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

This Prospectus  describes  American Skandia APEXSM II, 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 75. 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.

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American  Skandia  offers  several  different  annuities  which your  investment  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 because it allows you to accumulate  retirement savings and also offers payout
options  when you are ready to begin  receiving  income.  The Annuity  also  offers one or more death  benefits  that can protect  your
retirement  savings  if you die  during  a period  of  declining  markets.  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  investment  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
the U.S.  government,  the Federal Deposit Insurance  Corporation  (FDIC), the Federal Reserve Board or any other agency. An investment
in this annuity involves investment risks, including possible loss of value.

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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.
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                                             FOR FURTHER INFORMATION CALL 1-800-752-6342.
Prospectus Dated: January 17, 2002                                       Statement of Additional Information Dated: January 17, 2002
ASAPEXIIPROS- (1/2002)                                                                                                  ASAPEXIIPROS





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  periods - 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 9
       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:  American Skandia Trust,  Montgomery Variable
       Series,  Wells Fargo Variable Trust,  INVESCO Variable  Investment Funds, Inc.,  Evergreen Variable Annuity Trust,  ProFunds VP,
       First Defined Portfolio Fund LLC and The Prudential Series 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 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|      Annuity Owners can purchase an optional life insurance  rider called Plus40(TM)which provides an income  tax-free life insurance
       benefit to the Owner's beneficiary(ies) equal to 40% of the Account Value of your Annuity.

|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.  After Annuity Year 4, you
       are allowed to make unlimited withdrawals from your Annuity without any charges.

|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  investment  professionals.  You must complete an application  and submit a minimum
initial  purchase  payment of  $10,000.  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 $10,000.  If the Annuity is owned by
an  individual  or  individuals,  the oldest of those  persons  must be age 85 or under.  If the  Annuity  is owned by an  entity,  the
annuitant must be age 85 or under. The  availability of certain  optional  benefits may vary based on the age of the Owner on the Issue
Date.









