53           $ 17.64          $ 16.56                $ 17.28            $ 17.79
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                0.42            0.61                0.58                  0.58               0.59
Net realized and unrealized gains (losses) on investments . . . . . . . . . .                                       (1.35)          (0.86)               0.69                  1.14               2.52
      Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (0.93)          (0.25)               1.27                  1.72               3.11
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (0.58)          (0.62)                 —                   (0.59)            (0.58)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (0.23)          (0.24)              (0.19)                 (1.85)            (3.04)
      Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (0.81)          (0.86)              (0.19)                 (2.44)            (3.62)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             $ 14.79           $ 16.53          $ 17.64                $ 16.56            $ 17.28
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    (5.68)%         (1.44)%              7.78%             10.24%               17.96%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                $3,896.6          $4,463.8         $5,125.3               $5,410.0           $5,490.1
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         0.64%           0.64%               0.62%                 0.61%              0.62%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  2.61%           3.22%               3.20%                 3.21%              3.02%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            236%            132%                  76%                 138%               227%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions.




                                                                                                               F2
Financial Highlights
                                                                                                                                                 Global Portfolio
                                                                                                                                                   Year Ended
                                                                                                                                                  December 31,
                                                                                                                  2001                2000              1999        1998         1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 23.61             $ 30.98           $ 21.16      $17.92       $17.85
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                0.09              0.07             0.06        0.07         0.09
Net realized and unrealized gains (losses) on investments . . . . . . . . . . .                                       (3.58)            (5.30)           10.04        4.38         1.11
      Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (3.49)            (5.23)           10.10        4.45         1.20
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (0.06)            (0.07)               —       (0.16)       (0.13)
Distributions in excess of net investment income . . . . . . . . . . . . . . . . . . .                                   —              (0.13)            (0.10)     (0.12)       (0.10)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (4.77)            (1.94)            (0.18)     (0.93)       (0.90)
      Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (4.83)            (2.14)            (0.28)     (1.21)       (1.13)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             $ 15.29             $ 23.61           $ 30.98      $21.16       $17.92
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                (17.64)%             (17.68)%          48.27%      25.08%        6.98%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                $ 885.0             $1,182.1          $1,298.3     $844.5       $638.4
Ratios to average net assets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        0.84%             0.85%             0.84%       0.86%        0.85%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0.58%             0.25%             0.21%       0.29%        0.47%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             67%               95%               76%         73%          70%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions.


                                                                                                                                            High Yield Bond Portfolio
                                                                                                                                                  Year Ended
                                                                                                                                                 December 31,
                                                                                                                          2001            2000          1999          1998       1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         $ 6.14          $ 7.52           $ 7.21     $ 8.14      $ 7.87
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     0.58              0.74          0.79        0.77       0.78
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . .                                          (0.62)            (1.30)        (0.46)      (0.94)      0.26
      Total from Investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                           (0.04)            (0.56)         0.33       (0.17)      1.04
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               (0.70)            (0.82)        (0.02)      (0.76)     (0.77)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 5.40          $ 6.14           $ 7.52     $ 7.21      $ 8.14
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (0.44)%           (7.91)%        4.61%      (2.36)%    13.78%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $655.8          $661.3           $802.2     $789.3      $568.7
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.60%           0.60%           0.60%      0.58%       0.57%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      10.93%          10.47%          10.48%     10.31%       9.78%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   84%             76%             58%        63%       106%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions.




                                                                                                                 F3
Financial Highlights
                                                                                                        Jennison Portfolio (formerly, Prudential Jennison Portfolio)
                                                                                                              Class I                                       Class II
                                                                                                           Year Ended                          Year Ended    February 10, 2000(a)
                                                                                                        December 31, 2001                    December 31,            through
                                                                                    2001              2000      1999       1998       1997         2001       December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . .                       $ 22.97           $ 32.39           $ 23.91     $ 17.73     $14.32        $22.88                $34.25
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . .                        0.04                 0.01        0.05       0.04        0.04          0.01                (0.03)
Net realized and unrealized gains (losses) on
  investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (4.22)            (5.61)          9.88       6.56        4.48         (4.25)               (7.54)
      Total from investment operations . . . . . . . . . . .                           (4.18)            (5.60)          9.93       6.60        4.52         (4.24)               (7.57)
Less Distributions:
Dividends from net investment income . . . . . . . . . .                               (0.03)               —(d)        (0.05)      (0.04)     (0.04)           —(d)                 —(d)
Distributions from net realized gains . . . . . . . . . . . .                          (0.19)            (3.82)         (1.40)      (0.38)     (1.07)        (0.19)               (3.80)
      Total distributions . . . . . . . . . . . . . . . . . . . . . . . .              (0.22)            (3.82)         (1.45)      (0.42)     (1.11)        (0.19)               (3.80)
Net Asset Value, end of period . . . . . . . . . . . . . . . . .                 $ 18.57           $ 22.97           $ 32.39     $ 23.91     $17.73        $18.45                $22.88
Total Investment Return(b) . . . . . . . . . . . . . . . . . .                       (18.25)%          (17.38)%         41.76%     37.46% 31.71%            (18.60)%             (22.19)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . .                    $2,186.9          $2,892.7          $2,770.7    $1,198.7    $495.9        $ 59.6                $ 13.3
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.64%                0.64%       0.63%       0.63%      0.64%         1.04%                1.04%(c)
  Net investment income (loss) . . . . . . . . . . . . . . . .                          0.18%                0.02%       0.17%       0.20%      0.25%        (0.19)%              (0.39)%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . .                   86%                  89%         58%         54%        60%           86%                  89%(e)

(a) Commencement of offering of Class II shares.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for less than a full year are not annualized.

(c) Annualized.

(d) Less than $0.01 per share.

(e) Not annualized.


                                                                                                                                         Money Market Portfolio
                                                                                                                                             Year Ended
                                                                                                                                            December 31,
                                                                                                                     2001             2000         1999                1998          1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 10.00         $ 10.00             $ 10.00        $10.00        $10.00
Income From Investment Operations:
Net investment income and realized and unrealized gains . . . . . . . . . .                                             0.41            0.60                0.49         0.52          0.54
Dividend and distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (0.41)          (0.60)              (0.49)       (0.52)        (0.54)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 10.00         $ 10.00             $ 10.00        $10.00        $10.00
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         4.22%            6.20%              4.97%         5.39%            5.41%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       $1,501.9        $1,238.2            $1,335.5       $920.2        $657.5
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             0.43%            0.44%              0.42%         0.41%            0.43%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      3.86%            6.03%              4.90%         5.20%            5.28%

(a) Total investment return is calculated assuming a purchase on the first day and a sale on the last day of each year reported and includes
    reinvestment of dividends and distributions.




                                                                                                               F4
Financial Highlights
                                                                                                                                                     Stock Index Portfolio
                                                                                                                                                         Year Ended
                                                                                                                                                        December 31,
                                                                                                                                    2001          2000       1999        1998                 1997
Per Share Operating Performance:
Net Asset Value, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 38.66      $ 44.45      $ 37.74        $ 30.22       $ 23.74
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0.36         0.36         0.44            0.42           0.43
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . .                                     (5.05)       (4.37)        7.23            8.11           7.34
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (4.69)       (4.01)        7.67            8.53           7.77
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (0.35)       (0.37)        (0.43)          (0.42)         (0.42)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   (1.98)       (1.41)        (0.53)          (0.59)         (0.87)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (2.33)       (1.78)        (0.96)          (1.01)         (1.29)
Net Asset Value, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             $ 31.64      $ 38.66      $ 44.45        $ 37.74       $ 30.22
Total Investment Return(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 (12.05)%      (9.03)%      20.54%         28.42%          32.83%
Ratios/Supplemental Data:
Net assets, end of year (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                $3,394.1     $4,186.0     $4,655.0       $3,548.1      $2,448.2
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      0.39%         0.39%        0.39%           0.37%          0.37%
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               1.02%         0.83%        1.09%           1.25%          1.55%
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            3%            7%           2%              3%             5%

(a) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions.


                                                                                                                                                    Value Portfolio
                                                                                                                                                Class I                                   Class II
                                                                                                                                                                                     May 14, 2001(a)
                                                                                                                                           Year Ended                                   through
                                                                                                                                          December 31,                               December 31,
                                                                                                                      2001           2000     1999     1998               1997            2001
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 20.46         $ 19.52      $ 20.03     $ 22.39      $ 18.51          $19.79
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   0.25         0.46        0.51         0.56        0.61               0.12
Net realized and unrealized gains (losses) on investments . . . . . . . . . . .                                          (0.69)        2.45        1.89        (1.03)       6.06              (1.01)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (0.44)        2.91        2.40        (0.47)       6.67              (0.89)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             (0.30)       (0.44)       (0.50)      (0.59)       (0.57)            (0.14)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (1.81)       (1.53)       (2.41)      (1.30)       (2.22)            (0.85)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             (2.11)       (1.97)       (2.91)      (1.89)       (2.79)            (0.99)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $ 17.91         $ 20.46      $ 19.52     $ 20.03      $ 22.39          $17.91
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (2.08)%      15.59%       2.52%       (2.38)%     36.61%             (4.34)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $1,801.4        $1,975.3     $2,024.0    $2,142.3     $2,029.8         $     1.1
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            0.44%        0.45%       0.42%       0.42%        0.41%             0.84%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     1.32%        2.31%       2.34%       2.54%        2.90%             0.94%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               175%           85%         16%         20%          38%             175%

(a) Commencement of offering of Class II shares.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.




                                                                                                                 F5
Financial Highlights
                                                                                                                                                  SP Aggressive Growth Asset Allocation Portfolio
                                                                                                                                                                           September 22, 2000(a)
                                                                                                                                                    Year Ended                     through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 9.33                         $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       0.02                          0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        (1.69)                        (0.67)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (1.67)                        (0.66)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 (0.02)                        (0.01)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.06)                           —
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               (0.08)                        (0.01)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 7.58                         $ 9.33
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (17.92)%                       (6.65)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       $      7.5                     $     2.1
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               0.05%                          0.05%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        0.39%                          0.36%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    62%                             6%(d)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported includes
    reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Not annualized.


                                                                                                                                                          SP AIM Aggressive Growth Portfolio
                                                                                                                                                                              September 22, 2000(a)
                                                                                                                                                    Year Ended                      through
                                                                                                                                                 December 31, 2001             December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 8.60                         $ 10.00
Income from Investment Operations:
Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  (0.04)                         (0.01)
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      (2.07)                         (1.39)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (2.11)                         (1.40)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 6.49                         $ 8.60
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (24.53)%                       (14.00)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $      5.7                     $      3.9
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              1.07%                          1.07%(c)
  Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  (0.73)%                        (0.40)%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   87%                            16%(e)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 3.45% and (3.11)%, respectively, for the year ended December 31, 2001 and 5.57% and (4.90)%, respectively, for the period ended
    December 31, 2000.

(e) Not annualized.




