AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                                                    One Corporate Drive, Shelton, Connecticut 06484

This  Prospectus  describes the Evergreen  Skandia  Harvester  XTra Credit  Variable  Annuity,  a flexible  premium
deferred  annuity (the  "Annuity")  offered by American  Skandia Life Assurance  Corporation  ("American  Skandia",
"we",  "our" or "us").  The Annuity may be offered as an individual  annuity  contract or as an interest in a group
annuity.  This  Prospectus  describes the  important  features of the Annuity and what you should  consider  before
purchasing  the  Annuity.  We have also filed a Statement of  Additional  Information  that is  available  from us,
without charge,  upon your request.  The contents of the Statement of Additional  Information are described on page
52.  The  Annuity  or certain of its  investment  options  and/or  features  may not be  available  in all  states.
Various rights and benefits may differ between states to meet  applicable  laws and/or  regulations.  Certain terms
are  capitalized in this  prospectus.  Those terms are either defined in the Glossary of Terms or in the context of
the particular section.

===================================================================================================================
American Skandia offers several  different  annuities which your financial  professional may be authorized to offer
to you. Each annuity has different  features and benefits that may be  appropriate  for you based on your financial
situation,  your  age and how  you  intend  to use  the  annuity.  The  different  features  and  benefits  include
variations in death benefit  protection,  the ability to access your  annuity's  account value and the charges that
you will be  subject  to if you  choose to  surrender  the  annuity.  The fees and  charges  may also be  different
between each annuity.
===================================================================================================================

If you are purchasing the Annuity as a replacement  for existing  variable  annuity or variable life coverage,  you
should  consider any surrender or penalty  charges you may incur when  replacing  your  existing  coverage and that
this Annuity may be subject to a contingent  deferred  sales charge if you elect to surrender the Annuity or take a
partial  withdrawal.  You  should  consider  your need to access  the  annuity's  account  value  and  whether  the
annuity's liquidity features will satisfy that need.

WHY WOULD I CHOOSE TO PURCHASE THIS ANNUITY?

This Annuity is frequently used for retirement  planning.  It may be used as an investment  vehicle for "qualified"
investments,  including an IRA, SEP-IRA,  Roth IRA or Tax Sheltered Annuity (or 403(b)).  It may also be used as an
investment  vehicle for  "non-qualified"  investments.  The Annuity  allows you to invest your money in a number of
variable investment options as well as in one or more fixed investment options.

When an Annuity is purchased as a "non-qualified"  investment,  you generally are not taxed on any investment gains
the Annuity earns until you make a withdrawal or begin to receive annuity  payments.  This feature,  referred to as
"tax-deferral",  can be  beneficial  to the growth of your  Account  Value  because  money that would  otherwise be
needed to pay taxes on  investment  gains  each year  remains  invested  and can earn  additional  money.  However,
because the Annuity is designed for long-term  retirement  savings, a 10% penalty tax may be applied on withdrawals
you make  before you reach age 59 1/2.  Annuities  purchased  as a  non-qualified  investment  are not  subject to the
maximum  contribution  limits that may apply to a  qualified  investment,  and are not subject to required  minimum
distributions after age 701/2.

When an Annuity is purchased as a  "qualified"  investment,  you should  consider that the Annuity does not provide
any additional tax advantages to the preferential  treatment  already  available through your retirement plan under
the Internal  Revenue Code.  An Annuity may offer  features and benefits in addition to providing tax deferral that
other  investment  vehicles may not offer,  including  death benefit  protection for your  beneficiaries,  lifetime
income options,  and the ability to make transfers between numerous variable  investment  options offered under the
Annuity.  You should consult with your financial  professional as to whether the overall  benefits and costs of the
Annuity are appropriate considering your overall financial plan.



-------------------------------------------------------------------------------------------------------------------
These  annuities  are NOT deposits or  obligations  of, or issued,  guaranteed  or endorsed  by, any bank,  are NOT
insured or guaranteed by First Union Bank, the U.S. government,  the Federal Deposit Insurance  Corporation (FDIC),
the Federal Reserve Board or any other agency.  An investment in this annuity  involves certain  investment  risks,
including possible loss of principal.
-------------------------------------------------------------------------------------------------------------------

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR DISAPPROVED  BY THE  SECURITIES  AND EXCHANGE  COMMISSION OR ANY STATE
SECURITIES  COMMISSION  NOR HAS THE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE  ACCURACY OR
ADEQUACY  OF THIS  PROSPECTUS.  ANY  REPRESENTATION  TO THE  CONTRARY  IS A  CRIMINAL  OFFENSE.  PLEASE  READ  THIS
PROSPECTUS AND THE CURRENT PROSPECTUS FOR THE UNDERLYING MUTUAL FUNDS.  KEEP THEM FOR FUTURE REFERENCE.
                                   FOR FURTHER INFORMATION CALL 1-800-752-6342.
Prospectus Dated: May 1, 2001                                                 Statement of Additional Information Dated: May 1, 2001
EVAXT - PROS - (05/2001)                                                                                                   EVAXTPROS






===================================================================================================================
If you purchase this  Annuity,  we apply an  additional  amount (an XTra  CreditSM) to your account value with each
purchase payment you make, including your initial purchase payment and any additional purchase payments.
===================================================================================================================

     This Annuity  features the same Insurance Charge as many of American  Skandia's other variable  annuities.
     However,  if you make a  withdrawal  that  exceeds  the free  withdrawal  amount or choose to  surrender  your
     Annuity,  the  contingent  deferred sales charge (CDSC) on this Annuity is higher and is deducted for a longer
     period of time as compared to our other  variable  annuities.  As with any annuity that  features a CDSC,  you
     should  consider  your need to access your  account  value  during the CDSC  period and whether the  liquidity
     provision under the Annuity will satisfy that need.
===================================================================================================================
===================================================================================================================

===================================================================================================================
     The XTra CreditSM amount is included in your account value.  However,  American  Skandia may take back the
     original  XTra  CreditSM  amount  applied to your  purchase  payment if you die, or elect to withdraw all or a
     portion  of your  account  value  under the  medically-related  waiver  provision,  within 12 months of having
     received  an XTra  CreditSM  amount.  In either  situation,  the value of the XTra  CreditSM  amount  could be
     substantially  reduced.  However,  any  investment  gain on the XTra  CreditSM  amount will not be taken back.
     Additional conditions and restrictions apply.
===================================================================================================================
===================================================================================================================

===================================================================================================================

WHAT ARE SOME OF THE KEY FEATURES OF THE ANNUITY?

|X|      The Annuity is a "flexible  premium deferred  annuity." It is called  "flexible  premium" because you have
       considerable  flexibility  in the  timing  and  amount of premium  payments.  Generally,  investors  "defer"
       receiving annuity payments until after an accumulation period.
|X|      This Annuity  offers both  variable and fixed  investment  options.  If you allocate your Account Value to
       variable  investment  options,  the  value of your  Annuity  will  vary  daily  to  reflect  the  investment
       performance  of the underlying  investment  options.  Fixed  investment  options of different  durations are
       offered that are  guaranteed  by us, but may have a Market  Value  Adjustment  if you withdraw  your Account
       Value before the Maturity Date.
|X|      The Annuity  features two distinct  phases - the  accumulation  period and the payout  period.  During the
       accumulation  period your Account  Value is  allocated to one or more  underlying  investment  options.  The
       variable  investment  options,  each a Class 1 Sub-account of American  Skandia Life  Assurance  Corporation
       Variable Account B, invest in an underlying  mutual fund portfolio.  Currently,  portfolios of the following
       underlying  mutual funds are being  offered:  Evergreen  Variable  Annuity  Trust,  American  Skandia Trust,
       INVESCO Variable Investment Funds, Inc. and Davis Variable Account Fund, Inc.
|X|      During the payout period,  commonly called  "annuitization," you can elect to receive annuity payments (1)
       for life; (2) for life with a guaranteed minimum number of payments;  (3) based on joint lives; or (4) for a
       guaranteed number of payments.  We currently make annuity payments available on a fixed or variable basis.
|X|      This Annuity  offers two  different  types of Credits.  We add a Credit to your Annuity with each Purchase
       Payment we receive.  We also  provide an  additional  1% credit on Purchase  Payments  made within the first
       year and may provide  certain  additional  benefits if your Account  Value has not reached a Target Value on
       its 10th anniversary.
|X|      This  Annuity  offers a basic Death  Benefit.  It also offers  optional  Death  Benefits  that  provide an
       enhanced level of protection for your beneficiary(ies) for an additional charge.
|X|      You are allowed to withdraw a limited  amount of money from your  Annuity on an annual  basis  without any
       charges.  Other product features allow you to access your Account Value as necessary,  although a charge may
       apply.
|X|      Transfers  between  investment  options are tax-free.  Currently,  you may make twenty transfers each year
       free of  charge.  We also offer  several  programs  that  enable you to manage  your  Account  Value as your
       financial needs and investment performance change.

HOW DO I PURCHASE THIS ANNUITY?
We sell the Annuity through  licensed,  registered  financial  professionals.  You must complete an application and
submit a minimum initial  purchase  payment of $1,000.  We may allow you to make a lower initial  purchase  payment
provided you establish a bank drafting  program under which  purchase  payments  received in the first Annuity Year
total at least $1,000.  If the Annuity is owned by an individual or  individuals,  the oldest of those persons must
be age 80 or under.  If the Annuity is owned by an entity, the annuitant must be age 80 or under.








                                                Mailing Addresses:



New Business/Additional Purchase Payments:                                                                      Exchange Paperwork:

American Skandia Life Assurance Corporation                                             American Skandia Life Assurance Corporation
P.O. Box 7040                                                                                                         P.O. Box 7039
Bridgeport, CT  06601-7040                                                                               Bridgeport, CT  06601-7039



All other correspondence:                                                                                   Express/Overnight Mail:

American Skandia Life Assurance Corporation                                             American Skandia Life Assurance Corporation
P.O. Box 7038                                                                                                 Three Corporate Drive
Bridgeport, CT  06601-7038                                                                                       Shelton, CT  06484







                                                 TABLE OF CONTENTS


GLOSSARY OF TERMS..................................................................................................................6


SUMMARY OF CONTRACT FEES AND CHARGES...............................................................................................7


EXPENSE EXAMPLES...................................................................................................................9


INVESTMENT OPTIONS................................................................................................................11

   WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?.............................................................11
   WHAT ARE THE FIXED INVESTMENT OPTIONS?.........................................................................................14

FEES AND CHARGES..................................................................................................................14

   WHAT ARE THE CONTRACT FEES AND CHARGES?........................................................................................14
   WHAT CHARGES APPLY SOLELY TO THE VARIABLE INVESTMENT OPTIONS?..................................................................15
   WHAT CHARGES ARE ASSESSED BY THE PORTFOLIOS?...................................................................................15
   WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?...................................................................................16
   WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYOUT?..............................................................................16
   EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES......................................................................................16

PURCHASING YOUR ANNUITY...........................................................................................................16

   WHAT ARE OUR REQUIREMENTS FOR PURCHASING THE ANNUITY?..........................................................................16

MANAGING YOUR ANNUITY.............................................................................................................17

   MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?................................................................17
   MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?..................................................................................17
   MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?.......................................................................................18
   MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?...................................................................18
   MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?...............................................................18

MANAGING YOUR ACCOUNT VALUE.......................................................................................................18

   HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?...................................................................................18
   HOW DO I RECEIVE CREDITS?......................................................................................................19
   HOW ARE CREDITS APPLIED TO MY ACCOUNT VALUE?...................................................................................19
   ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?.....................................................21
   DO YOU OFFER DOLLAR COST AVERAGING?............................................................................................21
   DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?...............................................................................22
   DO YOU OFFER PROGRAMS DESIGNED TO GUARANTEE A "RETURN OF PREMIUM" AT A FUTURE DATE?............................................22
   MAY I AUTHORIZE MY FINANCIAL PROFESSIONAL TO MANAGE MY ACCOUNT?................................................................24
   HOW DO THE FIXED INVESTMENT OPTIONS WORK?......................................................................................24
   HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?..............................................................................24
   HOW DOES THE MARKET VALUE ADJUSTMENT WORK?.....................................................................................25
   WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?.................................................................................26

AMERICAN SKANDIA'S PERFORMANCE ADVANTAGE..........................................................................................26


ACCESS TO ACCOUNT VALUE...........................................................................................................27

   WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?...............................................................................27
   ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?..................................................................................28
   CAN I WITHDRAW A PORTION OF MY ANNUITY?........................................................................................28
   HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?..................................................................................28
   IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?....................................................................................29
   CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?...............................................29
   DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(T) OF THE INTERNAL REVENUE CODE?.......................................29
   WHAT ARE MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?.............................................................30
   CAN I SURRENDER MY ANNUITY FOR ITS VALUE?......................................................................................30
   WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?....................................................................30
   WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?...................................................................................31
   HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?...........................................................................32
   HOW ARE ANNUITY PAYMENTS CALCULATED?...........................................................................................32

DEATH BENEFIT.....................................................................................................................33

   WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?..................................................................................33
   OPTIONAL DEATH BENEFITS........................................................................................................33
   PAYMENT OF DEATH BENEFITS......................................................................................................36

VALUING YOUR INVESTMENT...........................................................................................................37

   HOW IS MY ACCOUNT VALUE DETERMINED?............................................................................................37
   WHAT IS THE SURRENDER VALUE OF MY ANNUITY?.....................................................................................37
   HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?....................................................................................37
   HOW DO YOU VALUE FIXED ALLOCATIONS?............................................................................................37
   WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?....................................................................................37

TAX CONSIDERATIONS................................................................................................................38

   WHAT ARE SOME OF THE FEDERAL TAX CONSIDERATIONS OF THIS ANNUITY?...............................................................38
   HOW ARE AMERICAN SKANDIA AND THE SEPARATE ACCOUNTS TAXED?......................................................................38
   IN GENERAL, HOW ARE ANNUITIES TAXED?...........................................................................................38
   HOW ARE DISTRIBUTIONS TAXED?...................................................................................................38
   WHAT TAX CONSIDERATIONS ARE THERE FOR TAX-QUALIFIED RETIREMENT PLANS OR QUALIFIED
     CONTRACTS?...................................................................................................................40
   HOW ARE DISTRIBUTIONS FROM QUALIFIED CONTRACTS TAXED?..........................................................................41
   GENERAL TAX CONSIDERATIONS.....................................................................................................42

GENERAL INFORMATION...............................................................................................................43

   HOW WILL I RECEIVE STATEMENTS AND REPORTS?.....................................................................................43
   WHO IS AMERICAN SKANDIA?.......................................................................................................44
   WHAT ARE SEPARATE ACCOUNTS?....................................................................................................44
   WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?...........................................................................45
   WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?.........................................................................46
   AVAILABLE INFORMATION..........................................................................................................47
   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................................................................47
   HOW TO CONTACT US..............................................................................................................47
   INDEMNIFICATION................................................................................................................48
   LEGAL PROCEEDINGS..............................................................................................................48
   EXECUTIVE OFFICERS AND DIRECTORS...............................................................................................48
   CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION............................................................................52

APPENDIX A - FINANCIAL INFORMATION ABOUT AMERICAN SKANDIA..........................................................................1


APPENDIX B - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B..............................................................1


APPENDIX C - CALCULATION OF OPTIONAL DEATH BENEFITS................................................................................1






                                                 GLOSSARY OF TERMS

Many terms used within this  Prospectus are described  within the text where they appear.  The description of those
terms are not repeated in this Glossary of Terms.

Account  Value:  The value of each  allocation to a Sub-account  or a Fixed  Allocation  prior to the Annuity Date,
plus any earnings,  and/or less any losses,  distributions  and charges.  The Account Value is calculated before we
assess any applicable  Contingent  Deferred Sales Charge  ("CDSC") and/or any Annual  Maintenance  Fee. The Account
Value  includes any  additional  amounts we applied to your Purchase  Payments that we are entitled to recover upon
surrender of your Annuity.  The Account  Value is determined  separately  for each  Sub-account  and for each Fixed
Allocation,  and then totaled to determine  Account Value for your entire Annuity.  The Account Value of each Fixed
Allocation on other than its Maturity Date may be calculated using a market value adjustment.

Annuitization:  The  application  of Account  Value to one of the  available  annuity  options  to begin  receiving
periodic  payments for life,  for a  guaranteed  minimum  number of payments or for life with a guaranteed  minimum
number of payments.

Annuity Date: The date you choose for annuity payments to commence.  A maximum Annuity Date may apply.

Annuity Year: A 12-month  period  commencing on the Issue Date of the Annuity and each  successive  12-month period
thereafter.

Code: The Internal Revenue Code of 1986, as amended from time to time.

Fixed  Allocation:  An  allocation of Account Value that is to be credited a fixed rate of interest for a specified
Guarantee Period during the accumulation period.

Guarantee  Period:  A period of time during the  accumulation  period where we credit a fixed rate of interest on a
Fixed Allocation.

Interim  Value:  The value of the Fixed  Allocation on any date other than the Maturity  Date. The Interim Value is
equal to the initial value  allocated to the Fixed  Allocation plus all interest  credited to the Fixed  Allocation
as of the date calculated, less any transfers or withdrawals from the Fixed Allocation.

Issue Date: The effective date of your Annuity.

MVA: A market value  adjustment  used in the  determination  of Account  Value of each Fixed  Allocation on any day
other than the Maturity Date of such Fixed Allocation.

Owner:  With an  Annuity  issued as an  individual  annuity  contract,  the Owner is either an  eligible  entity or
person  named as having  ownership  rights in  relation to the  Annuity.  With an Annuity  issued as a  certificate
under a group  annuity  contract,  the  "Owner"  refers to the person or entity  who has the  rights  and  benefits
designated as to the "Participant" in the certificate.

Surrender  Value:  The value of your Annuity  available  upon  surrender  prior to the Annuity  Date. It equals the
Account  Value as of the date we price the  surrender  minus any  applicable  CDSC,  Annual  Maintenance  Fee,  Tax
Charge,  the charge for any optional benefits and any additional  amounts we applied to your Purchase Payments that
we are entitled to recover upon surrender of your Annuity.

Unit:  A measure used to calculate your Account Value in a Sub-account during the accumulation period.

Valuation  Day:  Every day the New York Stock  Exchange  is open for  trading or any other day the  Securities  and
Exchange Commission requires mutual funds or unit investment trusts to be valued.





SUMMARY OF CONTRACT FEES AND CHARGES

Below is a summary of the fees and  expenses we charge for the  Annuity.  Some  charges are  assessed  against your
Annuity while others are assessed against assets  allocated to the variable  investment  options.  The charges that
are assessed against the Annuity include the Contingent  Deferred Sales Charge,  Annual  Maintenance Fee,  Transfer
Fee and the Tax Charge.  The charge  that is assessed  against the  variable  investment  options is the  Insurance
Charge,  which is the  combination  of a mortality and expense risk charge and a charge for  administration  of the
Annuity.  Each  underlying  mutual  fund  portfolio  assesses  a charge  for  investment  management  and for other
expenses.  The prospectus for each  underlying  mutual fund provides more detailed  information  about the expenses
for the  underlying  funds.  In certain  states,  a premium  tax charge  may be  applicable.  All of these fees and
expenses are described in more detail within this Prospectus.

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                                                       YOUR TRANSACTION EXPENSES
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------------------------------- ----------------------------------------------------------------- --------------------------------------
                                                        Amount Deducted/
         Fee/Expense                                 Description Of Charge                                    When Deducted
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------ --------------------------------------
                                Yr. 1   Yr. 2  Yr. 3  Yr. 4   Yr. 5  Yr. 6  Yr. 7   Yr. 8  Yr.
                                                                                            9+              Upon Surrender or
Contingent Deferred Sales                                                                                  Partial Withdrawal
Charge

------------------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------ --------------------------------------
------------------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------ --------------------------------------
                                 8.5%   8.5%   8.5%    8.5%   7.5%   5.5%    3.5%   1.5%   0.0%
------------------------------- ------- ------ ------ ------- ------ ------ ------- ------ ------
------------------------------- -----------------------------------------------------------------
                                     The charge is a percentage of each applicable purchase
                                  payment. The period is measured from the date each purchase
                                                     payment is allocated.
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- ----------------------------------------------------------------- --------------------------------------
Annual Maintenance Fee                       Smaller of $30 or 2% of Account Value                     Annually on the contract's
                                                                                                   anniversary date or upon surrender
------------------------------- ----------------------------------------------------------------- --------------------------------------
-------------------------------
Transfer Fee                                                 $10.00                               After the 20th transfer each annuity
                                                                                                                  year
------------------------------- ----------------------------------------------------------------- --------------------------------------
------------------------------- ----------------------------------------------------------------- --------------------------------------
Tax Charge                         Depends on the requirements of the applicable jurisdiction                    Various

------------------------------- ----------------------------------------------------------------- --------------------------------------

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                                                  ANNUAL EXPENSES OF THE SUB-ACCOUNTS
                                 (as a percentage of the average daily net assets of the Sub-accounts)
------------------------------- ----------------------------------------------------------------- --------------------------------------
Mortality & Expense Risk
Charge                                                       1.25%
                                                                                                                  Daily
Administration Charge                                        0.15%

Total  Annual  Expenses of the          1.40% per year of the value of each Sub-account              Applies to Variable Investment
Sub-accounts*                                                                                                 Options only
------------------------------- ----------------------------------------------------------------- --------------------------------------
*  The combination of the Mortality and Expense Risk Charges and Administration Charge is referred to as the
"Insurance Charge" elsewhere in this prospectus.

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                                                           OPTIONAL BENEFITS
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------------------------------------------------------------------------------------------------------- --------------------------------
GUARANTEED RETURN OPTION
We offer a program  that  guarantees a "return of premium" at a future  date,  while  allowing you to       0.25% of Account Value
allocate all or a portion of your Account Value to the  Sub-accounts of your choice.  Please refer to
the discussion of the Guaranteed Return Option for a description of restrictions under the program.        (Amounts are deducted in
                                                                                                          arrears each Annuity Year)
------------------------------------------------------------------------------------------------------- --------------------------------
------------------------------------------------------------------------------------------------------- --------------------------------
ENHANCED BENEFICIARY PROTECTION DEATH BENEFIT
We  offer an  Optional  Death  Benefit  that  provides  an  enhanced  level  of  protection  for your       0.25% of Account Value
beneficiary(ies)  by providing  additional amounts that can be used to offset federal and state taxes
payable on any taxable gains in your Annuity at the time of your death.                                    (Amounts are deducted in
                                                                                                          arrears each Annuity Year)
------------------------------------------------------------------------------------------------------- --------------------------------
------------------------------------------------------------------------------------------------------- --------------------------------
GUARANTEED MINIMUM DEATH BENEFIT
We  offer an  Optional  Death  Benefit  that  provides  an  enhanced  level  of  protection  for your     0.30% of the current Death
beneficiary(ies)  by providing the greater of the current  Account Value,  a 5.0% annual  increase on               Benefit
Purchase Payments minus proportional withdrawals or the Highest Anniversary Value.                         (Amounts are deducted in
                                                                                                          arrears each Annuity Year)
------------------------------------------------------------------------------------------------------- --------------------------------
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 Please refer to the section entitled "Death Benefit" for a complete discussion of the optional Death Benefits, including restrictions
                                 on the age of the Owner/ Annuitant and limits on the amount payable.
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                                           Underlying Mutual Fund Portfolio Annual Expenses
                               (as a percentage of the average net assets of the underlying Portfolios)
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Below are the  investment  management  fees,  other  expenses,  and the total annual  expenses for each  underlying
Portfolio as of December  31,  2000,  except as noted.  The total  annual  expenses  are the sum of the  investment
management  fee,  other  expenses  and any 12b-1 fees.  Each  figure is stated as a  percentage  of the  underlying
Portfolio's  average daily net assets.  For certain of the underlying  Portfolios,  a portion of the management fee
is being waived  and/or other  expenses are being  partially  reimbursed.  "N/A"  indicates  that no portion of the
management  fee and/or other  expenses is being waived and/or  reimbursed.  Any  footnotes  about  expenses  appear
after the list of all the  portfolios.  Those  portfolios  whose name  includes the prefix "AST" are  portfolios of
American  Skandia Trust.  The underlying  mutual fund portfolio  information was provided by the underlying  mutual
funds  and  has  not  been  independently  verified  by us.  See  the  prospectuses  or  statements  of  additional
information of the underlying  Portfolios for further details.  The current  prospectus and statement of additional
information for the underlying Portfolios can be obtained by calling 1-800-752-6342.

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                                                   Management        Other      12b-1 Fees    Total Annual   Fee          Net
              UNDERLYING PORTFOLIO                    Fees         Expenses                     Portfolio     Waivers     Annual
                                                                                                Operating       and       Fund
                                                                                                Expenses      Expense     Operating
                                                                                                            Reimburse-     Expenses
                                                                                                              ment (1)
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Evergreen Variable Annuity Trust:
  Omega                                                0.52%         0.16%           0.00%         0.68%          N/A         0.68%
  Equity Index                                         0.32%         0.22%           0.00%         0.54%         0.23%        0.31%
  Foundation                                           0.75%         0.17%           0.00%         0.92%          N/A         0.92%
  Global Leaders                                       0.87%         0.29%           0.00%         1.16%         0.15%        1.01%
  Small Cap Value                                      0.87%         0.27%           0.00%         1.14%         0.12%        1.02%
  Special Equity                                       0.92%         0.25%           0.00%         1.17%         0.13%        1.04%
  Strategic Income                                     0.55%         0.29%           0.00%         0.84%          N/A         0.84%
  Capital Growth                                       0.80%         0.32%           0.00%         1.12%         0.09%        1.03%
  Blue Chip                                            0.61%         0.64%           0.00%         1.25%         0.24%        1.01%

American Skandia Trust: (2)
  AST AIM International Equity                        0.86%          0.24%          0.06%         1.16%          N/A         1.16%
  AST MFS Growth                                      0.90%          0.30%          0.00%         1.20%          N/A         1.20%
  AST JanCap Growth                                   0.90%          0.13%          0.01%         1.04%         0.04%        1.00%
  AST MFS Growth with Income                          0.90%          0.33%          0.00%         1.23%          N/A         1.23%
  AST Federated High Yield                            0.75%          0.21%          0.00%         0.96%          N/A         0.96%
  AST Money Market                                    0.50%          0.15%          0.00%         0.65%         0.05%        0.60%

INVESCO Variable Investment Funds, Inc.:
  Dynamics                                             0.75%         0.34%           0.00%         1.09%          N/A         1.09%
  Technology                                           0.72%         0.30%           0.00%         1.02%          N/A         1.02%

Davis Variable Account Fund, Inc:
  Davis Value                                          0.75%          0.26%          0.00%         1.01%         0.01%        1.00%
------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------

1        The  Investment  Manager of American  Skandia Trust has agreed to reimburse  and/or waive fees for certain
     Portfolios  until at least April 30, 2002.  The caption "Total Annual Fund  Operating  Expenses"  reflects the
     Portfolios'  fees and  expenses  before such  waivers and  reimbursements,  while the caption "Net Annual Fund
     Operating Expenses" reflects the effect of such waivers and reimbursements.
2        American  Skandia Trust (the "Trust")  adopted a Distribution  Plan (the  "Distribution  Plan") under Rule
     12b-1 of the  Investment  Company  Act of 1940 to permit an  affiliate  of the Trust's  Investment  Manager to
     receive  brokerage  commissions in connection with purchases and sales of securities held by Portfolios of the
     Trust,  and to use these  commissions  to promote the sale of shares of such  Portfolios.  While the brokerage
     commission  rates and amounts paid by the various  Portfolios  are not expected to increase as a result of the
     Distribution  Plan,  the staff of the Securities and Exchange  Commission  takes the position that  commission
     amounts  received  under  the  Distribution  Plan  should  be  reflected  as  distribution   expenses  of  the
     Portfolios.  The  Distribution  Fee  estimates  are  derived and  annualized  from data  regarding  commission
     amounts  directed to the affiliate  under the  Distribution  Plan for the fiscal year ended December 31, 2000.
     Although there are no maximum amounts  allowable,  actual  commission  amounts directed under the Distribution
     Plan will vary and the  amounts  directed  during the first full  fiscal  year of the  Plan's  operations  may
     differ substantially from the annualized amounts listed in the above chart.






EXPENSE EXAMPLES
These examples are designed to assist you in  understanding  the various costs and expenses you will incur with the
Annuity  over  certain  periods of time  based on  specific  assumptions.  The  examples  reflect  expenses  of our
Sub-accounts,  as well as those of the underlying  mutual fund portfolios.  The Securities and Exchange  Commission
("SEC") requires these examples.

The examples  shown  assume that:  (a) you only  allocate  Account  Value in the  Sub-accounts;  (b) the  Insurance
Charge is  assessed as 1.40% per year;  (c) the Annual  Maintenance  Fee is  reflected  as a charge  equal to 0.05%
based on an assumed  average  contract  size; (d) you make no withdrawals of Account Value during the period shown;
(e) you make no  transfers,  withdrawals,  surrender or other  transactions  that we charge a fee during the period
shown;  (f) no tax  charge  applies;  (g) the  expenses  throughout  the  period  for the  underlying  mutual  fund
portfolios  will be the "Net Annual Fund Operating  Expenses," as shown above in the section  entitled  "Underlying
Mutual  Fund  Portfolio  Annual  Expenses";  and (h)  the  Credit  applicable  to your  Annuity  is 3% of  Purchase
Payments.  The Credit may be less when total  Purchase  Payments  are less then  $10,000 and may be more when total
Purchase  Payments  are at least  $1,000,000  (see "How do I Receive  Credits?").  The  examples do not reflect the
impact of any Target Value Credits that may be applied to Purchase Payments within the first Annuity Year.

These  examples do not reflect the charge for either  optional  Death  Benefit that is offered under the Annuity or
the  Guaranteed  Return  Option.  If you purchase the Annuity with either  optional Death Benefit or the Guaranteed
Return  Option,  this  charge is deducted on an annual  basis in arrears in  addition to the amounts  shown  below.
Please  see the  example  of how we charge  for the  optional  Death  Benefits  and the  Guaranteed  Return  Option
following these tables.

THE EXAMPLES ARE ILLUSTRATIVE  ONLY - THEY SHOULD NOT BE CONSIDERED A REPRESENTATION  OF PAST OR FUTURE EXPENSES OF
THE UNDERLYING MUTUAL FUNDS OR THEIR PORTFOLIOS - ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

-----------------------------------------------------------------------------------------------------------------------------------------
                                                                  Expense Examples
                                                  (amounts shown are rounded to the nearest dollar)
-----------------------------------------------------------------------------------------------------------------------------------------


                                         -------------------------------------------- ------- -----------------------------------------
                                         If you  surrender  your  Annuity at the end          If you do not surrender  your Annuity at
                                         of the  applicable  time period,  you would          the end of the  applicable  time  period
                                         pay  the  following  expenses  on a  $1,000          or  begin  taking  annuity  payments  at
                                         investment,  assuming  5% annual  return on          such time,  you would pay the  following
                                         assets:                                              expenses   on   a   $1,000   investment,
                                                                                              assuming 5% annual return on assets:
                                         -------------------------------------------- ------- -----------------------------------------


After:                                                                                 After:
----------------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
Sub-Account:                                 1 Year    3 Years    5 Years   10 Years          1 Year     3 Years    5 Years   10 Years
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------
EVA Omega                                      107        154       193        254               22         69        118        254
EVA Equity Index                               104        143       174        214               19         58         99        214
EVA Foundation                                 110        162       207        280               25         77        132        280
EVA Global Leaders                             111        165       212        290               26         80        137        290
EVA Small Cap Value                            111        165       212        290               26         80        137        290
EVA Special Equity                             111        166       213        293               26         81        138        293
EVA Strategic Income                           109        159       202        271               24         74        127        271
EVA Capital Growth                             111        165       212        291               26         80        137        291
EVA Blue Chip                                  111        165       212        290               26         80        137        290

AST AIM International Equity                   113        170       219        305               28         85        144        305
AST MFS Growth                                 113        171       221        309               28         86        146        309
AST JanCap Growth                              111        164       210        288               26         79        135        288
AST MFS Growth with Income                     113        172       223        312               28         87        148        312
AST Federated High Yield                       110        163       208        284               25         78        133        284
AST Money Market                               107        152       189        246               22         67        114        246

INVESCO VIF Dynamics                           112        167       215        297               27         82        140        297
INVESCO VIF Technology                         111        165       212        290               26         80        137        290

Davis Value                                    111        164       210        288               26         79        135        288
-------------------------------------------- --------- ---------- --------- ---------- ------ ---------- ---------- --------- ----------



Expenses For Optional Benefits

Guaranteed Return Option
If you elect to  participate in the Guaranteed  Return Option  program,  an annual charge of 0.25% is deducted from
your  Annuity's  Account  Value.  The charge will be based on the Account Value of the  Sub-accounts  and any Fixed
Allocations  as of the date the charge is deducted.  Below is an example of how the charge for the  Optional  Death
Benefit is calculated.

Initial Purchase Payment:           $10,000
Account Value on
  Anniversary of Issue Date:        $12,500

Cost of Optional Death Benefit      0.25% X $12,500 = $31.25 per year

Enhanced Beneficiary Protection Death Benefit
If you purchase the Enhanced Beneficiary Protection Optional Death Benefit, an annual charge of 0.25% is deducted
from your Annuity's Account Value. The charge will be based on the Account Value of the Sub-accounts and any
Fixed Allocations as of the date the charge is deducted.  Below is an example of how the charge for the Optional
Death Benefit is calculated.

Initial Purchase Payment:           $10,000
Account Value on
  Anniversary of Issue Date:        $12,500

Cost of Optional Death Benefit      0.25% X $12,500 = $31.25 per year

Since charges for the Optional Death Benefit are determined based on a percentage of Account Value, you will pay
more for this benefit if your Account Value increases.  The value of the Optional Death Benefit will also
increase as the Account Value increases.    However, the Optional Death Benefit is also subject to a maximum
benefit.  See the section entitled "Optional Death Benefits" for a description of the Enhanced Beneficiary
Protection Optional Death Benefit.


Guaranteed Minimum Death Benefit
If you purchase the Guaranteed Minimum Death Benefit, an annual charge of 0.30% is deducted from your Annuity's
Account Value.  The charge will be based on the current Death Benefit under the Guaranteed Minimum Death Benefit
as of the date the charge is deducted.  Below is an example of how the charge for the Guaranteed Minimum Death
Benefit is calculated.

Initial Purchase Payment:           $10,000
Account Value on
  Anniversary of Issue Date:        $12,500
Current Death Benefit:              $13,000

Cost of Optional Death Benefit      0.30% X Current Death Benefit = $39.00 per year

The charge for optional Death Benefits is deducted in addition to the Insurance Charge which is deducted on a
daily basis from the Account Value allocated to the Sub-accounts.  The charge for the optional Death Benefits is
deducted in arrears on each anniversary of the Issue Date of the Annuity or, if you terminate the optional Death
Benefit or surrender your Annuity, on the date the termination or surrender is effective.





INVESTMENT OPTIONS

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?

Each variable  investment option is a Class 1 Sub-account of American Skandia Life Assurance  Corporation  Variable
Account B (see "What are Separate Accounts" for more detailed  information.) Each Sub-account  invests  exclusively
in one Portfolio.  You should  carefully read the  prospectus  for any Portfolio in which you are  interested.  The
following chart  classifies  each of the Portfolios  based on our assessment of their  investment  style (as of the
date of this  Prospectus).  The chart also  provides a description  of each  Portfolio's  investment  objective (in
italics) and a short,  summary  description of their key policies to assist you in determining which Portfolios may
be of interest to you.  There is no guarantee  that any  underlying  mutual fund portfolio will meet its investment
objective.

The name of the  advisor/sub-advisor  for each Portfolio  appears next to the  description.  Those portfolios whose
name  includes the prefix  "AST" are  portfolios  of American  Skandia  Trust.  The  investment  manager for AST is
American  Skandia  Investment  Services,  Incorporated  ("ASISI"),  an  affiliated  company  of  American  Skandia.
However, a sub-advisor, as noted below, is engaged to conduct day-to-day investment decisions.

Some of the Portfolios  available as  Sub-accounts  under the Annuity are managed by the same portfolio  advisor or
sub-advisor  as a retail mutual fund that the Portfolio may have been modeled after at the  Portfolio's  inception.
Certain  retail  mutual funds may also have been modeled  after a Portfolio.  While the  investment  objective  and
policies  of the funds may be  substantially  similar,  the actual  investments  made by the funds  will  differ to
varying  degrees.  Differences  in the  performance  of the  funds  can be  expected,  and in some  cases  could be
substantial.  Details about the  investment  objectives,  policies,  risks,  costs and management of the Portfolios
are found in the prospectuses for the underlying mutual funds.

Please refer to Appendix B for certain  required  financial  information  related to the historical  performance of
the Sub-accounts.