                                                           TABLE OF CONTENTS

GLOSSARY OF TERMS..................................................................................................................5
SUMMARY OF CONTRACT FEES AND CHARGES...............................................................................................6
EXPENSE EXAMPLES..................................................................................................................10
INVESTMENT OPTIONS................................................................................................................27
   WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?.............................................................27
   WHAT ARE THE FIXED INVESTMENT OPTIONS?.........................................................................................39
FEES AND CHARGES..................................................................................................................39
   WHAT ARE THE CONTRACT FEES AND CHARGES?........................................................................................39
   WHAT CHARGES APPLY SOLELY TO THE SUB-ACCOUNTS?.................................................................................40
   WHAT CHARGES ARE ASSESSED BY THE PORTFOLIOS?...................................................................................40
   WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?...................................................................................41
   WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYOUT?..............................................................................41
   EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES......................................................................................41
PURCHASING YOUR ANNUITY...........................................................................................................41
   WHAT ARE OUR REQUIREMENTS FOR PURCHASING THE ANNUITY?..........................................................................41
MANAGING YOUR ANNUITY.............................................................................................................42
   MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?................................................................42
   MAY I RETURN THE ANNUITY IF I CHANGE MY MIND?..................................................................................42
   MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?.......................................................................................42
   MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?...................................................................43
   MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?...............................................................43
MANAGING YOUR ACCOUNT VALUE.......................................................................................................43
   HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?...................................................................................43
   ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?.....................................................43
   DO YOU OFFER DOLLAR COST AVERAGING?............................................................................................44
   DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?...............................................................................44
   DO YOU OFFER PROGRAMS DESIGNED TO GUARANTEE A "RETURN OF PREMIUM" AT A FUTURE DATE?............................................44
   MAY I AUTHORIZE MY INVESTMENT PROFESSIONAL TO MANAGE MY ACCOUNT?...............................................................46
   HOW DO THE FIXED INVESTMENT OPTIONS WORK?......................................................................................47
   HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?..............................................................................47
   HOW DOES THE MARKET VALUE ADJUSTMENT WORK?.....................................................................................47
   WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?.................................................................................48
ACCESS TO ACCOUNT VALUE...........................................................................................................49
   WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?...............................................................................49
   ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?..................................................................................49
   CAN I WITHDRAW A PORTION OF MY ANNUITY?........................................................................................49
   HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?..................................................................................50
   IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?....................................................................................50
   CAN I MAKE PERIODIC WITHDRAWALS FROM THE ANNUITY DURING THE ACCUMULATION PERIOD?...............................................50
   DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(T) OF THE INTERNAL REVENUE CODE?.......................................51
   WHAT ARE MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?.............................................................51
   CAN I SURRENDER MY ANNUITY FOR ITS VALUE?......................................................................................51
   WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?....................................................................51
   WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?...................................................................................52
   HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?...........................................................................53
   HOW ARE ANNUITY PAYMENTS CALCULATED?...........................................................................................53
DEATH BENEFIT.....................................................................................................................54
   WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?..................................................................................54
   OPTIONAL DEATH BENEFITS........................................................................................................55
   AMERICAN SKANDIA'S ANNUITY REWARDS.............................................................................................57
   PAYMENT OF DEATH BENEFITS......................................................................................................57
PLUS40(TM)OPTIONAL LIFE INSURANCE RIDER.............................................................................................59
VALUING YOUR INVESTMENT...........................................................................................................59
   HOW IS MY ACCOUNT VALUE DETERMINED?............................................................................................59
   WHAT IS THE SURRENDER VALUE OF MY ANNUITY?.....................................................................................59
   HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?....................................................................................59
   HOW DO YOU VALUE FIXED ALLOCATIONS?............................................................................................60
   WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?....................................................................................60
TAX CONSIDERATIONS................................................................................................................61
   WHAT ARE SOME OF THE FEDERAL TAX CONSIDERATIONS OF THIS ANNUITY?...............................................................61
   HOW ARE AMERICAN SKANDIA AND THE SEPARATE ACCOUNTS TAXED?......................................................................61
   IN GENERAL, HOW ARE ANNUITIES TAXED?...........................................................................................61
   HOW ARE DISTRIBUTIONS TAXED?...................................................................................................61
   WHAT TAX CONSIDERATIONS ARE THERE FOR TAX-QUALIFIED RETIREMENT PLANS OR QUALIFIED
      CONTRACTS?..................................................................................................................63
   HOW ARE DISTRIBUTIONS FROM QUALIFIED CONTRACTS TAXED?..........................................................................64
   GENERAL TAX CONSIDERATIONS.....................................................................................................65
GENERAL INFORMATION...............................................................................................................66
   HOW WILL I RECEIVE STATEMENTS AND REPORTS?.....................................................................................66
   WHO IS AMERICAN SKANDIA?.......................................................................................................67
   WHAT ARE SEPARATE ACCOUNTS?....................................................................................................67
   WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?...........................................................................68
   WHO DISTRIBUTES ANNUITIES OFFERED BY AMERICAN SKANDIA?.........................................................................69
   AVAILABLE INFORMATION..........................................................................................................70
   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................................................................70
   HOW TO CONTACT US..............................................................................................................70
   INDEMNIFICATION................................................................................................................71
   LEGAL PROCEEDINGS..............................................................................................................71
   EXECUTIVE OFFICERS AND DIRECTORS...............................................................................................71
   CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION............................................................................75
APPENDIX A - FINANCIAL INFORMATION ABOUT AMERICAN SKANDIA
   UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN SKANDIA LIFE
      ASSURANCE CORPORATION........................................................................................................2
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........................................11
   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................................................14
   SELECTED FINANCIAL DATA........................................................................................................15
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........................................16
   AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN SKANDIA LIFE
      ASSURANCE CORPORATION.......................................................................................................21
APPENDIX B - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B..............................................................1
APPENDIX C - CALCULATION OF OPTIONAL DEATH BENEFITS................................................................................1
APPENSIX D - PLUS40(TM)OPTIONAL LIFE INSURANCE RIDER.................................................................................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 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 a day more than 30 days prior
to 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 and the charge for any optional benefits.