                                                                                                                 F6
Financial Highlights
                                                                                                                                                           SP AIM Core Equity Portfolio
                                                                                                                                                  (formerly, SP AIM Growth and Income Portfolio)
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                     through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 8.41                       $ 10.00
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (—)(f)                         0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   (1.90)                          (1.59)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (1.90)                          (1.58)
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               —                            (0.01)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 6.51                       $ 8.41
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (22.68)%                        (15.74)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 10.2                       $      4.3
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           1.00%                          1.00%(c)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (0.02)%                         0.26%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                65%                            15%(e)

(a) Commencement of operations.

(b) Total investment return calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 2.55% and (1.57)%, respectively, for the year ended December 31, 2001 and 5.53% and (4.27)%, respectively, for the period ended
    December 31, 2000.

(e) Not annualized.

(f)    Less than $0.005 per share.




                                                                                                                 F7
Financial Highlights
                                                                                                                                                      SP Alliance Large Cap Growth Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                    through
                                                                                                                                                 December 31, 2001            December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 8.55                       $ 10.00
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    (0.01)                           0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   (1.23)                          (1.45)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (1.24)                          (1.44)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               —                            (0.01)
Tax return of capital distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      —(f)                            —
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               —(f)                         (0.01)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 7.31                       $ 8.55
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (14.47)%                        (14.44)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 35.9                       $      7.1
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           1.10%                          1.10%(c)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (0.08)%                         0.44%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                47%                            10%(e)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 1.57% and (0.55)%, respectively, for the year ended December 31, 2001 and 4.26% and (2.72)%, respectively, for the period ended
    December 31, 2000.

(e) Not annualized.

(f)    Less than $0.005 per share.




                                                                                                                 F8
Financial Highlights
                                                                                                                                                         SP Alliance Technology Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                    through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 7.62                       $ 10.00
Income from Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.03)                        0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      (1.88)                       (2.38)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (1.91)                       (2.37)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 —                          (0.01)
Distributions in excess of net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       —                             —(b)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 —                          (0.01)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 5.71                       $ 7.62
Total Investment Return(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (25.07)%                     (23.71)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $      7.7                   $      6.1
Ratios to average net assets: (e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              1.30%                       1.30%(d)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (0.69)%                      0.37%(d)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   47%                         23%(f)
(a) Commencement of operations.
(b) Less than $0.005 per share.
(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(d) Annualized.
(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 3.16% and (2.53)%, respectively, for the year ended December 31, 2001 and 4.66% and (2.99)%, respectively, for the period ended
    December 31, 2000.
(f)    Not annualized.

                                                                                                                                                      SP Balanced Asset Allocation Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                     through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         $ 9.80                      $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.14                         0.06
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     (0.73)                       (0.20)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (0.59)                       (0.14)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              (0.14)                       (0.06)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (0.05)                          —
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              (0.19)                       (0.06)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 9.02                      $ 9.80
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (5.99)%                      (1.42)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $ 66.1                      $     3.7
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             0.05%                        0.05%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      3.26%                        4.89%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  35%                           4%(d)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Not annualized.




                                                                                                                 F9
Financial Highlights
                                                                                                                                                     SP Conservative Asset Allocation Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                      through
                                                                                                                                                 December 31, 2001            December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $10.00                       $10.00
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.21                          0.08
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         (0.24)                           —(c)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.03)                         0.08
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.16)                         (0.08)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.04)                            —(c)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (0.20)                         (0.08)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 9.77                       $10.00
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (0.23)%                        0.84%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 47.9                       $     1.9
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.05%                          0.05%(d)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   4.76%                          8.07%(d)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               29%                             4%(e)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Less than $0.005 per share.
(d) Annualized.
(e) Not annualized.

                                                                                                                                                             SP Davis Value Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                      through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 10.15                      $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.05                          0.02
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         (1.11)                         0.15
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (1.06)                         0.17
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.05)                         (0.02)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 9.04                       $10.15
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (10.46)%                        1.69%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 94.4                       $ 12.8
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           0.83%                         0.83%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.64%                         1.48%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                17%                            3%(e)
(a) Commencement of operations.
(b) Total investment is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and includes
    reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment income (loss) ratios
    would have been 1.03% and 0.43%, respectively, for the year ended December 31, 2001 and 3.16% and (0.85)%, respectively, for the period
    ended December 31, 2000.
(e) Not annualized.




                                                                                                                F10
Financial Highlights
                                                                                                                                                     SP Deutsche International Equity Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                    Year Ended                      through
                                                                                                                                                 December 31, 2001             December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 9.44                       $10.00
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.05                           0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   (2.09)                         (0.57)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (2.04)                         (0.56)
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.05)                           —
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 7.35                       $ 9.44
Total Investment Return(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (22.07)%                        (5.20)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 24.7                       $     7.8
Ratios to average net assets:(e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           1.10%                         1.10%(d)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    0.61%                         0.55%(d)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              155%                            51%(f)
(a) Commencement of operations.
(b) Less than $0.01 per share.
(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(d) Annualized.
(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 3.27% and (1.56)%, respectively, for the year ended December 31, 2001 and 4.21% and (2.56)%, respectively, for the period ended
    December 31, 2000.
(f)    Not annualized.

                                                                                                                                                       SP Growth Asset Allocation Portfolio
                                                                                                                                                                           September 22, 2000(a)
                                                                                                                                                    Year Ended                     through
                                                                                                                                                 December 31, 2001           December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 9.52                       $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.09                           0.03
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   (1.21)                         (0.49)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (1.12)                         (0.46)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.08)                         (0.02)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.05)                            —
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (0.13)                         (0.02)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 8.27                       $ 9.52
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     (11.77)%                        (4.56)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 46.8                       $     3.9
Ratios to average net assets:
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           0.05%                         0.05%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    1.71%                         2.95%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                43%                           39%(d)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized
(d) Not annualized.




                                                                                                                F11
Financial Highlights
                                                                                                                                                   SP INVESCO Small Company Growth Portfolio
                                                                                                                                                                         September 22, 2000(a)
                                                                                                                                                    Year Ended                 through
                                                                                                                                                 December 31, 2001        December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $ 8.38                     $ 10.00
Income From Investment Operations:
Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  (0.02)                        —(f)
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      (1.42)                     (1.62)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (1.44)                     (1.62)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $ 6.94                     $ 8.38
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (17.18)%                   (16.20)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $      8.4                 $      5.5
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              1.15%                      1.15%(c)
  Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  (0.28)%                    (0.10)%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   83%                        29%(e)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 2.84% and (1.97)%, respectively, for the year ended December 31, 2001 and 4.00% and (2.95)%, respectively, for the period ended
    December 31, 2000.

(e) Not annualized.

(f)    Less than $0.005 per share.




                                                                                                                F12
Financial Highlights

                                                                                       SP Jennison International Growth Portfolio
                                                                               Class I                                            Class II
                                                                                    September 22, 2000(a)                                  October 4, 2000(b)
                                                               Year Ended                   through                 Year Ended                 through
                                                           December 31, 2001(i)        December 31, 2000        December 31, 2001(i)      December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . .                       $ 8.50                     $ 10.00                    $ 8.48                   $ 9.79
Income from Investment Operations:
Net investment income (loss) . . . . . . . . .                      0.02                        0.01                       (—)(g)                     (—)(g)
Net realized and unrealized losses on
  investments . . . . . . . . . . . . . . . . . . . . .             (3.05)                      (1.51)                   (3.04)                     (1.31)
      Total from investment operations . .                          (3.03)                      (1.50)                   (3.04)                     (1.31)
Less Distributions:
Tax return of capital distributions . . . . . .                     (0.02)                        —                      (0.01)                       —
Net Asset Value, end of period . . . . . . . .                   $ 5.45                     $ 8.50                     $ 5.43                   $ 8.48
Total Investment Return(c) . . . . . . . . .                       (35.64)%                  (15.00)%                   (35.92)%                 (13.28)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . .                      $ 19.9                     $     7.6                  $ 14.9                   $     2.7
Ratios to average net assets:(e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . .            1.24%                       1.24%(d)                  1.64%                     1.64%(d)
  Net investment income (loss) . . . . . . .                        0.31%(h)                    0.51%(d)                 (0.03)%(h)                  (—)%(d)
Portfolio turnover rate . . . . . . . . . . . . . . .                 86%                         12%(f)                    86%                       12%(f)

(a) Commencement of offering of Class I shares.

(b) Commencement of offering of Class II shares.

(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(d) Annualized.

(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 1.86% and (0.30)%, respectively, for Class I and 2.26% and (0.66)%, respectively, for Class II for the year ended December 31, 2001 and
    3.44% and (1.69)%, respectively, for Class I and 3.84% and (2.20)%, respectively, for Class II for the period ended December 31, 2000.

(f)   Not annualized.

(g) Less than $0.005 per share.

(h) Includes custodian fee credits of 0.12% for Class I and 0.13% for Class II. If the Portfolio had not earned custodian fee credits, the annual net
    investment income (loss) ratios would have been 0.19% and (0.16)%, respectively, for Class I and Class II for the year ended December 31,
    2001.

(i)   Calculated based upon weighted average shares outstanding during the year.




                                                                                     F13
Financial Highlights
                                                                                                                                                              SP Large Cap Value Portfolio
                                                                                                                                                                             September 22, 2000(a)
                                                                                                                                                        Year Ended                  through
                                                                                                                                                     December 31, 2001         December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $10.44                    $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.09                       0.04
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       (0.99)                      0.44
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.90)                      0.48
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.10)                      (0.04)
Distributions in excess of net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   —                           —(e)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (0.10)                      (0.04)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $ 9.44                    $10.44
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      (8.65)%                     4.82%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 23.7                    $     3.9
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.90%                       0.90%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   1.18%                       1.60%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               61%                         13%(f)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment income (loss) ratios
    would have been 1.98% and 0.10%, respectively, for the year ended December 31, 2001 and 5.47% and (2.97)%, respectively, for the period
    ended December 31, 2000.

(e) Less than $0.005 per share.

(f)    Not annualized.




                                                                                                                F14
Financial Highlights
                                                                                                                                                         SP MFS Capital Opportunities Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                        Year Ended                  through
                                                                                                                                                     December 31, 2001        December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $ 9.15                      $10.00
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (—)(f)                    0.01
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      (2.13)                     (0.85)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (2.13)                     (0.84)
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               (0.01)                     (0.01)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $ 7.01                      $ 9.15
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (23.28)%                    (8.39)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $      8.2                  $     4.3
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             1.00%                      1.00%(c)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (—)%(g)                   0.40%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  99%                        25%(e)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 3.04% and (2.04)%, respectively, for the year ended December 31, 2001 and 5.48% and (4.08)%, respectively, for the period ended
    December 31, 2000.
(e) Not annualized.
(f)    Less than $0.005 per share.
(g) Less than 0.005%.
                                                                                                                                                              SP MFS Mid-Cap Growth Portfolio
                                                                                                                                                                               September 22, 2000(a)
                                                                                                                                                        Year Ended                   through
                                                                                                                                                     December 31, 2001          December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $ 9.69                      $10.00
Income from Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.01)                      0.02
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      (2.01)                     (0.25)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (2.02)                     (0.23)
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               (0.01)                     (0.02)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (0.04)                     (0.06)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             (0.05)                     (0.08)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $ 7.62                      $ 9.69
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        (20.93)%                    (2.26)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 15.9                      $     5.6
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              1.00%                     1.00%(c)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (0.20)%                    1.16%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   93%                       27%(e)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 2.11% and (1.31)%, respectively, for the year ended December 31, 2001 and 4.59% and (2.43)%, respectively, for the period ended
    December 31, 2000.
(e) Not annualized.