------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Money Market:  seeks to maximize current income and maintain high levels of liquidity.  The
   MONEY MARKET     Portfolio  attempts to  accomplish  its  objective by  maintaining  a  dollar-weighted  average       J. P. Morgan
                    maturity  of not  more  than 90 days  and by  investing  in  securities  which  have  effective  Investment Management
                    maturities of not more than 397 days.                                                                     Inc.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Federated  High Yield:  seeks high current  income by investing  primarily in a diversified
                    portfolio of fixed income  securities.  The Portfolio will invest at least 65% of its assets in
 HIGH YIELD BOND    lower-rated  corporate fixed income  securities  ("junk bonds").  These fixed income securities
                    may include preferred stocks,  convertible  securities,  bonds,  debentures,  notes,  equipment   Federated Investment
                    lease  certificates  and  equipment  trust  certificates.  A fund  that  invests  primarily  in        Counseling
                    lower-rated  fixed  income  securities  will  be  subject  to  greater  risk  and  share  price
                    fluctuation  than a typical fixed income fund,  and may be subject to an amount of risk that is
                    comparable to or greater than many equity funds.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Strategic  Income:  seeks high current  income from  interest on debt  securities.
                    Secondarily,  the Portfolio considers potential for growth of capital in selecting  securities.
                    The  Portfolio  intends  to  allocate  its  assets  principally  between  domestic  high-yield,   Evergreen Investment
  INTER-NATIONAL    high-risk  bonds and debt securities  (which may be denominated in U.S.  dollars or in non-U.S.   Management Company,
       BOND         currencies) of foreign governments and foreign corporations.  In addition,  the Portfolio will,           LLC
                    from time to time,  allocate a portion of its assets to U.S. government  securities,  including     (f/k/a Evergreen
                    zero-coupon   U.S.   Treasury   securities,   mortgage-backed   securities   and  money  market  Investment Management
                    instruments.  This allocation will be made on the basis of the investment  advisor's assessment         Company)
                    of global  opportunities  for high income and high  investment  return.  From time to time, the
                    Portfolio may invest 100% of its assets in U.S. or foreign securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA  Foundation:  seeks,  in order of priority,  reasonable  income,  conservation  of
                    capital and capital  appreciation.  The  Portfolio  invests  principally  in a  combination  of
                    common stocks,  securities  convertible into or exchangeable for common stocks and fixed income   Evergreen Investment
                    securities.  Common  stocks are  selected  based on a  combination  of  financial  strength and   Management Company,
BALANCED            estimated  growth  potential.  Fixed income  securities  are selected  based on the  investment           LLC
                    adviser's  projections of interests  rates,  varying amounts and maturities in order to achieve     (f/k/a Evergreen
                    capital protection and, when possible,  capital appreciation.  Under normal circumstances,  the     Asset Management
                    Portfolio  anticipates  that at least 25% of its net assets will consist of debt securities and          Corp.)
                    the remainder in equity securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS Growth with Income:  seeks reasonable  current income and long-term  capital growth and
                    income.  Under  normal  market  conditions,  the  Portfolio  invests  at least 65% of its total
                    assets  in  common  stocks  and  related  securities,  such as  preferred  stocks,  convertible
 GROWTH & INCOME    securities and depositary  receipts.  The stocks in which the Portfolio  invests generally will      Massachusetts
                    pay  dividends.  While the  Portfolio  may  invest in  companies  of any  size,  the  Portfolio    Financial Services
                    generally  focuses  on  companies  with  larger  market  capitalizations  that the  Sub-advisor         Company
                    believes have  sustainable  growth  prospects and  attractive  valuations  based on current and
                    expected  earnings  or cash  flow.  The  Portfolio  may  invest up to 20% of its net  assets in
                    foreign securities.
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Equity Index:  seeks investment  results that achieve price and yield  performance
                    similar  to the  Standards  and  Poor's  500  Composite  Price  Index  ("S&P 500  Index").  The   Evergreen Investment
  S&P 500 INDEX     Portfolio  invests  substantially all of its total assets in equity securities that represent a   Management Company,
                    composite of the S&P 500 Index.  The  correlation  between the performance of the Portfolio and           LLC
                    the S&P 500  Index is  expected  to be,  before  expenses,  0.98 or  higher.  The S&P 500 is an   (f/k/a First Capital
                    unmanaged  index of 500 common stocks chosen to reflect the industries of the U.S.  economy and          Group)
                    is often considered a proxy for the stock market in general.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST JanCap Growth:  seeks growth of capital in a manner  consistent  with the  preservation  of
                    capital.  Realization of income is not a significant  investment  consideration  and any income
                    realized on the  Portfolio's  investments,  therefore,  will be incidental  to the  Portfolio's
                    objective.  The Portfolio will pursue its objective by investing  primarily in common stocks of      Janus Capital
                    companies that the Sub-advisor  believes are  experiencing  favorable demand for their products       Corporation
                    and services,  and which operate in a favorable  competitive  and regulatory  environment.  The
                    Sub-advisor  generally takes a "bottom up" approach to choosing  investments for the Portfolio.
                    In other words,  the Sub-advisor  seeks to identify  individual  companies with earnings growth
                    potential that may not be recognized by the market at large.



 LARGE CAP EQUITY
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS  Growth:  seeks  long-term  capital  growth  and future  income.  Under  normal  market
                    conditions,  the  Portfolio  invests  at least 80% of its total  assets  in common  stocks  and
                    related securities,  such as preferred stocks,  convertible securities and depositary receipts,      Massachusetts
                    of companies that the  Sub-advisor  believes offer better than average  prospects for long-term    Financial Services
                    growth.  The Sub-advisor seeks to purchase  securities of companies that it considers  well-run         Company
                    and  poised  for  growth.  The  Portfolio  may  invest up to 35% of its net  assets in  foreign
                    securities.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    Davis Value:  seeks growth of capital.  The  Portfolio  invests  primarily in common  stocks of
                    U.S.  companies with market  capitalizations  of at least $5 billion which the Advisor believes      Davis Selected
                    are of high  quality and whose shares are selling at  attractive  prices.  The Advisor  selects      Advisers, L.P.
                    stocks with the intention of holding them for the long term.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Blue Chip:  seeks  capital  growth with the  potential  for income.  The Portfolio   Evergreen Investment
                    invests  primarily  in common  stocks of  well-established,  large U.S.  companies  with a long   Management Company,
                    history  of  performance,   typically   recognizable   names  representing  a  broad  range  of           LLC
                    industries.   To  provide  balance,   the  Portfolio  also  invests  in  quality   medium-sized     (f/k/a Evergreen
                    companies.  The  Portfolio's  stock  selection  is  based  on a  diversified  style  of  equity  Investment Management
                    investment  management  that  allows  it to invest in both  value  and  growth-oriented  equity         Company)
                    securities.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen  VA  Capital  Growth:  seeks  to  provide  long-term  appreciation  of  capital.  The
                    Portfolio  invests  primarily  in common  stocks.  The  Portfolio  may also invest in preferred   Evergreen Investment
                    stocks,  convertible preferred stocks,  convertible debentures,  and any other class or type of   Management Company,
 LARGE CAP EQUITY   security which the investment  adviser believes offers the potential for capital  appreciation.           LLC
     (Cont.)        In selecting  investments,  the investment adviser attempts to identify  securities it believes      (f/k/a Mentor
                    will provide  capital  appreciation  over the  intermediate  or long term due to changes in the   Investment Advisors
                    financial condition of issuers, changes in financial conditions generally, or other factors.              LLC)
                    ------------------------------------------------------------------------------------------------ -----------------------








  MID-CAP EQUITY







------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Omega:  seeks maximum capital growth.  The Portfolio  invests  primarily in common
                    stocks and  securities  convertible  into  common  stocks of U.S.  companies  across all market   Evergreen Investment
                    capitalizations.  The  Portfolio  utilizes the  fully-managed  investment  concept  whereby the   Management Company,
                    Portfolio's  manager  will  continuously  review the  Portfolio's  holdings  in light of market           LLC
                    conditions,  business  developments  and  economic  trends.  During  this review  process,  the     (f/k/a Evergreen
                    Portfolio's  manager  seeks to identify and invest in industries  that are growing  faster than  Investment Management
                    the economy.  The Portfolio  invests in companies of all sizes. The continuous  review may lead         Company)
                    to high portfolio  turnover,  but that will not limit investment  decisions.  The Portfolio may
                    also invest up to 25% of its assets in foreign securities.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    INVESCO  Variable  Investment  Funds -  Dynamics:  seek  capital  appreciation.  The  Portfolio
                    invests   primarily  in  common  stocks  of  mid-size  U.S.   companies  -  those  with  market
                    capitalizations  between $2 billion  and $15 billion at the time of purchase - but also has the
                    flexibility to invest in other types of securities,  including  preferred  stocks,  convertible
                    securities  and bonds.  The core of the  Portfolio's  portfolio  is invested in  securities  of   INVESCO Funds Group,
                    established  companies  that are leaders in attractive  growth markets with a history of strong           Inc.
                    returns.  The  remainder of the  Portfolio  is invested in  securities  that show  accelerating
                    growth,  driven by product cycles,  favorable  industry or sector  conditions and other factors
                    that will lead to rapid sales and earnings growth.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Special Equity:  seeks capital growth.  The Portfolio  strives to provide a return   Evergreen Investment
                    greater  than  broad  stock  market  indices  such  as the  Russell  2000  Index  by  investing   Management Company,
                    principally  in a diversified  portfolio of common stocks of U.S.  companies.  The  Portfolio's           LLC
                    investment  adviser  principally  chooses  companies which it expects will experience growth in     (f/k/a Meridian
                    earnings  and price,  and which have small market  capitalizations  (up to $1.5  billion).  The   Investment Company)
 SMALL CAP EQUITY   Portfolio may purchase stocks in initial public offerings (IPOs).
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Small Cap Value:  seeks current income and capital growth.  The Portfolio seeks to   Evergreen Investment
                    achieve its goal by investing  primarily in common stocks and convertible  preferred  stocks of   Management Company,
                    small  companies  (less than $1.5 billion in market  capitalization).  The  Portfolio  seeks to           LLC
                    limit the investment  risk of small company  investing by seeking  stocks that produce  regular     (f/k/a Evergreen
                    income and trade below what the Portfolio's manager considers their intrinsic value.                Asset Management
                                                                                                                             Corp.)
                    ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Evergreen VA Global Leaders:  seeks to provide  investors with long-term  capital  growth.  The
                    Portfolio  normally  invests as least 65% of its assets in a diversified  portfolio of U.S. and   Evergreen Investment
                    non-U.S.   equity  securities  of  companies  located  in  the  world's  major   industrialized   Management Company,
  GLOBAL EQUITY     countries.  The Portfolio  will invest in no less than three  countries,  which may include the           LLC
                    U.S.,  but may invest more than 25% of its total assets in one country.  The Portfolio  invests     (f/k/a Evergreen
                    only in the  best  100  companies,  which  are  selected  by the  investment  advisor  based on     Asset Management
                    qualitative  and  quantitative  criteria  such as high  return on equity,  consistent  earnings          Corp.)
                    growth and established market presence.
------------------- ------------------------------------------------------------------------------------------------ -----------------------






------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
------------------- ------------------------------------------------------------------------------------------------ -----------------------
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST AIM International  Equity:  seeks capital growth. The Portfolio seeks to meet its objective
                    by investing,  normally,  at least 70% of its assets in marketable equity securities of foreign
  INTERNA-TIONAL    companies that are listed on a recognized  foreign  securities  exchange or traded in a foreign      A I M Capital
      EQUITY        over-the-counter  market.  The Portfolio will normally  invest in a diversified  portfolio that     Management, Inc.
                    includes  companies  from at least  four  countries  outside  the  United  States,  emphasizing
                    countries of Western Europe and the Pacific Basin.
                    ------------------------------------------------------------------------------------------------ -----------------------
--------------------------------------------------------------------------------------------------------------------------------------------
Sector funds generally diversify their investments across the particular economic sectors.  However,  because those investments are limited
to a  comparatively  narrow segment of the economy,  the sector funds are generally not as  diversified as most mutual funds.  Sector funds
tend to be more  volatile  than other  types of funds.  The value of fund shares may go up and down more  rapidly  than other  funds.  Each
sector of the economy may also have  different  regulatory  or other risk factors that can cause greater  fluctuations  in the share price.
Please read the prospectus for the underlying sector fund for further details about the risks of the particular sector of the economy.
------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    INVESCO  Variable  Investment  Funds - Technology:  seeks capital  appreciation.  The Portfolio
                    invests  primarily  in  the  equity  securities  of  companies  engaged  in  technology-related
                    industries.  These include,  but are not limited to,  communications,  computers,  electronics,
                    Internet, IT services and consulting,  oceanography, office and factory automation, networking,   INVESCO Funds Group,
      SECTOR        applied  technology,  biotechnology,  robotics  and video.  A core  portion of the  Portfolio's           Inc.
                    holdings are invested in  market-leading  technology  companies  which the  investment  advisor
                    believes  will  maintain  or  improve  their  market  share   regardless  of  overall  economic
                    conditions.  The  remainder  of  the  Portfolio's  holdings  consist  of  faster-growing,  more
                    volatile  technology  companies which the investment advisor believes to be emerging leaders in
                    their fields.
------------------- ------------------------------------------------------------------------------------------------ -----------------------


WHAT ARE THE FIXED INVESTMENT OPTIONS?
We  offer  fixed  investment  options  of  different  durations  during  the  accumulation   period.  These  "Fixed
Allocations"  earn a  guaranteed  fixed rate of interest  for a  specified  period of time,  called the  "Guarantee
Period."  In most  states,  we offer Fixed  Allocations  with  Guarantee  Periods  from 1 to 10 years.  We may also
offer  special  purpose Fixed  Allocations  for use with certain  optional  investment  programs.  We guarantee the
fixed rate for the entire Guarantee  Period.  However,  if you withdraw or transfer Account Value before the end of
the  Guarantee  Period,  we will  adjust the value of your  withdrawal  or  transfer  based on a formula,  called a
"Market  Value  Adjustment."  The Market  Value  Adjustment  can either be positive or  negative,  depending on the
rates that are currently being credited on Fixed  Allocations.  Please refer to the section  entitled "How does the
Market Value  Adjustment  Work?" for a description of the formula along with examples of how it is calculated.  You
may allocate Account Value to more than one Fixed Allocation at a time.

Fixed Allocations are currently not available in the state of Maryland, Nevada, Oregon, Utah and Washington.

FEES AND CHARGES

WHAT ARE THE CONTRACT FEES AND CHARGES?
(The Contingent Deferred Sales Charge is often referred to as a "Surrender Charge" or "CDSC".)

Contingent  Deferred Sales Charge:  We may assess a Contingent  Deferred Sales Charge or CDSC if you surrender your
Annuity or when you make a partial  withdrawal.  The CDSC is calculated  as a percentage  of your Purchase  Payment
being  surrendered  or withdrawn  during the  applicable  Annuity Year. The amount of the CDSC decreases over time,
measured from the date the Purchase Payment is applied.  The CDSC percentages are shown below.

                           ------------------ ----- ------ ----- ----- ----- ----- ----- ----- -----

                           YEARS               1      2     3     4     5     6     7     8     9+
                           ------------------ ----- ------ ----- ----- ----- ----- ----- ----- -----
                           ------------------ ----- ------ ----- ----- ----- ----- ----- ----- -----

                           CHARGE (%)         8.5    8.5   8.5   8.5   7.5   5.5   3.5   1.5   0.0
                           ------------------ ----- ------ ----- ----- ----- ----- ----- ----- -----

Each  Purchase  Payment has its own CDSC period.  When you make a  withdrawal,  we assume that the oldest  Purchase
Payment is being  withdrawn  first so that the lowest CDSC is deducted from the amount  withdrawn.  After eight (8)
complete  years from the date you make a Purchase  Payment,  no CDSC will be assessed if you  withdraw or surrender
that Purchase Payment.

Under certain  circumstances  you can withdraw a limited  amount of Account Value  without  paying a CDSC.  This is
referred to as a "Free  Withdrawal." We may waive the CDSC under certain  medically-related  circumstances  or when
taking  a  Minimum  Distribution  from  an  Annuity  purchased  as  a  "qualified"  investment.  Free  Withdrawals,
Medically-Related  Waivers and Minimum  Distributions are each explained more fully in the section entitled "Access
to Your Account Value".

Annual  Maintenance  Fee:  During  the  accumulation  period  we  deduct  an Annual  Maintenance  Fee.  The  Annual
Maintenance  Fee is $30.00 or 2% of your Account Value invested in the variable  investment  options,  whichever is
less.  This fee will be  deducted  annually  on the  anniversary  of the  Issue  Date of your  Annuity  or,  if you
surrender  your Annuity  during the Annuity  Year,  the fee is deducted at the time of  surrender.  We may increase
the Annual  Maintenance  Fee.  However,  any  increase  will only apply to  Annuities  issued after the date of the
increase.

Optional  Benefits:  If you elect to purchase either optional Death Benefit,  we will deduct the annual charge from
your Account  Value on the  anniversary  of your  Annuity's  Issue Date or, under certain  circumstances  on a date
other than the  anniversary  date.  Under  certain  circumstances,  we may deduct a pro-rata  portion of the annual
charge for the optional Death Benefit.  Please refer to the section  entitled  "Death Benefit" for a description of
the charge for each  Optional  Death  Benefit.  If you elect to purchase  the  Guaranteed  Return  Option,  we will
deduct the annual charge from your Account Value on the  anniversary  of your Annuity's  Issue Date.  Under certain
circumstances,  we may deduct a pro-rata  portion of the annual charge for the  Guaranteed  Return  Option.  Please
refer to the section  entitled  "Managing  Your  Account  Value - Do you offer  programs  designed  to  guarantee a
"return of premium" at a future date?" for a description of the charge for the Guaranteed Return Option.

Transfer Fee:  Currently,  you may make twenty (20) free transfers  between  investment  options each Annuity Year.
We will charge  $10.00 for each transfer  after the  twentieth in each Annuity  Year. We do not consider  transfers
made as part of a dollar cost  averaging  program when we count the twenty free  transfers.  Transfers made as part
of a rebalancing,  market timing or third party investment  advisory service will be subject to the twenty-transfer
limit.  However,  all  transfers  made on the same day will be treated as one (1)  transfer.  Renewals or transfers
of Account Value from a Fixed  Allocation  at the end of its  Guarantee  Period are not subject to the Transfer Fee
and are not counted toward the twenty free  transfers.  We may reduce the number of free  transfers  allowable each
Annuity Year  (subject to a minimum of eight)  without  charging a Transfer  Fee unless you make use of  electronic
means to transmit your transfer  requests.  We may  eliminate  the Transfer Fee for transfer  requests  transmitted
electronically or through other means that reduce our processing costs.

Tax Charges:  Several states and some municipalities  charge premium taxes or similar taxes. The amount of tax will
vary from  jurisdiction to jurisdiction  and is subject to change.  The tax charge  currently  ranges up to 3 1/2%. We
generally  will deduct the amount of tax payable at the time the tax is imposed,  but may also decide to deduct tax
charges  from each  Purchase  Payment at the time of a  withdrawal  or surrender of your Annuity or at the time you
elect  to begin  receiving  annuity  payments.  We may  assess a charge  against  the  Sub-accounts  and the  Fixed
Allocations equal to any taxes which may be imposed upon the separate accounts.

WHAT CHARGES APPLY SOLELY TO THE VARIABLE INVESTMENT OPTIONS?

Insurance  Charge:  We deduct an  Insurance  Charge  daily  against  the  average  daily  assets  allocated  to the
Sub-accounts.  The charge is equal to 1.40% on an annual  basis.  The  Insurance  Charge is intended to  compensate
American  Skandia for providing  the  insurance  benefits  under the Annuity,  including the Annuity's  basic death
benefit that  provides  guaranteed  benefits to your  beneficiaries  even if the market  declines and the risk that
persons  we  guarantee  annuity  payments  to will  live  longer  than our  assumptions.  The  charge  also  covers
administrative  costs  associated  with  providing the Annuity  benefits,  including  preparation  of the contract,
confirmation  statements,  annual account  statements  and annual  reports,  legal and  accounting  fees as well as
various related expenses.  Finally,  the charge covers the risk that our assumptions about the  administrative  and
non-mortality  expenses under this Annuity are incorrect.  We may increase the portion of the Insurance  Charge for
administrative costs.  However, any increase will only apply to Annuities issued after the date of the increase.

American  Skandia  may make a profit on the  Insurance  Charge if,  over time,  the actual  cost of  providing  the
guaranteed  insurance  obligations  under the Annuity are less than the amount we deduct for the Insurance  Charge.
To the extent we make a profit on the Insurance  Charge,  such profit may be used for any other corporate  purpose,
including  payment of other expenses that American Skandia incurs in distributing,  issuing and  administering  the
Annuity.

The Insurance Charge is not deducted against assets allocated to a fixed  investment  option.  However,  the amount
we credit to Fixed  Allocations may also reflect similar  assumptions  about the insurance  guarantees  provided to
Contract Owners under the Annuity.

WHAT CHARGES ARE ASSESSED BY THE PORTFOLIOS?
We do not assess any charges directly against the Portfolios.  However,  each Portfolio  charges a total annual fee
comprised of an investment  management fee,  operating  expenses and any distribution and service (12b-1) fees that
may  apply.  More  detailed  information  about  fees  and  charges  can be  found  in  the  prospectuses  for  the
Portfolios.  Please also see "Service Fees Payable by Underlying Funds".

WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?
No specific fee or expenses are deducted when determining the rate we credit to a Fixed  Allocation.  However,  for
some of the same reasons that we deduct the Insurance  Charge against Account Value allocated to the  Sub-accounts,
we also take into consideration  mortality,  expense,  administration,  profit and other factors in determining the
interest  rates we credit to Fixed  Allocations.  Any CDSC or Tax Charge applies to amounts that are taken from the
variable  investment  options or the Fixed  Allocations.  A Market Value  Adjustment  may also apply to  transfers,
certain withdrawals, surrender or annuitization from a Fixed Allocation.

WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYOUT?
In certain  states a tax is due if and when you  exercise  your right to receive  periodic  annuity  payments.  The
amount  payable will depend on the applicable  jurisdiction  and on the annuity  payment option you select.  If you
select a fixed  payment  option,  the amount of each fixed payment will depend on the Account Value of your Annuity
when you elected to annuitize.  There is no specific charge deducted from these  payments;  however,  the amount of
each annuity payment reflects  assumptions  about our insurance  expenses.  If you select a variable payment option
that we may offer,  then the amount of your  benefits  will  reflect  changes in the value of your Annuity and will
continue to be subject to an insurance charge.

EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES
We may reduce or eliminate  certain fees and charges or alter the manner in which the  particular  fee or charge is
deducted.  For  example,  we may  reduce  the  amount  of the CDSC or the  length  of time it  applies,  reduce  or
eliminate  the  amount  of  the  Annual  Maintenance  Fee  or  reduce  the  portion  of the  Insurance  Charge  for
administrative  costs.  Generally,  these types of changes will be based on a reduction  to our sales,  maintenance
or  administrative  expenses due to the nature of the  individual  or group  purchasing  the  Annuity.  Some of the
factors  we might  consider  in making  such a  decision  are:  (a) the size and type of group;  (b) the  number of
Annuities  purchased  by an Owner;  (c) the amount of  Purchase  Payments  or  likelihood  of  additional  Purchase
Payments;  and/or (d) other  transactions  where sales,  maintenance  or  administrative  expenses are likely to be
reduced.  We will not  discriminate  unfairly  between Annuity  purchasers if and when we reduce the portion of the
Insurance Charge attributed to the charge covering administrative costs.

PURCHASING YOUR ANNUITY

WHAT ARE OUR REQUIREMENTS FOR PURCHASING THE ANNUITY?

Initial Purchase  Payment:  You must make a minimum initial Purchase Payment of $1,000.  However,  if you decide to
make payments under a systematic  investment or "bank drafting"  program,  we will accept a lower initial  Purchase
Payment provided that, within the first Annuity Year, you make at least $1,000 in total Purchase Payments.

Where  allowed  by law,  initial  Purchase  Payments  in  excess  of  $1,000,000  require  our  approval  prior  to
acceptance.  We  may  apply  certain  limitations  and/or  restrictions  on  the  Annuity  as a  condition  of  our
acceptance,  including limiting the liquidity features or the Death Benefit protection  provided under the Annuity,
changing the number of transfers  allowable  under the Annuity or restricting the  Sub-accounts  that are available
to the Contract owner.  Other limitations and/or restrictions may apply.

Age  Restrictions:  The Owner must be age 80 or under as of the Issue Date of the Annuity.  If the Annuity is owned
jointly,  the  oldest  of the  Owners  must be age 80 or under on the Issue  Date.  If the  Annuity  is owned by an
entity,  the Annuitant  must be age 80 or under as of the Issue Date.  You should  consider your need to access the
value in your  contract  and whether  the  Annuity's  liquidity  features  will  satisfy  that need.  If you take a
distribution  prior to age 591/2, you may be subject to a 10% penalty in addition  to ordinary  income  taxes on any
gain.

Additional  Purchase  Payments  may be made at any time  before the  Annuity  Date as long as the  oldest  Owner or
Annuitant (if the Annuity is entity owned) is not over age 80.

Special Considerations for Purchasers of Bonus or Credit Products
->       This Annuity  features the same Insurance  Charge as many of American  Skandia's other variable  annuities
     and does not charge an additional  amount for the XTra  CreditSM  feature.  However,  if you make a withdrawal
     that exceeds the free  withdrawal  amount or choose to surrender your Annuity,  the contingent  deferred sales
     charge  (CDSC) on this Annuity is higher and is deducted for a longer  period of time as compared to our other
     variable  annuities.  If you expect that you will need to access your Account Value during the CDSC period and
     the liquidity  provisions are  insufficient to satisfy that need, then this Annuity may be more expensive than
     other variable annuities.

->       The XTra CreditSM amount is included in your Account Value.  However,  American  Skandia may take back the
     original  XTra  CreditSM  amount  applied to your  Purchase  Payment if you die, or elect to withdraw all or a
     portion  of your  Account  Value  under the  medically-related  waiver  provision,  within 12 months of having
     received  an XTra  CreditSM  amount.  In either  situation,  the value of the XTra  CreditSM  amount  could be
     substantially  reduced.  However,  any  investment  gain on the XTra  CreditSM  amount will not be taken back.
     Additional conditions and restrictions apply.

Owner, Annuitant and Beneficiary Designations: On your Application, we will ask you to name the Owner(s),
Annuitant and one or more Beneficiaries for your Annuity.

|X|      Owner:  The Owner(s)  holds all rights  under the Annuity.  You may name more than one Owner in which case
         -----
       all  ownership  rights are held  jointly.  However,  this Annuity does not provide a right of  survivorship.
       Refer to the Glossary of Terms for a complete description of the term "Owner."
|X|      Annuitant:  The  Annuitant  is the  person we agree to make  annuity  payments  to and upon  whose life we
         ---------
       continue to make such  payments.  You must name an  Annuitant  who is a natural  person.  We do not accept a
       designation of joint Annuitants  during the accumulation  period.  Where allowed by law, you may name one or
       more Contingent  Annuitants.  A Contingent  Annuitant will become the Annuitant if the Annuitant dies before
       the Annuity Date. Please refer to the discussion of  "Considerations  for Contingent  Annuitants" in the Tax
       Considerations section of the Prospectus.
|X|      Beneficiary:  The  Beneficiary  is the  person(s) or entity you name to receive the death  benefit.  If no
         -----------
       beneficiary is named the death benefit will be paid to you or your estate.

Your  right  to make  certain  designations  may be  limited  if  your  Annuity  is to be  used as an IRA or  other
"qualified"  investment  that is given  beneficial  tax  treatment  under the Code.  You should seek  competent tax
advice on the income, estate and gift tax implications of your designations.

MANAGING YOUR ANNUITY

MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?
You may change  the Owner,  Annuitant  and  Beneficiary  designations  by  sending us a request in  writing.  Where
allowed by law,  such changes will be subject to our  acceptance.  Some of the changes we will not accept  include,
but are not limited to:
|X|      a new Owner  subsequent to the death of the Owner or the first of any joint Owners to die,  except where a
     spouse-Beneficiary has become the Owner as a result of an Owner's death;
|X|      a new Annuitant subsequent to the Annuity Date;
|X|      for "non-qualified"  investments,  a new Annuitant prior to the Annuity Date if the Annuity is owned by an
     entity; and
|X|      a change in Beneficiary if the Owner had previously made the designation irrevocable.

Spousal Owners/Spousal Beneficiaries
If an Annuity is co-owned by spouses,  we will assume that the sole primary  Beneficiary  is the  surviving  spouse
unless  you  elect  an  alternative   Beneficiary   designation.   Unless  you  elect  an  alternative  Beneficiary
designation,  upon the death of either spousal  Owner,  the surviving  spouse may elect to assume  ownership of the
Annuity  instead of taking the Death  Benefit  payment.  The Death Benefit that would have been payable will be the
new  Account  Value of the  Annuity  as of the  date of due  proof of death  and any  required  proof of a  spousal
relationship.  As of the date the  assumption  is  effective,  the  surviving  spouse  will have all the rights and
benefits  that would be available  under the Annuity to a new  purchaser of the same  attained age. For purposes of
determining  any future Death  Benefit for the  surviving  spouse,  the new Account Value will be considered as the
initial  Purchase  Payment.  No CDSC  will  apply  to the new  Account  Value.  However,  any  additional  Purchase
Payments applied after the date the assumption is effective will be subject to all provisions of the Annuity.

Spousal Contingent Annuitant
If the Annuity is owned by an entity and the surviving  spouse is named as a Contingent  Annuitant,  upon the death
of the Annuitant,  the surviving  spouse will become the  Annuitant.  No Death Benefit is payable upon the death of
the  Annuitant.  However,  the Account  Value of the Annuity as of the date of due proof of death of the  Annuitant
(and any  required  proof of the spousal  relationship)  will reflect the amount that would have been payable had a
Death Benefit been paid.

MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?
(The right to return the Annuity is often referred to as the "free-look" right or "right to cancel.")

If after  purchasing  your Annuity you change your mind and decide that you do not want it, you may return it to us
within a certain  period of time known as a right to cancel  period.  Depending on the state in which you purchased
your Annuity and, in some states,  if you purchased the Annuity as a replacement  for a prior  contract,  the right
to cancel  period may be ten (10) days,  twenty-one  (21) days or longer,  measured from the time that you received
your Annuity.  If you return your Annuity during the applicable  period,  we will refund your current Account Value
plus any tax charge  deducted.  This  amount  may be higher or lower than your  original  Purchase  Payment.  Where
required  by law, we will  return  your  current  Account  Value or the amount of your  initial  Purchase  Payment,
whichever  is  greater.  The same rules may apply to an  Annuity  that is  purchased  as an IRA.  In any  situation
where we are  required  to return the greater of your  Purchase  Payment or Account  Value,  we may  allocate  your
Account  Value to the AST  Money  Market  Sub-account  during  the  right to  cancel  period  and for a  reasonable
additional  amount of time to allow for delivery of your Annuity.  If you return your  Annuity,  we will not return
any additional amounts we applied to your Annuity based on your Purchase Payments.

MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?
The minimum  amount that we accept as an additional  Purchase  Payment is $100 unless you  participate  in American
Skandia's  Systematic  Investment  Plan or a periodic  purchase  payment  program.  We will allocate any additional
Purchase  Payments  you make  according  to your most  recent  allocation  instructions,  unless  you  request  new
allocations when you submit a new Purchase  Payment.  Additional  Purchase  Payments may be paid at any time before
the Annuity Date as long as the oldest Owner or Annuitant (if the Annuity is entity owned) is not over age 80.

MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?
You can make  additional  Purchase  Payments to your Annuity by  authorizing  us to deduct money directly from your
              ----------
bank account and applying it to your  Annuity.  This type of program is often called "bank  drafting".  We call our
bank  drafting  program  "American  Skandia's  Systematic  Investment  Plan."  Purchase  Payments made through bank
drafting may only be allocated  to the variable  investment  options  when  applied.  Bank  drafting  allows you to
invest in an Annuity with a lower initial Purchase  Payment,  as long as you authorize  payments that will equal at
least $1,000  during the first 12 months of your  Annuity.  We may suspend or cancel bank  drafting  privileges  if
sufficient  funds are not available  from the  applicable  financial  institution on any date that a transaction is
scheduled to occur.

MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?
These  types of  programs  are only  available  with  certain  types of  qualified  investments.  If your  employer
sponsors such a program,  we may agree to accept periodic  Purchase  Payments through a salary reduction program as
long as the allocations are made only to variable  investment  options and the periodic  Purchase Payments received
in the first year total at least $1,000.

MANAGING YOUR ACCOUNT VALUE

HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?
(See "Valuing Your Investment" for a description of our procedure for pricing initial and subsequent Purchase
Payments.)

Initial  Purchase  Payment:  Once we accept your  application,  we invest your net Purchase Payment in the Annuity.
The net  Purchase  Payment  is your  initial  Purchase  Payment  minus  any tax  charges  that may  apply.  On your
application  we ask you to provide us with  instructions  for  allocating  your  Account  Value.  You can  allocate
Account Value to one or more variable investment options or Fixed Allocations.


In those  states  where we are required to return your  Purchase  Payment if you exercise  your right to return the
Annuity,  we initially  allocate all amounts that you choose to allocate to the variable  investment options to the
AST Money Market  Sub-account.  At the end of the right to cancel  period we will  reallocate  your  Account  Value
according to your most recent  allocation  instructions.  Where  permitted by law, we will  allocate  your Purchase
Payments  according  to  your  initial  instructions,  without  temporarily  allocating  to the  AST  Money  Market
Sub-account.  To do this,  we will ask that you execute our form called a "return  waiver"  that  authorizes  us to
allocate your  Purchase  Payment to your chosen  Sub-accounts  immediately.  If you submit the "return  waiver" and
then decide to return your Annuity during the right to cancel period,  you will receive your current  Account Value
which may be more or less  than your  initial  Purchase  Payment  (see  "May I Return  the  Annuity  if I Change my
Mind?").


Subsequent  Purchase  Payments:  We will  allocate any  additional  Purchase  Payments  you make  according to your
current  allocation  instructions.  If any rebalancing or asset allocation  programs are in effect,  the allocation
should conform with such a program.  We assume that your current  allocation  instructions are valid for subsequent
Purchase  Payments until you make a change to those  allocations or request new  allocations  when you submit a new
Purchase Payment.






HOW DO I RECEIVE CREDITS?
We apply a "Credit"  to your  Annuity's  Account  Value each time you make a  Purchase  Payment.  The amount of the
Credit is  payable  from our  general  account.  The  amount of the  Credit  depends  on the  cumulative  amount of
Purchase  Payments  you have made to your  Annuity,  payable as a percentage  of each  specific  Purchase  Payment,
according to the table below:

                      -------------------------------------------------------- -------------------
                      Cumulative Purchase Payments                                   Credit
                      -------------------------------------------------------- -------------------
                      -------------------------------------------------------- -------------------
                      Between $1,000 and $9,999.99                                    1.5%
                      Between $10,000 and $999,999.99                                 3.0%
                      Between $1,000,000 and $4,999,999.99                            4.0%
                      Greater than $5,000,000                                         5.0%
                      -------------------------------------------------------- -------------------


Credits Applied to Purchase Payments for Designated Class of Annuity Owner
Where  allowed by state law, on Annuities  owned by a member of the class  defined  below,  the table of Credits we
apply to Purchase  Payments is deleted.  The Credit  applied to all  Purchase  Payments on such  Annuities  will be
8.5%.


The designated  class of Annuity Owners includes:  (a) any parent company,  affiliate or subsidiary of ours; (b) an
officer,  director,  employee,  retiree,  sales  representative,  or in the  case of an  affiliated  broker-dealer,
registered  representative of such company;  (c) a director,  officer or trustee of any underlying mutual fund; (d)
a director,  officer or employee of any investment  manager,  sub-advisor,  transfer  agent,  custodian,  auditing,
legal or  administrative  services provider that is providing  investment  management,  advisory,  transfer agency,
custodianship,  auditing,  legal and/or  administrative  services to an underlying  mutual fund or any affiliate of
such firm; (e) a director,  officer,  employee or registered  representative of a broker-dealer or insurance agency
that has a then current  selling  agreement with us and/or with American  Skandia  Marketing,  Incorporated;  (f) a
director,  officer,  employee or authorized  representative of any firm providing us or our affiliates with regular
legal, actuarial,  auditing,  underwriting,  claims,  administrative,  computer support, marketing, office or other
services;  (g) the then current spouse of any such person noted in (b) through (f),  above;  (h) the parents of any
such person noted in (b) through (g),  above;  (i) the child(ren) or other legal  dependent  under the age of 21 of
any such person noted in (b) through (h); and (j) the siblings of any such persons noted in (b) through (h) above.


All other terms and  conditions of the Annuity  apply to Owners in the  designated  class,  except that we will not
provide any Additional  Amounts for any such contracts (see  "Additional  Amounts in the Fixed  Allocations").  Any
Target Value Credits applied under the Performance  Advantage  benefit are not affected by an Owner's  inclusion in
the designated class of Annuity Owners.

You must  notify us at the time you apply for an  Annuity  if you are a member of the  designated  class.  American
Skandia is not  responsible  for  monitoring  whether you qualify as a member of the designated  class.  Failure to
inform us that you qualify as a member of the designated  class may result in your Annuity  receiving fewer Credits
than would otherwise be applied to your Annuity.

HOW ARE CREDITS APPLIED TO MY ACCOUNT VALUE?
Each  Credit is  allocated  to your  Account  Value at the time the  Purchase  Payment is  applied to your  Account
Value.  The amount of the  Credit is  allocated  to the  investment  options  in the same  ratio as the  applicable
Purchase Payment is applied.

Examples of Applying Credits

Initial Purchase Payment
Assume you make an initial  Purchase  Payment of $250,000.  We would apply a 3.0% Credit to your  Purchase  Payment
and allocate the amount of the Credit ($7,500 = $250,000 X .03) to your Account Value in the  proportion  that your
Account Value is allocated.

Additional Purchase Payment (at same breakpoint)
Assume that you make an additional Purchase Payment of $500,000.  Because your cumulative Purchase Payments are
less than the next breakpoint ($1,000,000), we would apply a 3.0% Credit to your Purchase Payment and allocate
the amount of the Credit ($15,000 = $500,000 X .03) to your Account Value.

Additional Purchase Payment (at higher breakpoint)
Assume that you make an additional  Purchase  Payment of $400,000.  Because your cumulative  Purchase  Payments are
now  $1,150,000  (greater  than the next  breakpoint),  we would apply a 4.0% Credit to your  Purchase  Payment and
allocate the amount of the Credit ($16,000 = $400,000 X .04) to your Account Value.






===================================================================================================================
This Annuity  features the same Insurance  Charge as many of American  Skandia's other variable  annuities and does
not charge an  additional  amount for the XTra  CreditSM  feature.  However,  the amount of any Credits  applied to
your Account Value can be recovered by American Skandia under certain circumstances:
===================================================================================================================
|X|      any Credits  applied to your Account Value on Purchase  Payments made within the 12 months before the date
     of death will be recovered.
===================================================================================================================
===================================================================================================================
|X|      the amount  available under the  medically-related  surrender  portion of the Annuity will not include the
     amount of any Credits  payable on Purchase  Payments  made  within 12 months of the date the  Annuitant  first
     became eligible for the medically-related surrender.
===================================================================================================================
===================================================================================================================
|X|      if you elect to "free-look"  your Annuity,  the amount  returned to you will not include the amount of any
     Credits.
===================================================================================================================
===================================================================================================================

===================================================================================================================
The value of the XTra  CreditSM  amount  will be  substantially  reduced  if  American  Skandia  recovers  the XTra
CreditSM  amount under these  circumstances.  However,  any investment gain on the XTra CreditSM amount will not be
taken back.

