Northbrook Life Insurance Company
                     Northbrook Variable Annuity Account II

Supplement to:             Morgan Stanley Variable Annuity 3
                             Prospectus Dated May 1, 2001

This supplement announces that the 6 and 12 month dollar cost averaging options,
described on page 19 of your prospectus, are now available. Also, the Basic
Dollar Cost Averaging Option, described in page 19, is being discontinued,
although we may offer the Basic Dollar Cost Averaging Option in the future.
Please keep this supplement for future reference together with your prospectus.

On page 19 of your prospectus, the first two paragraphs under the heading
"Investment Alternatives" are deleted and replaced with the following:

         You may allocate all or a portion of your purchase payments to the
         Fixed Account Options. We also currently offer the 6 and 12 month
         dollar cost averaging options described below. The Basic Dollar Cost
         Averaging Option is currently not available, but we may offer it in the
         future. Please consult with your Morgan Stanley Financial Advisor for
         current information.

         The Fixed Account supports our insurance and annuity obligations. The
         Fixed Account consists of our general assets other than those in
         segregated asset accounts. We have sole discretion to invest the assets
         in the Fixed Accounts subject to applicable law. Any money you allocate
         to a Fixed Account Option does not entitle you to share in the
         investment experience of the Fixed Account.

The following sentence is inserted as the first sentence under the section
"Basic Dollar Cost Averaging Option":

         The Basic Dollar Cost Averaging Option is closed to new purchase
         payments, including automatic additions. In the future, we may offer
         the Basic Dollar Cost Averaging Option.

The first sentence under the section "6 and 12 Month Dollar Cost Averaging
Options," which notes that these options may be available in the future, is
deleted.

Finally, the following sentence is added to the end of the second paragraph
under the section "6 and 12 Month Dollar Cost Averaging Options:

         At the end of the transfer period, any residual amount in the Six-Month
         Dollar Cost Averaging Fixed Account or the Twelve-Month Dollar Cost
         Averaging Fixed Account will be automatically transferred to the Money
         Market Variable Sub-Account.

         For each purchase payment, the first transfer from the Six or Twelve
         Month Dollar Cost Averaging Fixed Account will begin within 30 days
         after the date we receive the payment. If we do not receive an
         allocation instruction from you within 30 days of when we receive
         payment, the purchase payment plus associated interest will be
         transferred to the Money Market Variable Sub-Account in equal monthly
         installments within the selected transfer period until we receive a
         different allocation instruction.

For current interest rate information, please contact your Morgan Stanley
Financial Advisor or Northbrook at 1-800-654-2397.



December 10, 2001