                                                                                                                F15
Financial Highlights

                                                                                                                                                             SP PIMCO High Yield Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                        Year Ended                 through
                                                                                                                                                     December 31, 2001        December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $10.02                    $10.00
Income from Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  0.59                       0.17
Net realized and unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       (0.21)                      0.02
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       0.38                        0.19
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.59)                      (0.16)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          —                        (0.01)
Distributions in excess of net realized capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  —                           —(d)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (0.59)                      (0.17)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $ 9.81                    $10.02
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      3.97%                       1.94%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 52.0                    $     8.0
Ratios to average net assets:(e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.82%                       0.82%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   7.44%                       7.78%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             105%                          88%(f)

(a) Commencement of operations.

(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(c) Annualized.

(d) Less than $0.005 per share.

(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment income ratios would
    have been 1.08% and 7.18%, respectively, for the year ended December 31, 2001 and 3.42% and 5.18%, respectively, for the period ended
    December 31, 2000.

(f)    Not annualized.




                                                                                                                F16
Financial Highlights
                                                                                                                                                            SP PIMCO Total Return Portfolio
                                                                                                                                                                            September 22, 2000(a)
                                                                                                                                                        Year Ended                 through
                                                                                                                                                     December 31, 2001        December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $10.40                    $10.00
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0.32                      0.13
Net realized and unrealized gains on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  0.57                      0.39
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       0.89                      0.52
Less Distributions:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.34)                   (0.11)
Distributions from net realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       (0.25)                   (0.01)
       Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          (0.59)                   (0.12)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  $10.70                    $10.40
Total Investment Return(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      8.66%                     5.18%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $147.0                    $ 10.7
Ratios to average net assets(d):
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          0.76%                     0.76%(c)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   3.69%                     5.94%(c)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             718%                      239%(e)
(a) Commencement of operations.
(b) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(c) Annualized.
(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment income ratios would
    have been 0.82% and 3.63%, respectively, for the year ended December 31, 2001 and 2.73% and 3.97%, respectively, for the period ended
    December 31, 2000.
(e) Not annualized.

                                                                                                                                    SP Prudential U.S. Emerging Growth Portfolio
                                                                                                                                            Class I                         Class II
                                                                                                                                               September 22, 2000(a)    July 9, 2001(b)
                                                                                                                              Year Ended               through              through
                                                                                                                           December 31, 2001     December 31, 2000    December 31, 2001
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              $ 8.38                         $ 10.00           $ 7.56
Income from Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              (0.01)                           0.01         (0.01)
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . . . . . . .                                             (1.48)                          (1.62)        (0.67)
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 (1.49)                          (1.61)        (0.68)
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                           —                          (0.01)           —
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          $ 6.89                         $ 8.38            $ 6.88
Total Investment Return(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (17.78)%                         (16.11)%       (8.99)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             $ 31.2                         $      6.4        $ 0.2
Ratios to average net assets:(d)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     0.90%                          0.90%(e)       1.30%(e)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                (0.37)%                         0.49%(e)      (0.87)%(e)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        258%                             82%(f)       258%(f)
(a) Commencement of operations.
(b) Commencement of offering of Class II shares.
(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.
(d) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 1.41% and (0.88)%, respectively, for Class I and 1.81% and (1.38)%, respectively, for Class II for the period ended December 31, 2001
    and 4.26% and (2.87)%, respectively, for Class I for the period ended December 31, 2000.
(e) Annualized.
(f)    Not annualized.




                                                                                                                F17
Financial Highlights

                                                                                                                                                                   SP Small/Mid Cap Value Portfolio
                                                                                                                                                                                  September 22, 2000(a)
                                                                                                                                                                  Year Ended             through
                                                                                                                                                               December 31, 2001   December 31, 2000
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        $11.13               $10.00
Income From Investment Operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 0.08                   0.03
Net realized and unrealized gains on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  0.26                   1.10
       Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       0.34                   1.13
Less Dividends:
Dividends from net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.11)                   —(b)
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    $11.36               $11.13
Total Investment Return(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      3.11%                  11.33%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 47.4               $    6.1
Ratios to average net assets:(e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          1.05%                  1.05%(d)
  Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   1.08%                  1.79%(d)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               89%                    18%(f)

(a) Commencement of operations.

(b) Less than $0.005 per share.

(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(d) Annualized.

(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment income (loss) ratios
    would have been 1.56% and 0.57%, respectively, for the year ended December 31, 2001 and 4.84% and (2.00)%, respectively, for the period
    ended December 31, 2000.

(f) Not annualized.




                                                                                                                 F18
Financial Highlights
                                                                                                                         SP Strategic Partners Focused Growth Portfolio
                                                                                                                                 Class I                           Class II
                                                                                                                                      September 22, 2000(a)  January 12, 2001(b)
                                                                                                                   Year Ended                through               through
                                                                                                               December 31, 2001(h)    December 31, 2000    December 31, 2001(h)
Per Share Operating Performance:
Net Asset Value, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         $ 7.94                 $ 10.00               $ 8.43
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          (0.01)                    —(g)               (0.03)
Net realized and unrealized losses on investments . . . . . . . . . . . . . . . .                                         (1.20)                 (2.06)                (1.70)
      Total from investment operations . . . . . . . . . . . . . . . . . . . . . . . . . . .                              (1.21)                 (2.06)                (1.73)
Less Distributions:
Dividends from net investment income(g) . . . . . . . . . . . . . . . . . . . . . . . .                                     —                      —                     —
Net Asset Value, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $ 6.73                 $ 7.94                $ 6.70
Total Investment Return(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         (15.32)%               (20.47)%              (20.80)%
Ratios/Supplemental Data:
Net assets, end of period (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      $      7.7             $      5.9            $      2.0
Ratios to average net assets:(e)
  Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               1.01%                 1.01%(d)               1.41%(d)
  Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            (0.16)%                0.18%(d)              (0.58)%(d)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  116%                    37%(f)               116%(f)

(a) Commencement of offering of Class I shares.

(b) Commencement of offering of Class II shares.

(c) Total investment return is calculated assuming a purchase of shares on the first day and a sale on the last day of each period reported and
    includes reinvestment of dividends and distributions. Total investment returns for periods of less than one full year are not annualized.

(d) Annualized.

(e) Net of expense subsidy. If the investment advisor had not subsidized expenses, the annual expense and net investment loss ratios would have
    been 2.61% and (1.76)%, respectively, for Class I and 3.01% and (2.18)%, respectively, for Class II for the period ended December 31, 2001
    and 3.88% and (2.69)%, respectively, for Class I for the period ended December 31, 2000.

(f)   Not annualized.

(g) Less than $0.005 per share.

(h) Calculated based upon weighted average shares outstanding during the period.




                                                                                                               F19
For more information
Additional information about the Fund and each Portfolio can be obtained upon request without charge and can be
found in the following documents:


Statement of Additional Information (SAI)
(incorporated by reference into this prospectus)


Annual Report
(including a discussion of market conditions and strategies that significantly affected the Portfolios’ performance during
the previous year)


Semi-Annual Report
To obtain these documents or to ask any questions about the Fund:

    Call toll-free (800) 778-2255

    Write to The Prudential Series Fund, Inc., Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102

You can also obtain copies of Fund documents from the Securities and Exchange Commission as follows:


By Mail:                                                                   In Person:

Securities and Exchange Commission                                         Public Reference Room
Public Reference Section                                                   in Washington, DC
Washington, DC 20549-0102                                                  (For hours of operation, call 1-202-942-8090)

By Electronic Request:                                                     Via the Internet:
                                                                           on the EDGAR Database at
publicinfo@sec.gov
                                                                           http://www.sec.gov
(The SEC charges a fee to copy documents.)
                                                                           SEC File No. 811-03623
AIM V.I. PREMIER EQUITY FUND
---------------------------------------------------------------------------------------------------------------

Series I Shares
Shares of the fund are currently offered only to insurance company separate accounts.
AIM V.I. Premier Equity Fund seeks to achieve long-term growth of capital. Income is a secondary




AIM
objective.



Prospectus                                                                                                          ˛
May 1, 2002




                                                  This prospectus contains important information about the
                                                  Series I class shares (‘‘Series I shares’’) of the fund. Please
                                                  read it before investing and keep it for future reference.

                                                  As with all other mutual fund securities, the Securities and
                                                  Exchange Commission has not approved or disapproved
                                                  these securities or determined whether the information in
                                                  this prospectus is adequate or accurate. Anyone who tells you
                                                  otherwise is committing a crime.

                                                  An investment in the fund:
                                                    ) is not FDIC insured;
                                                    ) may lose value; and
                                                    ) is not guaranteed by a bank.




                                                                                         Invest with DISCIPLINE˛
                                       AIM VARIABLE INSURANCE FUNDS

                                         AIM V.I. PREMIER EQUITY FUND

                                                 (Series I shares)

                                       Supplement dated December 31, 2002
                                        to the Prospectus dated May 1, 2002


Effective December 31, 2002, the following paragraph replaces in its entirety the first paragraph under the heading
“FUND MANAGEMENT – Portfolio Managers” on page 3 of the prospectus:

         •    Evan G. Harrel (lead manager), Senior Portfolio Manager, who has been responsible for the
              fund since 1998 and has been associated with the advisor and/or its affiliates since 1998.
              From 1994 to 1998, he was Vice President and portfolio manager of Van Kampen American
              Capital Asset Management, Inc. and portfolio manager for various growth and equity funds.

         •    Robert A. Shelton, Senior Portfolio Manager, who has been responsible for the fund since 1997
              and has been associated with the advisor and/or its affiliates since 1995.

         They are assisted by the Premier Equity Team. More information on the fund’s management team
         may be found on our website (http://www.aimfunds.com).