Examples of Recovering Credits
The following are hypothetical  examples of how Credits could be recovered by American  Skandia.  These examples do
not cover every potential situation.

Recovery from payment of Death Benefits
1.       Assume you purchase  your  Annuity with an initial  Purchase  Payment of $50,000.  You make an  additional
     Purchase of $10,000 in the 6th month  after the Issue  Date.  Both of the  Purchase  Payments  received a 3.0%
     Credit,  for a total of $1,800.  If the Death Benefit  becomes  payable in the 9th month after the Issue Date,
     the amount of the Death Benefit would be reduced by the entire amount of the prior Credits ($1,800).
2.       Assume you purchase  your  Annuity with an initial  Purchase  Payment of $50,000.  You make an  additional
     Purchase of $10,000 in the 6th month  after the Issue  Date.  Both of the  Purchase  Payments  received a 3.0%
     Credit,  for a total of $1,800.  If death  occurs in the 16th month  after the Issue  Date,  the amount of the
     Death  Benefit  would be  reduced  but only in the  amount  of  those  Credits  applied  within  the  previous
     12-months.  Since the  initial  Purchase  Payment  (and the  Credits  that were  applied)  occurred  more than
     12-months  before the date of death,  the Death  Benefit  would not be  reduced  by the amount of the  Credits
     applied to the initial Purchase  Payment.  However,  the $10,000  additional  Purchase Payment was made within
     12-months  of the date of death.  Therefore,  the amount of the Death  Benefit  would be reduced by the amount
     of the Credits payable on the additional Purchase Payment ($300).
3.       NOTE:  If the  Death  Benefit  would  otherwise  have  been  equal  to the  Purchase  Payments  minus  any
     withdrawals  due to poor  investment  performance,  we will not reduce the amount of the Death  Benefit by the
     amount of the Credits as shown in Example 2 above.

Recovery from Medically-Related Surrenders
1.       Assume you  purchase  your Annuity with an initial  Purchase  Payment of $50,000.  You receive a Credit of
     $1,500  ($50,000 X .03).  The Annuitant is diagnosed as  terminally  ill in the 6th month after the Issue Date
     and we grant  your  request  to  surrender  your  Annuity  under the  medically-related  surrender  provision.
     Assuming the Credits  were applied  within  12-months  of the date of diagnosis of the terminal  illness,  the
     amount that would be payable under the  medically-related  surrender  provision would be reduced by the entire
     amount of the Credits ($1,500).
2.       Assume you purchase  your  Annuity with an initial  Purchase  Payment of $50,000.  You make an  additional
     Purchase of $10,000 in the 6th month  after the Issue  Date.  Both of the  Purchase  Payments  received a 3.0%
     Credit,  for a total of $1,800.  The  Annuitant  is diagnosed  as  terminally  ill in the 16th month after the
     Issue  Date and we grant  your  request  to  surrender  your  Annuity  under the  medically-related  surrender
     provision.  Since the  initial  Purchase  Payment  (and the  Credits  that were  applied)  occurred  more than
     12-months  before the  diagnosis,  the  amount  that would be  payable  upon the  medically-related  surrender
     provision  would not be  reduced  by the  amount of the  Credits  applied  to the  initial  Purchase  Payment.
     However,  the  $10,000  additional  Purchase  Payment  was made  within  12-months  of the date of  diagnosis.
     Therefore,  the amount of the Death  Benefit  would be reduced  by the  amount of the  Credits  payable on the
     additional Purchase Payment ($300).

Credits applied to estimated Purchase Payments
Under  certain  circumstances,  we may determine  the amount of Credits  payable on two or more  separate  Purchase
Payments  based on the Credit  percentage  that would have applied had all such Purchase  Payments been made at the
same time. To make use of this  procedure,  often  referred to as a "letter of intent",  you must provide  evidence
of your intention to submit the cumulative  additional  Purchase  Payments  within a 13-month  period.  A letter of
intent  must be  provided  to us prior to the Issue Date to be  effective.  Acceptance  of a letter of intent is at
our sole  discretion and may be subject to restrictions  as to the minimum  initial  Purchase  Payment that must be
submitted to receive the next higher breakpoint.

Failure to inform us that you intend to submit two or more Purchase  Payments  within a 13-month  period may result
in your Annuity receiving fewer Credits than would otherwise be added to your Annuity.

If you submit a letter of intent and  receive  Credits on  Purchase  Payments at a higher  Credit  percentage  than
would have  applied BUT do not submit the required  Purchase  Payments  during the  13-month  period as required by
your  letter of intent,  we may  recover  the  "excess"  Credits.  "Excess"  Credits  are  Credits in excess of the
Credits  that  would  have been  payable  without  the letter of intent.  If we  determine  that you have  received
"excess"  Credits,  any such amounts  will be taken  pro-rata  from the  investment  options  based on your Account
Values as of the date we act to  recover  the  excess.  If the amount of the  recovery  exceeds  your then  current
Surrender Value, we will recover all remaining Account Value and terminate your Annuity.

General Information about Credits
|X|      We do not consider Credits to be "investment in the contract" for income tax purposes.
|X|      You may not withdraw the amount of any Credits under the Free Withdrawal  provision without  assessment of
     the contingent deferred sales charge  (see "Can I make withdrawal from my Annuity without a CDSC?").
|X|      These  Credits are separate and distinct  from the Target  Value  Credits  discussed  below in the section
     entitled "American Skandia's Performance Advantage."

ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?
During the  accumulation  period you may transfer  Account  Value  between  investment  options.  Transfers are not
subject to taxation on any gain. We currently  limit the number of  Sub-accounts  you can invest in at any one time
to twenty (20).  However,  you can invest in an  unlimited  number of Fixed  Allocations.  We may require a minimum
of $500 in each  Sub-account  you allocate  Account  Value to at the time of any  allocation  or  transfer.  If you
request a transfer  and,  as a result of the  transfer,  there would be less than $500 in the  Sub-account,  we may
transfer the  remaining  Account Value in the  Sub-account  pro rata to the other  investment  options to which you
transferred.


Currently,  we  charge  $10.00  for each  transfer  after the  twentieth  (20th) in each  Annuity  Year,  including
transfers  made as part of any  rebalancing,  market  timing,  asset  allocation or similar  program which you have
authorized.  Transfers  made as part of a dollar  cost  averaging  program  do not count  toward  the  twenty  free
transfer  limit.  Renewals  or  transfers  of Account  Value from a Fixed  Allocation  at the end of its  Guarantee
Period are not subject to the transfer  charge.  We may reduce the number of free transfers  allowable each Annuity
Year (subject to a minimum of eight)  without  charging a Transfer Fee unless you make use of  electronic  means to
transmit  your  transfer  requests.   We  may  eliminate  the  Transfer  Fee  for  transfer  requests   transmitted
electronically or through other means that reduce our processing costs.


We reserve the right to limit the number of  transfers  in any  Annuity  Year for all  existing  or new Owners.  We
also reserve the right to limit the number of  transfers in any Annuity Year or to refuse any transfer  request for
an Owner or certain Owners if: (a) we believe that  excessive  trading or a specific  transfer  request or group of
transfer  requests may have a detrimental  effect on Unit Values or the share prices of the  Portfolios;  or (b) we
are  informed by one or more of the  Portfolios  that the  purchase  or  redemption  of shares  must be  restricted
because of excessive  trading or a specific  transfer or group of transfers is deemed to have a detrimental  effect
on the share prices of affected  Portfolios.  Without  limiting the above, the most likely scenario where either of
the above  could  occur  would be if the  aggregate  amount of a trade or trades  represented  a  relatively  large
proportion of the total assets of a particular  Portfolio.  Under such a  circumstance,  we will process  transfers
according  to our rules then in effect  and  provide  notice if the  transfer  request  was  denied.  If a transfer
request is denied, a new transfer request may be required.


DO YOU OFFER DOLLAR COST AVERAGING?
Yes.  We offer  Dollar  Cost  Averaging  during  the  accumulation  period.  Dollar  Cost  Averaging  allows you to
systematically  transfer an amount each month from one investment  option to one or more other investment  options.
You can choose to transfer  earnings only,  principal plus earnings or a flat dollar amount.  Dollar Cost Averaging
allows you to invest  regularly each month,  regardless of the current unit value (or price) of the  Sub-account(s)
you invest in.  This  enables  you to  purchase  more units when the market  price is low and fewer  units when the
market  price  is  high.  This  may  result  in a lower  average  cost of units  over  time.  However,  there is no
guarantee that Dollar Cost Averaging will result in a profit or protect  against a loss in a declining  market.  We
do not deduct a charge for participating in a Dollar Cost Averaging program.


You must have a minimum Account Value of at least $10,000 to enroll in a Dollar Cost Averaging program.

You can Dollar Cost Average from variable  investment  options or Fixed  Allocations.  Dollar Cost  Averaging  from
Fixed Allocations is subject to a number of rules that include, but are not limited to the following:
|X|      You may only use Fixed Allocations with Guarantee Periods of 1, 2 or 3 years.
|X|      You may only Dollar Cost Average  earnings or principal  plus  earnings.  If  transferring  principal plus
     earnings, the program must be designed to last the entire Guarantee Period for the Fixed Allocation.
|X|      Dollar Cost Averaging transfers from Fixed Allocations are not subject to a Market Value Adjustment.


NOTE: When a Dollar Cost Averaging  program is established from a Fixed  Allocation,  the fixed rate of interest we
credit to your  Account  Value is applied to a  declining  balance  due to the  transfers  of Account  Value to the
Sub-accounts  during the Guarantee  Period.  This will reduce the effective rate of return on the Fixed  Allocation
over the Guarantee Period.


DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?
Yes. During the accumulation  period,  we offer automatic  rebalancing  among the variable  investment  options you
choose.  You can choose to have your  Account  Value  rebalanced  quarterly,  semi-annually,  or  annually.  On the
appropriate date, your variable  investment options are rebalanced to the allocation  percentages you request.  For
example,  over time the  performance  of the  variable  investment  options will  differ,  causing your  percentage
allocations to shift.  With  automatic  rebalancing,  we transfer the  appropriate  amount from the  "overweighted"
Sub-accounts  to the  "underweighted"  Sub-accounts to return your  allocations to the percentages you request.  If
you request a transfer from or into any variable  investment  option  participating  in the  automatic  rebalancing
program,  we will assume that you wish to change  your  rebalancing  percentages  as well,  and will  automatically
adjust the rebalancing  percentages in accordance with the transfer unless we receive  alternate  instructions from
you.

You must have a minimum  Account  Value of at least  $10,000 to enroll in automatic  rebalancing.  All  rebalancing
transfers  made on the same day as part of an automatic  rebalancing  program are  considered  as one transfer when
counting  the  number of  transfers  each year  toward the  maximum  number of free  transfers.  We do not deduct a
charge for participating in an automatic rebalancing program.

DO YOU OFFER PROGRAMS DESIGNED TO GUARANTEE A "RETURN OF PREMIUM" AT A FUTURE DATE?
Yes. We offer two  different  programs  for  investors  who wish to invest in the variable  investment  options but
also wish to  protect  their  principal,  at least as of a  specific  date in the  future.  You may not want to use
either of these programs if you expect to begin taking annuity payments before the program would be completed.

Balanced Investment Program
We offer a balanced  investment  program where a portion of your Account  Value is allocated to a Fixed  Allocation
and the remaining Account Value is allocated to the variable  investment  options that you select.  When you enroll
in the Balanced  Investment  program,  you choose the duration that you wish the program to last.  This  determines
the duration of the Guarantee  Period for the Fixed  Allocation.  Based on the fixed rate for the Guarantee  Period
chosen,  we calculate the portion of your Account  Value that must be allocated to the Fixed  Allocation to grow to
a specific  "principal  amount"  (such as your initial  Purchase  Payment).  We  determine  the amount based on the
rates  then in effect for the  Guarantee  Period you  choose.  If you  continue  the  program  until the end of the
Guarantee  Period and make no withdrawals or transfers,  at the end of the Guarantee  Period,  the Fixed Allocation
will have grown to equal the "principal  amount".  Withdrawals or transfers  from the Fixed  Allocation  before the
end of the Guarantee  Period will  terminate the program and may be subject to a Market Value  Adjustment.  You can
transfer  the  Account  Value  that is not  allocated  to the  Fixed  Allocation  between  any of the  Sub-accounts
available  under the Annuity.  Account Value you allocate to the variable  investment  options is subject to market
fluctuations  and may increase or decrease in value.  We do not deduct a charge for  participating  in the Balanced
Investment Program.

         Example
         Assume you invest  $100,000.  You choose a 10-year  program and allocate a portion of your  Account  Value
         to a Fixed  Allocation  with a 10-year  Guarantee  Period.  The rate for the 10-year  Guarantee  Period is
         5.33%*.  Based on the fixed  interest rate for the  Guarantee  Period  chosen,  the factor is 0.594948 for
         determining  how much of your Account  Value will be allocated  to the Fixed  Allocation.  That means that
         $59,495 will be allocated to the Fixed  Allocation  and the  remaining  Account  Value  ($41,505)  will be
         allocated to the variable  investment  options.  Assuming  that you do not make any  withdrawals  from the
         Fixed  Allocation,  it will  grow to  $100,000  at the end of the  Guarantee  Period.  Of course we cannot
         predict the value of the remaining Account Value that was allocated to the variable investment options.

*        The rate in this example is hypothetical and may not reflect the current rate for Guarantee Periods of
     this duration.

Guaranteed Return Option SM
We also offer a seven-year  program where we monitor your Account Value daily and  systematically  transfer amounts
between Fixed  Allocations and the variable  investment  options you choose.  American  Skandia  guarantees that at
the end of the seventh  (7th) year from  commencement  of the  program,  you will receive no less than the original
amount invested (such as your initial  Purchase  Payment).  Account Value is only  transferred to and maintained in
                                                                             ----
Fixed  Allocations to the extent we, in our sole  discretion,  deem is necessary to support our guarantee under the
program.  This differs from the Balanced  Investment  program where a set amount is allocated to a Fixed Allocation
regardless of the performance of the underlying  Sub-accounts.  With the Guaranteed Return Option,  your Annuity is
able to  participate  in the  upside  potential  of the  Sub-accounts  while  only  transferring  amounts  to Fixed
Allocations to protect against significant market downturns.

Each business day we monitor the performance of your Account Value to determine  whether it is greater than,  equal
to or below our  "reallocation  trigger",  described  below.  Based on the performance of the Sub-accounts in which
you choose to allocate  your Account Value  relative to the  reallocation  trigger,  we may transfer some or all of
your  Account  Value to or from a Fixed  Allocation.  You have  complete  discretion  over the  allocation  of your
Account  Value that  remains  allocated  in the  variable  investment  options.  However,  we reserve  the right to
restrict certain Portfolios if you participate in the program.

|X|      Account  Value  greater  than or equal to  reallocation  trigger:  Account  Value in  variable  investment
         options remains allocated  according to your most recent  instructions.  If a portion of Account Value was
         previously  allocated to a Fixed  Allocation,  those amounts may be transferred  from the Fixed Allocation
         and re-allocated to the variable  investment  options pro-rata  according to your current  allocations.  A
         Market Value Adjustment will apply.

|X|      Account  Value below  reallocation  trigger:  A portion of your Account  Value in the variable  investment
         options is  transferred  to a new Fixed  Allocation.  These amounts are  transferred  on a pro-rata  basis
         from the variable  investment  options.  The new Fixed  Allocation  will have a Guarantee  Period equal to
         the  remaining  duration in the  Guaranteed  Return  Option.  The Account  Value  applied to the new Fixed
         Allocation  will be credited with the fixed interest rate then being applied to a new Fixed  Allocation of
         the next higher yearly  duration.  The Account Value will remain  invested in the Fixed  Allocation  until
         the  maturity  date of the program  unless,  at an earlier  date,  your  Account  Value is at or above the
         reallocation  trigger and amounts can be  transferred  to the variable  investment  options (as  described
         above) while maintaining the guarantee protection under the program.

American  Skandia uses an allocation  mechanism  based on assumptions of expected and maximum market  volatility to
determine  the  reallocation  trigger.  The  allocation  mechanism is used to determine  the  allocation of Account
Value between Fixed  Allocations and the  Sub-accounts  you choose.  American  Skandia reserves the right to change
the allocation mechanism and the reallocation trigger at its discretion.

Program Termination
The  Guaranteed  Return  Option  will  terminate  on its  maturity  date.  You can  elect to  participate  in a new
Guaranteed  Return  Option or  re-allocate  your Account  Value at that time.  Any Account  Value  allocated to the
Fixed Allocations will be transferred to the AST Money Market  Sub-account,  unless you provide us with alternative
instructions.  On the program  maturity  date,  if your  Account  Value is below the initial  investment,  American
Skandia will apply  additional  amounts to your Account Value so that it is equal to the initial  investment in the
program.  Any amounts added to your Account Value will be applied to the AST Money Market  Sub-account,  unless you
provide us with  alternative  instructions.  We will notify you of any amounts  added to your  Account  Value under
the program.  We do not consider  amounts added to your Account Value to be "investment in the contract" for income
tax purposes.

Special Considerations under the Guaranteed Return Option
This program is subject to certain rules and restrictions, including, but not limited to the following:
|X|      You may  terminate  the  Guaranteed  Return  Option at any time.  American  Skandia  does not  provide any
     guarantees upon termination of the program.
|X|      Withdrawals  from your Annuity while the program is in effect will reduce the guaranteed  amount under the
     program in  proportion  to the Account  Value at the time of the  withdrawal.  Withdrawals  will be subject to
     all other  provisions  of the  Annuity,  including  any  Contingent  Deferred  Sales  Charge  or Market  Value
     Adjustment that would apply.
|X|      Additional  Purchase  Payments  applied to the Annuity  while the program is in effect will only  increase
     the amount guaranteed;  however,  all or a portion of any additional Purchase Payments may be allocated to the
     Fixed Allocations.
|X|      Annuity Owners cannot transfer  Account Value to or from a Fixed  Allocation  while  participating  in the
     program and cannot  participate  in any dollar cost  averaging  program that  transfers  Account  Value from a
     Fixed Allocation to the variable investment options.
|X|      Transfers  from  Fixed  Allocations  will be  subject to the Market  Value  Adjustment  formula  under the
     Annuity;  however,  the 0.10% "cushion"  feature of the formula will not apply. A Market Value  Adjustment may
     be  either  positive  or  negative.  Transfer  amounts  will be taken  from the most  recently  applied  Fixed
     Allocation.
|X|      Transfers from the Sub-accounts to Fixed Allocations or from Fixed  Allocations to the Sub-accounts  under
     the program will not count toward the maximum number of free transfers allowable under the Annuity.
|X|      The  Guaranteed  Return  Option will  terminate:  (a) upon the death of the Owner or the  Annuitant (in an
     entity owned contract); and (b) as of the date Account Value is applied to begin annuity payments.
|X|      You can elect to restart the seven (7) year program  duration on any  anniversary of the Issue Date of the
     Annuity.  The Account Value on the date the restart is effective will become the new  guaranteed  amount under
     the program.  You can only elect the program once per Annuity Year.

Charges under the Program
We charge a fee of 0.25% of Account Value per year to participate in the  Guaranteed  Return Option.  The charge is
deducted to  compensate  American  Skandia for: (a) the risk that your  Account  Value on the maturity  date of the
program is less than the amount  guaranteed;  and (b)  administration  of the  program.  The charge is  deducted in
arrears  on an annual  basis on each  anniversary  of the Issue  Date of the  Annuity.  If you  choose to begin the
program on a date other than the Issue Date of the Annuity or an anniversary  of the Issue Date of the Annuity,  we
will  charge a pro-rata  portion of the  annual  charge for the  remaining  portion  of the  Annuity  Year.  If the
program  terminates  before  completion  for any reason other than death or  medically-related  surrender,  we will
assess a  pro-rata  portion of the annual  charge.  We will  deduct  the  annual  charge for  participating  in the
program pro-rata from the variable investment options.

MAY I AUTHORIZE MY FINANCIAL PROFESSIONAL TO MANAGE MY ACCOUNT?
Yes. You may authorize  your financial  professional  to direct the allocation of your Account Value and to request
financial  transactions  between  investment  options while you are living,  subject to our rules.  We require that
you provide us with  written  proof that you have  authorized  your  financial  professional  to request  financial
transactions  on your behalf.  You must contact us immediately if and when you revoke such  authority.  We will not
be  responsible  for acting on  instructions  from your financial  professional  if you fail to inform us that such
person's  authority  has been revoked.  We may also suspend or cancel these  privileges at any time. We will notify
you if we do.

We or an affiliate of ours may provide  administrative support to licensed,  registered financial  professionals or
investment  advisors  who  you  authorize  to  make  financial   transactions  on  your  behalf.   These  financial
professionals  may be firms or  persons  who  also  are  appointed  by us as  authorized  sellers  of the  Annuity.
However,  we do not offer advice about how to allocate  your Account  Value under any  circumstance.  Any financial
professionals  you engage to provide advice and/or make  transfers for you is not acting on our behalf.  We are not
responsible  for any  recommendations  such financial  professionals  make,  any market timing or asset  allocation
programs they choose to follow or any specific transfers they make on your behalf.

We may require financial  professionals or investment  advisors,  who are authorized by multiple contract owners to
make financial  transactions,  to enter into an  administrative  agreement with American  Skandia as a condition of
our accepting  transactions on your behalf.  The  administrative  agreement may impose limitations on the financial
professional's  or  investment  advisor's  ability  to  request  financial   transactions  on  your  behalf.  These
limitations are intended to minimize the  detrimental  impact of a financial  professional  who is in a position to
transfer  large amounts of money for multiple  clients in a particular  Portfolio or type of portfolio or to comply
with specific  restrictions  or  limitations  imposed by a Portfolio(s)  on American  Skandia.  The  administrative
agreement may limit the available  investment  options,  require  advance notice of large  transactions,  or impose
other trading  limitations on your financial  professional.  Your  financial  professional  will be informed of all
such  restrictions  on an  ongoing  basis.  We may also  require  that your  financial  professional  transmit  all
financial  transactions  using  the  electronic  trading  functionality  available  through  our  Internet  website
(www.americanskandia.com).  Limitations  that we may impose on your financial  professional  or investment  advisor
under the terms of the  administrative  agreement do not apply to financial  transactions  requested by an Owner on
their own behalf, except as otherwise described in this Prospectus.

HOW DO THE FIXED INVESTMENT OPTIONS WORK?
(Fixed Allocations may not be available in all states and may not be available for certain durations.)

We credit the fixed  interest  rate to the Fixed  Allocation  throughout  a set period of time called a  "Guarantee
Period."  Fixed  Allocations  currently are offered with  Guarantee  Periods from 1 to 10 years.  We may make Fixed
Allocations of different  durations  available in the future,  including Fixed Allocations  offered exclusively for
use with certain  optional  investment  programs.  The interest rate credited to a Fixed  Allocation is the rate in
effect  when the  Guarantee  Period  begins  and does not  change  during the  Guarantee  Period.  The rates are an
effective  annual rate of interest.  We determine  the interest  rates for the various  Guarantee  Periods.  At the
time that we confirm your Fixed  Allocation,  we will advise you of the  interest  rate in effect and the date your
Fixed  Allocation  matures.  We may  change the rates we credit new Fixed  Allocations  at any time.  Any change in
interest rate does not affect Fixed  Allocations  that were in effect before the date of the change.  To inquire as
to the current rates for Fixed Allocations, please call 1-800-766-4530.

A Guarantee Period for a Fixed Allocation begins:
|X|      when all or part of a net Purchase Payment is allocated to that particular Guarantee Period;
|X|      upon transfer of any of your Account Value to a Fixed  Allocation for that  particular  Guarantee  Period;
       or
|X|      when you "renew" a Fixed Allocation by electing a new Guarantee Period.

To the extent  permitted by law, we may  establish  different  interest  rates for Fixed  Allocations  offered to a
class of Owners who choose to participate  in various  optional  investment  programs we make  available.  This may
include,  but is not limited to, Owners who elect to use Fixed  Allocations  under a dollar cost averaging  program
(see "Do You Offer  Dollar  Cost  Averaging?")  or a balanced  investment  program  (see "Do You Offer a Program to
Balance Fixed and Variable  Investments?").  The interest rate credited to Fixed Allocations  offered to this class
of purchasers  may be different than those offered to other  purchasers  who choose the same  Guarantee  Period but
who do not participate in an optional investment program.  Any such program is at our sole discretion.

HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?
We do not have a specific  formula for  determining the fixed interest rates for Fixed  Allocations.  Generally the
interest  rates we offer for Fixed  Allocations  will  reflect the  investment  returns  available  on the types of
investments  we make to  support  our fixed  rate  guarantees.  These  investment  types  may  include  cash,  debt
securities  guaranteed  by the United  States  government  and its  agencies  and  instrumentalities,  money market
instruments,  corporate debt obligations of different durations,  private placements,  asset-backed obligations and
municipal  bonds.  In  determining  rates we also consider  factors such as the length of the Guarantee  Period for
the Fixed  Allocation,  regulatory  and tax  requirements,  liquidity of the markets for the type of investments we
make,  commissions,  administrative  and  investment  expenses,  our  insurance  risks  in  relation  to the  Fixed
Allocations,  general  economic  trends  and  competition.  Some of these  considerations  are  similar to those we
consider in determining the Insurance Charge that we deduct from Account Value allocated to the Sub-accounts.

We will credit  interest on a new Fixed  Allocation in an existing  Annuity at a rate not less than the rate we are
then crediting to Fixed  Allocations for the same Guarantee  Period selected by new Annuity  purchasers in the same
class.

The  interest  rate we credit for a Fixed  Allocation  is subject to a minimum.  Please  refer to the  Statement of
Additional Information.

HOW DOES THE MARKET VALUE ADJUSTMENT WORK?
If you transfer or withdraw Account Value from a Fixed Allocation  before the end of its Guarantee  Period, we will
adjust the value of your investment  based on a formula,  called a "Market Value  Adjustment" or "MVA".  The Market
Value Adjustment  formula compares the interest rates credited for Fixed  Allocations at the time you invested,  to
interest  rates being credited when you make a transfer or  withdrawal.  The amount of any Market Value  Adjustment
can be either positive or negative, depending on the rates that are currently being credited on Fixed Allocations.

MVA Formula
The MVA  formula is applied  separately  to each Fixed  Allocation  to  determine  the  Account  Value of the Fixed
Allocation on a particular date.  The formula is as follows:

                                            [(1+I) / (1+J+0.0010)]N/12

                                                      where:

                  I is the fixed  interest rate we  guaranteed to credit to the Fixed  Allocation
                  as of its starting date;

                  J is the fixed  interest  rate for your class of  annuities  at the time of the
                  withdrawal  for a new Fixed  Allocation  with a Guarantee  Period  equal to the
                                    ---
                  remaining number of years in your original Guarantee Period;

                  N is the number of months remaining in the original Guarantee Period.


If you surrender your Annuity under the right to cancel provision, the MVA formula is [(1 + I)/(1 + J)]N/12.


If the transfer or  withdrawal  does not occur on the yearly or monthly  anniversary  of the beginning of the Fixed
Allocation, the numbers used in `J' and `N' will be rounded to the next highest integer.

MVA Examples
The  following  hypothetical  examples  show  the  effect  of the MVA in  determining  Account  Value.  Assume  the
following:
|X|      You allocate $50,000 into a Fixed Allocation with a Guarantee Period of 5 years.
|X|      The interest rate for your Fixed Allocation is 5.0% (I = 5.0%).
|X|      You make no  withdrawals  or transfers  until you decided to withdraw the entire  Fixed  Allocation  after
         exactly three (3) years, therefore 24 months remain before the Maturity Date (N = 24).

Example of Positive MVA
Assume that at the time you request the  withdrawal,  the fixed  interest  rate for a new Fixed  Allocation  with a
Guarantee  Period of 24 months  is 3.5% (J = 3.5%).  Based on these  assumptions,  the MVA would be  calculated  as
follows:

                         MVA Factor = [(1+I)/(I+J+0.0010)]N/12 = [1.05/1.036]2 = 1.027210
                                            Interim Value = $57,881.25
                        Account Value after MVA = Interim Value X MVA Factor = $59,456.20.






Example of Negative MVA
Assume that at the time you request the  withdrawal,  the fixed  interest  rate for a new Fixed  Allocation  with a
Guarantee  Period of 24 months  is 6.0% (J = 6.0%).  Based on these  assumptions,  the MVA would be  calculated  as
follows:

                         MVA Factor = [(1+I)/(1+J+0.0010)]N/12 = [1.05/1.061)]2 = 0.979372
                                            Interim Value = $57,881.25
                        Account Value after MVA = Interim Value X MVA Factor = $56,687.28.


WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?
The  "Maturity  Date" for a Fixed  Allocation is the last day of the Guarantee  Period.  Before the Maturity  Date,
you may choose to renew the Fixed  Allocation  for a new  Guarantee  Period of the same or different  length or you
may transfer all or part of that Fixed  Allocation's  Account Value to another  Fixed  Allocation or to one or more
Sub-accounts.  We will notify you before the end of the  Guarantee  Period about the fixed  interest  rates that we
are  currently  crediting  to all Fixed  Allocations  that are being  offered.  The rates  being  credited to Fixed
Allocations  may  change  before  the  Maturity  Date.  We will  not  charge a MVA if you  choose  to renew a Fixed
Allocation on its Maturity Date or transfer the Account Value to one or more variable investment options.

If you do not specify how you want a Fixed  Allocation to be allocated on its Maturity  Date, we will then transfer
the Account  Value of the Fixed  Allocation  to the AST Money  Market  Sub-account.  You can then elect to allocate
the Account Value to any of the Sub-accounts or to a new Fixed Allocation.



AMERICAN SKANDIA'S PERFORMANCE ADVANTAGE

Do you provide any guarantees on my investment?
The Annuity provides variable  investment options and fixed investment  options.  Only the fixed investment options
provide a guaranteed  return on your  investment,  subject to certain terms and conditions.  However,  your Annuity
includes a feature at no additional  cost that provides  certain  benefits if your Account Value has not reached or
exceeded a "target  value" on its 10th  anniversary.  If, on the 10th  anniversary  of your  Annuity's  Issue Date,
your  Account  Value has not reached the target  value (as defined  below) you can choose  either of the  following
benefits:

|X|      You may continue your Annuity without  electing to receive  Annuity  payments and receive an annual credit
                                                                                                      ------
     to your Account Value  payable until you begin  receiving  Annuity  payments.  The credit is equal to 0.25% of
     the average of your Annuity's  Account Value for the preceding four complete  calendar  quarters.  This credit
     is applied to your investment options pro-rata based on the allocation of your then current Account Value.

                                                        OR

|X|      You may begin  receiving  Annuity  payments  within one year and accept a one-time  credit to your Annuity
     equal to 10% of the net of the Account  Value on the 10th  anniversary  of its Issue Date minus the sum of all
     Purchase  Payments  allocated in the prior five years. The annuity option you select must initially  guarantee
     payments for not less than seven years.

Following  the 10th  anniversary  of your  Annuity's  Issue Date,  we will inform you if your Account Value did not
meet or exceed the Target  Value.  We will  assume  that you have  elected  to  receive  the annual  credit to your
Account Value unless,  not less than 30 days prior to the next  anniversary of the Annuity,  we receive at our home
office your election to begin receiving Annuity payments.

Certain  provisions  of this benefit and of the Target  Value  Credits  described  below may differ if you purchase
your  Annuity as part of an  exchange,  replacement  or transfer,  in whole or in part,  from any other  Annuity we
issue.

What is the "Target Value" and how is it calculated?
The Target  Value is a tool used to determine  whether you are  eligible to elect either of the benefits  described
above.  The Target  Value does not impact the Account  Value  available  if you  surrender  your  Annuity or make a
partial  withdrawal  and does not impact the Death  Benefit  available to your  Beneficiary(ies).  The Target Value
assumes a rate of return over ten (10) Annuity  Years that will allow your initial  investment  to double in value,
adjusted  for any  withdrawals  and/or  additional  Purchase  Payments  you  make  during  the 10 year  period.  We
calculate the "Target Value" as follows:

1.       Accumulate the initial  Purchase  Payment at an annual interest rate of 7.2% until the 10th anniversary of
     the Annuity's Issue Date; plus
                               ----
2.       Accumulate  any  additional  Purchase  Payments at an annual  interest  rate of 7.2% from the date applied
     until the 10th anniversary of the Annuity's Issue Date; minus
                                                             -----
3.       Each "proportional  reduction"  resulting from any withdrawal,  accumulating at an annual interest rate of
     7.2% from the date the  withdrawal is processed  until the 10th  anniversary  of the Annuity's  Issue Date. We
     determine each  "proportional  reduction" by  determining  the percentage of your Account Value then withdrawn
     and  reducing  the Target  Value by that same  percentage.  We include any  withdrawals  under your Annuity in
     this calculation,  as well as the charge we deduct for any optional benefits you elect under the Annuity,  but
     not the charge we deduct for the Annual Maintenance Fee or the Transfer Fee.

Examples
1.       Assume  you make an  initial  Purchase  Payment of $10,000  and make no  further  Purchase  Payments.  The
     Target Value on the 10th  anniversary of your Annuity's  Issue Date would be $20,042,  assuming no withdrawals
     are made.  This is equal to $10,000 accumulating at an annual rate of 7.2% for the 10-year period.

2.       Assume you make an initial Purchase Payment of $10,000 and make no further  Purchase  Payments.  Assume at
     the end of Year 6, your Account  Value has  increased  to $15,000 and you make a withdrawal  of 10% or $1,500.
     The  Target  Value on the 10th  anniversary  would be  $18,722.  This is equal to $10,000  accumulating  at an
     annual  rate of 7.2% for the  10-year  period,  minus the  proportional  reduction  accumulating  at an annual
     interest rate of 7.2%.

Can I restart the 10-year Target Value calculation?
Yes, you can elect to lock in the growth in your Annuity by  "restarting"  the 10-year period on any anniversary of
the Issue Date.  If you elect to restart the  calculation  period,  we will treat your Account Value on the restart
date as if it was your  Purchase  Payment when  determining  if your  Annuity's  Account Value meets or exceeds the
Target  Value on the  appropriate  tenth (10th)  anniversary.  You may elect to restart the  calculation  more than
once,  in which case,  the 10-year  calculation  period will begin on the date of the last  restart  date.  We must
receive your election to restart the  calculation at our home office not later than 30 days after each  anniversary
of the Issue Date.


What are Target Value Credits?
Target Value Credits are  additional  amounts that we apply to your Account Value to increase the  likelihood  that
your  Account  Value will meet or exceed the Target  Value.  We add Target Value  Credits to your Account  Value at
the time a Purchase  Payment is  applied to your  Annuity.  Only  those  Purchase  Payments  made  before the first
anniversary of the Issue Date of your Annuity are eligible to receive  Target Value  Credits.  Target Value Credits
are separate and distinct from other Credits we apply to all Purchase Payments.


The amount of the Target Value Credit is equal to 1.0% of each qualifying  Purchase  Payment.  Target Value Credits
are only payable on  qualifying  Purchase  Payments if the Owner(s) of the Annuity  is(are) less than age 81 on its
Issue Date. If the Annuity is owned by an entity,  the age  restriction  applies to the age of the Annuitant on the
Issue Date.  The Target  Value  Credit is payable  from our  general  account and is  allocated  to the  investment
options in the same ratio that the qualifying Purchase Payment is allocated.

Target Value  Credits will not be available  if you purchase  your Annuity as part of an exchange,  replacement  or
transfer, in whole or in part, of an Annuity we issued that has the same or a similar benefit.


 ====================================================================================================================================
 The amount of any Target Value Credits are not immediately  vested and can be recovered by American Skandia under the circumstances
 and for the time periods  shown below.  If American  Skandia  exercises its right to recover the amount of any Target Value Credit,
 any investment gain on the Target Value Credit will not be taken back.
 1.       If you surrender your Annuity before the 10th anniversary of the Issue Date of the Annuity.
 2.       If you elect to begin receiving Annuity payments before the first anniversary of the Issue Date.
 3.       If a  person  on  whose  life we pay the  Death  Benefit  dies,  or if a  "contingency  event"  occurs  which  triggers  a
      medically-related surrender:
 |X|      within 12 months after the date a Target Value Credit was allocated to your Account Value; or
 |X|      within 10 years after the date a Target Value Credit was allocated to your Account Value if any owner was over age 70 on
          the Issue Date, or, if the Annuity was then owned by an entity, the Annuitant was over age 70 on the Issue Date.
 Following completion of the above time periods, the amount of any Target Value Credits are vested in the Owner.
 ====================================================================================================================================


ACCESS TO ACCOUNT VALUE


WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?
During the  accumulation  period  you can  access  your  Account  Value  through  Partial  Withdrawals,  Systematic
Withdrawals,  and where required for tax purposes,  Minimum  Distributions.  You can also surrender your Annuity at
any time.  We may  deduct a  portion  of the  Account  Value  being  withdrawn  or  surrendered  as a CDSC.  If you
surrender  your  Annuity,  in addition to any CDSC, we may deduct the Annual  Maintenance  Fee, any Tax Charge that
applies  and the  charge  for any  optional  benefits.  We may also apply a Market  Value  Adjustment  to any Fixed
Allocations.  Certain  amounts may be  available  to you each  Annuity  Year that are not subject to a CDSC.  These
are called "Free  Withdrawals."  In addition,  under certain  circumstances,  we may waive the CDSC for  surrenders
made for qualified  medical reasons or for withdrawals made to satisfy Minimum  Distribution  requirements.  Unless
you notify us differently,  withdrawals are taken pro-rata based on the Account Value in the investment  options at
the time we receive your withdrawal request.  Each of these types of distributions is described more fully below.


ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?
(For more information, see "Tax Considerations")


During the Accumulation Period
A distribution  during the  accumulation  period is deemed to come first from any "gain" in your Annuity and second
as a return of your "tax  basis",  if any.  Distributions  from your  Annuity  are  generally  subject to  ordinary
income taxation on the amount of any investment gain unless the  distribution  qualifies as a non-taxable  exchange
or transfer.  If you take a  distribution  prior to the  taxpayer's age 59 1/2, you may be subject to a 10% penalty in
addition  to  ordinary  income  taxes on any gain.  You may wish to consult a  professional  tax advisor for advice
before requesting a distribution.