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, the Tax Charge and any charge for optional benefits.  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,  other expenses and with some funds, a 12b-1 charge.  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/
- ---------------------------------------                      DESCRIPTION OF CHARGE                               WHEN DEDUCTED
              FEE/EXPENSE
- ---------------------------------------- -------------------------------------------------------------- --------------------------------
- ---------------------------------------- ------------ ------------ ------------ ------------ ---------- --------------------------------

                                            Yr. 1        Yr. 2        Yr. 3        Yr. 4      Yrs. 5+
Contingent Deferred Sales Charge                                                                               Upon Surrender or
                                                                                                              Partial Withdrawal

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

                                            8.5%         8.0%         7.0%         6.0%        0.0%
- ---------------------------------------- ------------ ------------ ------------ ------------ ---------- --------------------------------
- ---------------------------------------- -------------------------------------------------------------- --------------------------------
                                           The charge is a percentage of the Purchase Payments being
                                          withdrawn where the time period is measured from the Issue
                                                               Date of Annuity.
- ---------------------------------------- -------------------------------------------------------------- --------------------------------
- ---------------------------------------- -------------------------------------------------------------- --------------------------------
Annual Maintenance Fee                               Lesser of $35 or 2% of Account Value                 Annually on the contract's
                                            (Only applicable if Account Value is $100,000 or less)         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 CHARGES OF THE SUB-ACCOUNTS
                                 (as a percentage of the average daily net assets of the Sub-accounts)
- ---------------------------------------- -------------------------------------------------------------- --------------------------------
Mortality & Expense Risk Charge
                                                                     1.50%
Administration Charge                                                                                                Daily
                                                                     0.15%
Total Annual Charges of the                                                                             Applies to Variable Investment
Sub-accounts*                                   1.65% per year of the value of each Sub-account                  Options only

- ---------------------------------------- -------------------------------------------------------------- --------------------------------
*  The combination of the Mortality and Expense Risk Charge 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)
- ------------------------------------------------------------------------------------------------------- --------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------------

 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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                                                     OPTIONAL LIFE INSURANCE RIDER
- ----------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------- --------------------------------
Plus40(TM)OPTIONAL LIFE INSURANCE RIDER                                                                   The charge is based on age and
We offer an income  tax-free life insurance  benefit to your  Beneficiary(ies)  that may be useful in       is a percentage of your
offsetting  federal and state taxes  payable on any taxable gains in your Annuity at the time of your       Account Value as of the
death.  Please refer to the Appendix for a detailed description of this Rider.                           anniversary of the Issue Date
                                                                                                          of your Annuity. The charge
                                                                                                          ranges from .80% for Owners
                                                                                                           age 40 - 75 to 10.50% for
                                                                                                          Owners age 95. Please refer
                                                                                                        to the Appendix for a detailed
                                                                                                           breakdown of the charge.
- ------------------------------------------------------------------------------------------------------- --------------------------------







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                                           UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
                               (as a percentage of the average net assets of the underlying Portfolios)
- ----------------------------------------------------------------------------------------------------------------------------------------

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.  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.  The "Net
Annual  Portfolio  Operating  Expenses"  reflect the combination of the Portfolio's  investment  management fee, other expenses and any
12b-1 fees, net of any fee waivers and expense  reimbursements.  The expenses  shown below are deducted by the  underlying  mutual fund
before it provides  American  Skandia with the daily net asset value.  Any footnotes  about  expenses  appear after the list of all the
Portfolios.  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.