AIMSUP2 Ed. 12-02
                                            AIM    V.I.   PREMIER   EQUITY     FUND




Table of Contents
Investment Objectives and Strategies                       1

Principal Risks of Investing in the Fund                   1

Performance Information                                    2

Annual Total Returns                                       2

Performance Table                                          2

Fund Management                                            3

The Advisor                                                3

Advisor Compensation                                       3

Portfolio Managers                                         3

Other Information                                          4

Purchase and Redemption of Shares                          4

Pricing of Shares                                          4

Taxes                                                      4

Dividends and Distributions                                4

Share Classes                                              4

Financial Highlights                                       5

Obtaining Additional Information                  Back Cover




The AIM Family of Funds, The AIM Family of Funds and Design         No dealer, salesperson or any other person has been authorized
(i.e., the AIM logo), AIM and Design, AIM, AIM Funds, AIM           to give any information or to make any representations other
Funds and Design, AIM Investor, AIM LINK, AIM Institutional         than those contained in this prospectus, and you should not rely
Funds, aimfunds.com, La Familia AIM de Fondos, La Familia AIM       on such other information or representations.
de Fondos and Design, Invierta con DISCIPLINA and Invest with
DISCIPLINE are registered service marks and AIM Bank
Connection, AIM Internet Connect, AIM Private Asset Manage-
ment, AIM Private Asset Management and Design, AIM stylized
and/or Design, AIM Alternative Assets and Design, myaim.com,
The AIM College Savings Plan, AIM Solo 401(k) and AIM Lifetime
America are service marks of A I M Management Group Inc.
                                                  AIM V.I. PREMIER EQUITY FUND




Investment Objectives and Strategies
The fund’s investment objective is to achieve long-term growth of          early but tangible evidence of improving prospects that are not
capital. Income is a secondary objective. The investment objec-            yet reflected in the price of the company’s equity securities; and
tive and policies of the fund may be changed by the Board of               (4) companies whose equity securities are selling at prices that
Trustees without shareholder approval                                      do not reflect the current market value of their assets and where
    The fund seeks to meet its objectives by investing, normally, at       there is reason to expect realization of this potential in the form
least 80% of its net assets, plus the amount of any borrowings             of increased equity values. The portfolio managers consider
for investment purposes, in equity securities, including convert-          whether to sell a particular security when they believe the
ible securities. In complying with this 80% investment require-            company no longer fits into any of the above categories.
ment, the fund’s investments may include synthetic instruments.               In anticipation of or in response to adverse market or other
Synthetic instruments are investments that have economic char-             conditions, or atypical circumstances such as unusually large
acteristics similar to the fund’s direct investments, and may              cash inflows or redemptions, the fund may temporarily hold all
include warrants, futures, options, exchange-traded funds and              or a portion of its assets in cash or the following liquid assets:
American Depositary Receipts. The fund also may invest in                  money market instruments, shares of affiliated money market
preferred stocks and debt instruments that have prospects for              funds or high-quality debt obligations. As a result, the fund may
growth of capital. The fund also may invest up to 25% of its total         not achieve its investment objective. For cash management
assets in foreign securities. Any percentage limitations with              purposes, the fund may also hold a portion of its assets in cash
respect to the assets of the fund are applied at the time of               or such liquid assets.
purchase.                                                                     A larger cash position or liquid assets could also detract from
    The portfolio managers focus on undervalued equity securities          the achievement of the funds’ objective(s), but could also
of (1) out-of-favor cyclical growth companies; (2) established             reduce the funds’ exposure in the event of a market downturn.
growth companies that are undervalued compared to historical               Any percentage limitations with respect to assets of the fund are
relative valuation parameters; (3) companies where there is                applied at the time of purchase.



Principal Risks of Investing in the Fund
There is a risk that you could lose all or a portion of your
                                                                           ) Markets—The securities markets of other countries are
investment in the fund and that the income you may receive from
                                                                             smaller than U.S. securities markets. As a result, many foreign
your investment may vary. The value of your investment in the
                                                                             securities may be less liquid and more volatile than
fund will go up and down with the prices of the securities in
                                                                             U.S. securities.
which the fund invests. The price of equity securities change in
response to many factors, including the historical and prospec-               These factors may affect the prices of securities issued by
tive earnings of the issuer, the value of its assets, general              foreign companies located in developing countries more than
economic conditions, interest rates, investor perceptions and              those in countries with mature economies. For example, many
market liquidity.                                                          developing countries have, in the past, experienced high rates of
    The prices of foreign securities may be further affected by            inflation or sharply devaluated their currencies against the
other factors, including:                                                  U.S. dollar, thereby causing the value of investments in compa-
                                                                           nies located in those countries to decline. Transaction costs are
) Currency exchange rates—The dollar value of the fund’s
                                                                           often higher in developing countries and there may be delays in
  foreign investments will be affected by changes in the exchange
                                                                           settlement procedures.
  rates between the dollar and the currencies in which those
                                                                              To the extent the fund holds cash or liquid assets rather than
  investments are traded.
                                                                           equity securities, the fund may not achieve its investment
) Political and economic conditions—The value of the fund’s                objective.
  foreign investments may be adversely affected by political and              If the seller of a repurchase agreement in which the fund
  social instability in their home countries and by changes in             invests defaults on its obligation or declares bankruptcy, the fund
  economic or taxation policies in those countries.                        may experience delays in selling the securities underlying the
                                                                           repurchase agreement. As a result, the fund may incur losses
) Regulations—Foreign companies generally are subject to less
                                                                           arising from decline in the value of those securities, reduced
  stringent regulations, including financial and accounting con-
                                                                           levels of income and expenses of enforcing its rights.
  trols, than are U.S. companies. As a result, there generally is
  less publicly available information about foreign companies
  than about U.S. companies.



                                                                       1
                                                       AIM V.I. PREMIER EQUITY FUND




Performance Information
The bar chart and table shown below provide an indication of the risks of investing in the fund. The fund’s past performance is not
necessarily an indication of its future performance. All performance shown assumes the reinvestment of dividends and capital gains. The
bar chart and performance table shown do not reflect charges at the separate rate account level; if they did, the performance shown would
be lower.


ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund’s shares from year to year.
80%



60



40                       36.25%
                                                                                    32.41%              29.90%
                                                                 23.69%
20                                           15.02%

       4.04%
  0



-20
                                                                                                                            -14.65%            -12.56%

-40
      12/31/94          12/31/95            12/31/96            12/31/97           12/31/98            12/31/99            12/31/00           12/31/01



  During the periods shown in the bar chart, the highest quarterly return was 27.04% (quarter ended December 31, 1998) and the lowest
quarterly return was -15.58% (quarter ended September 30, 2001).


PERFORMANCE TABLE
The following performance table compares the fund’s performance to that of a broad-based securities market index.

Average Annual Total Returns

(for the periods                                                                                                     Since                     Inception
ended December 31, 2001)                                         1 Year                  5 Years                   Inception                     Date

AIM V.I. Premier Equity Fund                                     (12.56)%                    9.69%                   13.41%                    05/05/93
Standard & Poor’s 500 Index(1)                                   (11.88)%                  10.70%                    13.85%(2)                 04/30/93(2)
(1) The Standard & Poor’s 500 Index is an unmanaged index of common stocks frequently used as a general measure of U.S. stock market performance.
(2) The average annual total return given is since the date closest to the inception date of the fund’s Series I shares.




                                                                              2
                                                AIM V.I. PREMIER EQUITY FUND




Fund Management
THE ADVISOR                                                              PORTFOLIO MANAGERS
A I M Advisors, Inc. (the advisor) serves as the fund’s investment       The advisor uses a team approach to investment management.
advisor. The advisor is located at 11 Greenway Plaza, Suite 100,         The individual members of the team who are primarily responsi-
Houston, Texas 77046-1173. The advisor supervises all aspects            ble for the day-to-day management of the fund’s portfolio are
of the fund’s operations and provides investment advisory                as follows:
services to the fund, including obtaining and evaluating eco-
                                                                         ) Joel E. Dobberpuhl, Senior Portfolio Manager, who has been
nomic, statistical and financial information to formulate and
                                                                           responsible for the fund since 1993, and has been associated
implement investment programs for the fund.
                                                                           with the advisor and/or its affiliates since 1990.
   The advisor has acted as an investment advisor since its
organization in 1976. Today, the advisor, together with its              ) Evan G. Harrel, Senior Portfolio Manager, who has been
subsidiaries, advises or manages over 150 investment portfolios,           responsible for the fund since 1998 and has been associated
including the fund, encompassing a broad range of investment               with the advisor and/or its affiliates since 1998. From 1994 to
objectives.                                                                1998, he was Vice President and portfolio manager of Van
                                                                           Kampen American Capital Asset Management, Inc. and portfo-
ADVISOR COMPENSATION
                                                                           lio manager for various growth and equity funds.
During the fund’s fiscal year ended December 31, 2001, the
advisor received compensation of 0.60% of the fund’s average             ) Robert A. Shelton, Senior Portfolio Manager, who has been
daily net assets.                                                          responsible for the fund since 1997 and has been associated
                                                                           with the advisor and/or its affiliates since 1995.




                                                                     3
                                                 AIM V.I. PREMIER EQUITY FUND




Other Information
PURCHASE AND REDEMPTION OF SHARES                                         security, the fund may value the security at its fair value as
The fund ordinarily effects orders to purchase and redeem                 determined in good faith by or under the supervision of the
shares at the fund’s next computed net asset value after it               Board of Trustees. The effect of using fair value pricing is that the
receives an order. Life insurance companies participating in the          fund’s net asset value will be subject to the judgment of the
fund serve as the fund’s designee for receiving orders of                 Board of Trustees or its designee instead of being determined by
separate accounts that invest in the fund.                                the market. Because the fund may invest in securities that are
    Shares of the fund are offered in connection with mixed and           primarily listed on foreign exchanges, the value of the fund’s
shared funding, i.e., to separate accounts of affiliated and               shares may change on days when the separate account will not
unaffiliated life insurance companies funding variable annuity             be able to purchase or redeem shares. The fund determines the
contracts and variable life insurance policies. The fund currently        net asset value of its shares as of the close of the customary
offers shares only to insurance company separate accounts. In             trading session of the NYSE on each day the NYSE is open for
the future, the fund may offer them to pension and retirement             business.
plans that qualify for special federal income tax treatment. Due to
differences in tax treatment and other considerations, the                TAXES
interests of variable contract owners investing in separate
                                                                          The amount, timing and character of distributions to the separate
accounts investing in the fund, and the interests of plan
                                                                          account may be affected by special tax rules applicable to
participants investing in the fund, may conflict.
                                                                          certain investments purchased by the fund. Holders of variable
    Mixed and shared funding may present certain conflicts of
                                                                          contracts should refer to the prospectus for their contracts for
interest. For example, violation of the federal tax laws by one
                                                                          information regarding the tax consequences of owning such
separate account investing in a fund could cause owners of
                                                                          contracts and should consult their tax advisors before investing.
contracts and policies funded through another separate account
to lose their tax-deferred status, unless remedial actions were
taken. The Board of Trustees of the fund will monitor for the             DIVIDENDS AND DISTRIBUTIONS
existence of any material conflicts and determine what action, if
                                                                          Dividends
any, should be taken. A fund’s net asset value could decrease if
                                                                          The fund generally declares and pays dividends, if any, annually
it had to sell investment securities to pay redemption proceeds
                                                                          to separate accounts of participating life insurance companies.
to a separate account (or plan) withdrawing because of a
conflict.                                                                  Capital Gains Distributions
                                                                          The fund generally distributes long-term and short-term capital
                                                                          gains, if any, annually to separate accounts of participating life
PRICING OF SHARES                                                         insurance companies.
The fund prices its shares based on its net asset value. The fund            At the election of participating life insurance companies,
values portfolio securities for which market quotations are               dividends and distributions are automatically reinvested at net
readily available at market value. The fund values short-term             asset value in shares of the fund.
investments maturing within 60 days at amortized cost, which
approximates market value. The fund values all other securities
and assets at their fair value. Securities and other assets quoted        SHARE CLASSES
in foreign currencies are valued in U.S. dollars based on the             The fund has two classes of shares, Series I and Series II. Each
prevailing exchange rates on that day. In addition, if, between the       class is identical except that Series II has a distribution plan or
time trading ends on a particular security and the close of the           ‘‘Rule 12b-1 Plan’’ that is described in the prospectus relating
customary trading session of the New York Stock Exchange                  to the Series II shares.
(NYSE), events occur that materially affect the value of the




                                                                      4
                                                            AIM V.I. PREMIER EQUITY FUND




Financial Highlights
The financial highlights table is intended to help you understand                                The table shows the financial highlights for a share of the fund
the fund’s financial performance of the fund’s Series I shares.                               outstanding during each of the fiscal years (or periods)
Certain information reflects financial results for a single fund                               indicated.
share.                                                                                          This information has been audited by Tait, Weller & Baker,
   The total returns in the table represent the rate that an                                 whose report, along with the fund’s financial statements, is
investor would have earned (or lost) on an investment in the                                 included in the fund’s annual report, which is available upon
fund (assuming reinvestment of all dividends and distributions).                             request.