During the Annuitization Period
During the  annuitization  period,  a portion of each annuity  payment is taxed as ordinary  income at the tax rate
you are subject to at the time of the payment.  The Code and regulations have  "exclusionary  rules" that we use to
determine  what  portion  of each  annuity  payment  should be treated as a return of any tax basis you have in the
Annuity.  Once the tax basis in the Annuity has been  distributed,  the remaining  annuity  payments are taxable as
ordinary  income.  The tax basis in the Annuity may be based on the tax-basis  from a prior contract in the case of
a 1035 exchange or other qualifying transfer.

CAN I WITHDRAW A PORTION OF MY ANNUITY?
Yes, you can make a withdrawal during the accumulation period.

|X|      To meet  liquidity  needs,  you can withdraw a limited amount of your Account Value during each of Annuity
         Year 1-8 without a CDSC being applied.  We call this the "Free  Withdrawal"  amount.  The Free  Withdrawal
         amount is not  available if you choose to surrender  your  Annuity.  The minimum Free  Withdrawal  you may
         request is $100.

|X|      You can  also  make  withdrawals  in  excess  of the  Free  Withdrawal  amount.  We call  this a  "Partial
         Withdrawal."  The  amount  that you may  withdraw  will  depend  on the  Annuity's  Surrender  Value.  The
         Surrender  Value is equal to your  Account  Value  minus any CDSC,  the Annual  Maintenance  Fee,  the Tax
         Charge,  any charges for optional  benefits and any Market  Value  Adjustment  that may apply to any Fixed
         Allocations.  After any Partial  Withdrawal,  your Annuity must have a Surrender Value of at least $1,000,
         or we may treat the  Partial  Withdrawal  request  as a  request  to fully  surrender  your  Annuity.  The
         minimum Partial Withdrawal you may request is $100.

When we determine if a CDSC applies to Partial  Withdrawals  and Systematic  Withdrawals,  we will first  determine
what,  if  any,  amounts  qualify  as a Free  Withdrawal.  Those  amounts  are not  subject  to the  CDSC.  Partial
Withdrawals or Systematic  Withdrawals of amounts greater than the maximum Free  Withdrawal  amount will be subject
to a CDSC.

Partial  Withdrawals may also be available  following  annuitization but only if you choose certain annuity payment
options.

To request the forms  necessary  to make a  withdrawal  from your  Annuity,  contact our  Customer  Service Team at
1-800-752-6342 or visit our Internet Website at www.americanskandia.com.

HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?
The maximum Free Withdrawal amount during any Annuity Year is the greater of:
|X|      the "Growth" in the Annuity; or
|X|      10% of Purchase  Payments  that,  as of the date of the  withdrawal,  have been invested for less than the
     CDSC period (with your Annuity, eight (8) years).  The 10% amount is not cumulative.

"Growth"  equals the current  Account  Value less all Purchase  Payments  that have been invested for less than the
CDSC period and have not been  previously  withdrawn.  "Growth" does not include any additional  amounts we applied
to your  Annuity  based on your  Purchase  Payments  (see "How Do I Receive  Credits"  and "What Are  Target  Value
Credits").

NOTE:  Free  withdrawals  do not  reduce  the amount of any CDSC that  would  apply  upon a partial  withdrawal  or
subsequent surrender. The minimum Free Withdrawal you may request is $100.

We may reduce or eliminate the amount  available as a Free  Withdrawal  if your Annuity is used in connection  with
certain  plans that receive  special tax  treatment  under the Code.  As of the date of this  Prospectus,  the Free
Withdrawal  privilege has been eliminated for Annuities  purchased as funding  vehicles for retirement  plans under
Section 401 or 403(b) of the Code.

Examples
Assume you make an initial Purchase  Payment of $10,000 and make no additional  Purchase  Payments.  Assume that in
Annuity  Year 2,  due to  positive  investment  performance,  your  Account  Value is  $12,500.  The  maximum  Free
Withdrawal  amount  would be the  greater of Growth  (Account  Value  minus  Purchase  Payments = $2,500) or 10% of
Purchase Payments ($1,000).  Your maximum Free Withdrawal amount would therefore be $2,500.

Further  assume that in your third Annuity  Year,  you choose to surrender  your Annuity.  Assume that after taking
your $2,500 Free  Withdrawal  in Year 2, your Account  Value has  increased  to $11,000 due to positive  investment
performance.  Upon  surrender,  we will  deduct a CDSC of 8.5%  based on the  number of years  that  your  Purchase
Payment has been invested times the amount of your Purchase  Payment that has not been  previously  withdrawn (8.5%
of  $10,000 = $850).  The  amount  of the  previous  Free  Withdrawal  was not  subject  to a CDSC when  withdrawn.
Therefore,  upon  surrender,  the amount of the entire  Purchase  Payment is subject to the CDSC. You would receive
$10,150 minus the Annual Maintenance Fee and any Target Value Credits.

These  examples do not reflect the effect of any Credits or Target Value  Credits.  These amounts are not available
as a free withdrawal.

When we determine if a CDSC applies to Partial  Withdrawals  and Systematic  Withdrawals,  we will first  determine
what,  if  any,  amounts  qualify  as a Free  Withdrawal.  Those  amounts  are not  subject  to the  CDSC.  Partial
Withdrawal or Systematic  Withdrawal of amounts greater than the maximum Free Withdrawal  amount will be subject to
a CDSC.

IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?
A CDSC may be assessed  against a Partial  Withdrawal  during the accumulation  period.  Whether a CDSC applies and
the amount to be charged depends on whether the Partial  Withdrawal  exceeds any Free Withdrawal amount and, if so,
the number of years that have elapsed since the Purchase Payment being withdrawn has been invested in the Annuity.

1.   If you  request a Partial  Withdrawal  we  determine  if the  amount  you  requested  is  available  as a Free
     Withdrawal (in which case it would not be subject to a CDSC);
2.   If the amount requested exceeds the available Free Withdrawal amount:
|X|      First,  we withdraw the amount from  Purchase  Payments  that have been  invested for longer than the CDSC
         period, if any (with your Annuity, eight (8) years);
|X|      Second,  we withdraw the  remaining  amount from the Purchase  Payments  that are still subject to a CDSC.
         We  withdraw  the  "oldest"  of your  Purchase  Payments  first so that the lowest  CDSC will apply to the
         amount withdrawn.

     Any CDSC will only apply to the amount withdrawn that exceeds the Free Withdrawal amount.

3.   If the amount  requested  exceeds the amounts  available under Item#2 above, we withdraw the remaining  amount
     from any other Account Value (including Account Value due to Credits and Target Value Credits).

CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?
Yes. We call these "Systematic  Withdrawals." You can receive  Systematic  Withdrawals of earnings only,  principal
plus  earnings  or a flat  dollar  amount.  Systematic  Withdrawals  may be  subject to a CDSC.  We will  determine
whether a CDSC applies and the amount in the same way as we would for a Partial Withdrawal.

Systematic  Withdrawals  can be made from  Account  Value  allocated to the  variable  investment  options or Fixed
Allocations.  Generally,  Systematic  Withdrawals from Fixed  Allocations are limited to earnings accrued after the
program of Systematic  Withdrawals  begins,  or payments of fixed dollar  amounts that do not exceed such earnings.
Systematic  Withdrawals  are available on a monthly,  quarterly,  semi-annual or annual basis.  The Surrender Value
of your Annuity must be at least $20,000 before we will allow you to begin a program of Systematic Withdrawals.

The minimum  amount for each  Systematic  Withdrawal is $100. If any  scheduled  Systematic  Withdrawal is for less
than $100,  we may postpone  the  withdrawal  and add the expected  amount to the amount that is to be withdrawn on
the next scheduled Systematic Withdrawal.

DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(t) OF THE INTERNAL REVENUE CODE?
Yes. If your Annuity is used as a funding vehicle for certain  retirement  plans that receive special tax treatment
under  Sections  401,  403(b) or 408 of the Code,  Section  72(t) of the Code may provide an  exception  to the 10%
penalty  tax on  distributions  made  prior  to age 59 1/2if you  elect  to  receive  distributions  as a  series  of
"substantially  equal  periodic  payments".  Distributions  received  under this provision in any Annuity Year that
exceed the maximum  amount  available  as a free  withdrawal  will be subject to a CDSC.  To request a program that
complies  with  Section  72(t),  you must  provide  us with  certain  required  information  in  writing  on a form
acceptable  to us. We may require  advance  notice to allow us to calculate  the amount of 72(t)  withdrawals.  The
Surrender  Value of your  Annuity  must be at least  $20,000  before  we will  allow  you to  begin a  program  for
withdrawals under Section 72(t). The minimum amount for any such withdrawal is $100.


You may also  annuitize  your  contract  and  begin  receiving  payments  for the  remainder  of your life (or life
expectancy) as a means of receiving income payments before age 59 1/2that are not subject to the 10% penalty.


WHAT ARE MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?
(See "Tax Considerations" for a further discussion of Minimum Distributions.)

Minimum  Distributions  are a type of  Systematic  Withdrawal  we allow  to meet  distribution  requirements  under
Sections 401, 403(b) or 408 of the Code.  Under the Code, you may be required to begin receiving  periodic  amounts
from your  Annuity.  In such case,  we will allow you to make  Systematic  Withdrawals  in amounts that satisfy the
minimum  distribution  rules under the Code. We do not assess a CDSC on Minimum  Distributions from your Annuity if
you are required by law to take such Minimum  Distributions  from your Annuity at the time it is taken.  However, a
CDSC may be assessed on that portion of a Systematic  Withdrawal that is taken to satisfy the minimum  distribution
requirements  in  relation  to other  savings or  investment  plans  under  other  qualified  retirement  plans not
maintained with American Skandia.


The amount of the required  Minimum  Distribution  for your  particular  situation  may depend on other  annuities,
savings or  investments.  We will only  calculate the amount of your  required  Minimum  Distribution  based on the
value of your  Annuity.  We require  three (3) days advance  written  notice to calculate and process the amount of
your payments.  We may charge you for calculating  required  Minimum  Distributions.  You may elect to have Minimum
Distributions  paid  out  monthly,  quarterly,  semi-annually  or  annually.  The  $100  minimum  that  applies  to
Systematic Withdrawals does not apply to Minimum Distributions.

You may also  annuitize  your  contract  and  begin  receiving  payments  for the  remainder  of your life (or life
expectancy) as a means of receiving  income  payments and satisfying the Minimum  Distribution  requirements  under
the Code.

CAN I SURRENDER MY ANNUITY FOR ITS VALUE?
Yes.  During  the  accumulation  period  you can  surrender  your  Annuity at any time.  Upon  surrender,  you will
receive  the  Surrender  Value.  Upon  surrender  of your  Annuity,  you will no longer  have any rights  under the
Annuity.
Under certain annuity payment options, you may be allowed to surrender your Annuity for its then current value.


To request the forms necessary to surrender your Annuity,  contact our Customer Service Team at  1-800-752-6342  or
visit our Internet Website at www.americanskandia.com.

WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?
Where  permitted by law, you may request to surrender  your Annuity  prior to the Annuity Date without  application
of any CDSC upon occurrence of a  medically-related  "Contingency  Event".  The amount payable will be your Account
Value  minus:  (a) the amount of any Credits  applied  within 12 months of the  applicable  "Contingency  Event" as
defined below;  (b) the amount of any Credits added in conjunction  with any Purchase  Payments  received after our
receipt of your request for a  medically-related  surrender (i.e.  Purchase Payments received at such time pursuant
to a salary reduction program; and (c) the amount of any Target Value Credits under certain circumstances.

This waiver of any applicable CDSC is subject to our rules, including but not limited to the following:
|X|      the Annuitant must be named or any change of Annuitant  must be accepted by us, prior to the  "Contingency
     Event" described below;
|X|      the Annuitant must be alive as of the date we pay the proceeds of such surrender request;
|X|      if the Owner is one or more natural persons, all such Owners must also be alive at such time;
|X|      we must receive  satisfactory  proof of the  Annuitant's  confinement  in a Medical Care Facility or Fatal
     Illness in writing on a form satisfactory to us; and
|X|      this benefit is not available if the total Purchase  Payments  received  exceed $500,000 for all annuities
     issued by us with this benefit where the same person is named as Annuitant.

A "Contingency Event" occurs if the Annuitant is:
|X|      first  confined in a "Medical Care  Facility"  while your Annuity is in force and remains  confined for at
       least 90 days in a row; or
|X|      first diagnosed as having a "Fatal Illness" while your Annuity is in force.

The definitions of "Medical Care Facility" and "Fatal  Illness," as well as additional  terms and  conditions,  are
provided in your  Annuity.  Specific  details  and  definitions  in relation to this  benefit may differ in certain
jurisdictions.

WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?
We currently make annuity options  available that provide fixed annuity  payments,  variable payments or adjustable
payments.  Fixed options provide the same amount with each payment.  Variable options  generally  provide a payment
which may increase or decrease  depending on the investment  performance of the Sub-accounts.  However,  currently,
we also make a variable  payment option that has a guarantee  feature.  Adjustable  options provide a fixed payment
that is  periodically  adjusted based on current  interest  rates.  We do not guarantee to make any Annuity Payment
Options available in the future.

When you  purchase  an Annuity,  or at a later  date,  you may choose an Annuity  Date,  an annuity  option and the
frequency  of annuity  payments.  You may change  your  choices up to 30 days before the  Annuity  Date.  A maximum
Annuity  Date may be  required  by law.  Any change to these  options  must be in  writing.  The  Annuity  Date may
depend on the annuity  option you choose.  Certain  annuity  options may not be  available  depending on the age of
the Annuitant.

Certain of these  annuity  options  may be  available  to  Beneficiaries  who choose to receive  the Death  Benefit
proceeds as a series of payments instead of a lump sum payment.

Option 1
--------
Payments  for Life:  Under this  option,  income is payable  periodically  until the death of the "key  life".  The
"key life" (as used in this  section)  is the person or persons  upon whose life  annuity  payments  are based.  No
additional  annuity  payments  are made after the death of the key life.  Since no minimum  number of  payments  is
guaranteed,  this option offers the largest amount of periodic  payments of the life  contingent  annuity  options.
It is  possible  that only one  payment  will be  payable if the death of the key life  occurs  before the date the
second  payment was due,  and no other  payments  nor death  benefits  would be payable.  This Option is  currently
available  on a fixed or variable  basis.  Under this  option,  you cannot make a partial or full  surrender of the
annuity.

Option 2
--------
Payments  Based on Joint Lives:  Under this option,  income is payable  periodically  during the joint  lifetime of
two key lives, and thereafter  during the remaining  lifetime of the survivor,  ceasing with the last payment prior
to the  survivor's  death.  No minimum  number of payments is  guaranteed  under this option.  It is possible  that
only one payment  will be payable if the death of all the key lives occurs  before the date the second  payment was
due, and no other  payments or death benefits  would be payable.  This Option is currently  available on a fixed or
variable basis.  Under this option, you cannot make a partial or full surrender of the annuity.

Option 3
--------
Payments  for Life with a Certain  Period:  Under this option,  income is payable  until the death of the key life.
However,  if the key life dies  before the end of the period  selected  (5,  10,  15, or 20 years),  the  remaining
payments are paid to the Beneficiary  until the end of such period.  This Option is currently  available on a fixed
or  variable  basis.  If you elect to receive  payments  on a variable  basis  under this  option,  you can request
partial or full surrender of the annuity and receive its then current cash value (if any) subject to our rules.

Option 4
--------
Fixed Payments for a Certain Period:  Under this option,  income is payable  periodically for a specified number of
years. If the payee dies before the end of the specified  number of years,  the remaining  payments are paid to the
Beneficiary to the end of such period.  Note that under this option,  payments are not based on any  assumptions of
life  expectancy.  Therefore,  that  portion  of the  Insurance  Charge  assessed  to cover the risk that key lives
outlive our  expectations  provides no benefit to an Owner  selecting  this option.  Under this option,  you cannot
make a partial or full surrender of the annuity.

Option 5
--------
Variable Payments for a Certain Period:  Under this option,  income is payable  periodically for a specified number
of  years.  The  number  of years  cannot  be less  than 5 or more  than 50.  Payments  may  increase  or  decrease
depending on the  investment  performance  of the  Sub-Accounts.  If the payee dies before the end of the specified
number of years,  the remaining  payments are paid to the  Beneficiary  to the end of such period.  Note that under
this  option,  payments  are not based on any  assumptions  of life  expectancy.  Therefore,  that  portion  of the
Insurance  Charge  assessed  to cover the risk that key lives  outlive our  expectations  provides no benefit to an
Owner  selecting  this option.  If this option is selected,  full  surrenders may be made from the Annuity prior to
the last guaranteed Payment Date.  No partial surrenders are permitted if this option is selected.






Option 6
--------
Variable  Payments for Life with a Cash Value:  Under this  option,  benefits  are payable  periodically  until the
death  of the key  life.  Benefits  may  increase  or  decrease  depending  on the  investment  performance  of the
Sub-accounts.  This option has a cash value that also varies with the investment  performance  of the  Sub-account.
The cash value provides a "cushion" from volatile investment  performance so that negative  investment  performance
does  not  automatically  result  in a  decrease  in the  annuity  payment  each  month,  and  positive  investment
performance  does not  automatically  result  in an  increase  in the  annuity  payment  each  month.  The  cushion
generally  "stabilizes"  monthly  annuity  payments.  Any cash value remaining on the death of the key life is paid
to the  Beneficiary  in a lump sum or as periodic  payments.  Under this  option,  you can request  partial or full
surrender of the annuity and receive its then current cash value (if any) subject to our rules.

Option 7
--------
Variable  Payments for Life with a Cash Value and Guarantee:  Under this option,  benefits are payable as described
in Option 6; except  that,  while the key life is alive,  the annuity  payment  will not be less than a  guaranteed
             ------
amount,  which  generally  is equal  to the  first  annuity  payment.  We  charge  an  additional  amount  for this
guarantee.  Under this option,  any cash value remaining on the death of the key life is paid to the Beneficiary in
a lump sum or as periodic  payments.  Under this option,  you can request  partial or full surrender of the annuity
and receive its then current cash value (if any) subject to our rules.

We may make additional annuity payment options available in the future.

HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?
Unless  prohibited  by law, we require that you elect either a life annuity or an annuity with a certain  period of
at least 5 years if any CDSC would  apply  were you to  surrender  your  Annuity on the  Annuity  Date.  Therefore,
making a purchase  payment  within  eight years of the Annuity Date limits your annuity  payment  options.  Certain
annuity  payment  options may not be  available  if your  Annuity  Date occurs  during the period that a CDSC would
apply.

If you have not provided us with your Annuity Date or Annuity Payment Option in writing, then:
|X|      the Annuity Date will be the first day of the calendar month following the later of the Annuitant's 85th
     birthday or the fifth anniversary of our receipt of your request to purchase an Annuity; and
|X|      the annuity payments, where allowed by law, will be calculated on a fixed basis under Option 3, Payments
     for Life with 10 years certain.

HOW ARE ANNUITY PAYMENTS CALCULATED?

Fixed Annuity Payments (Options 1-4)
If you choose to receive fixed  annuity  payments,  you will receive equal  fixed-dollar  payments  throughout  the
period you select.  The amount of the fixed payment will vary  depending on the annuity  payment option and payment
frequency you select.  Generally,  the first annuity payment is determined by multiplying the Account Value,  minus
any state premium taxes that may apply,  by the factor  determined  from our table of annuity  rates.  The table of
annuity  rates differs based on the type of annuity  chosen and the frequency of payment  selected.  Our rates will
not be less  than our  guaranteed  minimum  rates.  These  guaranteed  minimum  rates  are  derived  from the a2000
Individual  Annuity  Mortality  Table  with an assumed  interest  rate of 3% per annum.  Where  required  by law or
regulation,  such  annuity  table  will have  rates  that do not  differ  according  to the gender of the key life.
Otherwise, the rates will differ according to the gender of the key life.

Variable Annuity Payments
We offer three different types of variable  annuity payment  options.  The first annuity payment will be calculated
based upon the assumed  investment  return  ("AIR").  You select the AIR before we start to make Annuity  Payments.
The remaining  annuity  payments will fluctuate based on the performance of the Portfolios  relative to the AIR, as
well as, other  factors  described  below.  The greater the AIR, the greater the first  annuity  payment.  A higher
AIR may result in  smaller  potential  growth in the  annuity  payments.  A lower AIR  results  in a lower  initial
annuity payment.

|X|      Variable Payments (Options 1-3 & 5)
         -----------------
         We calculate  each annuity  payment  amount by  multiplying  the number of units  scheduled to be redeemed
         under a schedule  of units for each  Sub-account  by the Unit  Value of each  Sub-Account  on the  annuity
         payment  date.  We determine the schedule of units based on your Account Value (minus any premium tax that
         applies)  at the time you elect to begin  receiving  annuity  payments.  The  schedule  of units will vary
         based on the annuity  payment  option  selected,  the length of any certain  period (if  applicable),  the
         Annuitant's  age and gender  (if  annuity  payments  are due for the life of the  Annuitant)  and the Unit
         Value of the  Sub-Accounts  you initially  selected on the Issue Date.  The  calculation  is performed for
         each  Sub-Account,  and the  sum of the  Sub-Account  calculations  equals  the  amount  of  your  annuity
         payment.  Other than to fund annuity  payments,  the number of units  allocated to each  Sub-Account  will
         not change unless you transfer among the  Sub-Accounts  or make a withdrawal (if allowed).  You can select
         one of three AIRs for these options: 3%, 5% or 7%.

|X|      Stabilized Variable Payments (Option 6)
         ----------------------------
         This option  provides  guaranteed  payments for life, a cash value for the  Annuitant  (while alive) and a
         variable  period of time during which annuity  payments will be made whether or not the Annuitant is still
         alive.  We calculate the initial  annuity  payment amount by multiplying  the number of units scheduled to
                                  -------
         be  redeemed  under a schedule of units by the Unit  Values  determined  on the  annuitization  date.  The
         schedule of units is established for each  Sub-account you choose on the  annuitization  date based on the
         applicable  benchmark  rate  and  the  annuity  factors.  The  annuity  factors  reflect  our  assumptions
         regarding  the costs we expect to bear in  guaranteeing  payments for the lives of the  Annuitant and will
         depend  on the  benchmark  rate,  the  annuitant's  attained  age and  gender  (where  permitted).  Unlike
         variable  payments  (described above) where each payment can vary based on Sub-account  performance,  this
         payment option  cushions the immediate  impact of  Sub-account  performance by adjusting the length of the
         time during which  annuity  payments  will be made whether or not the  Annuitant is alive while  generally
         maintaining a level annuity payment  amount.  Sub-account  performance  that exceeds a benchmark rate will
         generally extend this time period,  while Sub-account  performance that is less than a benchmark rate will
         generally  shorten the period.  If the period  reaches  zero and the  Annuitant  is still  alive,  Annuity
         Payments  continue,  however,  the annuity payment amount will vary depending on Sub-account  performance,
         similar to conventional variable payments.  The AIR for this option is 4%.

|X|      Stabilized Variable Payments with a Guaranteed Minimum (Option7)
         ------------------------------------------------------
         This option  provides  guaranteed  payments for life in the same manner as  Stabilized  Variable  Payments
         (described  above).  In addition to the stabilization  feature,  this option also guarantees that variable
         annuity  payments will not be less than the initial  annuity  payment  amount  regardless  of  Sub-account
         performance.  The AIR for this option is 3%.

Adjustable Annuity Payments
We may make an adjustable annuity payment option available.  Adjustable  annuity payments are calculated  similarly
to fixed annuity payments except that on every fifth (5th) anniversary of receiving  annuity payments,  the annuity
payment  amount is  adjusted  upward or  downward  depending  on the rate we are  currently  crediting  to  annuity
payments.  The  adjustment  in the  annuity  payment  amount  does not affect the  duration  of  remaining  annuity
payments, only the amount of each payment.

DEATH BENEFIT


WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?
The  Annuity  provides a Death  Benefit  during its  accumulation  period.  If the  Annuity is owned by one or more
natural  persons,  the Death  Benefit is payable  upon the first  death of an Owner.  If the Annuity is owned by an
entity,  the Death  Benefit is payable  upon the  Annuitant's  death,  if there is no  Contingent  Annuitant.  If a
Contingent  Annuitant was  designated  before the  Annuitant's  death and the Annuitant  dies,  then the Contingent
Annuitant  becomes the  Annuitant  and a Death  Benefit will not be paid at that time.  The person upon whose death
the Death Benefit is paid is referred to below as the "decedent."

The Annuity  provides a basic Death Benefit at no additional  charge.  The Insurance  Charge we deduct from Account
Value  allocated to the  Sub-accounts  is used,  in part,  to pay us for the risk we assume in providing  the basic
Death  Benefit  guarantee  under the  Annuity.  The Annuity  also offers two  different  optional  Death  Benefits.
Either  benefit can be  purchased  for an  additional  charge.  The  additional  charge is  deducted to  compensate
American Skandia for providing  increased insurance  protection under the optional Death Benefits.  Notwithstanding
the  additional  protection  provided  under the optional Death  Benefits,  the  additional  cost has the impact of
reducing the net  performance of the investment  options.  Under certain  circumstances,  your Death Benefit may be
reduced by the amount of any Credits or Target Value  Credits we applied to your  Purchase  Payments  (see "How are
Credits Applied to My Account Value" and "Recovery of Target Value Credits").


Basic Death Benefit
The basic Death Benefit depends on the decedent's age on the date of death:

         If death occurs during the first ten (10) Annuity Years:  The Death Benefit is the greater of:

|X|      The sum of all Purchase Payments less the sum of all withdrawals; and
|X|      The sum of your Account  Value in the  variable  investment  options and your  Interim  Value in the Fixed
               Allocations.

         If death occurs after the tenth (10th) Annuity Year:  The Death Benefit is your Account Value.

OPTIONAL DEATH BENEFITS
You can  purchase  either of two  optional  Death  Benefits  with your  Annuity  to provide  an  enhanced  level of
protection for your beneficiaries.  We do not currently offer the Annuity with both optional Death Benefits.

-------------------------------------------------------------------------------------------------------------------
Currently,  these  benefits  are only offered and must be elected at the time that you purchase  your  Annuity.  We
may, at a later date,  allow existing  Annuity Owners to purchase either of the optional Death Benefits  subject to
our rules and any  changes  or  restrictions  in the  benefits.  Certain  terms and  conditions  may  differ if you
purchase  your  Annuity  as part of an  exchange,  replacement  or  transfer,  in whole or in part,  from any other
Annuity we issue.
-------------------------------------------------------------------------------------------------------------------

Enhanced Beneficiary Protection Optional Death Benefit
The Enhanced  Beneficiary  Protection  Optional Death Benefit can provide  additional  amounts to your  Beneficiary
that may be used to offset  federal and state taxes  payable on any  taxable  gains in your  Annuity at the time of
your death.  Whether this benefit is appropriate  for you may depend on your  particular  circumstances,  including
other  financial  resources  that may be available to your  Beneficiary to pay taxes on your Annuity should you die
during the accumulation period.  No benefit is payable if death occurs on or after the Annuity Date.

The Enhanced  Beneficiary  Protection  Optional Death Benefit provides a benefit that is payable in addition to the
basic Death  Benefit.  If the  Annuity  has one Owner,  the Owner must be age 75 or less at the time the benefit is
purchased.  If the Annuity has joint  Owners,  the oldest Owner must be age 75 or less.  If the Annuity is owned by
an entity, the Annuitant must be age 75 or less.

-------------------------------------------------------------------------------------------------------------------
The Enhanced  Beneficiary  Protection  Optional Death Benefit is being offered in those jurisdictions where we have
received  regulatory  approval.  Certain terms and conditions may differ between  jurisdictions once approved.  The
benefit is  currently  only  offered to Owners who purchase  the Annuity as a  "non-qualified"  investment.  We may
make the benefit  available  to Owners who  purchase  the Annuity as an IRA or other  "qualified"  investment  at a
later  date.  Please  refer  to  the  section  entitled  "Tax  Considerations"  for a  discussion  of  special  tax
considerations for purchasers of this benefit.
-------------------------------------------------------------------------------------------------------------------

Calculation of Enhanced Beneficiary Protection Optional Death Benefit
If you purchase the Enhanced Beneficiary Protection Optional Death Benefit, the Death Benefit is calculated as
follows:

1.       the basic Death Benefit described above

     PLUS

2.       50% of the "Death Benefit Amount" less Purchase Payments reduced by proportional withdrawals.

Death  Benefit  Amount  includes  your Account  Value and any amounts  added to your Account  Value under the basic
----------------------
Death  Benefit  when the Death  Benefit is  calculated.  Under the basic Death  Benefit,  amounts are added to your
Account Value when the Account Value is less than Purchase Payments minus proportional withdrawals.

The amount calculated in Items 1 & 2 above may be reduced by any Credits or Target Value Credits under certain
circumstances.

-------------------------------------------------------------------------------------------------------------------
The  Enhanced  Beneficiary  Protection  Optional  Death  Benefit is  subject  to a maximum  of 50% of all  Purchase
Payments  applied to the Annuity at least 12 months  prior to the death of the decedent  that  triggers the payment
of the Death Benefit.
-------------------------------------------------------------------------------------------------------------------

See Appendix C for examples of how the Enhanced Beneficiary Protection Optional Death Benefit is calculated.


Guaranteed Minimum Death Benefit
If the Annuity has one Owner, the Owner must be age 80 or less at the time either optional Death Benefit is
purchased.  If the Annuity has joint Owners, the oldest Owner must be age 80 or less.  If the Annuity is owned by
an entity, the Annuitant must be age 80 or less.


Key Terms Used with the Guaranteed Minimum Death Benefit


|X|      The Death  Benefit  Target Date is the contract  anniversary  on or after the 80th birthday of the current
             ---------------------------
     Owner, the oldest of either joint Owner or the Annuitant, if entity owned.

|X|      The Highest  Anniversary  Value equals the highest of all previous  "Anniversary  Values" on or before the
             ---------------------------
     earlier of the Owner's date of death and the "Death Benefit Target Date".

|X|      The  Anniversary  Value is the Account Value as of each  anniversary of the Issue Date plus the sum of all
              ------------------
     Purchase  Payments  on or after such  anniversary  less the sum of all  "Proportional  Reductions"  since such
     anniversary.

|X|      A Proportional  Reduction is a reduction to the value being measured caused by a withdrawal,  equaling the
           -----------------------
     percentage  of the  withdrawal  as  compared  to the  Account  Value  as of the  date of the  withdrawal.  For
     example,  if your Account  Value is $10,000 and you  withdraw  $2,000 (a 20%  reduction),  we will reduce both
     your Anniversary Value and the amount determined by Purchase Payments  increasing at the appropriate  interest
     rate by 20%.



Calculation of Guaranteed Minimum Death Benefit
The Guaranteed Minimum Death Benefit depends on whether death occurs before or after the Death Benefit Target
Date.


         If the Owner dies before the Death Benefit Target Date, the Death Benefit equals the greatest of:


1.       the Account Value in the Sub-accounts  plus the Interim Value of any Fixed  Allocations (no MVA) as of the
              date we receive in writing "due proof of death"; and
2.       the sum of all Purchase  Payments minus the sum of all  Proportional  Reductions,  each  increasing  daily
              until  the  Owner's  date of death at a rate of 5.0%,  subject  to a limit of 200% of the  difference
              between the sum of all  Purchase  Payments and the sum of all  withdrawals  as of the Owner's date of
              death; and
3.       the "Highest Anniversary Value" on or immediately preceding the Owner's date of death.


         The amount determined by this calculation is increased by any Purchase Payments received after the
         Owner's date of death and decreased by any Proportional Reductions since such date.  The amount
         calculated in Items 1 & 3 above may be reduced by any Credits or Target Value Credits under certain
         circumstances.

         If the Owner dies on or after the Death Benefit Target Date, the Death Benefit equals the greater of:

1.       the Account  Value as of the date we receive in writing "due proof of death" (an MVA may be  applicable to
              amounts in any Fixed Allocations); and
2.       the greater of Item 2 & 3 above on the Death  Benefit  Target Date plus the sum of all  Purchase  Payments
              less the sum of all Proportional Reductions since the Death Benefit Target Date.

         The amount calculated in Item 1 above may be reduced by any Credits or Target Value Credits under
         certain circumstances.

Annuities with joint Owners
For Annuities  with Joint Owners,  the Death Benefit is calculated as shown above except that the age of the oldest
of the Joint Owners is used to  determine  the Death  Benefit  Target  Date.  NOTE:  If you and your spouse own the
Annuity  jointly,  we will pay the  Death  Benefit  to the  Beneficiary.  If the sole  primary  Beneficiary  is the
surviving  spouse,  then the  surviving  spouse can elect to assume  ownership  of the  Annuity  and  continue  the
contract instead of receiving the Death Benefit.

Annuities owned by entities
For  Annuities  owned by an entity,  the Death  Benefit is  calculated  as shown  above  except that the age of the
Annuitant is used to determine  the Death Benefit  Target Date.  Payment of the Death Benefit is based on the death
of the Annuitant (or Contingent Annuitant, if applicable).

Can I terminate the optional Death Benefits?  Do the optional Death Benefits terminate under other circumstances?
You can terminate the Enhanced  Beneficiary  Protection  Optional Death Benefit at any time. Upon termination,  you
will be required to pay a pro-rata  portion of the annual  charge for the benefit.  The  Guaranteed  Minimum  Death
Benefit cannot be terminated  once it is elected.  Both optional Death  Benefits will  terminate  automatically  on
the  Annuity  Date.  We  may  also   terminate  the  optional  Death  Benefit  if  necessary  to  comply  with  our
interpretation of the Code and applicable regulations.

How much do you charge for the optional Death Benefit?
We deduct a charge from your  Account  Value if you elect to purchase  either  optional  Death  Benefit.  No charge
applies after the Annuity Date.  We deduct the charge:
1.       on each anniversary of the Issue Date;
2.       when Account Value is transferred to our general account prior to the Annuity Date;
3.       if you surrender your Annuity; and
4.       if you choose to terminate the benefit (Enhanced Beneficiary Protection Optional Death Benefit only)

If you surrender the Annuity,  elect to begin receiving  annuity  payments or terminate the benefit on a date other
than an  anniversary  of the Issue Date,  the charge will be prorated.  During the first year after the Issue Date,
the charge will be prorated  from the Issue  Date.  In all  subsequent  years,  it would be prorated  from the last
anniversary of the Issue Date.

We first deduct the amount of the charge  pro-rata from the Account Value in the variable  investment  options.  We
only deduct the charge  pro-rata from the Fixed  Allocations to the extent there is  insufficient  Account Value in
the variable  investment  options to pay the charge.  If your Annuity's  Account Value is  insufficient  to pay the
charge,  we may deduct  your  remaining  Account  Value and  terminate  your  Annuity.  We will  notify you if your
Account  Value is  insufficient  to pay the  charge  and  allow you to submit an  additional  Purchase  Payment  to
continue your Annuity.

Please  refer to the  section  entitled  "Tax  Considerations"  for  additional  considerations  in relation to the
optional Death Benefit.

PAYMENT OF DEATH BENEFITS

Payment of Death Benefit to Beneficiary
Except in the case of a spousal Beneficiary, in the event of your death, the death benefit must be distributed:
|X|      as a lump sum amount at any time within five (5) years of the date of death; or
|X|      as a series of annuity  payments not extending  beyond the life  expectancy of the Beneficiary or over the
         life of the Beneficiary.  Payments under this option must begin within one year of the date of death.

Unless you have made an election prior to death benefit  proceeds  becoming due, a Beneficiary can elect to receive
the Death Benefit  proceeds as a series of fixed annuity  payments  (Annuity  Payment Option 1-4) or as a series of
variable  annuity  payments  (Annuity  Payment Option 1-3 or 5-7). See the section  entitled "What Types of Annuity
Options are Available."

Spousal Beneficiary - Assumption of Annuity
You may name your spouse as your  Beneficiary.  If you and your spouse own the Annuity jointly,  we assume that the
sole primary  Beneficiary  will be the surviving  spouse unless you elect an alternative  Beneficiary  designation.
Unless you elect an alternative  Beneficiary  designation,  the spouse Beneficiary may elect to assume ownership of
the  Annuity  instead  of taking the Death  Benefit  payment.  Any Death  Benefit  (including  any  optional  Death
Benefits)  that would have been  payable to the  Beneficiary  will become the new  Account  Value as of the date we
receive due proof of death and any  required  proof of a spousal  relationship.  As of the date the  assumption  is
effective,  the surviving  spouse will have all the rights and benefits  that would be available  under the Annuity
to a new  purchaser  of the same  attained  age.  For  purposes of  determining  any future  Death  Benefit for the
surviving  spouse,  the new Account Value will be considered as the initial  Purchase  Payment.  No CDSC will apply
to the new Account  Value.  However,  any  additional  Purchase  Payments  applied after the date the assumption is
effective will be subject to all provisions of the Annuity.

See the section entitled "Managing Your Annuity - Spousal  Contingent  Annuitant" for a discussion of the treatment
of a spousal Contingent Annuitant in the case of the death of the Annuitant in an entity owned Annuity.

Inherited IRA Death Benefit Payout
The Code  provides for  alternative  death  benefit  payment  options when an Annuity is used as an IRA,  403(b) or
other  "qualified  investment" that requires Minimum  Distributions.  The available  payment options will depend on
whether  the Owner died on or before  the date he or she was  required  to begin  receiving  Minimum  Distributions
under the Code and whether the Beneficiary is the surviving spouse.

|X|      If death occurs  before the date Minimum  Distributions  must begin under the Code,  the Death Benefit can
         be paid out in either a lump  sum,  within  five  years  from the date of death,  or over the life or life
         expectancy  of the  designated  Beneficiary  (as  long as  payments  begin  by  December  31st of the year
         following the year of death).  However,  if the spouse is the  Beneficiary,  the Death Benefit can be paid
         out over the life or life  expectancy of the spouse with such payments  beginning no earlier than December
         31 of the year  following the year of death or December 31st of the year in which the deceased  would have
         reached age 70 1/2, which ever is later.

|X|      If death occurs after the date Minimum  Distributions  must begin under the Code,  the Death  Benefit must
         be paid out at least as rapidly as under the method then in effect.