- ------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
                                                    Management     Other         12b-1 Fees    Total Annual   Fee          Net
                                                       Fees         Expenses                    Portfolio    Waivers       Annual
              UNDERLYING PORTFOLIO                                                              Operating    and           Portfolio
                                                                                                 Expenses    Expense       Operating
                                                                                                             Reimburse-mentExpenses
                                                                                                                 1
- ------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
American Skandia Trust: 2
  AST Founders Passport                               1.00%          0.38%          0.00%         1.38%          N/A         1.38%
  AST Scudder Japan 3                                 1.00%          1.78%          0.00%         2.78%         1.03%        1.75%
  AST Strong International Equity                     0.86%          0.24%          0.06%         1.16%          N/A         1.16%
  AST American Century International Growth 4         1.00%          0.24%          0.00%         1.24%          N/A         1.24%
  AST MFS Global Equity                               1.00%          1.11%          0.00%         2.11%         0.36%        1.75%
  AST PBHG Small-Cap Growth                           0.90%          0.16%          0.01%         1.07%          N/A         1.07%
  AST DeAm Small-Cap Growth                           0.95%          0.16%          0.02%         1.13%          N/A         1.13%
  AST Federated Aggressive Growth 3                   0.95%          6.27%          0.00%         7.22%         5.87%        1.35%
  AST Goldman Sachs Small Cap Value                   0.95%          0.20%          0.00%         1.15%          N/A         1.15%
  AST Gabelli Small-CapValue                          0.90%          0.21%          0.01%         1.12%          N/A         1.12%
  AST Janus Mid-Cap Growth                            1.00%          0.28%          0.00%         1.28%          N/A         1.28%
  AST Neuberger Berman Mid-Cap Growth                 0.90%          0.16%          0.03%         1.09%          N/A         1.09%
  AST Neuberger Berman Mid-Cap Value                  0.90%          0.18%          0.16%         1.24%          N/A         1.24%
  AST Alger All-Cap Growth                            0.95%          0.24%          0.05%         1.24%          N/A         1.24%
  AST Gabelli All-Cap Value 3                         0.95%          0.64%          0.00%         1.59%         0.14%        1.45%
  AST Kinetics Internet 3                             1.00%          4.34%          0.00%         5.34%         3.94%        1.40%
  AST T. Rowe Price Natural Resources                 0.90%          0.24%          0.06%         1.20%          N/A         1.20%
  AST Alliance Growth                                 0.90%          0.19%          0.07%         1.16%          N/A         1.16%
  AST MFS Growth                                      0.90%          0.30%          0.00%         1.20%          N/A         1.20%
  AST Marsico Capital Growth                          0.90%          0.14%          0.02%         1.06%         0.02%        1.04%
  AST JanCap Growth                                   0.90%          0.13%          0.01%         1.04%         0.04%        1.00%
  AST Janus Strategic Value 3                         1.00%          1.41%          0.00%         2.41%         1.06%        1.35%
  AST Alliance/Bernstein Growth + Value 5             0.90%          0.24%          0.03%         1.17%          N/A         1.17%
  AST Sanford Bernstein Core Value                    0.75%          0.24%          0.03%         1.02%          N/A         1.02%
  AST Cohen & Steers Realty                           1.00%          0.22%          0.06%         1.28%          N/A         1.28%
  AST Sanford Bernstein Managed Index 500             0.60%          0.16%          0.02%         0.78%          N/A         0.78%
  AST American Century Income & Growth                0.75%          0.19%          0.00%         0.94%          N/A         0.94%
  AST Alliance Growth and Income                      0.75%          0.15%          0.16%         1.06%         0.01%        1.05%
  AST MFS Growth with Income                          0.90%          0.33%          0.00%         1.23%          N/A         1.23%
  AST INVESCO Equity Income                           0.75%          0.17%          0.03%         0.95%         0.01%        0.94%
  AST AIM Balanced                                    0.73%          0.22%          0.00%         0.95%          N/A         0.95%
  AST American Century Strategic Balanced             0.85%          0.25%          0.00%         1.10%          N/A         1.10%
  AST T. Rowe Price Asset Allocation                  0.85%          0.23%          0.00%         1.08%          N/A         1.08%
  AST T. Rowe Price Global Bond                       0.80%          0.32%          0.00%         1.12%          N/A         1.12%
  AST Federated High Yield                            0.75%          0.21%          0.00%         0.96%          N/A         0.96%
  AST Lord Abbett Bond-Debenture 3                    0.80%          2.27%          0.00%         3.07%         1.87%        1.20%
  AST PIMCO Total Return Bond                         0.65%          0.17%          0.00%         0.82%          N/A         0.82%
  AST PIMCO Limited Maturity Bond                     0.65%          0.22%          0.00%         0.87%          N/A         0.87%
  AST Money Market                                    0.50%          0.15%          0.00%         0.65%         0.05%        0.60%