                                                                                                               Year Ended December 31,
                                                                               2001(a)               2000(a)              1999(a)            1998        1997
Net asset value, beginning of period                                       $      27.30          $      33.50         $      26.25       $     20.83    $ 17.48
Income from investment operations:
   Net investment income                                                           0.06                  0.04                 0.06              0.09        0.08
      Net gains (losses) on securities (both realized and unrealized)             (3.50)                (4.94)                7.76              6.59        4.05
        Total from investment operations                                          (3.44)                (4.90)                7.82              6.68        4.13
Less distributions:
   Dividends from net investment income                                           (0.03)                (0.04)               (0.09)            (0.13)      (0.19)
      Distributions from net realized gains                                       (0.48)                (1.26)               (0.48)            (1.13)      (0.59)
        Total distributions                                                       (0.51)                (1.30)               (0.57)            (1.26)      (0.78)
Net asset value, end of period                                             $      23.35          $      27.30         $      33.50       $     26.25    $ 20.83
Total return(b)                                                                  (12.53)%              (14.68)%              29.90%            32.41%      23.69%

Ratios /supplemental data:
Net assets, end of period (000s omitted)                                   $2,558,120            $2,746,161           $2,383,367         $1,221,384     $690,841
                                                                                           (c)
Ratio of expenses to average net assets                                            0.85%                 0.84%                0.76%             0.66%       0.70%
Ratio of net investment income to average net assets                               0.24%(c)              0.12%                0.20%             0.68%       1.05%
Portfolio turnover rate                                                              40%                   62%                  62%             100%        127%
(a)
      Calculated using average shares outstanding.
(b)
      Total returns do not reflect charges at the separate account level and these changes would reduce total returns for all periods shown.
(c)
      Ratios are based on average daily net assets of $2,590,014,174.




                                                                                     5
                                                 AIM V.I. PREMIER EQUITY FUND




Obtaining Additional Information
More information may be obtained free of charge upon request.
The Statement of Additional Information (SAI), a current version
of which is on file with the Securities and Exchange Commis-
sion (SEC), contains more details about the fund and is
incorporated by reference into the prospectus (is legally a part of
this prospectus). Annual and semiannual reports to sharehold-
ers contain additional information about the fund’s investments.
The fund’s annual report also discusses the market conditions
and investment strategies that significantly affected the fund’s
performance during its last fiscal year.
   If you wish to obtain free copies of the fund’s current SAI,
please send a written request to A I M Distributors, Inc.,
11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173 or
call (800) 410-4246.
   You also can review and obtain copies of the fund’s SAI,
reports and other information at the SEC’s Public Reference
Room in Washington, DC; on the EDGAR database on the SEC’s
Internet website (http://www.sec.gov); or, after paying a dupli-
cation fee, by sending a letter to the SEC’s Public Reference
Section, Washington, DC 20549-0102 or by sending an electronic
mail request to publicinfo@sec.gov. Please call the SEC at
1-202-942-8090 for information about the Public Reference
Room.


 AIM V.I. Premier Equity Fund
 SEC 1940 Act file number: 811-7452




                                                            www.aimfunds.com    Invest with DISCIPLINE˛
Your
American Century
prospectus


                   CLASS I        May 1, 2002

                   VP Value Fund




                   The Securities and Exchange
                   Commission has not approved or
                   disapproved these securities or
                   determined if this Prospectus is
                   accurate or complete. Anyone
                   who tells you otherwise is
                   committing a crime.

                   American Century
                   Investment Services, Inc.
Table of Contents
An Overview of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2



Fund Performance History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3



Objectives, Strategies and Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4



Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6



Share Price, Distributions and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
                                                                                                                              Throughout this book you’ll find
                                                                                                                              definitions of key investment terms
                                                                                                                              and phrases. When you see a word
Multiple Class Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10                printed in green italics, look for
                                                                                                                              its definition in the margin.


                                                                                                                          L   This symbol highlights special
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11          information and helpful tips.
                                             An Overview of the Fund

                                             What are the fund’s investment objectives?
                                             This fund seeks long-term capital growth. Income is a secondary objective.


                                             What are the fund’s primary investment strategy and principal risks?
                                             In selecting stocks for VP Value, the fund managers look for companies whose stock price
                                             is less than they believe the company is worth. The managers attempt to purchase the
                                             stock of these undervalued companies and hold them until their stock price has increased
                                             to, or is higher than, a level the managers believe more accurately reflects the fair value of
                                             the company. A more detailed description of the fund’s value investment strategy begins
                                             on page 4.
                                             The fund’s principal risks include
                                             • Market Risk – The value of the fund’s shares will go up and down based on the
                                               performance of the companies whose securities it owns and other factors generally
                                               affecting the securities market.
                                             • Price Volatility – The value of the fund’s shares may fluctuate significantly in the
                                               short term.
                                             • Principal Loss – At any given time your shares may be worth more or less than the
                                               price you paid for them. In other words, it is possible to lose money by investing
                                               in the funds
                                             • Style Risk – If the fund’s investment style is out of favor with the market, the fund’s
                                               performance may suffer.


                                             Who may want to invest in the fund?
                                             The fund may be a good investment if you are
L




    An investment in the fund is not a
    bank deposit, and it is not insured or   • seeking long-term capital growth and income from your investment
    guaranteed by the Federal Deposit
    Insurance Corporation (FDIC) or          • seeking an equity fund that utilizes a value style of investing
    any other government agency.             • comfortable with the risks associated with the fund’s investment strategy
                                             • comfortable with the fund’s short-term price volatility


                                             Who may not want to invest in the fund?
                                             The fund may not be a good investment if you are
                                             • investing for a short period of time
                                             • uncomfortable with volatility in the value of your investment




2
Fund Performance History

Annual Total Returns
The following bar chart shows the performance of the fund’s Class I shares for each full
calendar year in the life of the fund. It indicates the volatility of the fund’s historical
returns from year to year.




                                                                                                                            L
2001                                                                  12.82%                                                The performance information on this
                                                                                                                            page is designed to help you see how
2000                                                                           18.14%
                                                                                                                            the fund’s returns can vary. Keep in
1999                              -0.85%                                                                                    mind that past performance does not
                                                                                                                            predict how the fund will perform in
1998                                                  4.81%
                                                                                                                            the future.
1997                                                                                            26.08%

       -20%            -10%                0%                 10%               20%               30%               40%


The highest and lowest returns for the period reflected in the bar chart are:

                                      Highest                                         Lowest
VP Value                              18.09% (2Q 1999)                                -11.05% (3Q 1999)

Average Annual Total Returns
The following table shows the average annual total returns of the fund’s Class I shares for
the periods indicated. The benchmarks are unmanaged indices that have no operating
costs and are included in the table for performance comparison. The S&P 500 is viewed as
a broad measure of U.S. Stock performance. The Lipper Multicap Value Index is an index
of multicap value funds that have management styles similar to the fund’s.

For the calendar year ended December 31,2001                   1 year                 5 years            Life of Fund (1)
VP Value                                                        12.82%                11.80%             12.61%
S&P 500 Index                                                  -11.87%                10.70%             12.12%
Lipper Multicap Value Index                                         1.30%               9.73%            10.83%
1
    The inception date for VP Value is May 1, 1996.




                                                                                                                                                                   3
                                             Objectives, Strategies and Risks

                                             VP Value Fund
                                             What are the fund’s investment objectives?
                                             The fund seeks long-term capital growth. Income is a secondary objective.


                                             How does the fund pursue its investment objective?
                                             The fund managers look for stocks of companies that they believe are undervalued at the
                                             time of purchase. The managers use a value investment strategy that looks for companies
                                             that are temporarily out of favor in the market. The managers attempt to purchase the
                                             stocks of these undervalued companies and hold them until they have returned to favor in
                                             the market and their stock prices have gone up.
                                             Companies may be undervalued due to market declines, poor economic conditions, actual
                                             or anticipated bad news regarding the issuer or its industry, or because they have been
                                             overlooked by the market. To identify these companies, the fund managers look for
                                             companies with earnings, cash flows and/or assets that may not be reflected accurately in
                                             the companies’ stock prices or may be outside the companies’ historical ranges.
                                             The fund managers do not attempt to time the market. Instead, under normal market
                                             conditions, they intend to keep at least 80% of the fund’s assets invested in U.S. equity
                                             securities at all times. When the managers believe it is prudent, the fund may invest a
                                             portion of its assets in convertible debt securities, equity-equivalent securities, foreign
                                             securities, debt securities of companies, debt obligations of governments and their
    Nonleveraged means that the fund         agencies, nonleveraged stock index futures contracts and other similar securities. Stock
    may not invest in futures contracts      index futures contracts, a type of derivative security, can help the fund’s cash assets remain
    when it would be possible to lose more   liquid while performing more like stocks. The fund has a policy governing stock index
    than the fund invested.                  futures contracts and similar derivative securities to help manage the risk of these types of
                                             investments. For example, the fund managers cannot invest in a derivative security if it
                                             would be possible for the fund to lose more money than it invested. A complete descrip-
                                             tion of the derivatives policy is included in the Statement of Additional Information.
                                             In the event of exceptional market or economic conditions, the fund may, as a temporary
                                             defensive measure, invest all or a substantial portion of its assets in cash or short-term
                                             debt securities. To the extent the fund assumes a defensive position, it will not be
                                             pursuing its objective of capital growth. The fund generally limits its purchase of debt
                                             securities to investment-grade obligations, except for convertible debt securities, which
                                             may be rated below investment grade.