A Beneficiary  has the flexibility to take out more each year than required under the Minimum  Distribution  rules.
Until withdrawn,  amounts in an IRA, 403(b) or other "qualified  investment"  continue to be tax deferred.  Amounts
withdrawn each year,  including  amounts that are required to be withdrawn  under the Minimum  Distribution  rules,
are  subject to tax.  You may wish to  consult a  professional  tax  advisor  for tax advice as to your  particular
situation.   See  the  section  entitled  "How  are  Distributions  From  Qualified   Contracts  Taxed?  -  Minimum
Distributions after age 70 1/2."

Are there any exceptions to these rules for paying the Death Benefit?
Yes,  there are exceptions  that apply no matter how your Death Benefit is calculated.  There are exceptions to the
Death  Benefit if the  decedent was not the Owner or Annuitant as of the Issue Date and did not become the Owner or
Annuitant  due to the prior  Owner's  or  Annuitant's  death.  Any  minimum  Death  Benefit  that  applies  will be
suspended  for a two-year  period  from the date he or she first  became  Owner or  Annuitant.  After the  two-year
suspension  period is completed,  the Death Benefit is the same as if this person had been an Owner or Annuitant on
the Issue Date.

When do you determine the Death Benefit?
We determine  the amount of the Death  Benefit as of the date we receive "due proof of death" and any other written
representations  we require to determine the proper payment of the Death Benefit to all  Beneficiaries.  "Due proof
of  death"  may  include  a  certified  copy of a death  certificate,  a  certified  copy of a decree of a court of
competent  jurisdiction as to the finding of death or other  satisfactory  proof of death. Upon our receipt of "due
proof of death" we automatically  transfer the Death Benefit to the AST Money Market  Sub-Account  until we further
determine  the  universe  of  eligible  Beneficiaries.  Once  the  universe  of  eligible  Beneficiaries  has  been
determined  each  eligible  Beneficiary  may  allocate  his or her  eligible  share  of the  Death  Benefit  to the
Sub-Accounts according to our rules.

Each  Beneficiary  must make an election as to the method they wish to receive their portion of the Death  Benefit.
Absent an election of a Death  Benefit  payment  method,  no Death Benefit can be paid to the  Beneficiary.  We may
require written  acknowledgment of all named Beneficiaries  before we can pay the Death Benefit.  During the period
from the date of death until we receive all  required  paper work,  the amount of the Death  Benefit may be subject
to market fluctuations.

VALUING YOUR INVESTMENT

HOW IS MY ACCOUNT VALUE DETERMINED?
During the accumulation  period,  the Annuity has an Account Value. The Account Value is determined  separately for
each  Sub-account  allocation  and for each Fixed  Allocation.  The Account  Value is the sum of the values of each
Sub-account  allocation  and the value of each Fixed  Allocation.  The Account Value does not reflect any CDSC that
may apply to a withdrawal  or  surrender.  The Account  Value  includes any  additional  amounts we applied to your
Purchase  Payments that we are entitled to recover upon  surrender of your Annuity.  When  determining  the Account
Value on any day other than a Fixed  Allocation's  Maturity  Date,  the Account  Value may include any Market Value
Adjustment that would apply to a Fixed Allocation (if withdrawn or transferred) on that day.


WHAT IS THE SURRENDER VALUE OF MY ANNUITY?
The Surrender Value of your Annuity is the value available to you on any day during the  accumulation  period.  The
Surrender  Value is equal to your  Account  Value minus any CDSC,  the Annual  Maintenance  Fee, the charge for any
optional  Death Benefit and any  additional  amounts we applied to your  Purchase  Payments that we are entitled to
recover upon  surrender of your Annuity.  The Surrender  Value will also include any Market Value  Adjustment  that
may apply.


HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?
When you allocate Account Value to a Sub-Account,  you are purchasing  units of the  Sub-account.  Each Sub-account
invests  exclusively  in shares of an  underlying  Portfolio.  The value of the  Units  fluctuate  with the  market
fluctuations of the Portfolios.  The value of the Units also reflect the daily accrual for the Insurance Charge.

Each  Valuation  Day, we  determine  the price for a Unit of each  Sub-account,  called the "Unit  Price." The Unit
Price is used for  determining  the value of transactions  involving  Units of the  Sub-accounts.  We determine the
number of Units involved in any  transaction  by dividing the dollar value of the  transaction by the Unit Price of
the Sub-account as of the Valuation Day.

Example
Assume you allocate  $5,000 to a  Sub-account.  On the  Valuation  Day you make the  allocation,  the Unit Price is
$14.83.  Your $5,000 buys  337.154  Units of the  Sub-account.  Assume that later,  you wish to transfer  $3,000 of
your Account  Value out of that  Sub-account  and into another  Sub-account.  On the  Valuation Day you request the
transfer,  the Unit Price of the  original  Sub-account  has  increased  to $16.79.  To  transfer  $3,000,  we sell
178.677  Units at the  current  Unit  Price,  leaving  you  158.477  Units.  We then buy $3,000 of Units of the new
Sub-account at the Unit Price of $17.83.  You would then have 168.255 Units of the new Sub-account.

HOW DO YOU VALUE FIXED ALLOCATIONS?
During the Guarantee  Period,  we use the concept of an Interim  Value.  The Interim Value can be calculated on any
day and is equal to the  initial  value  allocated  to a Fixed  Allocation  plus all  interest  credited to a Fixed
Allocation  as of the date  calculated.  The  Interim  Value  does not  include  the  impact  of any  Market  Value
Adjustment.  If you made any transfers or withdrawals from a Fixed  Allocation,  the Interim Value will reflect the
withdrawal of those amounts and any interest  credited to those amounts  before they were  withdrawn.  To determine
the Account Value of a Fixed  Allocation on any day other than its Maturity  Date, we multiply the Account Value of
the Fixed Allocation times the Market Value Adjustment factor.

WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?

Initial Purchase  Payments:  We are required to allocate your initial  Purchase Payment to the Sub-accounts  within
two (2) days after we receive all of our  requirements  to issue the  Annuity.  If we do not have all the  required
information  to allow us to issue your  Annuity,  we may retain the Purchase  Payment  while we try to reach you or
your  representative  to  obtain  all  of our  requirements.  If we  are  unable  to  obtain  all  of our  required
information  within five (5) days, we are required to return the Purchase  Payment to you at that time,  unless you
specifically  consent to our  retaining  the Purchase  Payment  while we gather the required  information.  Once we
obtain the required  information,  we will invest the Purchase  Payment and issue the Annuity  within two (2) days.
During any period that we are trying to obtain the required information, your money is not invested.

Additional  Purchase Payments:  We will apply any additional Purchase Payments on the Valuation Day that we receive
the Purchase Payment with satisfactory instructions.

Scheduled  Transactions:  "Scheduled"  transactions  include transfers under a Dollar Cost Averaging,  rebalancing,
or asset  allocation  program,  Systematic  Withdrawals,  Minimum  Distributions  or  annuity  payments.  Scheduled
transactions  are  processed  and  valued as of the date they are  scheduled,  unless  the  scheduled  day is not a
Valuation  Day.  In that  case,  the  transaction  will be  processed  and  valued  on  Valuation  Day prior to the
scheduled transaction date.

Unscheduled  Transactions:  "Unscheduled"  transactions include any other non-scheduled  transfers and requests for
Partial  Withdrawals or Free  Withdrawals or Surrenders.  Unscheduled  transactions  are processed and valued as of
the Valuation Day we receive the request at our Office in good order.

Medically-related  Surrenders & Death  Benefits:  Medically-related  surrender  requests and Death  Benefit  claims
require our review and evaluation  before  processing.  We price such transactions as of the date we receive at our
Office all materials we require for such transaction and that are satisfactory to us.

TAX CONSIDERATIONS

WHAT ARE SOME OF THE FEDERAL TAX CONSIDERATIONS OF THIS ANNUITY?
Following is a brief summary of some of the Federal tax  considerations  relating to this Annuity.  However,  since
the tax laws are complex and tax  consequences are affected by your individual  circumstances,  this summary of our
interpretation  of the  relevant  tax laws is not  intended  to be fully  comprehensive  nor is it  intended as tax
advice.  Therefore,  you may wish to  consult a  professional  tax  advisor  for tax  advice as to your  particular
situation.

HOW ARE AMERICAN SKANDIA AND THE SEPARATE ACCOUNTS TAXED?
The  Separate  Accounts  are taxed as part of  American  Skandia.  American  Skandia  is taxed as a life  insurance
company  under  Part I,  subchapter  L of the Code.  No taxes are due on  interest,  dividends  and  short-term  or
long-term capital gains earned by the Separate Accounts with respect to the Annuities.

IN GENERAL, HOW ARE ANNUITIES TAXED?
Section 72 of the Code  governs  the  taxation of  annuities  in  general.  Taxation of the Annuity  will depend in
large part on:

1.       whether the Annuity is used by:
|X|      a qualified  pension  plan,  profit  sharing  plan or other  retirement  arrangement  that is eligible for
         special treatment under the Code (for purposes of this discussion, a "Qualified Contract"); or
|X|      an individual or a corporation, trust or partnership (a "Non-qualified Contract"); and

2.       whether the Owner is:
|X|      an individual person or persons; or
|X|      an entity including a corporation, trust or partnership.

Individual  Ownership:  If one or more individuals own an Annuity,  the Owner of the Annuity is generally not taxed
on any  increase in the value of the  Annuity  until an amount is  received  (a  "distribution").  This is commonly
referred to as "tax  deferral".  A  distribution  can be in the form of a lump sum payment  including  payment of a
Death Benefit,  or in annuity  payments under one of the annuity payment  options.  Certain other  transactions may
qualify as a distribution and be subject to taxation.


Entity  Ownership:  If the Annuity is owned by an entity and is not a Qualified  Contract,  generally  the Owner of
the  Annuity  must  currently  include  any  increase  in the value of the  Annuity  during a tax year in its gross
income.  An  exception  from  current  taxation  applies  for  annuities  held by an  employer  with  respect  to a
terminated  tax-qualified  retirement  plan, a trust holding an annuity as an agent for a natural  person,  or by a
decedent's  estate by reason of the death of the  decedent.  A tax-exempt  entity for Federal tax purposes will not
be subject to income tax as a result of this provision.


HOW ARE DISTRIBUTIONS TAXED?
Distributions from an Annuity are taxed as ordinary income and not as capital gains.

Distributions Before Annuitization:  Distributions  received before annuity payments begin are generally treated as
coming first from "income on the contract" and then as a return of the  "investment  in the  contract".  The amount
of any  distribution  that is treated as receipt of "income on the contract" is includible in the taxpayer's  gross
income  and  taxable  in the year it is  received.  The  amount  of any  distribution  treated  as a return  of the
"investment in the contract" is not includible in gross income.


|X|      "Income on the contract" is calculated by  subtracting  the  taxpayer's  "investment in the contract" from
     the aggregate value of all "related contracts" (discussed below).
|X|      "Investment in the contract" is equal to total  purchase  payments for all "related  contracts"  minus any
     previous  distributions  or  portions  of such  distributions  from  such  "related  contracts"  that were not
     includible  in gross  income.  "Investment  in the  contract"  may be  affected  by  whether an annuity or any
     "related  contract"  was purchased as part of a tax-free  exchange of life  insurance,  endowment,  or annuity
     contracts  under Section 1035 of the Code. The  "investment in the contract" for a Qualified  Contract will be
     considered zero for tax reporting purposes.

Distributions  After  Annuitization:  A portion of each annuity payment  received on or after the Annuity Date will
generally be taxable.  The taxable  portion of each annuity  payment is determined  by a formula which  establishes
the ratio that the  "investment in the contract"  bears to the total value of annuity  payments to be made. This is
called the  "exclusion  ratio." The  investment in the contract is excluded  from gross  income.  Any portion of an
annuity  payment  received  that exceeds the  exclusion  ratio will be entirely  includible  in gross  income.  The
formula for  determining  the exclusion ratio differs  between fixed and variable  annuity  payments.  When annuity
payments  cease  because of the death of the  person  upon whose  life  payments  are based and,  as of the date of
death,  the amount of annuity  payments  excluded from taxable  income by the  exclusion  ratio does not exceed the
"investment in the  contract,"  then the remaining  portion of unrecovered  investment is allowed as a deduction by
the beneficiary in the tax year of such death.


Penalty  Tax on  Distributions:  Generally,  any  distribution  from an  annuity  not  used in  conjunction  with a
Qualified  Contract  (Qualified  Contracts are discussed  below) is subject to a penalty equal to 10% of the amount
includible in gross income.  This penalty does not apply to certain distributions, including:
|X|      Distributions made on or after the taxpayer has attained age 591/2;
|X|      Distributions  made on or after the death of the contract owner, or, if the owner is an entity,  the death
     of the annuitant;
|X|      Distributions attributable to the taxpayer's becoming disabled;
|X|      Distributions  which are part of a series of substantially  equal periodic  payments for the life (or life
     expectancy) of the taxpayer (or the joint lives of the taxpayer and the taxpayer's Beneficiary);
|X|      Distributions  of amounts  which are treated as  "investments  in the  contract"  made prior to August 14,
     1982;
|X|      Payments under an immediate annuity as defined in the Code;
|X|      Distributions under a qualified funding asset under Code Section 130(d); or
|X|      Distributions  from an annuity  purchased by an employer on the  termination  of a qualified  pension plan
     that is held by the employer until the employee separates from service.

Special rules  applicable to "related  contracts":  Contracts issued by the same insurer to the same contract owner
within the same calendar year (other than certain  contracts owned in connection  with a  tax-qualified  retirement
arrangement)  are to be treated as one annuity  contract  when  determining  the taxation of  distributions  before
annuitization.  We refer to these contracts as "related  contracts." In situations  involving  related contracts we
believe  that the values  under such  contracts  and the  investment  in the  contracts  will be added  together to
determine the proper taxation of a distribution  from any one contract  described under the section  "Distributions
before  Annuitization."  Generally,  distributions  will be treated as coming  first  from  income on the  contract
until all of the income on all such related  contracts is withdrawn,  and then as a return of the investment in the
contract.  There is some  uncertainty  regarding  the  manner in which the  Internal  Revenue  Service  would  view
related  contracts when one or more contracts are immediate  annuities or are contracts that have been  annuitized.
The Internal  Revenue  Service has not issued  guidance  clarifying  this issue as of the date of this  Prospectus.
You are particularly cautioned to seek advice from your own tax advisor on this matter.


Special  concerns  regarding   "substantially  equal  periodic  payments":   (also  known  as  "72(t)"  or  "72(q)"
distributions)  Any  modification to a program of distributions  which are part of a series of substantially  equal
periodic  payments  that occur before the later of the  taxpayer  reaching age 59 1/2or five (5) years from the first
of such  payments will result in the  requirement  to pay the 10%  premature  distribution  penalty that would have
been due had the  payments  been  treated  as  subject  to the 10%  premature  distribution  penalty  in the  years
received,  plus  interest.  This  does not  apply  when  the  modification  is by  reason  of death or  disability.
American Skandia does not currently support a section 72(q) program.


Special concerns regarding immediate  annuities:  The Internal Revenue Service has ruled that the immediate annuity
exception to the 10% penalty described above under "Penalty Tax on  Distributions"  for  "non-qualified"  immediate
annuities as defined under the Code may not apply to annuity  payments under a contract  recognized as an immediate
annuity  under state  insurance  law obtained  pursuant to an exchange of a contract if: (a) purchase  payments for
the  exchanged  contract  were  contributed  or deemed to be  contributed  more than one year prior to the  annuity
starting date under the immediate  annuity;  and (b) the annuity  payments under the immediate  annuity do not meet
the requirements of any other exception to the 10% penalty.

Special  rules in relation to tax-free  exchanges  under  Section  1035:  Section 1035 of the Code permits  certain
tax-free exchanges of a life insurance,  annuity or endowment  contract for an annuity.  If an annuity is purchased
through a tax-free exchange of a life insurance,  annuity or endowment  contract that was purchased prior to August
14, 1982, then any distributions other than as annuity payments will be considered to come:
|X|      First,  from the amount of  "investment  in the contract" made prior to August 14, 1982 and exchanged into
       the annuity;
|X|      Then,  from any "income on the  contract"  that is  attributable  to the purchase  payments  made prior to
       August 14, 1982 (including income on such original purchase payments after the exchange);
|X|      Then, from any remaining "income on the contract"; and
|X|      Lastly, from the amount of any "investment in the contract" made after August 13, 1982.


Therefore,  to the extent a  distribution  is equal to or less than the  remaining  investment in the contract made
prior to August 14, 1982, such amounts are not included in taxable  income.  Further,  distributions  received that
are  considered to be a return of investment on the contract from purchase  payments made prior to August 14, 1982,
such  distributions are not subject to the 10% tax penalty.  In all other respects,  the general  provisions of the
Code apply to distributions from annuities obtained as part of such an exchange.




Partial  surrenders  may be treated in the same way as  tax-free  1035  exchanges  of entire  contracts,  therefore
avoiding  current  taxation  of any  gains  in the  contract  as well as the 10% IRS tax  penalty  on  pre-age  59 1/2
withdrawals.  The IRS has reserved the right to treat  transactions  it considers  abusive as  ineligible  for this
favorable  partial 1035  exchange  treatment.  We do not know what  transactions  may be  considered  abusive.  For
example,  we do not know how the IRS may view early withdrawals or annuitizations  after a partial exchange.  As of
the date of this  prospectus,  we will treat a partial  surrender of this type  involving a  non-qualified  annuity
contract as a "tax-free" exchange for future tax reporting  purposes,  except to the extent that we, as a reporting
and  withholding  agent,  believe that we would be expected to deem the  transaction to be abusive.  However,  some
insurance  companies  may not  recognize  these  partial  surrenders  as tax-free  exchanges and may report them as
taxable  distributions  to the extent of any gain  distributed  as well as  subjecting  the taxable  portion of the
distribution  to the 10% IRS early  distribution  penalty.  We strongly urge you to discuss any transaction of this
type with your tax advisor before proceeding with the transaction.

There is no guidance  from the Internal  Revenue  Service as to whether a partial  exchange  from a life  insurance
contract is eligible for  non-recognition  treatment  under  Section 1035 of the Code. We will continue to report a
partial  surrender  of a life  insurance  policy as  subject  to current  taxation  to the  extent of any gain.  In
addition,  please be cautioned  that no specific  guidance has been provided as to the impact of such a transaction
for the  remaining  life  insurance  policy,  particularly  as to the  subsequent  methods  to be used to test  for
compliance  under the Code for both the  definition of life  insurance and the  definition of a modified  endowment
contract.

Special  Considerations for Purchasers of the Enhanced  Beneficiary  Protection  Optional Death Benefit:  As of the
date of this  Prospectus,  it is our  understanding  that the charges related to the optional Death Benefit are not
subject to current  taxation and we will not report them as such.  However,  the IRS could take the  position  that
these charges should be treated as partial  withdrawals  subject to current taxation to the extent of any gain and,
if  applicable,  the 10% tax  penalty.  We reserve the right to report  charges for the optional  Death  Benefit as
partial  withdrawals if we, as a reporting and withholding agent,  believe that we would be expected to report them
as such.


WHAT TAX CONSIDERATIONS ARE THERE FOR TAX-QUALIFIED RETIREMENT PLANS OR QUALIFIED CONTRACTS?
An annuity may be  suitable as a funding  vehicle for various  types of  tax-qualified  retirement  plans.  We have
provided  summaries  of the types of  tax-qualified  retirement  plans  with which we may issue an  Annuity.  These
summaries  provide general  information  about the tax rules and are not intended to be complete  discussions.  The
tax rules  regarding  qualified  plans are  complex.  These  rules may include  limitations  on  contributions  and
restrictions on  distributions,  including  additional  taxation of  distributions  and additional  penalties.  The
terms and conditions of the  tax-qualified  retirement plan may impose other  limitations and restrictions that are
in  addition  to the  terms of the  Annuity.  The  application  of these  rules  depends  on  individual  facts and
circumstances.  Before  purchasing an Annuity for use in a qualified plan, you should obtain  competent tax advice,
both as to the tax treatment and  suitability  of such an  investment.  American  Skandia does not offer all of its
annuities to all of these types of tax-qualified retirement plans.

Corporate Pension and  Profit-sharing  Plans:  Annuities may be used to fund employee benefits of various corporate
pension and  profit-sharing  plans  established by corporate  employers  under Section 401(a) of the Code including
401(k) plans.  Contributions  to such plans are not taxable to the employee until  distributions  are made from the
retirement  plan.  The  Code  imposes  limitations  on the  amount  that  may be  contributed  and  the  timing  of
distributions.  The tax treatment of distributions  is subject to special  provisions of the Code, and also depends
on the  design  of the  specific  retirement  plan.  There  are  also  special  requirements  as to  participation,
nondiscrimination, vesting and nonforfeitability of interests.

H.R. 10 Plans:  Annuities  may also be used to fund  benefits of  retirement  plans  established  by  self-employed
individuals  for  themselves  and their  employees.  These are commonly  known as "H.R. 10 Plans" or "Keogh Plans".
These plans are subject to most of the same types of limitations and requirements as retirement  plans  established
by corporations.  However, the exact limitations and requirements may differ from those for corporate plans.
Tax Sheltered  Annuities:  Under Section  403(b) of the Code, a tax  sheltered  annuity  ("TSA") is a contract into
which  contributions  may be made by certain  qualifying  employers such as public schools and certain  charitable,
educational and scientific  organizations  specified in Section 501(c)(3) for the benefit of their employees.  Such
contributions  are not taxable to the employee until  distributions  are made from the TSA. The Code imposes limits
on contributions, transfers and distributions.  Nondiscrimination requirements also apply.

-------------------------------------------------------------------------------------------------------------------
Under a TSA, you may be prohibited from taking  distributions from the contract  attributable to contributions made
pursuant to a salary reduction agreement unless the distribution is made:
-------------------------------------------------------------------------------------------------------------------
|X|      After the participating employee attains age 59 1/2;
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
|X|      Upon separation from service, death or disability; or
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
|X|      In the case of financial hardship (subject to restrictions).
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------

Section 457 Plans:  Under Section 457 of the Code,  deferred  compensation  plans  established by governmental  and
certain  other  tax  exempt  employers  for their  employees  may  invest in  annuity  contracts.  The Code  limits
contributions and distributions,  and imposes  eligibility  requirements as well.  Contributions are not taxable to
employees  until  distributed  from the plan.  However,  plan assets  remain the  property of the  employer and are
subject to the claims of the employer's  general  creditors until such assets are made available to participants or
their beneficiaries.

Individual  Retirement  Programs  or "IRAs":  Section 408 of the Code allows  eligible  individuals  to maintain an
individual  retirement  account or individual  retirement  annuity ("IRA").  IRAs are subject to limitations on the
amount that may be contributed,  the  contributions  that may be deducted from taxable income,  the persons who may
be  eligible  to  establish  an IRA and the time when  distributions  must  commence.  Further,  an Annuity  may be
established  with  "roll-over"   distributions  from  certain  tax-qualified  retirement  plans  and  maintain  the
tax-deferred status of these amounts.

Roth  IRAs:  A form  of IRA is  also  available  called  a  "Roth  IRA".  Contributions  to a Roth  IRA are not tax
deductible.  However,  distributions  from a Roth IRA are free from Federal income taxes and are not subject to the
10% penalty tax if five (5) tax years have passed since the first  contribution  was made or any conversion  from a
traditional  IRA was made and the  distribution  is made (a) once the  taxpayer  is age 59 1/2or older,  (b) upon the
                          ---
death or disability  of the  taxpayer,  or (c) for qualified  first-time  home buyer  expenses,  subject to certain
limitations.  Distributions  from a Roth IRA that are not  "qualified" as described above may be subject to Federal
income and penalty taxes.

Purchasers  of IRAs and Roth IRAs will  receive a special  disclosure  document,  which  describes  limitations  on
eligibility,  contributions,  transferability  and  distributions.  It also  describes the  conditions  under which
distributions  from IRAs and qualified plans may be rolled over or transferred into an IRA on a tax-deferred  basis
and the conditions  under which  distributions  from traditional IRAs may be rolled over to, or the traditional IRA
itself may be converted into, a Roth IRA.

SEP IRAs:  Eligible  employers  that meet  specified  criteria may establish  Simplified  Employee  Pensions or SEP
IRAs.  Employer  contributions  that may be made to  employee  SEP IRAs are  larger  than the  amounts  that may be
contributed to other IRAs, and may be deductible to the employer.

HOW ARE DISTRIBUTIONS FROM QUALIFIED CONTRACTS TAXED?
Distributions  from  Qualified  Contracts are generally  taxed under Section 72 of the Code.  Under these rules,  a
portion  of each  distribution  may be  excludable  from  income.  The  excludable  amount is the  proportion  of a
distribution  representing  after-tax  contributions.  Generally,  a 10% penalty tax applies to the taxable portion
of a  distribution  from a Qualified  Contract made prior to age 59 1/2.  However,  the 10% penalty tax does not apply
when the distribution:
|X|      is part of a properly executed transfer to another IRA or another eligible qualified account;
|X|      is subsequent  to the death or  disability  of the taxpayer (for this purpose  disability is as defined in
     Section 72(m)(7) of the Code);
|X|      is part of a  series  of  substantially  equal  periodic  payments  to be paid not  less  frequently  than
     annually  for the  taxpayer's  life or life  expectancy  or for the joint  lives or life  expectancies  of the
     taxpayer and a designated beneficiary;
|X|      is subsequent to a separation from service after the taxpayer attains age 55*;
|X|      does not exceed the employee's allowable deduction in that tax year for medical care*;
|X|      is made to an alternate payee pursuant to a qualified domestic relations order*; and
|X|      is made pursuant to an IRS levy.

The exceptions  above which are followed by an asterisk (*) do not apply to IRAs.  Certain other  exceptions may be
available.

Minimum  Distributions  after  age 70 1/2:  A  participant's  interest  in a  Qualified  Contract  must  generally  be
distributed,  or begin to be  distributed,  by the  "required  beginning  date".  This is April 1st of the calendar
year following the later of:
|X|      the calendar year in which the individual attains age 70 1/2; or
|X|      the calendar  year in which the  individual  retires from service with the employer  sponsoring  the plan.
      The retirement option is not available to IRAs.


The IRS has released  proposed  Treasury  regulations  containing  new Minimum  Distribution  rules.  Under the new
rules,  the Minimum  Distribution  amount will be lower for the vast  majority  of  individuals.  The new rules are
available,  at the option of the  individual,  for Minimum  Distributions  required  in the year 2001.  For Minimum
Distributions required in 2002 and beyond, the individual must utilize the new Minimum Distribution rules.

Under existing Minimum  Distribution  rules,  the  participant's  entire interest must be distributed  beginning no
later than the  required  beginning  date over a period  which may not extend  beyond a maximum of the life or life
expectancy of the participant (or the life  expectancies  of the owner and a designated  beneficiary).  Each annual
distribution  must equal or exceed a "minimum  distribution  amount"  which is  determined  by dividing the account
value by the  applicable  life  expectancy  or pursuant to an annuity  payout.  If the account  balance is used, it
generally  is based upon the Account  Value as of the close of business  on the last day of the  previous  calendar
year.

If the  participant  dies before  reaching his or her "required  beginning  date",  his or her entire interest must
generally  be  distributed  within  five (5)  years of death.  However,  this  rule  will be  deemed  satisfied  if
distributions  begin before the close of the calendar year following  death to a designated  beneficiary (or over a
period not extending  beyond the life  expectancy  of the  beneficiary).  If the  Beneficiary  is the  individual's
surviving  spouse,  distributions  may be  delayed  until  the  deceased  owner  would  have  attained  age 701/2. A
surviving  spouse  would  also  have  the  option  to  assume  the IRA as his or her  own if he or she is the  sole
designated  beneficiary.  If a  participant  dies  after  reaching  his or her  required  beginning  date or  after
distributions  have  commenced,  the  individual's  interest must  generally be  distributed at least as rapidly as
under the method of distribution in effect at the time of the individual's death.


If the amount  distributed is less than the minimum required  distribution for the year, the participant is subject
to a 50% tax on the amount that was not properly distributed.


Under the new Minimum  Distribution  rules, a uniform life  expectancy  table will be utilized by all  participants
except those with a spouse who is more than ten (10) years  younger  than the  participant.  In that case,  the new
rules  permit the  participant  to utilize the actual  life  expectancies  of the  participant  and the spouse.  In
addition,  the  designated  beneficiary  under  the new  rules  is not  determined  until  December  31 of the year
following  the  year of the  participant's  death.  In most  cases,  the  beneficiary  may be  changed  during  the
participant's  lifetime with no affect on the Minimum  Distributions.  At death,  the  designated  Beneficiary  may
take  Minimum  Distributions  over  his/her  life  expectancy  or in a lump sum.  In the  absence  of a  designated
beneficiary, the beneficiary may take a lump sum or distributions over five (5) years.

It is  important  to note that the new Minimum  Distribution  rules may not apply to certain  qualified  retirement
plans (at this time), but currently generally apply to IRA's and 403(b)'s.


GENERAL TAX CONSIDERATIONS

Diversification:  Section 817(h) of the Code provides that a variable annuity  contract,  in order to qualify as an
annuity,  must have an "adequately  diversified"  segregated asset account (including  investments in a mutual fund
by the segregated asset account of insurance  companies).  If the  diversification  requirements under the Code are
not met and the  annuity is not  treated as an annuity,  the  taxpayer  will be subject to income tax on the annual
gain in the  contract.  The Treasury  Department's  regulations  prescribe  the  diversification  requirements  for
variable  annuity  contracts.  We believe the  underlying  mutual fund  portfolios  should comply with the terms of
these regulations.

Transfers  Between  Investment  Options:  Transfers  between  investment  options are not subject to taxation.  The
Treasury  Department may  promulgate  guidelines  under which a variable  annuity will not be treated as an annuity
for tax purposes if persons with  ownership  rights have excessive  control over the  investments  underlying  such
variable  annuity.  Such  guidelines  may or may not  address  the  number of  investment  options or the number of
transfers between  investment  options offered under a variable  annuity.  It is not known whether such guidelines,
if in fact  promulgated,  would have retroactive  effect. It is also not known what effect, if any, such guidelines
may have on transfers  between the investment  options of the Annuity offered pursuant to this Prospectus.  We will
take any  action,  including  modifications  to your  Annuity or the  Sub-accounts,  required  to comply  with such
guidelines if promulgated.

Federal  Income Tax  Withholding:  Section 3405 of the Code  provides  for Federal  income tax  withholding  on the
portion of a  distribution  which is  includible  in the gross  income of the  recipient.  Amounts  to be  withheld
depend upon the nature of the  distribution.  However,  under most  circumstances a recipient may elect not to have
income taxes withheld or have income taxes  withheld at a different  rate by filing a completed  election form with
us.

Certain  distributions,  known as  eligible  rollover  distributions,  from  Qualified  Contracts,  are  subject to
automatic  20%  withholding  for Federal  income  taxes.  The  following  distributions  are not eligible  rollover
distributions and not subject to 20% withholding::
|X|      any portion of a distribution paid as Minimum Distributions;
|X|      direct transfers to the trustee of another retirement plan;
|X|      distributions from an individual retirement account or individual retirement annuity;
|X|      distributions  made as  substantially  equal  periodic  payments  for the life or life  expectancy  of the
     participant  in the  retirement  plan or the  life  or life  expectancy  of  such  participant  and his or her
     designated beneficiary under such plan;
|X|      distributions  that are part of a series of  substantial  periodic  payments  pursuant to Section 72(q) or
     72(t) of the Code; and
|X|      certain other distributions where automatic 20% withholding may not apply.

Loans,  Assignments and Pledges:  Any amount  received  directly or indirectly as a loan from, or any assignment or
pledge  of any  portion  of the  value  of, an  annuity  before  annuity  payments  have  begun  are  treated  as a
distribution  subject  to  taxation  under the  distribution  rules set forth  above.  Any gain in an annuity on or
after the  assignment  or pledge of an entire  annuity  and while such  assignment  or pledge  remains in effect is
treated as "income  on the  contract"  in the year in which it is earned.  For  annuities  not issued as  Qualified
Contracts,  the cost basis of the annuity is  increased by the amount of any  assignment  or pledge  includible  in
gross  income.  The cost basis is not affected by any  repayment of any loan for which the annuity is collateral or
by payment of any interest thereon.

Gifts:  The gift of an annuity to someone  other  than the  spouse of the owner (or  former  spouse  incident  to a
divorce) is treated, for income tax purposes, as a distribution.

Estate and Gift Tax  Considerations:  You should obtain  competent tax advice with respect to possible  federal and
state estate and gift tax consequences flowing from the ownership and transfer of annuities.

Generation-Skipping  Transfers:  Under  the  Code  certain  taxes  may be due  when  all or part of an  annuity  is
transferred  to, or a death benefit is paid to, an  individual  two or more  generations  younger than the contract
holder.  These  generation-skipping  transfers  generally  include  those  subject  to  federal  estate or gift tax
rules.  There is an  aggregate  $1 million  exemption  from taxes for all such  transfers.  We may be  required  to
determine  whether a transaction  is a direct skip as defined in the Code and the amount of the  resulting  tax. We
will  deduct from your  Annuity or from any  applicable  payment  treated as a direct skip any amount of tax we are
required to pay.

Considerations  for  Contingent  Annuitants:  There may be  adverse  tax  consequences  if a  contingent  annuitant
succeeds an annuitant  when the Annuity is owned by a trust that is neither tax exempt nor  qualifies for preferred
treatment under certain sections of the Code. In general,  the Code is designed to prevent  indefinite  deferral of
tax.  Continuing  the  benefit of tax  deferral  by naming one or more  contingent  annuitants  when the Annuity is
owned by a  non-qualified  trust might be deemed an attempt to extend the tax  deferral for an  indefinite  period.
Therefore,  adverse tax treatment may depend on the terms of the trust,  who is named as contingent  annuitant,  as
well as the  particular  facts and  circumstances.  You should  consult your tax advisor before naming a contingent
annuitant if you expect to use an Annuity in such a fashion.

GENERAL INFORMATION

HOW WILL I RECEIVE STATEMENTS AND REPORTS?
We send any  statements  and reports  required by applicable law or regulation to you at your last known address of
record.  You should  therefore  give us prompt notice of any address  change.  We reserve the right,  to the extent
permitted  by law  and  subject  to  your  prior  consent,  to  provide  any  prospectus,  prospectus  supplements,
confirmations,  statements  and reports  required  by  applicable  law or  regulation  to you through our  Internet
Website at  http://www.americanskandia.com  or any other electronic means,  including diskettes or CD ROMs. We send
a  confirmation  statement  to you  each  time a  transaction  is made  affecting  Account  Value,  such as  making
additional Purchase Payments,  transfers,  exchanges or withdrawals.  We also send quarterly  statements  detailing
the activity  affecting your Annuity during the calendar quarter.  You may request additional  reports.  We reserve
the right to charge up to $50 for each such  additional  report.  Instead of  immediately  confirming  transactions
made pursuant to some type of periodic  transfer  program (such as a dollar cost  averaging  program) or a periodic
Purchase Payment program,  such as a salary reduction  arrangement,  we may confirm such  transactions in quarterly
statements.  You should review the information in these statements carefully.

All errors or corrections  must be reported to us at our Office as soon as possible to assure proper  accounting to
your Annuity. For transactions that are confirmed  immediately,  we assume all transactions are accurate unless you
notify us  otherwise  within 10 days from the date you receive the  confirmation.  For  transactions  that are only
confirmed on the quarterly  statement,  we assume all transactions are accurate unless you notify us within 10 days
from the date you  receive  the  quarterly  statement.  All  transactions  confirmed  immediately  or by  quarterly
statement  are deemed  conclusive  after the  applicable  10-day  period.  We may also send an annual  report and a
semi-annual report containing  applicable financial  statements,  as of December 31 and June 30,  respectively,  to
Owners or, with your prior consent,  make such documents available  electronically  through our Internet Website or
other electronic means.

WHO IS AMERICAN SKANDIA?
American Skandia Life Assurance  Corporation  ("American  Skandia") is a stock life insurance  company domiciled in
Connecticut  with  licenses  in all 50 states and the  District of  Columbia.  American  Skandia is a  wholly-owned
subsidiary of American Skandia,  Inc.,  formerly known as American Skandia  Investment Holding  Corporation,  whose
ultimate parent is Skandia  Insurance  Company Ltd., a Swedish  company.  American  Skandia markets its products to
broker-dealers  and financial  planners  through an internal field marketing  staff. In addition,  American Skandia
markets  through and in  conjunction  with financial  institutions  such as banks that are permitted  directly,  or
through affiliates, to sell annuities.

American  Skandia is in the business of issuing variable  annuity and variable life insurance  contracts.  American
Skandia currently offers the following  products:  (a) flexible premium deferred annuities and single premium fixed
deferred  annuities  that are  registered  with the SEC; (b) certain other fixed  deferred  annuities  that are not
registered with the SEC; (c) certain group variable  annuities that are exempt from  registration with the SEC that
serve as funding  vehicles for various types of qualified  pension and profit sharing  plans;  (d) a single premium
variable life insurance  policy that is registered with the SEC; and (e) a flexible  premium life insurance  policy
that is registered with the SEC.


WHAT ARE SEPARATE ACCOUNTS?
The assets  supporting  our  obligations  under the  Annuities  may be held in various  accounts,  depending on the
obligation  being supported.  In the accumulation  period,  assets  supporting  Account Values are held in separate
accounts  established  under  the laws of the  State of  Connecticut.  We are the  legal  owner  of  assets  in the
separate  accounts.  In the payout phase,  assets  supporting  fixed annuity  payments and any  adjustable  annuity
payments we make  available  are held in our general  account.  Income,  gains and losses from assets  allocated to
these  separate  accounts are credited to or charged  against each such separate  account  without  regard to other
income,  gains or losses of American  Skandia or of any other of our  separate  accounts.  These assets may only be
charged  with  liabilities  which  arise from the  annuity  contracts  issued by American  Skandia  Life  Assurance
Corporation.  The  amount  of our  obligation  in  relation  to  allocations  to the  Sub-accounts  is based on the
investment  performance  of such  Sub-accounts.  However,  the  obligations  themselves  are our general  corporate
obligations.