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






- ------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
                                                    Management     Other         12b-1 Fees    Total Annual   Fee          Net
                                                       Fees         Expenses                    Portfolio    Waivers       Annual
              UNDERLYING PORTFOLIO                                                              Operating    and           Portfolio
                                                                                                 Expenses    Expense       Operating
                                                                                                             Reimburse-mentExpenses

- ------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------
Montgomery Variable Series:
  Emerging Markets                                    1.25%          0.56%           0.00%        1.81%         0.25%        1.56%

Wells Fargo Variable Trust:
  Equity Income                                       0.70%          0.22%          0.25%         1.17%         0.17%        1.00%

INVESCO Variable Investment Funds, Inc.:
  Technology                                           0.72%         0.30%           0.00%         1.02%          N/A         1.02%
  Health Sciences                                      0.75%         0.32%           0.00%         1.07%          N/A         1.07%
  Financial Services                                   0.75%         0.34%           0.00%         1.09%          N/A         1.09%
  Telecommunications                                   0.75%         0.31%           0.00%         1.06%          N/A         1.06%
  Dynamics                                             0.75%         0.34%           0.00%         1.09%          N/A         1.09%

Evergreen Variable Annuity Trust:
  Global Leaders                                       0.87%         0.29%           0.00%         1.16%         0.15%        1.01%
  Omega                                                0.52%         0.16%           0.00%         0.68%          N/A         0.68%
  Special Equity                                       0.92%         0.25%           0.00%         1.17%         0.13%        1.04%

ProFund VP:
  Europe 30                                            0.75%         0.75%           0.25%         1.75%          N/A         1.75%
  UltraSmall-Cap                                       0.75%         1.34%           0.25%         2.34%         0.29%        2.05%
  UltraOTC                                             0.75%         0.75%           0.25%         1.75%          N/A         1.75%
  OTC 6                                                0.75%         0.95%           0.25%         1.95%          N/A         1.95%
  Bear 6                                               0.75%         0.95%           0.25%         1.95%          N/A         1.95%
  Bull Plus 6                                          0.75%         0.95%           0.25%         1.95%          N/A         1.95%
  Biotechnology 6                                      0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Energy 6                                             0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Financial 6                                          0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Healthcare 6                                         0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Real Estate 6                                        0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Technology 6                                         0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Telecommunications 6                                 0.75%         1.00%           0.25%         2.00%          N/A         2.00%
  Utilities 6                                          0.75%         1.00%           0.25%         2.00%          N/A         2.00%

First Defined Portfolio Fund LLC:
First Trust(R)10 Uncommon Values                       0.60%          2.47%          0.25%         3.32%         1.95%        1.37%

The Prudential Series Fund, Inc.:
SP Jennison International Growth 7                    0.85%          0.60%          0.25%         1.70%         0.06%        1.70%
- ------------------------------------------------- --------------- ------------- -------------- ------------- ------------ -------------

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 Portfolio  Operating  Expenses"  reflects the Portfolios' fees and expenses before
     such waivers and  reimbursements,  while the caption "Net Annual Portfolio 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 under the  Distribution
     Plan.  Although there are no maximum amounts  allowable,  actual commission amounts directed under the Distribution Plan will vary
     and the  amounts  directed  during the last full fiscal year of the Plan's  operations  may differ from the amounts  listed in the
     above chart.
3        These  Portfolios  commenced  operations on October 23, 2000.  "Other  Expenses" and "12b-1 Fees" shown are based on estimated
     amounts for the fiscal year ending December 31, 2001.
4        This  Portfolio's  expense  information  reflects  the addition of the net assets of the AST  American  Century  International
     Growth Portfolio II ("Portfolio II") as a result of the merger between this Portfolio and Portfolio II.
5        These  Portfolios  commenced  operations  on May 1, 2001.  "Other  Expenses"  and "12b-1  Fees"  shown are based on  estimated
     amounts for the fiscal year ending December 31, 2001.
6        These  Portfolios  commenced  operations on January 22, 2001.  "Other  Expenses" and "12b-1 Fees" shown are based on estimated
     amounts for the fiscal year ending December 31, 2001.
7        This Portfolio  commenced  operations on April 15, 2001.  "Other Expenses" are based on estimated  amounts for the fiscal year
     ending December 31, 2001 and include a 0.15%  Administration  Fee. The 0.06% fee waiver and expense  reimbursement is currently in
     effect but may be eliminated.  Therefore,  the Expense Examples reflect the Total Annual Portfolio Operating Expenses, not the Net
     Annual Portfolio Operating Expenses.