4
What are the principal risks of investing in the fund?
The value of the fund’s shares depends on the value of the stocks and other securities it
owns. The value of the individual securities the fund owns will go up and down
depending on the performance of the companies that issued them, general market and
economic conditions, and investor confidence.
At any given time your shares may be worth more or less than the price you paid for
them. In other words, it is possible to lose money by investing in the fund.
If the market does not consider the individual stocks purchased by the fund to be under-
valued, the value of the fund’s shares may not rise as high as other funds and may in fact
decline, even if stock prices generally are increasing.
Market performance tends to be cyclical, and, in the various cycles, certain investment
styles may fall in and out of favor. If the market is not favoring the fund’s style, the fund’s
gains may not be as big as, or its losses may be bigger than, other equity funds using
different investment styles.
Although the fund managers intend to invest the fund’s assets primarily in U.S. stocks,
the fund may invest in securities of foreign companies. Foreign investment involves
additional risks, including fluctuations in currency exchange rates, less stable political
and economic structures, reduced availability of public information, and lack of uniform
financial reporting and regulatory practices similar to those that apply in the United
States. These factors make investing in foreign securities generally riskier than investing
in U.S. stocks.
The fund is offered only to insurance companies for the purpose of offering the fund as
an investment option under variable annuity or variable life insurance contracts. Although
the fund does not foresee any disadvantages to contract owners due to the fact that it
offers its shares as an investment medium for both variable annuity and variable life
products, the interests of various contract owners participating in the fund might, at some
time, be in conflict due to future differences in tax treatment of variable products or other
considerations. Consequently, the fund’s Board of Directors will monitor events in order
to identify any material irreconcilable conflicts that may possibly arise and to determine
what action, if any, should be taken in response to such conflicts. If a conflict were to
occur, an insurance company separate account might be required to withdraw its invest-
ments in the fund, and the fund might be forced to sell securities at disadvantageous
prices to redeem such investments.




                                                                                                  5
    Management

    Who manages the fund?
    The Board of Directors, investment advisor and fund management team play key roles in
    the management of the fund.


    The Board of Directors
    The Board of Directors oversees the management of the fund and meets at least quarterly
    to review reports about fund operations. Although the Board of Directors does not
    manage the fund, it has hired an investment advisor to do so. More than two-thirds of the
    directors are independent of the fund’s advisor; that is, they are not employed by and have
    no financial interest in the advisor.


    The Investment Advisor
    The fund’s investment advisor is American Century Investment Management, Inc. The
    advisor has been managing mutual funds since 1958 and is headquartered at 4500 Main
    Street, Kansas City, Missouri 64111.
    The advisor is responsible for managing the investment portfolios of the fund and
    directing the purchase and sale of its investment securities. The advisor also arranges
    for transfer agency, custody and all other services necessary for the fund to operate.
    For the services it provided to the fund during the most recent fiscal year, the advisor
    received a unified management fee of 0.97% of the average net assets of the Class I shares
    of the fund. The amount of the management fee is calculated daily and paid monthly
    in arrears.
    Out of that fee, the advisor paid all expenses of managing and operating the fund except
    brokerage expenses, taxes, interest, fees and expenses of the independent directors
    (including legal counsel fees), and extraordinary expenses. A portion of the management
    fee may be paid by the fund’s advisor to unaffiliated third parties who provide record-
    keeping and administrative services that would otherwise be performed by an affiliate of
    the advisor.




6
The Fund Management Team
The advisor uses a team of portfolio managers, assistant portfolio managers and analysts
to manage the fund. The team meets regularly to review portfolio holdings and discuss
purchase and sale activity. Team members buy and sell securities for the fund as they see
fit, guided by the fund’s investment objective and strategy.
The portfolio managers on the investment team are identified below:

Phillip N. Davidson




                                                                                               L
                                                                                               Code of Ethics
Mr. Davidson, Senior Vice President and Senior Portfolio Manager,has been a member of          American Century has a Code of
the team that manages VP Value since May 1996. He joined American Century in                   Ethics designed to ensure that the
September 1993 as a Portfolio Manager. Prior to joining American Century, he spent 11          interests of fund shareholders come
years at Boatmen’s Trust Company in St. Louis and served as Vice President and Portfolio       before the interests of the people who
Manager responsible for institutional value equity clients. He has a bachelor’s degree in      manage the fund. Among other provi-
finance and an MBA from Illinois State University. He is a CFA charterholder.                  sions, the Code of Ethics prohibits
                                                                                               portfolio managers and other invest-
Scott A. Moore                                                                                 ment personnel from buying securities
                                                                                               in an initial public offering or profiting
Mr. Moore, Vice President and Portfolio Manager, has been a member of the team that            from the purchase and sale of the
manages VP Value since October 1996 and Portfolio Manager since February 1999. He              same security within 60 calendar days.
joined American Century in August 1993 as an Investment Analyst. He has a bachelor’s           In addition, the Code of Ethics requires
degree in finance from Southern Illinois University and an MBA in finance from the             portfolio managers and other
University of Missouri – Columbia. He is a CFA charterholder.                                  employees with access to information
                                                                                               about the purchase or sale of securities
                                                                                               by the fund to obtain approval before
Fund Performance                                                                               executing permitted personal trades.
VP Value has the same management team and investment policies as another fund in the
American Century family of funds. The fees and expenses of the funds are expected to be
similar, and they will be managed with substantially the same investment objective and
strategies. Notwithstanding these general similarities, this fund and the retail fund are
separate mutual funds that will have different investment performance. Differences in
cash flows into the two funds, the size of their portfolios and specific investments held by
the two funds, as well as the additional expenses of the insurance product, will cause
performance to differ.
Please consult the separate account prospectus for a description of the insurance product
through which the fund is offered and its associated fees.


Fundamental Investment Policies
Fundamental investment policies contained in the Statement of Additional Information
and the investment objective of the fund may not be changed without shareholder
approval. The Board of Directors may change any other policies and investment strategies.




                                                                                                                                       7
                                              Share Price, Distributions and Taxes

                                              Purchase and Redemption of Shares
                                              For instructions on how to purchase and redeem shares, read the prospectus of your
                                              insurance company separate account. Your order will be priced at the net asset value next
                                              determined after your request is received in the form required by the insurance company
                                              separate account. There are no sales commissions or redemption charges. However, certain
                                              sales or deferred sales charges and other charges may apply to the variable annuity or life
                                              insurance contracts. Those charges are disclosed in the separate account prospectus.


                                              Abusive Trading Practices
                                              We do not permit market timing or other abusive trading practices in our funds.
                                              Excessive, short-term (market timing) or other abusive trading practices may disrupt port-
                                              folio management strategies and harm fund performance. To minimize harm to the fund
                                              and its shareholders, we reserve the right to reject any purchase order (including
                                              exchanges) from any investor we believe has a history of abusive trading or whose trading,
                                              in our judgment, has been or may be disruptive to a fund. In making this judgment, we
                                              may consider trading done in multiple accounts under common ownership or control.
                                              We also reserve the right to delay delivery of redemption proceeds up to seven days.


                                              Modifying or Canceling an Investment
                                              Investment instructions are irrevocable. That means that once you have mailed or other-
                                              wise transmitted your investment instruction, you may not modify or cancel it. The fund
                                              reserves the right to suspend the offering of shares for a period of time, and to reject any
                                              specific investment (including a purchase by exchange). Additionally, we may refuse a
                                              purchase if, in our judgment, it is of a size that would disrupt the management of the fund.


                                              Share Price
                                              American Century determines the net asset value (NAV) of the fund as of the close of
                                              regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time) on each
                                              day the Exchange is open. On days when the Exchange is closed (including certain U.S.
                                              holidays), we do not calculate the NAV. A fund share’s NAV is the current value of the
                                              fund’s assets, minus any liabilities, divided by the number of fund shares outstanding.
                                              If current market prices of securities owned by a fund are not readily available, the advisor
                                              may determine their fair value in accordance with procedures adopted by the fund’s
                                              Board. Trading of securities in foreign markets may not take place every day the Exchange
                                              is open. Also, trading in some foreign markets and on some electronic trading networks
                                              may take place on weekends or holidays when a fund’s NAV is not calculated. So, the value
                                              of a fund’s portfolio may be affected on days when you can’t purchase or redeem shares of
                                              the fund.
    Good order means that your                We will price your purchase, exchange or redemption at the NAV next determined after
    instructions have been received           the insurance company separate account receives your transaction request in good order.
    in the form required by American
    Century. This may include, for example,
    providing the fund name and account
    number, the amount of the transaction
    and all required signatures.




8
Distributions
Federal tax laws require the fund to make distributions to its shareholders in order to
qualify as a “regulated investment company.” Qualification as a regulated investment
company means the fund will not be subject to state or federal income tax on amounts
distributed. The distributions generally consist of dividends and interest received by a
fund, as well as capital gains realized by a fund on the sale of its investment securities.   Capital gains are increases in the
The fund generally pays distributions from net income and capital gains, if any, once a       values of capital assets, such as stock,
year in March. The fund may make more frequent distributions, if necessary, to comply         from the time the assets are purchased.
with Internal Revenue Code provisions.
You will participate in fund distributions when they are declared, starting the next
business day after your purchase is effective. For example, if you purchase shares on a
day that a distribution is declared, you will not receive that distribution. If you redeem
shares, you will receive any distribution declared on the day you redeem. If you redeem
all shares, we will include any distributions received with your redemption proceeds. All
distributions from the fund will be invested in additional shares.
Provided that all shareholders agree, the fund may utilize the consent dividend provision
of Internal Revenue Code section 565 which treats the income earned by the fund as
distributed to the shareholders as of the end of the taxable year.


Taxes
Consult the prospectus of your insurance company separate account for a discussion of
the tax status of your variable contract.




                                                                                                                                     9
     Multiple Class Information

     American Century offers three classes of the fund: Class I (the original class), Class II and
     Class III. The shares offered by this Prospectus are Class I shares. All classes are offered
     exclusively to insurance companies to fund their obligations under the variable annuity
     and variable life contracts purchased by their clients.
     Class I and Class III have the same fees and expenses, with one exception. Class III shares
     have a 1.0% redemption fee for shares that are redeemed or exchanged within 60 days of
     purchase. Class II shares have different fees and expenses. The difference in the fee
     structures between the classes is the result of their separate arrangements for distribution
     services and not the result of any difference in amounts charged by the advisor for core
     investment advisory services. Accordingly, the core investment advisory expenses do
     not vary by class. Different fees and expenses will affect performance. For additional
     information concerning the other classes of shares not offered by this Prospectus, call us
     at 1-800-345-3533.
     Except as described below, all classes of shares of the fund have identical voting, dividend,
     liquidation and other rights, preferences, terms and conditions. The only differences
     between the classes are (a) each class may be subject to different expenses specific to that
     class; (b) each class has a different identifying designation or name; (c) each class has
     exclusive voting rights with respect to matters solely affecting that class; and (d) each class
     may have different exchange privileges.




10
Financial Highlights

Understanding the Financial Highlights
The table on the next page itemizes what contributed to the changes in share price during
the most recently ended fiscal year. It also shows the changes in share price for this
period in comparison to changes over the last five fiscal years or less, if the fund is not
five years old.
On a per-share basis, the table includes as appropriate
• share price at the beginning of the period
• investment income and capital gains or losses
• distributions of income and capital gains paid to investors
• share price at the end of the period
The table also includes some key statistics for the period as appropriate
• Total Return – the overall percentage of return of the fund, assuming the reinvestment
  of all distributions
• Expense Ratio – the operating expenses of the fund as a percentage of average
  net assets
• Net Income Ratio – the net investment income of the fund as a percentage of average
  net assets
• Portfolio Turnover – the percentage of the fund’s buying and selling activity
The Financial Highlights have been audited by Deloitte & Touche LLP, independent auditors.
Their Independent Auditors’ Report and the financial statements are included in the
fund’s Annual Report, which is available upon request.