Separate Account B
During the accumulation  period, the assets supporting  obligations based on allocations to the variable investment
options are held in Class 1 Sub-accounts of American  Skandia Life Assurance  Corporation  Variable Account B, also
referred to as  "Separate  Account B".  Separate  Account B consists  of  multiple  Sub-accounts.  The name of each
Sub-account  generally  corresponds  to the name of the underlying  Portfolio.  The names of each  Sub-account  are
shown  in  the  Statement  of  Additional  Information.  Separate  Account  B was  established  by us  pursuant  to
Connecticut  law.  Separate  Account B also holds assets of other  annuities  issued by us with values and benefits
that vary  according to the investment  performance of Separate  Account B. The  Sub-accounts  offered  pursuant to
this  Prospectus  are all Class 1  Sub-accounts  of  Separate  Account B. Each class of  Sub-accounts  in  Separate
Account  B has a  different  level  of  charges  assessed  against  such  Sub-accounts.  You will  find  additional
information about these underlying mutual funds and portfolios in the prospectuses for such funds.


Separate Account B is registered with the SEC under the Investment  Company Act of 1940 ("Investment  Company Act")
as a unit investment  trust,  which is a type of investment  company.  This does not involve any supervision by the
SEC of the investment  policies,  management or practices of Separate Account B. Each  Sub-account  invests only in
a single mutual fund or mutual fund portfolio.


We  reserve  the  right  to  make  changes  to  the  Sub-accounts  available  under  the  Annuity  as we  determine
appropriate.  We may  offer  new  Sub-accounts,  eliminate  Sub-accounts,  or  combine  Sub-accounts  at  our  sole
discretion.  We may also close  Sub-accounts  to  additional  Purchase  Payments on existing  Annuity  contracts or
close  Sub-accounts  for Annuities  purchased on or after  specified  dates.  We may also  substitute an underlying
mutual fund or  portfolio  of an  underlying  mutual fund for another  underlying  mutual fund or  portfolio  of an
underlying  mutual fund,  subject to our receipt of any  exemptive  relief that we are required to obtain under the
Investment  Company Act of 1940. We will notify Owners of changes we make to the  Sub-accounts  available under the
Annuity.


Values and benefits  based on  allocations to the  Sub-accounts  will vary with the  investment  performance of the
underlying  mutual funds or fund  portfolios,  as  applicable.  We do not guarantee the  investment  results of any
Sub-account.  Your Account  Value  allocated  to the  Sub-accounts  may  increase or decrease.  You bear the entire
investment risk.


Separate Account D
During the accumulation  period,  assets supporting our obligations based on Fixed Allocations are held in American
Skandia Life Assurance  Corporation  Separate  Account D, also referred to as Separate  Account D. Such obligations
are  based on the  fixed  interest  rates we credit to Fixed  Allocations  and the  terms of the  Annuities.  These
obligations do not depend on the investment  performance  of the assets in Separate  Account D. Separate  Account D
was established by us pursuant to Connecticut law.


There are no units in  Separate  Account  D. The Fixed  Allocations  are  guaranteed  by our  general  account.  An
Annuity  Owner who allocates a portion of their Account  Value to Separate  Account D does not  participate  in the
investment  gain or loss on assets  maintained  in Separate  Account D. Such gain or loss accrues  solely to us. We
retain  the risk that the  value of the  assets  in  Separate  Account  D may drop  below  the  reserves  and other
liabilities  we must  maintain.  Should the value of the assets in  Separate  Account D drop below the  reserve and
other  liabilities we must maintain in relation to the annuities  supported by such assets, we will transfer assets
from our general  account to  Separate  Account D to make up the  difference.  We have the right to transfer to our
general  account any assets of Separate  Account D in excess of such  reserves and other  liabilities.  We maintain
assets in Separate Account D supporting a number of annuities we offer.


We have sole discretion over the investment  managers  retained to manage the assets maintained in Separate Account
D. Each manager we employ is  responsible  for  investment  management of a different  portion of Separate  Account
D. From time to time  additional  investment  managers  may be  employed  or  investment  managers  may cease being
employed.  We are under no obligation to employ or continue to employ any investment manager(s).


We are not  obligated  to invest  according  to  specific  guidelines  or  strategies  except as may be required by
Connecticut and other state insurance laws.

WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?
Each  underlying  mutual fund is  registered as an open-end  management  investment  company  under the  Investment
Company Act.  Shares of the  underlying  mutual fund  portfolios  are sold to separate  accounts of life  insurance
companies  offering  variable  annuity and variable life insurance  products.  The shares may also be sold directly
to qualified pension and retirement plans.

Voting Rights
We are the legal owner of the shares of the  underlying  mutual funds in which the  Sub-accounts  invest.  However,
under SEC rules,  you have  voting  rights in relation  to Account  Value  maintained  in the  Sub-accounts.  If an
underlying  mutual fund portfolio  requests a vote of shareholders,  we will vote our shares in the manner directed
by Owners with Account Value  allocated to that  Sub-account.  Owners have the right to vote an amount equal to the
number of shares  attributable  to their  contracts.  If we do not  receive  voting  instructions  in  relation  to
certain  shares,  we will vote  those  shares in the same  manner  and  proportion  as the shares for which we have
received  instructions.  We will furnish  those  Owners who have Account  Value  allocated to a  Sub-account  whose
underlying  mutual fund  portfolio has  requested a "proxy" vote with the necessary  forms to provide us with their
instructions.  Generally,  you will be asked to provide  instructions  for us to vote on matters such as changes in
a fundamental  investment  strategy,  adoption of a new investment advisory  agreement,  or matters relating to the
structure of the underlying mutual fund that require a vote of shareholders.


American  Skandia Trust (the "Trust") has obtained an exemption from the Securities  and Exchange  Commission  that
permits its investment adviser, American Skandia Investment Services,  Incorporated ("ASISI"),  subject to approval
by the Board of Trustees of the Trust, to change  sub-advisors  for a Portfolio and to enter into new  sub-advisory
agreements,  without  obtaining  shareholder  approval  of  the  changes.  This  exemption  (which  is  similar  to
exemptions  granted to other investment  companies that are organized in a similar manner as the Trust) is intended
to facilitate the efficient  supervision and management of the  sub-advisors  by ASISI and the Trustees.  The Trust
is required,  under the terms of the exemption,  to provide  certain  information to  shareholders  following these
types of changes.


Material Conflicts
It is possible  that  differences  may occur  between  companies  that offer  shares of an  underlying  mutual fund
portfolio to their  respective  separate  accounts  issuing  variable  annuities  and/or  variable  life  insurance
products.  Differences may also occur  surrounding the offering of an underlying  mutual fund portfolio to variable
life  insurance  policies  and  variable  annuity  contracts  that we offer.  Under  certain  circumstances,  these
differences  could be considered  "material  conflicts,"  in which case we would take  necessary  action to protect
persons with voting  rights under our variable  annuity  contracts  and variable life  insurance  policies  against
persons  with  voting  rights  under  other  insurance  companies'  variable  insurance  products.  If a  "material
conflict" were to arise between owners of variable  annuity  contracts and variable life insurance  policies issued
by us we would take  necessary  action to treat  such  persons  equitably  in  resolving  the  conflict.  "Material
conflicts"  could arise due to  differences  in voting  instructions  between owners of variable life insurance and
variable annuity contracts of the same or different companies.  We monitor any potential conflicts that may exist.


Service Fees Payable by Underlying Funds
American  Skandia or our affiliates  have entered into  agreements  with the  investment  adviser or distributor of
many of the underlying Portfolios.  Under the terms of these agreements,  American Skandia provides  administrative
and support  services to the  Portfolios  for which a fee is paid that is generally  based on a  percentage  of the
average  assets  allocated to the  Portfolios  under the Annuity.  Any fees  payable  will be  consistent  with the
services  rendered or the expected cost savings  resulting from the arrangement.  These agreements may be different
for each underlying mutual fund whose portfolios are offered as Sub-accounts.


WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?
American Skandia  Marketing,  Incorporated  ("ASM"),  a wholly-owned  subsidiary of American Skandia,  Inc., is the
distributor  and  principal  underwriter  of the  securities  offered  through  this  prospectus.  ASM  acts as the
distributor  of a number of annuity  and life  insurance  products  we offer and both  American  Skandia  Trust and
American  Skandia  Advisor  Funds,  Inc.,  a  family  of  retail  mutual  funds.  ASM also  acts as an  introducing
broker-dealer  through which it receives a portion of brokerage  commissions in connection with purchases and sales
of  securities  held by portfolios of American  Skandia  Trust which are offered as underlying  investment  options
under the Annuity.

ASM's  principal  business  address is One  Corporate  Drive,  Shelton,  Connecticut  06484.  ASM is  registered as
broker-dealer  under  the  Securities  Exchange  Act of 1934  ("Exchange  Act")  and is a  member  of the  National
Association of Securities Dealers, Inc. ("NASD").

The  Annuity  is  offered  on a  continuous  basis.  ASM  enters  into  distribution  agreements  with  independent
broker-dealers  who are  registered  under the  Exchange Act and with  entities  that may offer the Annuity but are
exempt from  registration.  Applications  for the Annuity are  solicited  by  registered  representatives  of those
firms.  Such  representatives  will also be our appointed  insurance agents under state insurance law. In addition,
ASM may offer the Annuity directly to potential purchasers.

Compensation  is paid to  firms  on  sales  of the  Annuity  according  to one or more  schedules.  The  individual
representative  will receive a portion of the  compensation,  depending  on the practice of the firm.  Compensation
is generally  based on a percentage of Purchase  Payments made, up to a maximum of 7.0%.  Alternative  compensation
schedules are available that provide a lower initial  commission plus ongoing annual  compensation  based on all or
a portion of Account Value. We may also provide  compensation  for providing  ongoing service to you in relation to
the Annuity.  Commissions  and other  compensation  paid in relation to the Annuity do not result in any additional
charge to you or to the Separate  Account.  No  compensation  is payable on Annuities  purchased by a member of the
designated class of Owners (see "Credits Applied to Purchase Payments for Designated Class of Annuity Owner").

In addition,  firms may receive separate  compensation or reimbursement for, among other things,  training of sales
personnel,  marketing  or  other  services  they  provide  to us or  our  affiliates.  We or  ASM  may  enter  into
compensation  arrangements  with certain firms.  These  arrangements will not be offered to all firms and the terms
of such  arrangements  may  differ  between  firms.  Any such  compensation  will be paid by us or ASM and will not
result in any  additional  charge to you.  To the  extent  permitted  by NASD rules and other  applicable  laws and
regulations,  ASM may  pay or  allow  other  promotional  incentives  or  payments  in the  form  of cash or  other
compensation.

Advertising:  We may advertise certain  information  regarding the performance of the investment  options.  Details
on how we  calculate  performance  for the  Sub-accounts  are found in the  Statement  of  Additional  Information,
including  how we account for  Credits in these  performance  measures.  This  information  may help you review the
performance  of  the  investment   options  and  provide  a  basis  for  comparison  with  other  annuities.   This
information's  usefulness may be limited because of the Credits, since, as of the date of this Prospectus,  we were
not aware of many annuities  with variable  and/or market value  adjusted  fixed  investment  options that included
this type of feature.  This  information  also may be less useful when comparing the  performance of the investment
options with other  savings or investment  vehicles.  Such other  investments  may not provide some of the benefits
of annuities,  or may not be designed for long-term investment  purposes.  Additionally other savings or investment
vehicles may not be receive the beneficial tax treatment given to annuities under the Code.



We may  advertise  the  performance  of the  underlying  mutual  fund  portfolios  in the  form of  "Standard"  and
"Non-standard"  Total Returns.  "Standard  Total Return"  figures assume that all charges and fees are  applicable,
including  any  contingent  deferred  sales  charge  that may apply for the period  shown but it does not take into
consideration  any  Credits.  "Non-standard  Total  Return"  figures  may be used that do not  reflect all fees and
charges and may assume Credits of 1.5%,  3.0%, 4.0% or 5.0%,  respectively,  depending on the cumulative  amount of
Purchase  Payments  being  illustrated.  The amount of  credits  illustrated  may be more or less than the  Credits
applicable  to your Annuity (see "What are Credits and how do I Receive  Them?").  Non-standard  Total  Returns are
calculated in the same manner as  standardized  returns  except that the  calculations  may assume no redemption at
the end of the  applicable  periods.  These  figures  may not take  into  consideration  the  Annuity's  contingent
deferred  sales  charge.  Standard and  Non-standard  Total  returns will not reflect  charges that apply to either
Optional  Death  Benefit.   Non-standard  Total  Returns  must  be  accompanied  by  Standard  Total  Returns.  Any
performance advertisements will not reflect the impact of any Target Value Credits.


Performance  information  on the  Sub-accounts  is  based on past  performance  only  and is not an  indication  or
representation  of future  performance.  Performance of the  Sub-accounts  is not fixed.  Actual  performance  will
depend on the type,  quality and, for some of the  Sub-accounts,  the  maturities  of the  investments  held by the
underlying  mutual funds or portfolios  and upon  prevailing  market  conditions and the response of the underlying
mutual  funds  to such  conditions.  Actual  performance  will  also  depend  on  changes  in the  expenses  of the
underlying  mutual funds or portfolios.  Such changes are reflected,  in turn, in the Sub-accounts  which invest in
such underlying  mutual fund or portfolio.  In addition,  the amount of charges  assessed  against each Sub-account
will affect performance.


Some of the underlying  mutual fund portfolios  existed prior to the inception of these  Sub-accounts.  Performance
quoted in advertising  regarding such  Sub-accounts may indicate periods during which the Sub-accounts have been in
existence but prior to the initial  offering of the Annuities,  or periods during which the underlying  mutual fund
portfolios have been in existence,  but the  Sub-accounts  have not. Such  hypothetical  historical  performance is
calculated  using  the  same  assumptions  employed  in  calculating  actual  performance  since  inception  of the
Sub-accounts.  Hypothetical  historical performance of the underlying mutual fund portfolios prior to the existence
of the Sub-accounts may only be presented as Non-Standard Total Returns.


The information we may advertise  regarding the Fixed  Allocations  may include the then current  interest rates we
are  crediting to new Fixed  Allocations.  Information  on current  rates will be as of the date  specified in such
advertisement.  Rates will be included in  advertisements  to the extent  permitted  by law.  Given that the actual
rates  applicable  to any Fixed  Allocation  are as of the date of any such  Fixed  Allocation's  Guarantee  Period
begins, the rate credited to a Fixed Allocation may be more or less than those quoted in an advertisement.

Advertisements  we distribute may also compare the  performance  of our  Sub-accounts  with: (a) certain  unmanaged
market  indices,  including  but not limited to the Dow Jones  Industrial  Average,  the Standard & Poor's 500, the
NASDAQ 100, the Shearson Lehman Bond Index, the Frank Russell  non-U.S.  Universal Mean, the Morgan Stanley Capital
International Index of Europe,  Asia and Far East Funds, and the Morgan Stanley Capital  International World Index;
and/or (b) other  management  investment  companies  with  investment  objectives  similar  to the  mutual  fund or
portfolio  underlying  the  Sub-accounts  being  compared.  This may include the  performance  ranking  assigned by
various  publications,  including but not limited to the Wall Street Journal,  Forbes,  Fortune,  Money,  Barron's,
Business Week, USA Today and statistical  services,  including but not limited to Lipper Analytical Services Mutual
Funds  Survey,  Lipper  Annuity  and Closed End Survey,  the  Variable  Annuity  Research  Data  Survey,  SEI,  the
Morningstar Mutual Fund Sourcebook and the Morningstar Variable Annuity/Life Sourcebook.

American  Skandia Life Assurance  Corporation  may advertise its rankings  and/or ratings by independent  financial
ratings  services.  Such rankings may help you in  evaluating  our ability to meet our  obligations  in relation to
Fixed  Allocations,  pay minimum death benefits,  pay annuity payments or administer  Annuities.  Such rankings and
ratings do not reflect or relate to the performance of Separate Account B.

AVAILABLE INFORMATION
A Statement of Additional  Information is available from us without  charge upon your request.  This  Prospectus is
part of the  registration  statement we filed with the SEC regarding  this offering.  Additional  information on us
and this offering is available in those  registration  statements and the exhibits  thereto.  You may obtain copies
of these  materials  at the  prescribed  rates from the SEC's  Public  Reference  Section,  450 Fifth  Street N.W.,
Washington,  D.C., 20549. You may inspect and copy those registration  statements and exhibits thereto at the SEC's
public  reference  facilities at the above address,  Room 1024, and at the SEC's  Regional  Offices,  7 World Trade
Center,  New York, NY, and the Everett McKinley Dirksen  Building,  219 South Dearborn Street,  Chicago,  IL. These
documents,  as well as  documents  incorporated  by  reference,  may also be obtained  through  the SEC's  Internet
Website  (http://www.sec.gov)  for  this  registration  statement  as  well  as for  other  registrants  that  file
electronically with the SEC.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
To the  extent  and only to the  extent  that any  statement  in a document  incorporated  by  reference  into this
Prospectus  is  modified or  superseded  by a statement  in this  Prospectus  or in a  later-filed  document,  such
statement is hereby deemed so modified or  superseded  and not part of this  Prospectus.  The Annual Report on Form
10-K for the year ended  December 31, 2000  previously  filed by the Company with the SEC under the Exchange Act is
incorporated by reference in this Prospectus.

We will  furnish  you  without  charge a copy of any or all of the  documents  incorporated  by  reference  in this
Prospectus,  including any exhibits to such documents which have been  specifically  incorporated by reference.  We
will do so upon receipt of your written or oral request.

HOW TO CONTACT US
You can contact us by:
|X|      calling our  Customer  Service  Team at  1-800-752-6342  or our  automated  telephone  access and response
       system (STARS) at 1-800-766-4530
|X|      writing to us at American  Skandia Life  Assurance  Corporation,  Attention:  Customer  Service,  P.O. Box
       7038, Bridgeport, Connecticut 06601-7038
|X|      sending  an  email  to   customerservice@americanskandia.com   or  visiting   our   Internet   Website  at
       www.americanskandia.com
|X|      accessing information about your Annuity through our Internet Website at www.americanskandia.com

You can obtain  account  information  through our automated  telephone  access and response  system  (STARS) and at
www.americanskandia.com,  our Internet  Website.  Our Customer  Service  representatives  are also available during
business hours to provide you with information  about your account.  You can request certain  transactions  through
our telephone voice response system,  our Internet Website or through a customer  service  representative.  You can
provide  authorization for a third party,  including your  attorney-in-fact  acting pursuant to a power of attorney
or a  financial  professional,  to access  your  account  information  and  perform  certain  transactions  on your
account.  You will need to complete a form  provided by us which  identifies  those  transactions  that you wish to
authorize via telephonic  and electronic  means and whether you wish to authorize a third party to perform any such
transactions.  We  require  that  you or  your  representative  provide  proper  identification  before  performing
transactions  over the  telephone  or through our  Internet  Website.  This may  include a Personal  Identification
Number  (PIN) that will be  provided  to you upon issue of your  Annuity or you may  establish  or change  your PIN
through our automated  telephone  access and response system (STARS) and at  www.americanskandia.com,  our Internet
Website.  Any third party that you authorize to perform  financial  transactions on your account will be assigned a
PIN for your account.

Transactions  requested  via telephone are  recorded.  To the extent  permitted by law, we will not be  responsible
for any claims,  loss,  liability  or expense in  connection  with a  transaction  requested  by telephone or other
electronic means if we acted on such transaction  instructions  after following  reasonable  procedures to identify
those persons  authorized to perform  transactions on your Annuity using  verification  methods which may include a
request for your Social  Security  number,  PIN or other form of  electronic  identification.  We may be liable for
losses due to unauthorized or fraudulent instructions if we did not follow such procedures.

American  Skandia does not guarantee  access to telephonic  and  electronic  information or that we will be able to
accept  transaction  instructions  via the telephone or electronic  means at all times.  American  Skandia reserves
the right to limit, restrict or terminate telephonic and electronic transaction privileges at any time.

INDEMNIFICATION
Insofar as indemnification  for liabilities  arising under the Securities Act of 1933 (the "Securities Act") may be
permitted to directors,  officers or persons controlling the registrant pursuant to the foregoing  provisions,  the
registrant  has been  informed  that in the opinion of the SEC such  indemnification  is against  public  policy as
expressed in the Securities Act and is therefore unenforceable.

LEGAL PROCEEDINGS
As of the date of this  Prospectus,  neither we nor ASM were  involved in any  litigation  outside of the  ordinary
course of business, and know of no material claims.

EXECUTIVE OFFICERS AND DIRECTORS
Our executive officers,  directors and certain significant  employees,  their ages, positions with us and principal
occupations  are indicated  below.  The  immediately  preceding work  experience is provided for officers that have
not been employed by us or an affiliate for at least five years as of the date of this Prospectus.

Name/                                                         Position with American Skandia
Age                                                           Life Assurance Corporation                        Principal Occupation
---                                                           --------------------------                        --------------------
Patricia J. Abram                                             Senior Vice President                           Senior Vice President:
49                                                            and Director (since September, 2000)                 American Skandia
                                                                                                             Marketing, Incorporated

Ms. Abram joined us in 1998. She previously  held the position of Senior Vice President,  Chief  Marketing  Officer
with Mutual Service Corporation.  Ms. Abram was employed there since 1982.

Lori Allen                                                    Vice President                                         Vice President:
31                                                                                                                 American Skandia
                                                                                                             Marketing, Incorporated

Robert M. Arena                                               Vice President                                         Vice President:
32                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Gordon C. Boronow                                             Deputy Chief Executive Officer         Deputy Chief Executive Officer:
48                                                            and Director (since July, 1991)                  American Skandia Life
                                                                                                               Assurance Corporation


Robert W. Brinkman                                            Senior Vice President                           Senior Vice President:
36                                                                                                                  American Skandia
                                                                                                             Marketing, Incorporated

Malcolm M. Campbell                                           Director (since July, 1991)                 Director of Operations and
45                                                                                                     Chief Actuary, Assurance and
                                                                                                        Financial Services Division:
                                                                                                      Skandia Insurance Company Ltd.

Carl Cavaliere                                                Vice President                                         Vice President:
38                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Mr.  Cavaliere  joined us in 1998.  He  previously  held the position of Director of  Operations  with Aetna,  Inc.
since 1989.

Y.K. Chan                                                     Senior Vice President                            Senior Vice President
43                                                            and Director (since September, 2000)    and Chief Information Officer:
                                                                                                        American Skandia Information
                                                                                                 Services and Technology Corporation

Mr. Chan  joined us in 1999.  He  previously  held the  position of Chief  Information  Officer  with E.M.  Warburg
Pincus  from  January  1995  until  April  1999 and the  position  of Vice  President,  Client  Server  Application
Development with Scudder, Stevens and Clark from January 1991 until January 1995.

Lucinda C. Ciccarello                                         Vice President                                         Vice President:
42                                                                                                                 American Skandia
                                                                                                             Marketing, Incorporated

Ms.  Ciccarello  joined us in 1997. She previously  held the position of Assistant Vice President with Phoenix Duff
& Phelps since 1984.

Lincoln R. Collins                                            Senior Vice President                           Senior Vice President:
40                                                            Director (since February, 1996)                  American Skandia Life
                                                                                                               Assurance Corporation

Tim Cronin                                                    Vice President                                         Vice President:
35                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Mr.  Cronin  joined us in 1998. He previously  held the position of  Manager/Client  Investor with Columbia  Circle
Investors since 1995.

Harold Darak                                                  Vice President                                         Vice President:
40                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Mr. Darak joined us in 1999. He previously  held the position of  Consultant/Senior  Manager with Deloitte & Touche
since  1998 and the  positions  of Second  Vice  President  with The  Guardian  since 1996 and The  Travelers  from
October, 1982 until December, 1995.

Wade A. Dokken                                                President and Chief Executive Officer                    President and
41                                                            and Chairman of the Board                     Chief Executive Officer:
                                                                                                              American Skandia, Inc.

Elaine C. Forsyth                                             Vice President                                         Vice President:
39                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Larisa Gromyko                                                Director, Insurance Compliance         Director, Insurance Compliance:
54                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Maureen Gulick                                                Director, Business Operations           Director, Business Operations:
38                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Ian Kennedy                                                   Senior Vice President                           Senior Vice President:
53                                                            and Director (since September, 2000)                  American Skandia
                                                                                                             Marketing, Incorporated

Mr. Ian  Kennedy  joined us in 1998.  He  previously  was  self-employed  since 1996 and held the  position of Vice
President, Customer Service with SunLife of Canada from September, 1968 to August, 1995.

N. David Kuperstock                                           Vice President                                         Vice President:
49                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation
Robert K. Leach                                               Vice President and                                     Vice President,
46                                                            Chief Actuary                                           Chief Actuary:
                                                                                                               American Skandia Life
                                                                                                               Assurance Corporation

Mr.  Robert K. Leach joined us in 2000.  He previously  was employed in the U.S.  Retirement  Products and Services
Division of Sun Life of Canada and held the position of Vice President, Finance and Product.

Thomas M. Mazzaferro                                          Executive Vice President and              Executive Vice President and
48                                                            Chief Financial Officer,                      Chief Financial Officer:
                                                              Director (since September, 1994)                 American Skandia Life
                                                                                                               Assurance Corporation

Gunnar J. Moberg                                              Director (since October, 1994)         Director - Marketing and Sales,
46                                                                                                          Assurances and Financial
                                                                                                                  Services Division:
                                                                                                      Skandia Insurance Company Ltd.

David R. Monroe                                               Senior Vice President,                          Senior Vice President,
39                                                            Treasurer and                                            Treasurer and
                                                              Corporate Controller                             Corporate Controller:
                                                                                                               American Skandia Life
                                                                                                               Assurance Corporation

Michael A. Murray                                             Senior Vice President                           Senior Vice President:
32                                                                                                                  American Skandia
                                                                                                             Marketing, Incorporated

Polly Rae                                                     Vice President                                         Vice President:
38                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Rebecca Ray                                                   Vice President                                  Senior Vice President:
45                                                                                                                  American Skandia
                                                                                                             Marketing, Incorporated

Ms. Ray joined us in 1999. She previously  held the position of First Vice  President  with  Prudential  Securities
since 1997 and Vice President with Merrill Lynch since 1995.

Rodney D. Runestad                                            Vice President                                         Vice President:
51                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation


Hayward L. Sawyer                                             Senior Vice President                           Senior Vice President:
56                                                                                                                 American Skandia
                                                                                                             Marketing, Incorporated

Lisa Shambelan                                                Vice President                                         Vice President:
35                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Karen Stockla                                                 Vice President                                         Vice President:
34                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Ms.  Stockla  joined us in 1998.  She  previously  held the  position  of  Manager,  Application  Development  with
Citizens  Utilities  Company since 1996 and HRIS Tech Support  Representative  with Yale New Haven  Hospital  since
1993.

William H. Strong                                             Vice President                                         Vice President:
57                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Mr. Strong joined us in 1997. He previously  held the position of Vice  President with American  Financial  Systems
from June 1994 to October  1997 and the  position of Actuary  with  Connecticut  Mutual Life from June 1965 to June
1994.

Guy Sullivan                                                  Vice President                                         Vice President:
40                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Mr.  Sullivan  joined us in 2000. He previously  held the positions of Managing  Director,  Wholesale  Distribution
with  Allmerica  Financial  Services  since 1999 and Managing  Director and Member of the Executive  Committee with
Putnam Investments since 1995.

Leslie S. Sutherland                                          Vice President                                         Vice President:
47                                                                                                                  American Skandia
                                                                                                             Marketing, Incorporated

Amanda C. Sutyak                                              Vice President                                         Vice President:
43                                                            Director (since July, 1991)                      American Skandia Life
                                                                                                               Assurance Corporation

Christian W. Thwaites                                         Senior Vice President                           Senior Vice President:
43                                                            and Director (since September, 2000)                  American Skandia
                                                                                                             Marketing, Incorporated

Mary Toumpas                                                  Vice President                                      Vice President and
49                                                                                                              Compliance Director:
                                                                                                                    American Skandia
                                                                                                             Marketing, Incorporated

Ms.  Toumpas  joined  us in 1997.  She  previously  held the  position  of  Assistant  Vice  President  with  Chubb
Life/Chubb Securities since 1973.

Bayard F. Tracy                                               Senior Vice President and                       Senior Vice President:
53                                                            Director (since September, 1994)                      American Skandia
                                                                                                             Marketing, Incorporated

Deborah G. Ullman                                             Senior Vice President                           Senior Vice President:
46                                                            and Director (since September, 2000)             American Skandia Life
                                                                                                               Assurance Corporation

Ms. Ullman joined us in 1998.  She previously held the position of Vice President with Aetna, Inc. since 1977.

Jeffrey M. Ulness                                             Vice President                                         Vice President:
40                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation


Kirk Wickman                                                  General Counsel                                       General Counsel:
44                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation
Mr.  Wickman joined us in 2001. He previously  held the position of Senior Vice President and General  Counsel with
Aetna Financial Services since 1992.

Brett M. Winson                                               Senior Vice President and                       Senior Vice President:
45                                                            Director (since March 2000)                     American Skandia, Inc.

Mr.  Winson  joined us in 1998. He previously  held the position of Senior Vice  President  with Sakura Bank,  Ltd.
since 1990.

CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The following are the contents of the Statement of Additional Information:

General Information about American Skandia
|X|      American Skandia Life Assurance Corporation
|X|      American Skandia Life Assurance Corporation Variable Account B (Class 1 Sub-accounts)
|X|      American Skandia Life Assurance Corporation Separate Account D

Principal Underwriter/Distributor - American Skandia Marketing, Incorporated

How Performance Data is Calculated
|X|      Current and Effective Yield
|X|      Total Return

How the Unit Price is Determined

Additional Information on Fixed Allocations
|X|      How We Calculate the Market Value Adjustment

General Information
|X|      Voting Rights
|X|      Modification
|X|      Deferral of Transactions
|X|      Misstatement of Age or Sex
|X|      Ending the Offer

Independent Auditors

Legal Experts

Financial Statements
|X|      Appendix A - American Skandia Life Assurance Corporation Variable Account B (Class 1 Sub-accounts)
|X|



















                             APPENDIX A - FINANCIAL INFORMATION ABOUT AMERICAN SKANDIA

SELECTED FINANCIAL DATA

The following table summarizes information with respect to the operations of the Company:

(in thousands)                                                            For the Year Ended December 31,
                                                         2000           1999           1998            1997           1996
                                                         ----           ----           ----            ----           ----
STATEMENT OF OPERATIONS DATA
----------------------------

Revenues:
Annuity and life insurance charges and fees*         $424,578        $289,989         $186,211       $121,158        $69,780

Fee income
                                                     130,610           83,243           50,839         27,593         16,420
Net investment income
                                                      11,656           10,441           11,130          8,181          1,586
Premium income and other revenues
                                                       4,778            3,688            1,360          1,082            265
                                                       -----            -----            -----          -----            ---

Total revenues                                     $ 571,622        $ 387,361        $ 249,540       $ 158,014      $ 88,051
                                                      ======        =========          =======        =========    ============


Benefits and Expenses:
Annuity and life insurance benefits                   $  751            $ 612            $ 558        $  2,033        $  613

Change in annuity and life insurance                  45,018            3,078            1,053              37           635
   policy reserves

Cost of minimum death benefit reinsurance                  -            2,945            5,144           4,545         2,867

Return credited to contractowners
                                                       9,046           (1,639)          (8,930)         (2,018)          673
Underwriting, acquisition and other insurance
   expenses
                                                     335,213          206,350          167,790          90,496        49,887

Interest expense                                      85,998           69,502           41,004          24,895        10,791
                                                     ---------     ---------       ---------      ---------       ------------


Total benefits and expenses                        $ 476,026    $     280,848    $     206,619   $     119,988   $    65,466
                                                     ======        =============   =============  =============   ===========


Income tax expense (benefit)                       $  30,779    $      30,344    $       8,154   $      10,478   $    (4,038)
                                                     ========      ==============  ==========     ==============  =


Net income                                         $  64,817    $      76,169    $      34,767   $      27,548   $    26,623
                                                     ========      ========        ========       ==============  ===========


STATEMENT OF FINANCIAL CONDITION DATA
-------------------------------------

Total Assets                                         $31,702,705   $30,881,579     $18,848,273    $12,894,290     $8,268,696
                                                     ===========   ===========     ===========    ===========     ==========

Future fees payable to parent                        $   934,410   $   576,034     $   368,978    $   233,034     $   47,112
                                                     ======        =============   =============  =============   ============



Surplus Notes                                        $  159,000    $   179,000     $   193,000    $   213,000     $  213,000
                                                     ==========     =============   ==========      =============   ===========


Shareholder's Equity                                 $  496,911    $   359,434     $   250,417    $   184,421     $   126,345
                                                     ======        =============   ======         =============   ===========


*    On annuity and life insurance  sales of $8,216,167,  $6,862,968,  $4,159,662,  $3,697,990,  and $2,795,114  during the
     years ended December 31, 2000, 1999, 1998, 1997, and 1996,  respectively,  with contractowner  assets under management
     of $29,751,822,  $29,396,693,  $17,854,761,  $12,119,191, and $7,764,891 as of December 31, 2000, 1999, 1998, 1997 and
     1996, respectively.





MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's  Discussion  and Analysis of Financial  Condition  and Results of Operations  should be read in  conjunction
with the consolidated financial statements and the notes thereto and Item 6, Selected Financial Data.

Management's  Discussion and Analysis of Financial Condition and Results of Operations  contains certain  forward-looking
statements  pursuant to the Private  Securities  Litigation  Reform Act of 1995.  These  forward-looking  statements  are
based on estimates and assumptions  that involve certain risks and  uncertainties,  therefore actual results could differ
materially  due to factors not  currently  known.  These factors  include  significant  changes in financial  markets and
other economic and business conditions, state and federal legislation and regulation, ownership and competition.

 Results of Operations
 ---------------------

 Annuity and life  insurance  sales  increased 20% in 2000 to  $8,216,167,000  as compared to 65% in 1999.  Overall sales
growth in 2000 was driven by  significant  sales  volume in the first  quarter of 2000 due to the  strong  equity  market
performance.  However,  the decline in the equity markets during the remainder of the year  negatively  impacted sales as
the first quarter growth rate was not sustained.  The Company  continues to focus on increasing sales through  innovative
product  development  activities,  the  recruitment  and retention of top producers,  high quality  customer  service and
improvements in web-based technology.  All three major distribution channels achieved sales growth in 2000.

 Average assets under management totaled  $31,413,809,000 in 2000 and  $21,984,759,000 in 1999,  representing an increase
of 43%. As a result of the growth in sales and average assets under  management,  annuity and life insurance  charges and
fees  increased 46% in 2000 and 56% in 1999.  Fee income  generated  from transfer  agency-type  and  investment  support
activities increased 57% in 2000 and 64% in 1999.

Net  investment  income  increased 12% in 2000  compared to 1999 and decreased 6% in 1999 compared to 1998.  The increase
in 2000 is primarily due to a higher level of  investments,  partially  offset by $6,939,000 of  amortization of premiums
paid on derivative  instruments.  The decrease in 1999 was primarily  the result of  $1,036,000  of  amortization  of the
premium paid on a derivative  instrument  purchased  during 1999. See Note 2D to the  consolidated  financial  statements
for information  related to derivative  instruments  used to hedge the guaranteed  minimum death benefit ("GMDB") reserve
fluctuations.  Excluding the derivative  amortization,  net investment  income  increased 62% in 2000 and increased 3% in
1999 as a result of increased bond holdings that support the Company's risk-based capital objectives.

 Premium income  represents  premiums  earned on the sale of ancillary  contracts  such as immediate  annuities with life
contingencies,  supplementary  contracts with life contingencies and certain life insurance products.  Increased sales of
these  products led to an increase in premium  income in 2000.  The increase in 2000 and 1999 was primarily due to higher
sales of  supplementary  contracts.  Management  expects  supplementary  contracts to grow over time with the maturing of
core business lines.

Net  realized  investment  losses  totaled  $688,000 in 2000,  compared to gains of $578,000 in 1999 and $99,000 in 1998.
The  change  from  1999 to 2000 is  primarily  due to  realized  losses  on sales of  securities  in the  fixed  maturity
portfolio.  These losses were  partially  offset by realized  gains on sales of fixed  maturities  and mutual funds.  The
increase in realized gains in 1999 compared to 1998 is due to higher gains on sales of mutual fund investments.

 The change in annuity policy reserves  includes changes in reserves related to annuity contracts with mortality risks as
well as the Company's GMDB liability.  In 2000,  equity markets  declined and the underlying  fund  performance was lower
than the prior year. In contrast,  the equity markets and  underlying  fund  performance  were up  significantly  in 1999
compared to 1998.  The  combination  of these events  resulted in an increase in GMDB  reserves of  $39,866,000  in 2000.
This compares to an increase in GMDB reserves of $2,323,000 in 1999.






 In 1999,  the Company began to develop a program  utilizing  equity put options to manage the risks embedded in the GMDB
in annuity contracts that would result from significant  declines in the equity markets.  Prior to the  implementation of
the hedge strategies  utilizing equity put options,  the Company had reinsured  substantially  all of its exposure on the
GMDB  liability.  The  reinsurance  was  terminated  during the second  quarter of 1999 as the  reinsurer had exited this
market.

 Return credited to contractowners  consists of revenues on the variable and market value adjusted annuities and variable
life  insurance,  offset by the benefit  payments  and  changes in  reserves  required  on this  business.  Market  value
adjusted  annuity  activity has the largest  impact on this benefit.  In 2000 and 1999, the Separate  Account  investment
returns on the market  value  adjusted  annuities  were less than the expected  returns as  calculated  in the  reserves,
contributing to the significant  increase in the return credited to contractholders  benefit.  In addition,  this benefit
increased as a result of the  amortization  of unearned  Performance  Advantage  target value  credits,  which  increased
$6,826,000  in 2000 over  1999.  Other  significant  contributors  to the  change  from 1999 to 2000  include  guaranteed
minimum death benefit  payments on variable  annuities which were driven up due to the market declines in 2000 as well as
increased  costs  associated with processing of backdated  financial  transactions.  These increased costs were partially
offset by a 2000 experience refund on certain reinsurance treaties in the amount of $4,339,000.

 Underwriting, acquisition and other insurance expenses for 2000, 1999 and 1998 were as follows:

                     (in thousands)                                  2000                 1999                1998
                                                                     ----                 ----                ----

   Commissions and purchase credits                              $ 393,494            $ 358,279           $ 201,008

   General operating expenses                                      252,206              214,269             141,586

   Acquisition costs deferred during the year                     (495,103)            (450,059)           (261,432)
   Acquisition costs amortized during the year                     184,616               83,861              86,628
                                                                   -------   -           ------   -          ------

   Net capitalization of deferred acquisition costs               (310,487)            (366,198)           (174,804)
                                                       -          ---------            ---------           ---------

   Underwriting, acquisition and other
        insurance expenses                                       $ 335,213            $ 206,350           $ 167,790
                                                                 =========            =========           =========


 Underwriting,  acquisition  and  other  insurance  expenses  increased  62%  and  23% in 2000  and  1999,  respectively.
 Increased  commissions  and  purchase  credits  reflect  the  increase  in sales  in both  2000  and  1999.  Significant
 investments  in new  product  development  and  internet-based  technology  contributed  to  general  operating  expense
 increases in both 2000 and 1999. The  amortization  of acquisition  costs  increased  substantially  in 2000 compared to
 1999 as the  associated  costs  from  record  sales in late  1999 and early  2000 were  recognized  in  accordance  with
 accounting principles generally accepted in the United States profit and expense recognition models.

 Interest expense increased  $16,496,000 in 2000 and $28,498,000 in 1999 as a result of additional  securitized financing
transactions,  which  consist  of  the  transfer  of  rights  to  receive  future  fees  to the  Parent  ("securitization
transactions").  In  addition,  the  Company  retired  surplus  notes on  December  10,  2000 and  December  31,  1999 of
$20,000,000  and  $14,000,000,  respectively.  Surplus  notes  outstanding  as of  December  31,  2000 and  1999  totaled
$159,000,000 and $179,000,000, respectively.

 The  effective  income  tax  rates  for the  years  ended  December  31,  2000,  1999 and 1998  were  32%,  28% and 19%,
respectively.  The effective  rate is lower than the corporate  rate of 35% due to permanent  differences,  with the most
significant item being the dividend  received  deduction.  Management  believes that based on the taxable income produced
in the past two years,  as well as the continued  growth in annuity sales,  the Company will produce  sufficient  taxable
income in future years to realize its deferred tax assets.






 The  Company  generated  net income  after tax of  $64,817,000,  $76,169,000  and  $34,767,000  in 2000,  1999 and 1998,
respectively.  Revenue  increases in 2000 were more than offset by higher  benefits and expenses  driven  primarily  from
the  increase  in the  reserve  requirement  related  to the GMDB as a  result  of the  decline  in the  equity  markets.
Investments  in new product  development  and  technology  also  contributed  to the increase in expenses.  These factors
resulted in the 15% decline in net income.  Net income  increased  119% in 1999 due to strong sales growth and  favorable
market  conditions  which led to higher  asset-based  revenue.  The Company  considers  Mexico an emerging market and has
invested in the Skandia Vida  operations with the expectation of generating  profits from long-term  savings  products in
future years.  As such,  Skandia Vida has generated net losses of  $2,540,000,  $2,523,000  and  $2,514,000 for the years
ended December 31, 2000, 1999 and 1998,  respectively.  The Company  expects to transfer  ownership of Skandia Vida to an
upstream affiliate during 2001.

 On March 22, 2001, the Company announced that it will begin an aggressive  operating expense reduction program to better
align its operating  infrastructure  with the current  investment  environment.  The planned moves include a reduction of
approximately  150 positions,  representing  13% of the Company's  workforce,  reductions in the compensation and benefit
programs and the curtailment of certain discretionary expenses.

 Total assets grew 3% in 2000  partially as a result of the modest  increase in separate  account  assets  reflecting the
impact of strong  sales  which  were  almost  entirely  offset by the  decline  in  equity  markets.  Increased  deferred
acquisition  costs also  contributed  to the  increase  in  assets.  Liabilities  grew 2% in 2000 due to higher  reserves
required to support the increase in annuity and life insurance  business,  and increased  financing  activity  related to
the transfer of rights to receive future fees and charges.

 Liquidity and Capital Resources
 -------------------------------

 The Company's liquidity requirement was met by cash from insurance operations,  investment  activities,  borrowings from
 ASI and the securitization transactions with ASI.

 The majority of the operating  cash outflow  resulted from the sale of variable  annuity and variable life products that
carry a  contingent  deferred  sales  charge.  This type of product  causes a  temporary  cash strain in that 100% of the
proceeds are invested in separate  accounts  supporting the product leaving a cash (but not capital) strain caused by the
acquisition  cost for the new business.  This cash strain  required the Company to look beyond the cash made available by
insurance  operations and  investments of the Company to financing in the form of surplus notes,  capital  contributions,
securitization transactions and modified coinsurance reinsurance arrangements:

o        During 2000 and 1999, the Company  received  $69,000,000 and  $34,800,000,  respectively,  from ASI to support the
     capital  needs and  anticipated  growth in business  of its U.S.  operations.  In  addition,  the  Company  received
     $2,450,000 and $1,690,000 from ASI in 2000 and 1999, respectively, to support its investment in Skandia Vida.

o        Funds received from new  securitization  transactions  amounted to $476,288,000  in 2000 and  $265,710,000 in 1999
     (see Note 8 to the consolidated financial statements).

o        During  2000 and 1999,  the  Company  extended  its  reinsurance  agreements.  The Company  also  entered  into an
     agreement with SICL in 2000. The reinsurance  agreements are modified  coinsurance  arrangements where the reinsurer
     shares in the experience of a specific book of business.

 The  Company  expects  the  continued  use of  reinsurance  and  securitization  transactions  to fund the  cash  strain
anticipated from the acquisition costs on the coming years' sales volume.

 As of December  31, 2000 and 1999,  shareholder's  equity  totaled  $496,911,000  and  $359,434,000,  respectively.  The
increases  were  driven  by the  previously  mentioned  capital  contributions  received  from  ASI and net  income  from
operations.

 The Company has long-term surplus notes and short-term borrowings with ASI.  No dividends have been paid to ASI.






 The  National  Association  of Insurance  Commissioners  ("NAIC")  requires  insurance  companies to report  information
regarding  minimum  Risk  Based  Capital  ("RBC")  requirements.  These  requirements  are  intended  to allow  insurance
regulators  to  identify  companies  that may need  regulatory  attention.  The RBC model  law  requires  that  insurance
companies  apply various  factors to asset,  premium and reserve  items,  all of which have inherent  risks.  The formula
includes  components  for asset risk,  insurance  risk,  interest rate risk and business  risk.  The Company has complied
with the NAIC's RBC reporting requirements and has total adjusted capital well above required capital.

 Effects of Inflation
 --------------------

The rate of inflation has not had a significant effect on the Company's financial statements.

Outlook
-------

The Company  believes that it is well  positioned  to retain and enhance its position as a leading  provider of financial
products for long-term  savings and  retirement  purposes as well as to address the economic  impact of premature  death,
estate and business  planning  concerns and supplemental  retirement  needs.  The Company  continues to focus on offering
innovative  long-term  savings and income products and providing  superior customer service in order to gain market share
and improve profitability in an increasingly competitive market.

The  Gramm-Leach-Bliley  Act of 1999  (the  Financial  Services  Modernization  Act)  permits  affiliation  among  banks,
securities  firms  and  insurance   companies.   This  legislative   change  has  created   opportunities  for  continued
consolidation  in the financial  services  industry and increased  competition as large  companies  offer a wide array of
financial products and services.

Various  other  legislative  initiatives  could impact the Company such as pension  reform,  capital gains and estate tax
changes,  privacy  standards and internet  regulation.  Pension  reform may change  current tax deferral  rules and allow
increased  contributions to retirement plans,  which may lead to higher  investments in tax-deferred  products and create
growth  opportunities  for the  Company.  A  capital  gains tax  reduction  may cause  tax-deferred  products  to be less
attractive to consumers,  which could adversely  impact the Company.  New privacy  standards and internet  regulation may
impact the Company's  strategic  initiatives  especially  related to potential  partnerships  with  web-based  technology
providers.

 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The  Company  is  subject  to  potential  fluctuations  in  earnings  and the fair  value of  certain  of its  assets and
liabilities,  as well as  variations in expected cash flows due to changes in market  interest  rates and equity  prices.
The  following  discussion  focuses on specific  exposures  the Company  has to interest  rate and equity  price risk and
describes  strategies used to manage these risks.  The discussion is limited to financial  instruments  subject to market
risks and is not intended to be a complete discussion of all of the risks to which the Company is exposed.

 Interest Rate Risk
 ------------------

 Fluctuations in interest rates can potentially  impact the Company's  profitability  and cash flows. The Company has 97%
of assets held under  management that are in  non-guaranteed  Separate  Accounts for which the Company's  exposure is not
significant  as the  contractowner  assumes  substantially  all the investment  risk. On the remaining 3% of assets,  the
interest  rate risk from  contracts  that carry  interest rate exposure is managed  through an  asset/liability  matching
program which takes into account the risk variables of the insurance liabilities supported by the assets.

 At December 31, 2000, the Company held fixed maturity  investments in its general  account that are sensitive to changes
in interest  rates.  These  securities  are held in support of the Company's  fixed  immediate  annuities,  supplementary
contracts,  the fixed  components of variable life insurance  contracts,  and in support of the Company's target solvency
capital.  The Company has a conservative  investment  philosophy  with regard to these  investments.  All investments are
investment grade corporate securities, government agency or U.S. government securities.






 The Company's  deferred  annuity  products  offer a fixed option which  subjects the Company to interest rate risk.  The
fixed option  guarantees a fixed rate of interest for a period of time selected by the  contractowner.  Guarantee  period
options  available range from one to ten years.  Withdrawal of funds before the end of the guarantee  period subjects the
contractowner  to a market  value  adjustment  ("MVA").  In the  event of rising  interest  rates,  which  make the fixed
maturity  securities  underlying  the  guarantee  less  valuable,  the MVA could be  negative.  In the event of declining
interest  rates,  which make the fixed maturity  securities  underlying  the guarantee  more  valuable,  the MVA could be
positive.  The  resulting  increase or decrease in the value of the fixed option,  from  calculation  of the MVA,  should
substantially  offset the  increase or decrease in the market  value of the  securities  underlying  the  guarantee.  The
Company  maintains  strict  asset/liability  matching  to enable this  offset.  However,  the Company  still takes on the
default risk for the underlying  securities,  the interest rate risk of reinvestment of interest payments and the risk of
failing to maintain the asset/liability matching program with respect to duration and convexity.

Liabilities  held in the  Company's  general  account and  guaranteed  separate  account as of December  31, 2000 totaled
$1,095,100,000.  Fixed income investments  supporting those liabilities had a fair value of  $1,098,500,000.  The Company
performed a sensitivity  analysis on these  interest-sensitive  liabilities and assets at December 31, 2000. The analysis
showed that an  immediate  decrease of 100 basis points in interest  rates would result in a net increase in  liabilities
and the  corresponding  assets of  approximately  $37,300,000 and $41,500,000,  respectively.  An analysis of a 100 basis
point  decline in interest  rates at December 31, 1999 showed a net increase in  interest-sensitive  liabilities  and the
corresponding assets of approximately $10,200,000 and $24,800,000, respectively.

 Equity Market Exposure
 ----------------------

 The primary  equity market risk to the Company comes from the nature of the variable  annuity and variable life products
sold by the Company.  Various fees and charges  earned are  substantially  derived as a percentage of the market value of
assets  under  management.  In a market  decline,  this income  would be  reduced.  This could be further  compounded  by
customer  withdrawals,  net of applicable  surrender charge  revenues,  partially offset by transfers to the fixed option
discussed  above.  A 10% decline in the market value of the assets  under  management  at December  31,  2000,  sustained
throughout  2001,  would result in an approximate  drop in related annual fee income of $54,000,000.  This result was not
materially different than the result obtained from the analysis performed as of December 31, 1999.

 Another equity market risk exposure of the Company relates to the guaranteed minimum death benefit  liability.  Declines
in equity markets and  correspondingly  the performance of the underlying mutual funds,  increases the guaranteed minimum
death  benefit  liabilities.  As discussed in Note 2D of the  consolidated  financial  statements,  the Company  utilizes
derivative   instruments  to  hedge  against  the  risk  of  significant  decreases  in  equity  markets.  Prior  to  the
implementation of this program the Company utilized reinsurance to transfer this risk.

 The  Company  has a small  portfolio  of equity  investments;  mutual  funds  which are held in  support  of a  deferred
compensation  program.  In the event of a decline in market values of underlying  securities,  the value of the portfolio
would decline,  however the accrued benefits payable under the related deferred  compensation  program would decline by a
corresponding amount.

 Estimates of interest rate risk and equity price risk were obtained using computer  models that take into  consideration
various  assumptions  about the future.  Given the  uncertainty  of future  interest  rate  movements,  volatility in the
equity markets and consumer behavior, actual results may vary from those predicted by the Company's models.













                                       AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION









                                               INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Shareholder of American Skandia Life Assurance Corporation
Shelton, Connecticut

We have audited the  consolidated  statements of financial  condition of American  Skandia Life Assurance  Corporation (the
"Company" which is a wholly-owned  subsidiary of Skandia  Insurance Company Ltd.) as of December 31, 2000 and 1999, and the
related  consolidated  statements  of  operations,  shareholder's  equity and cash flows for the three  year  period  ended
December 31, 2000.  These  consolidated  financial  statements  are the  responsibility  of the Company's  management.  Our
responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with auditing  standards  generally  accepted in the United States.  Those standards
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.  An audit also includes  assessing the accounting  principles used and significant  estimates
made by  management,  as well as  evaluating  the overall  financial  statement  presentation.  We believe  that our audits
provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly,  in all material  respects,  the consolidated
financial  position of American  Skandia Life Assurance  Corporation  at December 31, 2000 and 1999,  and the  consolidated
results of their  operations  and their cash flows for each of the three  years in the period  ended  December  31, 2000 in
conformity with accounting principles generally accepted in the United States.



/s/Ernst & Young

February 2, 2001
Hartford, Connecticut





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                      Consolidated Statements of Financial Condition
                                                      (in thousands)

                                        See notes to consolidated financial statements.

                                                                             As of December 31,
                                                                          2000                        1999
                                                                     ---------------            ----------------
ASSETS
------

Investments:
  Fixed maturities - at fair value                                          285,708             $       198,165                                                                                $
  Fixed maturities - at amortized cost                                                                    3,360
                                                                                  -
  Equity securities - at fair value                                          20,402                      16,404
  Derivative instruments
                                                                              3,015                         189
  Policy loans                                                                3,746                       1,270
                                                                      --------------              --------------
                                                                      --------------              --------------

    Total investments                                                       312,871                     219,388

Cash and cash equivalents                                                    76,499                      89,212
Accrued investment income                                                     5,209                       4,054
Deferred acquisition costs                                                1,398,192                   1,087,705
Reinsurance receivable                                                        3,642                       4,062
Receivable from affiliates                                                    3,327
                                                                                                              -
Income tax receivable
                                                                             34,620                           -
Income tax receivable - deferred                                                                         51,726
                                                                                  -
State insurance licenses                                                      4,113                       4,263
Fixed assets                                                                 10,737                       3,305
Other assets                                                                 96,403                      36,698
Separate account assets                                                  29,757,092                  29,381,166
                                                                     ---------------            ----------------
                                                                     ---------------            ----------------

  Total assets                                                       $   31,702,705             $    30,881,579
                                                                     ===============            ================
                                                                     ===============            ================

LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------

Liabilities:
Reserves for future insurance policy and contract benefits                  135,545             $        73,292                                                                                $
Drafts outstanding                                                           63,758                      51,059
Accounts payable and accrued expenses                                       137,040                     158,590
Income tax payable                                                                                       24,268
                                                                                  -
Income tax payable - deferred
                                                                              8,949                           -
Payable to affiliates
                                                                                  -                      68,736
Future fees payable to parent                                               934,410
                                                                                                        576,034
Short-term borrowing                                                         10,000                      10,000
Surplus notes                                                               159,000                     179,000
Separate account liabilities                                             29,757,092                  29,381,166
                                                                     ---------------            ----------------
                                                                     ---------------            ----------------

  Total liabilities                                                      31,205,794                  30,522,145
                                                                     ---------------            ----------------
                                                                     ---------------            ----------------

Shareholder's equity:
Common stock, $100 par value, 25,000 shares authorized,
    issued and outstanding                                                    2,500                       2,500
Additional paid-in capital                                                  287,329                     215,879
Retained earnings                                                           205,979                     141,162
Accumulated other comprehensive income (loss)                                 1,103                       (107)
                                                                     ---------------            ----------------
                                                                     ---------------            ----------------

    Total shareholder's equity                                              496,911                     359,434
                                                                     ---------------            ----------------
                                                                     ---------------            ----------------

    Total liabilities and shareholder's equity                           31,702,705             $    30,881,579                                                                                $
                                                                     ===============            ================





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                           Consolidated Statements of Operations
                                                      (in thousands)


                                        See notes to consolidated financial statements.

                                                                        For the Year Ended December 31,
                                                                   2000                  1999                 1998
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

REVENUES
--------

Annuity and life insurance charges and fees                  $                     $                    $
                                                                     424,578              289,989              186,211
Fee income                                                           130,610               83,243               50,839
Net investment income                                                 11,656               10,441               11,130
Premium income                                                         3,118                1,278                  874
Net realized capital (losses) gains                                    (688)                  578                   99
Other                                                                  2,348                1,832                  387
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

  Total revenues                                                     571,622              387,361              249,540
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------


EXPENSES
--------

Benefits:
  Annuity and life insurance benefits                                    751                  612                  558
  Change in annuity and life insurance policy reserves                45,018                3,078                1,053
  Cost of minimum death benefit reinsurance
                                                                           -                2,945                5,144
  Return credited to contractowners                                    9,046               (1,639)              (8,930)
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

                                                                      54,815                4,996              (2,175)

Expenses:
  Underwriting, acquisition and other insurance
    expenses                                                         335,213              206,350              167,790
  Interest expense                                                    85,998               69,502               41,004
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

                                                                     421,211              275,852              208,794
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

  Total benefits and expenses                                        476,026              280,848              206,619
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

    Income from operations before income tax                          95,596              106,513               42,921

      Income tax expense
                                                                      30,779               30,344                8,154
                                                             ----------------      ---------------      ---------------
                                                             ----------------      ---------------      ---------------

        Net income                                           $                     $                    $
                                                                      64,817               76,169               34,767
                                                             ================      ===============      ===============
                                                             ================      ===============      ===============







                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                      Consolidated Statements of Shareholder's Equity
                                                      (in thousands)


                                      See notes to consolidated financial statements.

                                                                   For the Year Ended December 31,
                                                               2000                 1999                  1998
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------


Common stock:
  Beginning balance                                      $                   $                     $
                                                                  2,500                 2,000                 2,000
  Increase in par value
                                                                      -                   500                     -
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

    Ending balance
                                                                  2,500                 2,500                 2,000
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

Additional paid in capital:
  Beginning balance                                             215,879               179,889               151,527
  Transferred to common stock
                                                                      -                  (500)                    -
  Additional contributions                                       71,450                36,490                28,362
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

    Ending balance                                              287,329               215,879               179,889
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

Retained earnings:
  Beginning balance                                             141,162                64,993                30,226
  Net income                                                     64,817                76,169                34,767
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

    Ending balance                                              205,979               141,162                64,993
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

Accumulated other comprehensive income (loss):
  Beginning balance
                                                                  (107)                 3,535                   668
  Other comprehensive income (loss)
                                                                  1,210                (3,642)                2,867
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

    Ending balance
                                                                  1,103                 (107)                 3,535
                                                         ---------------     -----------------     -----------------
                                                         ---------------     -----------------     -----------------

      Total shareholder's equity                         $                   $                     $
                                                                496,911               359,434               250,417
                                                         ===============     =================     =================
                                                         ===============     =================     =================







                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                           Consolidated Statements of Cash Flow
                                                      (in thousands)

                                      See notes to consolidated financial statements.

                                                                        For the Year Ended December 31,
                                                                  2000               1999                1998
                                                             -------------      --------------      -------------

Cash flow from operating activities:
  Net income                                                 $                  $                   $
                                                                   64,817              76,169             34,767
  Adjustments to reconcile net income to net
    cash used in operating activities:
      Amortization and depreciation
                                                                    7,565               1,495                251
      Deferred tax expense
                                                                   60,023             (10,903)           (14,242)
      Change in unrealized losses on derivatives
                                                                  (2,935)               3,749                  -
      Increase in policy reserves
                                                                   50,892               4,367              1,130
      (Decrease) increase in payable to affiliates
                                                                 (72,063)              69,897                166
      Change in income tax payable/receivable
                                                                 (58,888)              17,611              7,704
      Increase in other assets
                                                                 (59,987)             (32,954)            (1,173)
      Increase in accrued investment income
                                                                  (1,155)             (1,174)              (438)
      Decrease in reinsurance receivable
                                                                      420                 129              2,152
      Net increase in deferred acquisition costs
                                                                (310,487)            (366,198)          (174,804)
      (Decrease) increase in accounts payable and accrued
        expenses                                                 (21,550)              66,763             20,637
      Increase in drafts outstanding
                                                                   12,699              22,118              9,663
      Change in foreign currency translation, net
                                                                    (101)                 701                (22)
      Net realized capital gain on expiration of derivatives
                                                                    (500)                   -                  -
      Net realized capital losses (gains)
                                                                      688               (578)                (99)
                                                             -------------      --------------      -------------

        Net cash used in operating activities                    (330,562)          (148,808)           (114,308)

                                                             -------------      --------------      -------------

Cash flow from investing activites:
      Purchase of fixed maturity investments
                                                                (380,737)            (99,250)            (31,828)
      Proceeds from sale and maturity of fixed
        maturity investments
                                                                  303,736              36,226              4,049
      Purchase of derivatives
                                                                  (6,722)             (4,974)                  -
      Purchase of shares in mutual funds
                                                                 (18,136)            (17,703)             (7,158)
      Proceeds from sale of shares in mutual funds
                                                                   8,345              14,657               6,086
      Purchase of fixed assets
                                                                  (7,348)             (3,178)                (18)
      Increase in policy loans
                                                                  (2,476)               (701)                118
                                                             -------------      --------------      -------------

        Net cash used in investing activities
                                                                (103,338)            (17,703)            (28,751)
                                                             -------------      --------------      -------------

Cash flow from financing activities:
      Capital contribution from parent
                                                                   51,450              22,490              8,362
      Increase in future fees payable to parent, net
                                                                  358,376             207,056            135,944
      Net deposits to (withdrawals from) contractowner
        accounts                                                   11,361               5,872            (5,696)
--------------------------------------------------------------------------      --------------      -------------

        Net cash provided by financing activities
                                                                  421,187             235,418            138,610
                                                             -------------      --------------      -------------

          Net (decrease) increase in cash and cash
            equivalents
                                                                 (12,713)              11,687            (4,449)
          Cash and cash equivalents at beginning of period
                                                                   89,212              77,525             81,974
                                                             -------------      --------------      -------------

            Cash and cash equivalents at end of period       $                  $                   $
                                                                   76,499              89,212             77,525
                                                             =============      ==============      =============

     Income taxes paid                                       $                  $                   $
                                                                   29,644              23,637             14,651
                                                             =============      ==============      =============

      Interest paid                                          $                  $                   $
                                                                   85,551              69,697             35,588
                                                             =============      ==============      =============







                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                        Notes to Consolidated Financial Statements
                                                     December 31, 2000


1.       ORGANIZATION AND OPERATION

         American Skandia Life Assurance  Corporation (the "Company") is a wholly-owned  subsidiary of American  Skandia,
         Inc. ("ASI") whose ultimate parent is Skandia Insurance Company Ltd., ("SICL") a Swedish Corporation.

         The Company  develops  long-term  savings and retirement  products which are distributed  through its affiliated
         broker/dealer company,  American Skandia Marketing,  Incorporated ("ASM"). The Company currently issues variable
         and term life  insurance and variable,  fixed,  market value adjusted and immediate  annuities for  individuals,
         groups and qualified pension plans.

         The Company has 99.9%  ownership  in Skandia  Vida,  S.A. de C.V.  ("Skandia  Vida")  which is a life  insurance
         company  domiciled in Mexico.  Skandia Vida had total  shareholder's  equity of $4,402,000  and $4,592,000 as of
         December 31, 2000, and 1999,  respectively.  The Company considers Mexico an emerging market and has invested in
         the Skandia Vida  operations  with the  expectation  of generating  profits from long-term  savings  products in
         future years.  As such,  Skandia Vida has generated net losses of $2,540,000,  $2,523,000 and $2,514,000 for the
         years ended December 31, 2000, 1999 and 1998, respectively.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.       Basis of Reporting
                  ------------------

                  The  accompanying  consolidated  financial  statements have been prepared in conformity with accounting
                  principles  generally accepted in the United States.  Intercompany  transactions and balances have been
                  eliminated in consolidation.

                  Certain  reclassifications  have been made to prior  year  amounts  to conform  with the  current  year
                  presentation.

         B.       New Accounting Standard
                  -----------------------

                  The FASB has issued  Statement of Financial  Accounting  Standards No. 133,  "Accounting for Derivative
                  Instruments and Hedging  Activities",  as amended by SFAS 137 and SFAS 138 (collectively,  "SFAS 133").
                  SFAS 133 is  effective  for all fiscal  quarters of all fiscal  years  beginning  after June 15,  2000;
                  accordingly,  the Company  adopted SFAS 133 on January 1, 2001. This statement  establishes  accounting
                  and reporting standards for derivative  instruments,  including certain derivative instruments embedded
                  in other contracts,  and for hedging  activities.  SFAS No. 133 requires that all derivative  financial
                  instruments  be measured at fair value and recognized in the statement of condition as either assets or
                  liabilities.  Changes in the fair value of the  derivative  financial  instruments  will be reported in
                  either earnings or comprehensive  income,  depending on the use of the derivative and whether or not it
                  qualifies for hedge accounting.

                  Special hedge accounting  treatment is permitted only if specific criteria are met,  including that the
                  hedging  relationship  be highly  effective both at inception and on an ongoing  basis.  Accounting for
                  hedges  varies based on the type of hedge - fair value or cash flow.  Results of  effective  hedges are
                  recognized in current  earnings for fair value hedges and in other  comprehensive  income for cash flow
                  hedges. Ineffective portions of hedges are recognized immediately in earnings.





                                       AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

                  The  derivative  instruments  held by the  Company in 2000 and 1999  consisted  of equity  put  options
                  utilized to manage the market risk and reserve  fluctuations  associated  with the  guaranteed  minimum
                  death benefit  ("GMDB").  The adoption of SFAS No. 133 did not have a material  effect on the Company's
                  financial statements.

         C.       Investments

                  The  Company  has   classified  its  fixed  maturity   investments   as  either   held-to-maturity   or
                  available-for-sale.  Investments  classified as  held-to-maturity  are investments that the Company has
                  the ability and intent to hold to  maturity.  Such  investments  are carried at amortized  cost.  Those
                  investments  which are  classified  as  available-for-sale  are  carried at fair  value and  changes in
                  unrealized gains and losses are reported as a component of other comprehensive income.

                  The Company has classified its mutual fund investments held in support of a deferred  compensation plan
                  (see Note 13) as  available-for-sale.  Such  investments  are  carried  at fair  value and  changes  in
                  unrealized gains and losses are reported as a component of other comprehensive income.

                  Policy loans are carried at their unpaid principal balances.

                  Realized  gains and losses on disposal of  investments  are  determined by the specific  identification
                  method and are included in revenues.

         D.       Derivative Instruments
                  ----------------------

                  The Company uses derivative  instruments  which consist of equity option  contracts for risk management
                  purposes,  and not for trading or speculation.  The Company hedges the market value fluctuations of the
                  GMDB exposure  embedded in its policy  reserves.  Premiums paid on option  contracts are amortized into
                  net investment  income over the terms of the contracts.  The options are carried at amortized cost plus
                  intrinsic   value,   if  any,  at  the  valuation  date.  An  option  has  intrinsic  value  if  it  is
                  "in-the-money."  For a put option to be  "in-the-money,"  the  exercise  price must be greater than the
                  value of the  underlying  index.  Changes in intrinsic  value are recorded as a component of the change
                  in annuity and life insurance policy reserves consistent with changes in the GMDB reserve.

         E.       Cash Equivalents
                  ----------------

                  The Company  considers all highly liquid time deposits,  commercial paper and money market mutual funds
                  purchased with a maturity at date of acquisition of three months or less to be cash equivalents.

         F.       Fair Values of Financial Instruments
                 ------------------------------------

                  The methods and assumptions used to determine the fair value of financial instruments are as follows:

                  Fair values of fixed  maturities  with  active  markets are based on quoted  market  prices.  For fixed
                  maturities  that trade in less active  markets,  fair values are obtained from an  independent  pricing
                  service.






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


                  Fair values of investments in mutual funds are based on quoted market prices.

                  The intrinsic  value portion of the derivative  instrument is determined  based on the current value of
                  the underlying index.

                  The carrying value of cash and cash equivalents  (cost)  approximates  fair value due to the short-term
                  nature of these investments.

                  The carrying  value of  short-term  borrowings  (cost)  approximates  fair value due to the  short-term
                  nature of these liabilities.

                  Fair values of certain financial  instruments,  such as future fees payable to parent and surplus notes
                  are not readily determinable and are excluded from fair value disclosure requirements.

         G.       State Insurance Licenses
                  ------------------------

                  Licenses to do business in all states have been  capitalized  and  reflected at the  purchase  price of
                  $6,000,000  less  accumulated  amortization.  The  cost  of  the  licenses  is  being  amortized  on  a
                  straight-line basis over 40 years.

         H.       Software Capitalization
                  -----------------------

                  The Company  capitalizes  certain costs  associated  with internal use software in accordance  with the
                  American  Institute  of  Certified  Public  Accountants   Statement  of  Position  98-1  ("SOP  98-1"),
                  "Accounting  for the Costs of Software  Developed  or Obtained for  Internal  Use.  The SOP,  which was
                  adopted  prospectively as of January 1, 1999,  requires the capitalization of certain costs incurred in
                  connection with developing or obtaining  internal use software.  Prior to the adoption of SOP 98-1, the
                  Company  expensed  all  internal use software  related  costs as incurred.  Details of the  capitalized
                  software  costs,  which are  included in fixed  assets,  and related  amortization  for the years ended
                  December 31, are as follows:

                  (in thousands)                                              2000              1999
                                                                              ----              ----

                  Balance at beginning of year                               $2,920             $  -
                                                                             ------             ----

                  Software costs capitalized during the year                  4,804            3,035


                  Software costs amortized during the year                     (512)            (115)
                                                                               -----            -----

                                                                              4,292             2,920
                                                                              -----             -----


                  Balance at end of year                                     $7,212            $2,920
                                                                             ======            ======








                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         I.       Income Taxes
                  ------------

                  The Company is included in the  consolidated  federal  income tax return and combined  state income tax
                  return of an  upstream  company,  Skandia  AFS  Development  Holding  Corporation  and  certain  of its
                  subsidiaries.  In  accordance  with the tax  sharing  agreement,  the  federal  and  state  income  tax
                  provisions  are  computed on a separate  return basis as adjusted  for  consolidated  items such as net
                  operating loss carryforwards.

                  Deferred  income  taxes  reflect  the net tax effects of  temporary  differences  between the  carrying
                  amounts of assets and liabilities for financial  reporting purposes and the amounts used for income tax
                  purposes.

         J.       Recognition of Revenue and Contract Benefits
                  --------------------------------------------

                  Revenues for variable  deferred  annuity  contracts  consist of charges against  contractowner  account
                  values  for  mortality  and  expense  risks,  administration  fees,  surrender  charges  and an  annual
                  maintenance fee per contract.  Benefit  reserves for variable annuity  contracts  represent the account
                  value of the contracts and are included in the separate account liabilities.

                  Revenues for variable  immediate  annuity  contracts  with and without  life  contingencies  consist of
                  certain  charges  against  contractowner  account  values  including  mortality  and expense  risks and
                  administration  fees. Benefit reserves for variable  immediate annuity contracts  represent the account
                  value of the contracts and are included in the separate account liabilities.

                  Revenues for market value  adjusted  fixed annuity  contracts  consist of separate  account  investment
                  income  reduced by benefit  payments and changes in reserves in support of  contractowner  obligations,
                  all of which are included in return credited to  contractowners.  Benefit  reserves for these contracts
                  represent  the account  value of the  contracts,  and are included in the general  account  reserve for
                  future contractowner benefits to the extent in excess of the separate account assets.

                  Revenues for immediate annuity contracts without life  contingencies  consist of net investment income.
                  Revenues for immediate  annuity  contracts with life  contingencies  consist of single premium payments
                  recognized as annuity  considerations when received.  Benefit reserves for these contracts are based on
                  the Society of Actuaries  1983 Table-a with  assumed  interest  rates that vary by issue year.  Assumed
                  interest rates ranged from 6.25% to 8.25% at December 31, 2000 and 1999.

                  Revenues for variable life insurance contracts consist of charges against  contractowner account values
                  for mortality and expense risk fees,  cost of insurance  fees,  taxes and  surrender  charges.  Certain
                  contracts  also include  charges  against  premium to pay state  premium  taxes.  Benefit  reserves for
                  variable life insurance  contracts represent the account value of the contracts and are included in the
                  separate account liabilities.






                                       AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


         K.       Deferred Acquisition Costs
                  --------------------------

                  The costs of acquiring new business,  which vary with and are  primarily  related to the  production of
                  new  business,  are being  deferred,  net of  reinsurance.  These costs include  commissions,  costs of
                  contract  issuance,  and certain  selling  expenses  that vary with  production.  These costs are being
                  amortized  generally in proportion to expected gross profits from surrender  charges,  policy and asset
                  based fees and  mortality  and expense  margins.  This  amortization  is adjusted  retrospectively  and
                  prospectively  when  estimates  of current  and future  gross  profits to be  realized  from a group of
                  products are revised.

                  Details of the deferred  acquisition  costs and related  amortization  for the years ended December 31,
                  are as follows:


                          (in thousands)                                  2000             1999              1998
                                                                          ----             ----              ----

                  Balance at beginning of year                          $1,087,705       $721,507          $546,703
                                                                        ----------       --------          --------

                  Acquisition costs deferred during the year               495,103        450,059           261,432


                  Acquisition costs amortized during the year             (184,616)       (83,861)          (86,628)
                                                                          ---------      ------------       ---------

                                                                           310,487        366,198           174,804
                                                                     ----  -------        -------          --------


                  Balance at end of year                                $1,398,192     $1,087,705          $721,507
                                                                        ==========        ==========       ========


         L.       Reinsurance
                  -----------

                  The  Company  cedes   reinsurance   under  modified   co-insurance   arrangements.   These  reinsurance
                  arrangements  provide  additional  capacity  for growth in  supporting  the cash flow  strain  from the
                  Company's  variable  annuity and variable life insurance  business.  The  reinsurance is effected under
                  quota share contracts.

                           The Company reinsured its exposure to market  fluctuations  associated with its GMDB liability
                  in the first half of 1999 and in 1998.  Under this  reinsurance  agreement,  the Company ceded premiums
                  of $2,945,000 and  $5,144,000;  received claim  reimbursements  of $242,000 and $9,000;  and,  recorded
                  increases/(decreases) in reserves of ($2,763,000) and $323,000 in 1999 and 1998, respectively.

                 At December 31, 2000 and 1999, in accordance  with the  provisions of modified  coinsurance  agreements,  the Company
                 accrued $4,339,000 and $41,000, respectively, for amounts receivable from favorable reinsurance experience on certain
                 blocks of variable annuity business.





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


         M.       Translation of Foreign Currency
                  -------------------------------

                  The financial  position and results of operations of Skandia Vida are measured  using local currency as
                  the functional  currency.  Assets and liabilities are translated at the exchange rate in effect at each
                  year-end.  Statements of income and  shareholder's  equity  accounts are translated at the average rate
                  prevailing during the year.  Translation  adjustments  arising from the use of differing exchange rates
                  from period to period are reported as a component of other comprehensive income.

         N.       Separate Accounts
                  -----------------

                  Assets and  liabilities  in Separate  Accounts  are included as separate  captions in the  consolidated
                  statements of financial  condition.  Separate  Account assets  consist  principally of long term bonds,
                  investments  in mutual funds,  short-term  securities and cash and cash  equivalents,  all of which are
                  carried at fair value.  The  investments  are managed  predominately  through the Company's  investment
                  advisory  affiliate,  American Skandia  Investment  Services,  Inc.  ("ASISI"),  utilizing various fund
                  managers as sub-advisors.  The remaining  investments are managed by independent  investment firms. The
                  contractowner  has the option of directing  funds to a wide  variety of mutual  funds.  The  investment
                  risk on the  variable  portion of a  contract  is borne by the  contractowner.  A fixed  option  with a
                  minimum  guaranteed  interest rate is also  available.  The Company is responsible  for the credit risk
                  associated with these investments.

                  Included in Separate Account  liabilities are reserves of  $1,059,987,000  and $896,205,000 at December
                  31,  2000 and 1999,  respectively,  relating  to  annuity  contracts  for which  the  contractowner  is
                  guaranteed a fixed rate of return.  Separate  Account  assets of  $1,059,987,000  and  $896,205,000  at
                  December  31,  2000 and 1999,  respectively,  consisting  of long term  bonds,  short-term  securities,
                  transfers  due from the  general  account  and cash and cash  equivalents  are held in support of these
                  annuity contracts, pursuant to state regulation.

         O.       Estimates
                  ---------

                  The preparation of financial statements in conformity with accounting  principles generally accepted in
                  the United States  requires that  management  make estimates and  assumptions  that affect the reported
                  amount of assets and  liabilities at the date of the financial  statements and the reported  amounts of
                  revenues and expenses during the reporting period.  The more significant  estimates and assumptions are
                  related to deferred  acquisition  costs and involve policy lapses,  investment  return and  maintenance
                  expenses.  Actual results could differ from those estimates.