                                                                                              11
     VP Value Fund
     Class I

     For a Share Outstanding Throughout the Years Ended December 31


     Per-Share Data
                                                                                          2001              2000              1999              1998              1997

     Net Asset Value, Beginning of Period                                                  $6.67            $5.95             $6.73             $6.93             $5.58
     Income From Investment Operations
         Net Investment Income                                                              0.08(1)           0.08              0.08              0.08(1)          0.07
         Net Realized and Unrealized Gain (Loss)                                            0.77              0.90             (0.15)             0.27             1.37
         Total From Investment Operations                                                   0.85              0.98             (0.07)             0.35             1.44
     Distributions
         From Net Investment Income                                                        (0.08)            (0.07)            (0.07)            (0.04)            (0.04)
         From Net Realized Gains                                                              .—             (0.19)            (0.64)            (0.51)            (0.05)
         Total Distributions                                                               (0.08)            (0.26)            (0.71)            (0.55)            (0.09)
     Net Asset Value, End of Period                                                        $7.44            $6.67             $5.95             $6.73             $6.93
         Total Return(2)                                                                   12.82%            18.14%            (0.85)%            4.81%           26.08%


     Ratios/Supplemental Data
                                                                                          2001              2000              1999              1998              1997

     Ratio of Operating Expenses to Average Net Assets                                      0.97%             1.00%             1.00%             1.00%            1.00%
     Ratio of Net Investment Income to Average Net Assets                                   1.28%             1.81%             1.40%              1.21%           1.60%
     Portfolio Turnover Rate                                                                 174%             159%              118%               158%             138%
     Net Assets, End of Period (in thousands)                                         $1,424,235          $672,214          $416,166           $316,624        $188,015

     1
         Computed using average shares outstanding throughout the year.
     2
         Total return assumes reinvestment of dividends and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense
         differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the
         total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accor-
         dance with SEC guidelines and does not result in any gain or loss of value between one class and another.




12
Notes




        13
                                   More information about the fund is contained in these documents.


                                   Annual and Semiannual Reports
                                   Annual and semiannual reports contain more information about the fund’s investments
                                   and the market conditions and investment strategies that significantly affected the fund’s
                                   performance during the most recent fiscal period.

                                   Statement of Additional Information (SAI)
                                   The SAI contains a more detailed, legal description of the fund’s operations, investment
                                   restrictions, policies and practices. The SAI is incorporated by reference into this
                                   Prospectus. This means that it is legally part of this Prospectus, even if you don’t request
                                   a copy.
                                   You may obtain a free copy of the SAI or annual and semiannual reports, and ask ques-
                                   tions about the fund or your accounts, by contacting the insurance company from which
                                   you purchased the fund or American Century at the address or telephone numbers
                                   listed below.
                                   You also can get information about the fund (including the SAI) from the Securities
                                   and Exchange Commission (SEC). The SEC charges a duplicating fee to provide copies
                                   of this information.
                                   In person               SEC Public Reference Room
                                                           Washington, D.C.
                                                           Call 202-942-8090 for location and hours.
                                   On the Internet         • EDGAR database at www.sec.gov
                                                           • By email request at publicinfo@sec.gov
                                   By mail                 SEC Public Reference Section
                                                           Washington, D.C. 20549-0102

                                   Investment Company Act File No. 811-5188




American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385
1-800-345-6488 or 816-531-5575
www.americancentury.com

0205
SH-PRS-28991
                                                                     M   May 1, 2002




                                   Janus Aspen Series
                                         Institutional Shares
                                              Growth Portfolio

                                                   Prospectus




The Securities and Exchange Commission has not approved or disapproved of these securities or passed on the accuracy or
adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
This prospectus describes Growth Portfolio (the ‘‘Portfolio’’). This Portfolio of Janus Aspen Series
currently offers two classes of shares. The Institutional Shares (the ‘‘Shares’’) are offered by this
prospectus in connection with investment in and payments under variable annuity contracts and
variable life insurance contracts (collectively, ‘‘variable insurance contracts’’), as well as certain
qualified retirement plans.
Janus Aspen Series sells and redeems its Shares at net asset value without sales charges or
commissions. Each variable insurance contract involves fees and expenses that are not described in
this Prospectus. See the accompanying contract prospectus for information regarding contract fees
and expenses and any restrictions on purchases or allocations.
This prospectus contains information that a prospective purchaser of a variable insurance contract
or plan participant should consider in conjunction with the accompanying separate account
prospectus of the specific insurance company product before allocating purchase payments or
premiums to the Portfolio.
TABLE   OF CONTENTS




          RISK/RETURN   SUMMARY
            Growth Portfolio ****************************************************************              2
            Fees and expenses ***************************************************************              4

          INVESTMENT    OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS
            Investment objective and principal investment strategies ********************************      5
            General portfolio policies**********************************************************           6
            Risks **************************************************************************               7

          MANAGEMENT      OF THE   PORTFOLIO
            Investment adviser *************************************************************** 10
            Management expenses ************************************************************ 10
            Portfolio manager **************************************************************** 11

          OTHER   INFORMATION *************************************************************              12

          DISTRIBUTIONS   AND TAXES
            Distributions ********************************************************************           13
            Taxes **************************************************************************             13
          SHAREHOLDER’S    GUIDE
            Pricing of portfolio shares *********************************************************        14
            Purchases **********************************************************************             14
            Redemptions ********************************************************************             15
            Excessive trading ****************************************************************           15
            Shareholder communications*******************************************************            15

          FINANCIAL   HIGHLIGHTS ***********************************************************             16

          GLOSSARY    OF INVESTMENT TERMS
            Equity and debt securities *********************************************************         17
            Futures, options and other derivatives ***********************************************       19
            Other investments, strategies and/or techniques ***************************************      19



                                                                                               Table of contents 1
RISK/RETURN            SUMMARY



GROWTH PORTFOLIO
                The Portfolio is designed for long-term investors who primarily seek growth of capital and who can
                tolerate the greater risks associated with common stock investments.
1. What is the investment objective of the Portfolio?


                Growth Portfolio seeks long-term growth of capital in a manner consistent with the preservation of
                capital.


                The Portfolio’s Trustees may change this objective or the Portfolio’s principal investment policies without
                a shareholder vote. The Portfolio will notify you at least 60 days before making any changes to its
                objective or principal investment policies. If there is a material change to the Portfolio’s objective or
                principal investment policies, you should consider whether the Portfolio remains an appropriate
                investment for you. There is no guarantee that the Portfolio will meet its objective.
2. What are the main investment strategies of the Portfolio?
                The portfolio manager applies a ‘‘bottom up’’ approach in choosing investments. In other words, he looks
                at companies one at a time to determine if a company is an attractive investment opportunity and is
                consistent with the Portfolio’s investment policies. If the portfolio manager is unable to find investments
                with earnings growth potential, a significant portion of the Portfolio’s assets may be in cash or similar
                investments.
                Within the parameters of its specific investment policies discussed below, the Portfolio may invest without
                limit in foreign equity and debt securities.
                Within the parameters of its specific investment policies discussed below, the Portfolio will limit its
                investment in high-yield/high-risk bonds to less than 35% of its net assets.
                The Portfolio invests primarily in common stocks selected for their growth potential. Although the
                Portfolio can invest in companies of any size, it generally invests in larger, more established companies.
3. What are the main risks of investing in the Portfolio?
                The biggest risk is that the Portfolio’s returns may vary, and you could lose money. The Portfolio is
                designed for long-term investors who can accept the risks of investing in a portfolio with significant
                common stock holdings. Common stocks tend to be more volatile than other investment choices.
                The value of the Portfolio’s holdings may decrease if the value of an individual company in the portfolio
                decreases. The value of the Portfolio’s holdings could also decrease if the stock market goes down. If the
                value of the Portfolio’s holdings decreases, the Portfolio’s net asset value (NAV) will also decrease, which
                means if you sell your shares in the Portfolio you may get back less money.
                An investment in the Portfolio is not a bank deposit and is not insured or guaranteed by the Federal
                Deposit Insurance Corporation or any other government agency.




2 Janus Aspen Series
The following information provides some indication of the risks of investing in the Portfolio by showing
how the Portfolio’s performance has varied over time. The bar chart depicts the change in performance
from year to year during the periods indicated. The table compares the average annual returns for the
Shares of the Portfolio for the periods indicated to a broad-based securities market index.

 Growth Portfolio – Institutional Shares
            Annual returns for periods ended 12/31
                                                                              43.98%                         50%
                                                                    35.66%                                   40%
                                         30.17%
                                                                                                             30%
                                                           22.75%
                                                  18.45%                                                     20%
                                                                                                             10%
                                2.76%                                                   (14.55%) (24.73%)
                                                                                                             0%
                                                                                                            -10%
                                                                                                            (20%)
                                                                                                            (30%)
                                1994     1995     1996     1997      1998      1999      2000     2001
             Best Quarter: 4th-1998         27.71% Worst Quarter:       3rd-2001       (24.79%)

                                                                Average annual total return for periods ended 12/31/01
                                                                                                      Since Inception
                                                                          1 year         5 years         (9/13/93)
Growth Portfolio – Institutional Shares                                      (24.73%)        9.05%            11.83%
S&P 500 Index*                                                               (11.88%)       10.70%            13.70%
 * The S&P 500 is the Standard & Poor’s Composite Index of 500 Stocks, a widely recognized, unmanaged index of common stock
   prices.

The Portfolio’s past performance does not necessarily indicate how it will perform in the future.




                                                                                                       Risk return summary 3
FEES   AND EXPENSES
                 Shareholder fees, such as sales loads, redemption fees or exchange fees, are charged directly to an
                 investor’s account. The Janus funds are no-load investments, so you will generally not pay any shareholder
                 fees when you buy or sell shares of the Portfolio. However, each variable insurance contract involves fees
                 and expenses not described in this prospectus. See the accompanying contract prospectus for information
                 regarding contract fees and expenses and any restrictions on purchases or allocations.
                 Annual fund operating expenses are paid out of the Portfolio’s assets and include fees for portfolio
                 management, maintenance of shareholder accounts, shareholder servicing, accounting and other services.
                 You do not pay these fees directly but, as the example below shows, these costs are borne indirectly by all
                 shareholders.
                 This table and example are designed to assist participants in qualified plans that invest in the Shares of the
                 Portfolio in understanding the fees and expenses that you may pay as an investor in the Shares. Owners of
                 variable insurance contracts that invest in the Shares should refer to the variable insurance contract
                 prospectus for a description of fees and expenses, as the table and example do not reflect deductions
                 at the separate account level or contract level for any charges that may be incurred under a contract.

                                                                                                                                   Total Annual Fund
                                                                                                     Management        Other           Operating
                                                                                                        Fee           Expenses         Expenses*
   Growth Portfolio                                                                                    0.65%          0.01%             0.66%
    * Expenses are based upon expenses for the year ended December 31, 2001. All expenses are shown without the effect of any expense offset
      arrangements.
   EXAMPLE:
   This example is intended to help you compare the cost of investing in the Portfolio with the cost of investing in other mutual funds. The
   example assumes that you invest $10,000 in the Portfolio for the time periods indicated and then redeem all of your shares at the end of
   those periods. The example also assumes that your investment has a 5% return each year, and that the Portfolio’s operating expenses remain
   the same. Since no sales load applies, the results apply whether or not you redeem your investment at the end of each period. Although your
   actual costs may be higher or lower, based on these assumptions your costs would be:
                                                                                                       1 Year       3 Years     5 Years      10 Years

   Growth Portfolio                                                                                    $67         $211          $368        $822




4 Janus Aspen Series
INVESTMENT          OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS



              The Portfolio has a similar investment objective and similar principal investment strategies to Janus Fund.
              Although it is anticipated that the Portfolio and its corresponding retail fund will hold similar securities,
              differences in asset size, cash flow needs and other factors may result in differences in investment
              performance. The expenses of the Portfolio and its corresponding retail fund are expected to differ. The
              variable contract owner will also bear various insurance related costs at the insurance company level. You
              should review the accompanying separate account prospectus for a summary of fees and expenses.
INVESTMENT     OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
              This section takes a closer look at the investment objectives of the Portfolio, its principal investment
              strategies and certain risks of investing in the Portfolio. Strategies and policies that are noted as
              ‘‘fundamental’’ cannot be changed without a shareholder vote.
              Please carefully review the ‘‘Risks’’ section of this Prospectus for a discussion of risks associated with
              certain investment techniques. We’ve also included a Glossary with descriptions of investment terms used
              throughout this Prospectus.
              Growth Portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital.
              It pursues its objective by investing primarily in common stocks selected for their growth potential.
              Although the Portfolio can invest in companies of any size, it generally invests in larger, more established
              companies.
The following questions and answers are designed to help you better understand the Portfolio’s principal investment
strategies.
1. How are common stocks selected?
              Consistent with its investment objective and policies, each of the Portfolio may invest substantially all of its
              assets in common stocks if the portfolio manager believes that common stocks will appreciate in value.
              The portfolio manager generally takes a ‘‘bottom up’’ approach to selecting companies. This means that he
              seeks to identify individual companies with earnings growth potential that may not be recognized by the
              market at large. The portfolio manager makes this assessment by looking at companies one at a time,
              regardless of size, country of organization, place of principal business activity, or other similar selection
              criteria.
              Realization of income is not a significant consideration when choosing investments for the Portfolio.
              Income realized on the Portfolio’s investments may be incidental to its objective.
2. Are the same criteria used to select foreign securities?
              Generally, yes. The portfolio manager seeks companies that meet his selection criteria, regardless of where
              a company is located. Foreign securities are generally selected on a stock-by-stock basis without regard to
              any defined allocation among countries or geographic regions. However, certain factors such as expected
              levels of inflation, government policies influencing business conditions, the outlook for currency
              relationships, and prospects for economic growth among countries, regions or geographic areas may
              warrant greater consideration in selecting foreign securities. There are no limitations on the countries in
              which the Portfolio may invest and the Portfolio may at times have significant foreign exposure.
3. What does ‘‘market capitalization’’ mean?
              Market capitalization is the most commonly used measure of the size and value of a company. It is
              computed by multiplying the current market price of a share of the company’s stock by the total number
              of its shares outstanding. The Portfolio does not emphasize companies of any particular size.


                                                                        Investment objective, principal investment strategies and risks 5
GENERAL     PORTFOLIO POLICIES
                The percentage limitations included in these policies and elsewhere in this Prospectus apply at the time of
                purchase of a security. So, for example, if the Portfolio exceeds a limit as a result of market fluctuations or
                the sale of other securities, it will not be required to dispose of any securities.

                Cash Position
                When the portfolio manager believes that market conditions are unfavorable for profitable investing, or
                when he is otherwise unable to locate attractive investment opportunities, the Portfolio’s cash or similar
                investments may increase. In other words, the Portfolio does not always stay fully invested in stocks and
                bonds. Cash or similar investments generally are a residual – they represent the assets that remain after the
                portfolio manager has committed available assets to desirable investment opportunities. However, the
                portfolio manager may also temporarily increase the Portfolio’s cash position to, for example, protect its
                assets, maintain liquidity or meet unusually large redemptions. The Portfolio’s cash position may also
                increase temporarily due to unusually large cash inflows. When the Portfolio’s investments in cash or
                similar investments increase, it may not participate in market advances or declines to the same extent that
                it would if the Portfolio remained more fully invested in stocks or bonds.

                Other Types of Investments
                The Portfolio invests primarily in domestic and foreign equity securities, which may include preferred
                stocks, common stocks and securities convertible into common or preferred stocks. To a lesser degree, the
                Portfolio may invest in other types of domestic and foreign securities and use other investment strategies,
                which are described in the Glossary. These may include:
                ) debt securities
                ) indexed/structured securities
                ) high-yield/high-risk bonds (less than 35% of the Portfolio’s assets)
                ) options, futures, forwards, swaps and other types of derivatives for hedging purposes or for non-hedging
                  purposes such as seeking to enhance return
                ) short sales (no more than 8% of the Portfolio’s assets may be invested in ‘‘naked’’ short sales)
                ) securities purchased on a when-issued, delayed delivery or forward commitment basis

                Illiquid Investments
                The Portfolio may invest up to 15% of its net assets in illiquid investments. An illiquid investment is a
                security or other position that cannot be disposed of quickly in the normal course of business. For
                example, some securities are not registered under U.S. securities laws and cannot be sold to the
                U.S. public because of SEC regulations (these are known as ‘‘restricted securities’’). Under procedures
                adopted by the Portfolio’s Trustees, certain restricted securities may be deemed liquid, and will not be
                counted toward this 15% limit.

                Foreign Securities
                Within the parameters of its specific investment policies, the Portfolio may invest without limit in foreign
                equity and debt securities. The Portfolio may invest directly in foreign securities denominated in a foreign
                currency and not publicly traded in the United States. Other ways of investing in foreign securities include
                depositary receipts or shares and passive foreign investment companies.

6 Janus Aspen Series
              Special Situations
              The Portfolio may invest in special situations. A special situation arises when, in the opinion of the
              portfolio manager, the securities of a particular issuer will be recognized and appreciate in value due to a
              specific development with respect to that issuer. Special situations may include significant changes in a
              company’s allocation of its existing capital, a restructuring of assets, or a redirection of free cash flow.
              Developments creating a special situation might include, among others, a new product or process, a
              technological breakthrough, a management change or other extraordinary corporate event, or differences in
              market supply of and demand for the security. The Portfolio’s performance could suffer if the anticipated
              development in a ‘‘special situation’’ investment does not occur or does not attract the expected attention.

              Portfolio Turnover
              The Portfolio generally intends to purchase securities for long-term investment, although, to the extent
              permitted by its specific investment policies, the Portfolio may purchase securities in anticipation of
              relatively short-term price gains. Short-term transactions may also result from liquidity needs, securities
              having reached a price or yield objective, changes in interest rates or the credit standing of an issuer, or by
              reason of economic or other developments not foreseen at the time of the investment decision. The
              Portfolio may also sell one security and simultaneously purchase the same or a comparable security to take
              advantage of short-term differentials in bond yields or securities prices. Portfolio turnover is affected by
              market conditions, changes in the size of the Portfolio, the nature of the Portfolio’s investments and the
              investment style of the portfolio manager. Changes are made in the Portfolio’s holdings whenever the
              portfolio manager believes such changes are desirable. Portfolio turnover rates are generally not a factor in
              making buy and sell decisions.
              Increased portfolio turnover may result in higher costs for brokerage commissions, dealer mark-ups and
              other transaction costs and may also result in taxable capital gains. Higher costs associated with increased
              portfolio turnover may offset gains in the Portfolio’s performance. The Financial Highlights section of this
              Prospectus shows the Portfolio’s historical turnover rates.
RISKS
              Because the Portfolio may invest substantially all of its assets in common stocks, the main risk is the risk
              that the value of the stocks it holds might decrease in response to the activities of an individual company
              or in response to general market and/or economic conditions. If this occurs, the Portfolio’s share price may
              also decrease. The Portfolio’s performance may also be affected by risks specific to certain types of
              investments, such as foreign securities, derivative investments, non-investment grade bonds, initial public
              offerings (IPOs) or companies with relatively small market capitalizations. IPOs and other investment
              techniques may have a magnified performance impact on a Portfolio with a small asset base. A Portfolio
              may not experience similar performance as its assets grow.
The following questions and answers are designed to help you better understand some of the risks of investing in the
Portfolio.
1. The Portfolio may invest in smaller or newer companies. Does this create any special risks?
              Many attractive investment opportunities may be smaller, start-up companies offering emerging products or
              services. Smaller or newer companies may suffer more significant losses as well as realize more substantial
              growth than larger or more established issuers because they may lack depth of management, be unable to
              generate funds necessary for growth or potential development, or be developing or marketing new
              products or services for which markets are not yet established and may never become established. In


                                                                        Investment objective, principal investment strategies and risks 7
                addition, such companies may be insignificant factors in their industries and may become subject to
                intense competition from larger or more established companies. Securities of smaller or newer companies
                may have more limited trading markets than the markets for securities of larger or more established
                issuers, or may not be publicly traded at all, and may be subject to wide price fluctuations. Investments in
                such companies tend to be more volatile and somewhat more speculative.
2. How could the Portfolio’s investments in foreign securities affect its performance?
                Within the parameters of its specific investment policies, the Portfolio may invest without limit in foreign
                securities either indirectly (e.g., depositary receipts) or directly in foreign markets. Investments in foreign
                securities, including those of foreign governments, may involve greater risks than investing in domestic
                securities because the Portfolio’s performance may depend on issues other than the performance of a
                particular company. These issues include:
                ) Currency Risk. As long as the Portfolio holds a foreign security, its value will be affected by the value of
                  the local currency relative to the U.S. dollar. When the Portfolio sells a foreign denominated security, its
                  value may be worth less in U.S. dollars even if the security increases in value in its home country.
                  U.S. dollar denominated securities of foreign issuers may also be affected by currency risk.
                ) Political and Economic Risk. Foreign investments may be subject to heightened political and economic
                  risks, particularly in emerging markets which may have relatively unstable governments, immature
                  economic structures, national policies restricting investments by foreigners, different legal systems, and
                  economies based on only a few industries. In some countries, there is the risk that the government may
                  take over the assets or operations of a company or that the government may impose taxes or limits on
                  the removal of the Portfolio’s assets from that country.
                ) Regulatory Risk. There may be less government supervision of foreign markets. As a result, foreign
                  issuers may not be subject to the uniform accounting, auditing and financial reporting standards and
                  practices applicable to domestic issuers and there may be less publicly available informati