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


3.       COMPREHENSIVE INCOME

         The components of comprehensive income, net of tax, for the years ended December 31 were as follows:

                           (in thousands)                                            2000          1999        1998
                                                                                     ----          ----        ----

         Net income                                                                 $64,817       $76,169    $34,767
         Other comprehensive income:
            Unrealized investment (losses) gains on
                available for sale securities                                        (1,681)       (3,438)     2,801
            Reclassification adjustment for realized losses (gains)
                included in investment income                                         2,957          (660)        88
                                                                                   ---------  -----   ----- ----------
            Net unrealized gains (losses) on securities                               1,276        (4,098)     2,889

            Foreign currency translation                                                (66)          456        (22)
                                                                                    -------     ---------- -----------


         Other comprehensive income (loss)                                             1,210       (3,642)     2,867
                                                                                   ---------       -------    ------

         Comprehensive income                                                        $66,027      $72,527    $37,634
                                                                                    =======       =======     =======


         The components of accumulated other comprehensive income, net of tax, as of December 31 were as follows:

                     (in thousands)                                                    2000          1999
                                                                                       ----          ----

        Unrealized investment gains (losses)                                          $1,021         ($255)
        Foreign currency translation                                                      82           148
                                                                                      ------         ------

        Accumulated other comprehensive income (loss)                                 $1,103         ($107)
                                                                                      ======         ======






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


4.       INVESTMENTS

         The  amortized  cost,  gross  unrealized  gains/losses  and  estimated  fair  value  of  available-for-sale  and
         held-to-maturity  fixed  maturities  and  investments in mutual funds as of December 31, 2000 and 1999 are shown
         below.  All securities held at December 31, 2000 and 1999 were publicly traded.

         Investments in fixed maturities as of December 31, 2000 consisted of the following:


                       (in thousands)                                     Available-for-Sale
                                                                          ------------------

                                                                           Gross              Gross
                                                        Amortized        Unrealized        Unrealized         Fair
                                                           Cost            Gains             Losses          Value
                                                           ----            -----             ------          -----

         U.S. Government obligations                       $206,041        $4,445             $ (11)        $210,475

         Foreign government obligations                       2,791           195                 -            2,986


         Obligations of state and political
            subdivisions                                        253             1                 -              254

         Corporate securities                                72,237         1,565            (1,809)          71,993
                                                             ------         -----            -------          ------

             Totals                                        $281,322        $6,206           $(1,820)        $285,708
                                                           ========        ======           ========        ========


         The amortized cost and fair value of fixed maturities,  by contractual  maturity, at December 31, 2000 are shown
         below.

                       (in thousands)                        Available-for-Sale
                                                             ------------------

                                                          Amortized           Fair
                                                            Cost             Value
                                                            ----             -----

         Due in one year or less                              $ 7,005           $ 7,018

         Due after one through five years                     157,111           158,344

         Due after five through ten years                     107,729           110,469

         Due after ten years                                    9,477             9,877
                                                             --------          ---------

            Total                                            $281,322          $285,708
                                                             ========          ========






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


4.       INVESTMENTS  (continued)

         Investments in fixed maturities as of December 31, 1999 consisted of the following:

                        (in thousands)                                            Available-for-Sale
                                                                                  ------------------

                                                                            Gross             Gross
                                                          Amortized       Unrealized       Unrealized         Fair
                                                            Cost            Gains            Losses           Value
                                                            ----            -----            ------           -----

         U.S. Government obligations                      $ 81,183             $ -           $(678)          $ 80,505

         Obligations of state and political
            subdivisions                                       253               -              (3)               250

         Corporate securities                              121,859               -          (4,449)           117,410
                                                           -------                          -------           -------

             Totals                                       $203,295             $ -         $(5,130)          $198,165
                                                          ========             ===         ========          ========


                        (in thousands)                                            Held-to-Maturity
                                                                                  ----------------

                                                                            Gross             Gross
                                                          Amortized       Unrealized       Unrealized         Fair
                                                            Cost            Gains            Losses           Value
                                                            ----            -----            ------           -----

         U.S. Government obligations                       $1,105             $ -              $ (1)         $1,104

         Corporate securities                               2,255               -               (15)          2,240
                                                           -------             --               ----         ------

             Totals                                        $3,360             $ -              $(16)         $3,344
                                                           ======             ===              =====         ======

         Proceeds  from  sales of fixed  maturities  during  2000,  1999 and 1998  were  $302,632,000,  $32,196,000,  and
         $999,000,  respectively.  Proceeds from maturities during 2000, 1999 and 1998 were $1,104,000,  $4,030,000,  and
         $3,050,000, respectively.






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)



4.       INVESTMENTS (continued)


        The cost, gross unrealized gains/losses and fair value of investments in mutual funds at December 31, 2000 and 1999 are shown
         below:


                    (in thousands)                                          Gross             Gross
                                                                         Unrealized        Unrealized         Fair
                                                            Cost            Gains            Losses           Value
                                                            ----            -----            ------           -----

         2000                                             $23,218           $ 372           $(3,188)           $20,402
                                                          =======           =====           ========           =======

         1999                                             $11,667          $4,763            $ (26)            $16,404
                                                          =======          ======            ======            =======


         Net realized investment gains (losses) were as follows for the years ended December 31:


                    (in thousands)                                           2000             1999            1998
                                                                             ----             ----            ----

         Fixed maturities:
           Gross gains                                                      $1,002            $ 253            $ -
           Gross losses                                                     (3,450)            (228)              (1)
         Investment in mutual funds:
           Gross gains                                                       1,913              990              281
           Gross losses                                                       (153)            (437)            (181)
                                                                          ---  -----     --    -----            -----

         Totals                                                             $ (688)           $ 578             $ 99
                                                                            =======           =====            ====



5.       NET INVESTMENT INCOME

         The sources of net investment income for the years ended December 31 were as follows:

                    (in thousands)                                           2000             1999            1998
                                                                             ----             ----            ----

         Fixed maturities                                                  $13,502           $ 9,461         $ 8,534
         Cash and cash equivalents                                            5,154            2,159           1,717
         Investment in mutual funds                                              99               32           1,013
         Policy loans                                                            97               31              45
         Derivative instruments                                              (6,939)          (1,036)              -
                                                                             -------          -------

         Total investment income                                             11,913           10,647          11,309

         Investment expenses                                                    257              206             179
                                                                             ------           ------          ------

         Net investment income                                              $11,656          $10,441         $11,130
                                                                           =======           =======         =======









                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


6.       INCOME TAXES

         The significant components of income tax expense for the years ended December 31 were as follows:

                       (in thousands)                                            2000             1999        1998
                                                                                 ----             ----        ----

         Current tax (benefit) expense                                         ($29,244)         $41,248      $22,384

         Deferred tax expense (benefit)                                          60,023          (10,904)     (14,230)
                                                                                -------         --------     -------


         Total income tax expense                                               $30,779          $30,344       $8,154
                                                                                 =======         =======       ======

         The tax effects of significant  items comprising the Company's  deferred tax balance as of December 31, 2000 and
         1999 are as follows:

                      (in thousands)                                                     2000                 1999
                                                                                         ----                 ----

         Deferred tax liabilities:
             Deferred acquisition costs                                              ($411,417)             ($321,873)
             Payable to reinsurers                                                     (29,985)               (26,733)
             Future contractowner benefits                                             (11,526)
                                                                                                           -
             Internal use software                                                      (2,524)
                                                                                                               (1,022)
             Policy fees                                                                (1,551)                (1,146)
             Net unrealized gains                                                         (550)
                                                                                                           -
             Foreign exchange translation                                                  (45)                   (80)
                                                                    ---------              ----  ---------        ----

             Total                                                                    (457,598)              (350,854)
                                                                                      ---------              ---------

         Deferred tax assets:
             Net separate account liabilities
                                                                                       421,662                333,521
             Future contractowner benefits
                                                                                             -                  3,925
             Other reserve differences
                                                                                         2,675                 39,645
             Deferred compensation
                                                                                        17,869                 18,844
             Surplus notes interest
                                                                                         5,536                  5,030
             Net unrealized losses
                                                                                             -                    137
             Other
                                                                                           907                  1,478
                                                                    --------               ---                  -----

             Total
                                                                                           -
                                                                                       448,649                402,580
                                                                                       -------                -------

             Income tax (payable) receivable - deferred                            ($   8,949)                $51,726
                                                                                    ===========               =======









                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


6.       INCOME TAXES (continued)

         The income tax expense was different from the amount computed by applying the federal  statutory tax rate of 35%
         to pre-tax income from continuing operations as follows:

                    (in thousands)                                                2000           1999           1998
                                                                                  ----           ----           ----

         Income (loss) before taxes
            Domestic                                                             $98,136      $109,036       $45,435
            Foreign                                                               (2,540)       (2,523)       (2,514)
                                                                                  -------    --- -------      -------
            Total                                                                 95,596       106,513        42,921

            Income tax rate                                                          35%            35%           35%
                                                                                -------         ------       --------

         Tax expense at federal statutory income tax rate                         33,459         37,280        15,022

         Tax effect of:
            Dividend received deduction                                           (7,350)        (9,572)       (9,085)
            Losses of foreign subsidiary                                             889            883           880

            Meals and entertainment                                                  841            664           487

            State income taxes                                                      (524)         1,071           673
            Other                                                                  3,464             18           177
                                                                                 --------     ----------     ---------

         Income tax expense                                                     $ 30,779       $ 30,344       $ 8,154
                                                                                ========       ========       =======



7.       COST ALLOCATION AGREEMENTS WITH AFFILIATES

         Certain  operating  costs  (including  personnel,  rental of office space,  furniture,  and equipment) have been
         charged to the Company at cost by American Skandia Information  Services and Technology  Corporation  ("ASIST"),
         an affiliated  company.  The Company has also charged  operating  costs to ASISI.  The total cost to the Company
         for these items was  $13,974,000,  $11,136,000,  and $7,722,000 for the years ended December 31, 2000,  1999 and
         1998,  respectively.  Income received for these items was  $11,186,000,  $3,919,000 and $1,355,000 for the years
         ended December 31, 2000, 1999 and 1998, respectively.

         Beginning in 1999, the Company was reimbursed by ASM for certain  distribution related costs associated with the
         sales of business  through an  investment  firm where ASM serves as an  introducing  broker  dealer.  Under this
         agreement,  the expenses  reimbursed  were  $5,842,000  and $1,441,000 for the years ended December 31, 2000 and
         1999. As of December 31, 2000 and 1999,  amounts  receivable  under this  agreement  were $492,000 and $245,000,
         respectively.








                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


8.       FUTURE FEES PAYABLE TO PARENT

         In a series of  transactions  with ASI,  the  Company  transferred  certain  rights to receive  future  fees and
         contract  charges  expected  to be  realized  on variable  portions  of  designated  blocks of deferred  annuity
         contracts.

         The proceeds from the transfers  have been  recorded as a liability and are being  amortized  over the remaining
         surrender  charge period of the designated  contracts  using the interest  method.  The Company did not transfer
         the right to receive future fees and charges after the expiration of the surrender charge period.

         In connection with these transactions,  ASI issued collateralized notes in private placements, which are secured
         by the rights to receive future fees and charges purchased from the Company.

         Under the terms of the  Purchase  Agreements,  the rights  transferred  provide for ASI to receive a  percentage
         (60%, 80% or 100% depending on the underlying  commission  option) of future  mortality and expense  charges and
         contingent  deferred  sales charges,  after  reinsurance,  expected to be realized over the remaining  surrender
         charge period of the designated contracts (6 to 8 years).

         Payments  representing  fees and charges in the aggregate amount of  $219,454,000,  $131,420,000 and $69,226,000
         were made by the Company to the Parent for the years  ended  December  31,  2000,  1999 and 1998,  respectively.
         Related  interest  expense of  $70,667,000,  $52,840,000  and  $22,978,000 has been included in the statement of
         income for the years ended December 31, 2000, 1999 and 1998, respectively.

         The Commissioner of the State of Connecticut has approved the transfer of future fees and charges;  however,  in
         the event that the Company becomes subject to an order of liquidation or  rehabilitation,  the  Commissioner has
         the ability to stop the payments due to the Parent under the  Purchase  Agreement  subject to certain  terms and
         conditions.

         The present values of the transactions as of the respective effective date were as follows:

                              Closing      Effective          Contract Issue         Discount       Present
           Transaction         Date           Date                Period               Rate          Value
           -----------         ----           ----                ------               ----          -----

             1996-1           12/16/96         9/1/96        1/1/94  -   6/30/96       7.5%           $50,221
             1997-1            7/23/97         6/1/97        3/1/96  -   4/30/97       7.5%            58,767
             1997-2           12/30/97        12/1/97        5/1/95  -  12/31/96       7.5%            77,552
             1997-3           12/30/97        12/1/97        5/1/96  -  10/31/97       7.5%            58,193
             1998-1            6/30/98         6/1/98        1/1/97  -   5/31/98       7.5%            61,180
             1998-2           11/10/98        10/1/98        5/1/97  -   8/31/98       7.0%            68,573
             1998-3           12/30/98        12/1/98        7/1/96  -  10/31/98       7.0%            40,128
             1999-1            6/23/99         6/1/99        4/1/94  -   4/30/99       7.5%           120,632
             1999-2           12/14/99        10/1/99       11/1/98  -   7/31/99       7.5%           145,078
             2000-1            3/22/00         2/1/00        8/1/99  -   1/31/00       7.5%           169,459
             2000-2            7/18/00         6/1/00        2/1/00  -   4/30/00       7.25%           92,399
             2000-3           12/28/00        12/1/00        5/1/00  -  10/31/00       7.25%          107,291
             2000-4           12/28/00        12/1/00        1/1/98  -  10/31/00       7.25%          107,139






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


8.       FUTURE FEES PAYABLE TO PARENT (continued)

         Expected payments of future fees payable to ASI as of December 31, 2000 are as follows:

                                                     Year Ended
               (in thousands)                        December 31,                          Amount
                                                     ------------                          ------

                                                         2001                             $164,892
                                                         2002                              169,511
                                                         2003                              165,626
                                                         2004                              151,516
                                                         2005                              128,053
                                                             2006 and thereafter           154,812
                                                                                --         -------

                                                        Total                             $934,410
                                                                                          ========


9.       LEASES

         The Company  leases office space under a lease  agreement  established in 1989 with ASIST.  The Company  entered
         into a lease agreement for office space in Westminster,  Colorado,  effective January 1, 2001. Lease expense for
         2000, 1999 and 1998 was $6,593,000,  $5,003,000 and $3,588,000  respectively.  Future minimum lease payments per
         year and in aggregate as of December 31, 2000 are as follows:

                 (in thousands)          2001                              $6,487
                                         2002                               8,032
                                         2003                               8,098
                                         2004                               8,209
                                         2005                               8,756
                                         2006 and thereafter               51,922
                                                                       -----------

                                         Total                            $91,504
                                                                       ===========


10.      RESTRICTED ASSETS

         To comply with certain state insurance  departments'  requirements,  the Company maintains cash, bonds and notes
         on deposit with various  states.  The carrying value of these deposits  amounted to $4,636,000 and $4,868,000 as
         of December 31, 2000,  and 1999,  respectively.  These deposits are required to be maintained for the protection
         of contractowners within the individual states.






                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


11.      RETAINED EARNINGS AND DIVIDEND RESTRICTIONS

         Statutory  basis  shareholder's  equity  was  $342,804,000  and  $286,385,000  at  December  31,  2000 and 1999,
         respectively.

         The statutory  basis net income for the year ended December 31, 2000 was  $11,550,000,  as compared to losses of
         $17,672,000 and $13,152,000 for the years ended December 31, 1999 and 1998, respectively.

         Under various state  insurance  laws, the maximum amount of dividends that can be paid to  shareholders  without
         prior approval of the state insurance  department is subject to restrictions  relating to statutory  surplus and
         net gain from operations.  At December 31, 2000, no amounts may be distributed without prior approval.

         On November 8, 1999,  the Board of  Directors  authorized  the Company to increase  the par value of its capital
         stock from $80 per share to $100 per share in order to comply  with  minimum  capital  levels as required by the
         California  Department  of  Insurance.  This  transaction  resulted in a  corresponding  decrease in paid in and
         contributed surplus of $500,000 and had no effect on capital and surplus.

12.      STATUTORY ACCOUNTING PRACTICES

         The National  Association of Insurance  Commissioners  ("NAIC") revised the Accounting  Practices and Procedures
         Manual in a process  referred to as  Codification.  The State of  Connecticut  has adopted the provisions of the
         revised manual,  which is effective January 1, 2001. The revised manual has changed, to some extent,  prescribed
         statutory  accounting  practices and will result in changes to the accounting practices that the Company uses to
         prepare its  statutory-basis  financial  statements.  The  adoption of the revised  accounting  practices is not
         expected to have a material adverse effect on the Company's statutory-basis capital and surplus.

13.      EMPLOYEE BENEFITS

         The Company has a 401(k) plan for which  substantially all employees are eligible.  Under this plan, the Company
         contributes 3% of salary for all  participating  employees and matches employee  contributions at a 50% level up
         to an additional  3% Company  contribution.  Company  contributions  to this plan on behalf of the  participants
         were $3,734,000, $3,164,000 and $2,115,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

         The Company has a deferred  compensation  plan,  which is available to the internal  field  marketing  staff and
         certain officers.  Company contributions to this plan on behalf of the participants were $399,000,  $193,000 and
         $342,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

         The Company and certain  affiliates  cooperatively  have a  long-term  incentive  program  under which units are
         awarded to  executive  officers  and other  personnel.  The Company and  certain  affiliates  also have a profit
         sharing program which benefits all employees below the officer level.  These programs  consist of multiple plans
         with new plans  instituted  each year.  Generally,  participants  must  remain  employed  by the  Company or its
         affiliates at the time such units are payable in order to receive any payments  under the programs.  The accrued
         liability  representing  the value of these units was  $31,632,000  and  $42,619,000 as of December 31, 2000 and
         1999,  respectively.  Payments  under these programs were  $13,542,000,  $4,079,000 and $2,407,000 for the years
         ended December 31, 2000, 1999, and 1998, respectively.





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                 (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


14.      REINSURANCE

         The effect of reinsurance for the years ended December 31, 2000, 1999 and 1998 is as follows:

         (in thousands)                                       2000
                                                              ----

                                Annuity and Life Insurance   Change in Annuity and Life          Return Credited
                                     Charges and Fees                 Insurance                to Contractowners
                                     ----------------                                          -----------------
                                                                   Policy Reserves
                                                                   ---------------

        Gross                            $477,802                      $45,784                      $13,607
        Ceded                             (53,224)                        (766)                      (4,561)
                                         --------                       ------                      -------
        Net                              $424,578                      $45,018                      $ 9,046
                                         ========                      =======                      =======

                                                           1999
                                                           ----

                                Annuity and Life Insurance   Change in Annuity and Life          Return Credited
                                     Charges and Fees                 Insurance                to Contractowners
                                     ----------------                                          -----------------
                                                                   Policy Reserves
                                                                   ---------------

        Gross                            $326,670                       $4,151                      ($1,382)
        Ceded                             (36,681)                      (1,073)                        (257)
                                         --------                      -------                        -----
        Net                              $289,989                       $3,078                      ($1,639)
                                         ========                       ======                      ========

                                                           1998
                                                           ----

                                Annuity and Life Insurance   Change in Annuity and Life          Return Credited
                                     Charges and Fees                 Insurance                to Contractowners
                                     ----------------                                          -----------------
                                                                   Policy Reserves
                                                                   ---------------

        Gross                            $215,425                       $ 691                       ($8,921)
        Ceded                             (29,214)                        362                            (9)
                                         --------                         ---                      ---------
        Net                              $186,211                      $1,053                       ($8,930)
                                         ========                      ======                       ========


         In December 2000, the Company entered into a modified  coinsurance  agreement with SICL effective  January 1996.
         During 2000, ceded premiums received net of commission  expenses and reserve  adjustments were  $10,360,000.  At
         December 31, 2000, $6,109,000 was payable to SICL under this agreement.

         Such ceded  reinsurance  does not relieve the Company of its obligations to  policyholders.  The Company remains
         liable to its  policyholders  for the  portion  reinsured  to the extent  that any  reinsurer  does not meet its
         obligations assumed under the reinsurance agreements.








                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


15.      SURPLUS NOTES

         The Company has issued surplus notes to its Parent in exchange for cash.  Surplus notes outstanding as of December 31, 2000
         and 1999 were as follows:

              (in thousands)
                                                                                            Interest for the
         ---------------------------------
                                            Interest       2000         1999           Years Ended December 31,
         ---------------------------------
                 Issue Date                   Rate        Amount       Amount         2000       1999        1998
                 ----------                   ----        ------       ------         ----       ----        ----
         ---------------------------------

         ---------------------------------
         December 29, 1993                   6.84%              -               -           -           -       1,387

         ---------------------------------
         February 18, 1994                   7.28%                         10,000         732         738         738
                                                      -
         ---------------------------------
         March 28, 1994                      7.90%                         10,000         794         801         801
                                                      -
         ---------------------------------
         September 30, 1994                  9.13%          15,000         15,000       1,392       1,389       1,389
         ---------------------------------
         December 28, 1994                   9.78%                              -           -       1,308       1,388
                                                           -
         ---------------------------------
         December 19, 1995                   7.52%          10,000         10,000         765         762         762
         ---------------------------------
         December 20, 1995                   7.49%          15,000         15,000       1,142       1,139       1,139
         ---------------------------------
         December 22, 1995                   7.47%           9,000          9,000         684         682         682
         ---------------------------------
         June 28, 1996                       8.41%          40,000         40,000       3,420       3,411       3,411
         ---------------------------------
         December 30, 1996                   8.03%          70,000         70,000       5,715       5,698       5,699
                                                      ---   ------  ---    ------ ---   ----- ---   ----- ---   -----
         ---------------------------------

         Total                                            $159,000       $179,000     $14,644     $15,928     $17,396
                                                          ========       ========     =======     =======     =======
         ---------------------------------


         Surplus notes for  $10,000,000  dated February 18, 1994 and  $10,000,000  dated March 28, 1994 were converted to
         additional  paid-in  capital on December 27, 2000. A surplus note for  $14,000,000  dated  December 28, 1994 was
         converted to  additional  paid-in  capital on December 10, 1999.  All surplus  notes mature seven years from the
         issue date.

         Payment of interest  and  repayment of principal  for these notes is subject to certain  conditions  and require
         approval by the Insurance  Commissioner of the State of Connecticut.  At December 31, 2000 and 1999, $15,816,000
         and  $14,372,000,  respectively,  of accrued  interest on surplus notes was not approved for payment under these
         criteria.


16.      SHORT-TERM BORROWING

         The  Company  had a  $10,000,000  short-term  loan  payable to ASI at  December  31,  2000 and 1999 as part of a
         revolving  loan  agreement.  The loan has an  interest  rate of 7.13% and matures on March 12,  2001.  The total
         interest  expense to the Company was $687,000,  $585,000 and $622,000 and for the years ended December 31, 2000,
         1999 and 1998,  respectively.  Accrued  interest  payable was  $222,000 and $197,000 as of December 31, 2000 and
         1999, respectively.


17.      CONTRACT WITHDRAWAL PROVISIONS

         Approximately  99% of the Company's  separate  account  liabilities are subject to  discretionary  withdrawal by
         contractowners  at market value or with market value  adjustment.  Separate  account assets which are carried at
         fair value are adequate to pay such withdrawals  which are generally  subject to surrender  charges ranging from
         10% to 1% for contracts held less than 10 years.





                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


18.      SEGMENT REPORTING

         In recent years, in order to complete the array of products  offered by the Company and its affiliates to meet a
         wide variety of financial planning,  the Company developed the variable life insurance and qualified  retirement
         plan annuity  products.  Assets under  management and sales for the products other than variable  annuities have
         not been  significant  enough to warrant full segment  disclosures as required by SFAS 131,  "Disclosures  about
         Segments of an Enterprise and Related Information."







                                        AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                               (a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

                                  Notes to Consolidated Financial Statements (continued)


19.      QUARTERLY FINANCIAL DATA (UNAUDITED)

         The following table summarizes information with respect to the operations of the Company on a quarterly basis:

        (in thousands)                                                       Three months Ended

                                                            March 31     June 30      September 30     December 31
                                                            --------     -------      ------------     -----------
        2000
        Premiums and other insurance
           revenues                                        $137,255       $139,317           $147,923         $136,159
        Net investment income                                 2,876          3,628              4,186              966

        Net realized capital gains (losses)                     729         (1,436)              (858)             877
                                                            -------        -------             -----           -------
        Total revenues                                      140,860         141,509            151,251         138,002
        Benefits and expenses                               106,641         121,356            137,514         110,515
                                                            -------        --------           --------         -------
        Pre-tax net income                                   34,219          20,153             13,737          27,487

        Income taxes                                         10,038           5,225              3,167          12,349
                                                             ------         ---------          ------          ------

        Net income                                          $24,181         $14,928            $10,570         $15,138
                                                            =======         =======            =======         =======


        1999
        Premiums and other insurance
           revenues                                          $78,509         $88,435           $97,955        $111,443
        Net investment income                                  2,654           2,842             2,735           2,210

        Net realized capital gains                               295              25               206              52
                                                             -------       ---------           -------       ---------

        Total revenues                                        81,458          91,302           100,896         113,705
        Benefits and expenses                                 64,204          67,803            71,597          77,244
                                                              ------        ---------          -------          ------

        Pre-tax net income                                    17,254           23,499           29,299          36,461

        Income taxes                                           3,844            7,142            7,898          11,460
                                                              ------           ------        ----------         -------

        Net income                                          $ 13,410        $ 16,357          $ 21,401        $ 25,001
                                                            ========        ========          ========        ========


        1998
        Premiums and other insurance
           revenues                                          $50,593        $57,946             $62,445        $67,327
        Net investment income                                  3,262          2,410               2,469          2,989

        Net realized capital gains (losses)                      156             13                 (46)           (24)
                                                             -------        --------             -------       --------

        Total revenues                                        54,011         60,369              64,868         70,292
        Benefits and expenses                                 46,764         42,220              48,471         69,164
                                                              ------         ------              -------        -------
        Pre-tax net income                                     7,247         18,149              16,397          1,128
        Income taxes                                           1,175          4,174               2,223            582
                                                               -----          -----              ------        -------

        Net income                                            $6,072        $13,975             $14,174       $    546
                                                              ======        =======             =======        ========








                       APPENDIX B - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B

The Unit Prices and number of Units in the  Sub-accounts  that  commenced  operations  prior to January 1, 2001 are
shown below. All or some of these  Sub-accounts  were available during the periods shown as investment  options for
other variable  annuities we offer pursuant to different  prospectuses.  The Insurance  Charge assessed against the
Sub-accounts  under the terms of those other variable  annuities are the same as the charges  assessed against such
Sub-accounts under the Annuity offered pursuant to this Prospectus.

         Unit  Prices And  Numbers  Of Units:  The  following  table  shows:  (a) the Unit  Price,  as of the dates
shown,  for Units in each of the Class 1  Sub-accounts  of Separate  Account B that commenced  operations  prior to
January 1, 2001 and are being  offered  pursuant to this  Prospectus  or which we offer  pursuant to certain  other
prospectuses;  and (b) the number of Units  outstanding in each such  Sub-account  as of the dates shown.  The year
in which  operations  commenced  in each  such  Sub-account  is noted in  parentheses.  The  portfolios  in which a
particular  Sub-account  invests  may or may not have  commenced  operations  prior to the  date  such  Sub-account
commenced operations.  The initial offering price for each Sub-account was $10.00.

                                                                       Year Ended December 31,
----------------------------------------------------------------------------------------------------------------------------------------
                         2000        1999        1998       1997       1996       1995        1994       1993       1992       1991
----------------------
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Omega
(2000)
Unit Price                  $7.98           -          -          -          -           -          -           -         -           -
Number of Units         1,637,475           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA - Equity
Index
(2000)
Unit Price                  $9.47           -          -          -          -           -          -           -         -           -
Number of Units           302,954           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Foundation
(2000)
Unit Price                  $9.65           -          -          -          -           -          -           -         -           -
Number of Units           755,890           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA - Global
Leaders
(1999)
Unit Price                 $10.55       11.72          -          -          -           -          -           -         -           -
Number of Units           887,758      23,100          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA - Small
Cap Value
(2000)
Unit Price                 $12.24           -          -          -          -           -          -           -         -           -
Number of Units            65,490           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Special
Equity
(1999)                     $11.01       12.19          -          -          -           -          -           -         -           -
Unit Price              1,731,145     152,341          -          -          -           -          -           -         -           -
Number of Units
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Strategic Income
(2000)
Unit Price                  $9.83           -          -          -          -           -          -           -         -           -
Number of Units           118,558           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
----------------------------------------------------------------------------------------------------------------------------------------
                         2000        1999        1998       1997       1996       1995        1994       1993       1992       1991
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA -
Capital Growth
(2000)
Unit Price                 $12.35           -          -          -          -           -          -           -         -           -
Number of Units           268,886           -          -          -          -           -          -           -         -           -
----------------------------------------------------------------------------------------------------------------------------------------
Evergreen VA - Blue
Chip
(2000)
Unit Price                  $8.99           -          -          -          -           -          -           -         -           -
Number of Units           351,338           -          -          -          -           -          -           -         -           -

AST AIM
International Equity
(1)
(1989)                     $31.88       43.99      27.18      22.95      19.70       18.23      16.80      16.60      12.37       13.69
Unit Price             19,112,622  16,903,882 17,748,560 17,534,233 17,220,688  14,393,137 14,043,215  9,063,464  1,948,773   1,092,902
Number of Units
----------------------------------------------------------------------------------------------------------------------------------------
AST MFS Growth
(1999)
Unit Price                 $10.38       11.27          -          -          -           -          -          -          -           -
Number of Units         7,515,486     409,467          -          -          -           -          -          -          -           -
----------------------------------------------------------------------------------------------------------------------------------------
AST JanCap Growth
(1992)
Unit Price                 $41.14       60.44      39.54      23.83      18.79       14.85      10.91      11.59      10.51           -
Number of Units        99,250,773  94,850,623 80,631,598 62,486,302 46,779,164  28,662,737 22,354,170 13,603,637  1,476,139           -
----------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------
AST MFS Growth
with Income
(1999)
Unit Price                 $10.36       10.49          -          -          -           -          -          -          -           -
Number of Units         6,937,627     741,323          -          -          -           -          -          -          -           -
----------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------
AST Federated High
Yield
(1994)
Unit Price                 $12.80       14.38      14.30      14.13      12.62       11.27       9.56          -          -           -
Number of Units        36,914,825  41,588,401 40,170,144 29,663,242 15,460,522   6,915,158  2,106,791          -          -           -
----------------------------------------------------------------------------------------------------------------------------------------
AST Money Market
(1992)
Unit Price                 $12.94       12.38      12.00      11.57      11.16       10.77      10.35      10.12      10.01           -
Number of Units       172,493,206 187,609,708 75,855,442 66,869,998 42,435,169  30,564,442 27,491,389 11,422,783    457,872           -

INVESCO VIF -
Technology
(1999)
Unit Price                 $12.48       16.52          -          -          -           -          -          -          -           -
Number of Units        29,491,113   4,622,241          -          -          -           -          -          -          -           -
----------------------------------------------------------------------------------------------------------------------------------------
INVESCO VIF -
Dynamics
(1999)
Unit Price                 $13.23       13.91          -          -          -           -          -          -          -           -
Number of Units        11,409,827   2,022,584          -          -          -           -          -          -          -           -

----------------------------------------------------------------------------------------------------------------------------------------





                                                                       Year Ended December 31,
----------------------------------------------------------------------------------------------------------------------------------------
                         2000        1999        1998       1997       1996       1995        1994       1993       1992       1991
----------------------------------------------------------------------------------------------------------------------------------------
Davis Variable
Account
Fund, Inc. - Value
(2000)                      $9.94           -          -          -          -           -          -          -          -           -
Unit Price                195,203           -          -          -          -           -          -          -          -           -
Number of Units
----------------------------------------------------------------------------------------------------------------------------------------

1.       Effective  May 3, 1999, A I M Capital  Management,  Inc.  became  Sub-advisor  of the  Portfolio.  Between
     October 15, 1996 and May 3, 1999, Putnam Investment  Management,  Inc. served as Sub-advisor of the Portfolio,
     then named "AST Putnam  International  Equity."  Prior to October 15, 1996,  Seligman  Henderson Co. served as
     the Sub-advisor of the Portfolio, then named "Seligman Henderson International Equity Portfolio."







                                APPENDIX C - CALCULATION OF OPTIONAL DEATH BENEFITS


Examples of Enhanced Beneficiary Protection Optional Death Benefit Calculation
The following are examples of how the Enhanced  Beneficiary  Protection Optional Death Benefit is calculated.  Each
example  assumes that a $50,000  initial  Purchase  Payment is made and that no  withdrawals  are made prior to the
Owner's  death.  Each example  assumes that there is one Owner who is age 50 on the Issue Date and that all Account
Value is maintained in the variable investment options.

NOTE:  The  examples  below do not include  Credits or Target  Value  Credits  which may be  recovered  by American
Skandia under certain circumstances.

Example with market increase
Assume that the Owner's  Account  Value has been  increasing  due to positive  market  performance.  On the date we
receive  due proof of death,  the Account  Value is $75,000.  The basic  Death  Benefit is  calculated  as Purchase
Payments minus  proportional  withdrawals,  or Account  Value,  which ever is greater.  Therefore,  the basic Death
Benefit is equal to $75,000.  The Enhanced  Beneficiary  Protection  Optional  Death Benefit is equal to the amount
payable under the basic Death  Benefit  ($75,000)  PLUS 50% of the "Death  Benefit  Amount" less Purchase  Payments
reduced by proportional withdrawals.

         Purchase Payments =        $50,000
         Account Value =            $75,000
         Basic Death Benefit =      $75,000
         Death Benefit Amount =     $75,000 - $50,000 = $25,000

         Amount Payable Under Enhanced Beneficiary Protection Optional Death Benefit =  $75,000    +    $12,500   =
$87,500

Examples with market decline
Assume that the Owner's  Account Value has been  decreasing due to declines in market  performance.  On the date we
receive  due proof of death,  the Account  Value is $45,000.  The basic  Death  Benefit is  calculated  as Purchase
Payments minus  proportional  withdrawals,  or Account  Value,  which ever is greater.  Therefore,  the basic Death
Benefit is equal to $50,000.  The Enhanced  Beneficiary  Protection  Optional  Death Benefit is equal to the amount
payable under the basic Death  Benefit  ($50,000)  PLUS 50% of the "Death  Benefit  Amount" less Purchase  Payments
reduced by proportional withdrawals.

         Purchase Payments =        $50,000
         Account Value =            $40,000
         Basic Death Benefit =      $50,000
         Death Benefit Amount =     $50,000 - $50,000 = $0

         Amount Payable Under Enhanced Beneficiary Protection Optional Death Benefit =  $50,000 + $0 = $50,000

         In this  example  you would  receive no  additional  benefit  from  purchasing  the  Enhanced  Beneficiary
         Protection Optional Death Benefit.






Examples of Guaranteed Minimum Death Benefit Calculation
The following are examples of how the  Guaranteed  Minimum Death Benefit is calculated.  Each example  assumes that
a $50,000  initial  Purchase  Payment is made and that no  withdrawals  are made prior to the Owner's  death.  Each
example  assumes that there is one Owner who is age 50 on the Issue Date and that all Account  Value is  maintained
in the variable investment options.

NOTE:  The  examples  below do not include  Credits or Target  Value  Credits  which may be  recovered  by American
Skandia under certain circumstances.

Example of market increase
Assume that the Owner's  Account Value has generally been  increasing due to positive  market  performance.  On the
date we receive due proof of death,  the  Account  Value is $90,000.  The Highest  Anniversary  Value at the end of
any previous period is $72,000.  The Death Benefit would be the Account Value ($90,000)  because it is greater than
the  Highest  Anniversary  Value  ($72,000)  or the sum of  prior  Purchase  Payments  increased  by 5.0%  annually
($73,872.77).

Example of market decrease
Assume that the Owner's  Account  Value  generally  increased  until the fifth  anniversary  but generally has been
decreasing  since the fifth contract  anniversary.  On the date we receive due proof of death, the Account Value is
$48,000.  The Highest  Anniversary  Value at the end of any previous period is $54,000.  The Death Benefit would be
the sum of prior Purchase Payments increased by 5.0% annually  ($73,872.77)  because it is greater than the Highest
Anniversary Value ($54,000) or the Account Value ($48,000).

Example of market increase followed by decrease
Assume that the Owner's  Account  Value  increased  significantly  during the first six years  following  the Issue
Date. On the sixth  anniversary  date the Account Value is $90,000.  During the seventh  Annuity Year,  the Account
Value increases to as high as $100,000 but then  subsequently  falls to $80,000 on the date we receive due proof of
death.  The Death  Benefit  would be the Highest  Anniversary  Value at the end of any previous  period  ($90,000),
which occurred on the sixth  anniversary,  although the Account Value was higher during the subsequent  period. The
Account  Value on the date we receive due proof of death  ($80,000) is lower,  as is the sum of all prior  Purchase
Payments increased by 5.0% annually ($73,872.77).







                                    American Skandia Life Assurance Corporation
                                             Attention: Concierge Desk

                                               For Written Requests:

                                                   P.O. Box 883
                                            Shelton, Connecticut 06484

                                             For Electronic Requests:

                                        customerservice@americanskandia.com

                                              For Requests by Phone:

                                                  1-800-752-6342


-------------------------------------------------------------------------------------------------
                  PLEASE SEND ME A STATEMENT OF  ADDITIONAL  INFORMATION  THAT  CONTAINS  FURTHER
                  DETAILS ABOUT THE AMERICAN SKANDIA ANNUITY  DESCRIBED IN PROSPECTUS  EVAXT-PROS
                  (05/2001).
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------

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        ADDITIONAL INFORMATION: Inquiries will be answered by calling your representative or by writing to:

                                    AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                                        at

                                                   P.O. Box 883
                                            Shelton, Connecticut 06484

                                                        or

                                        customerservice@americanskandia.com



Issued by:                                                                                                     Serviced at:

AMERICAN SKANDIA LIFE                                                                                 AMERICAN SKANDIA LIFE
ASSURANCE CORPORATION                                                                                 ASSURANCE CORPORATION
One Corporate Drive                                                                                            P.O. Box 883
Shelton, Connecticut 06484                                                                       Shelton, Connecticut 06484
Telephone: 1-800-752-6342                                                                         Telephone: 1-800-752-6342
http://www.americanskandia.com                                                               http://www.americanskandia.com

                                                  Distributed by:

                                     AMERICAN SKANDIA MARKETING, INCORPORATED
                                                One Corporate Drive
                                            Shelton, Connecticut 06484
                                              Telephone: 203-926-1888
                                          http://www.americanskandia.com