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 the Insurance Charge,  Contingent  Deferred Sales Charges
(when  applicable),  the Annual Maintenance Fee (when  applicable),  the charges deducted by the underlying mutual fund portfolios,  as
well as the charges for the optional  benefits that are offered  under the Annuity.  The  Securities  and Exchange  Commission  ("SEC")
requires these examples.

The  examples  shown  assume  that:  (a) you only  allocate  Account  Value to the  Sub-accounts,  not to a Fixed  Allocation;  (b) the
Insurance  Charge is assessed as 1.65% per year;  (c) the Annual  Maintenance  Fee (when  applicable)  is reflected  as an  asset-based
charge 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 for during the  period  shown;  (f) no tax charge
applies;  (g) the expenses  throughout the period for the underlying  mutual fund  portfolios are the "Net Annual  Portfolio  Operating
Expenses," as shown above in the section  entitled  "Underlying  Mutual Fund Portfolio Annual  Expenses";  and (h) the optional charges
are reflected as charges equal to 0.25% for the Guaranteed  Return Option,  0.25% for the Enhanced  Beneficiary  Protection,  and 0.30%
for the Guaranteed  Minimum Death Benefit.  The charges for the optional  benefits are deducted on an annual basis in arrears.  Amounts
shown in the examples are rounded to the nearest dollar.

Expense  Examples are provided for the basic Annuity contract without any optional  benefits,  for the basic Annuity contract  assuming
that you elect one of the  following:  the Guaranteed  Return Option,  the Enhanced  Beneficiary  Protection or the Guaranteed  Minimum
Death Benefit;  and for the basic Annuity contract  assuming you elect both the Guaranteed  Return Option and the Enhanced  Beneficiary
Protection, or both the Guaranteed Return Option and the Guaranteed Minimum Death Benefit.

Unlike the annual charge for either the  Guaranteed  Return Option or the Enhanced  Beneficiary  Protection,  the annual charge for the
Guaranteed  Minimum  Death  Benefit  is based on the Death  Benefit  and not the  Account  Value.  You  cannot  purchase  the  Enhanced
Beneficiary Protection with any other optional death benefit or life insurance rider.

Expense Examples are not provided for the Plus40(TM)Optional Life Insurance Rider because it is supported by American  Skandia's  general
account and is not subject to, or registered as a security  under,  either the Securities Act of 1933 or the Investment  Company Act of
1940 and because  Owners can pay the annual,  age-based  charge  through funds  outside of the Annuity.  If the Owner elects to pay the
annual charge from the Annuity,  charges are deducted as a partial  withdrawal from the Annuity,  subject to applicable  taxes.  Please
refer to the Appendix for a detailed description of this Rider.

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.






49

If your Account Value is $100,000 or higher, so that the Annual Maintenance Fee does not apply.
- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
surrender  your  Annuity  at the end of                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
the applicable period or you annuitize
- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------                                   -------- -------- ------- -------- ------- -------- -------- -------
AST Founders Passport                      31       95      161      338      34      103      174     361      34       103     174      361      34      104      177     371
AST Scudder Japan                          35      106      179      371      37      113      191     395      37       113     191      395      38      116      196     406
AST Strong International Equity            29       88      150      317      31      95       162     340      31       95      162      340      32      98       167     351
AST American Century International         30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     358
Growth
AST MFS Global Equity                      35      106      179      371      37      113      191     395      37       113     191      395      38      116      196     406
AST PBHG Small-Cap Growth                  28       85      145      307      30      93       158     331      30       93      158      331      31      95       162     343
AST DeAm Small-Cap Growth                  28       87      148      313      31      95       161     338      31       95      161      338      32      97       165     348
AST Federated Aggressive Growth            31       94      159      334      33      101      171     357      33       101     171      357      34      104      176     369
AST Goldman Sachs Small Cap Value          29       88      149      314      31      95       162     339      31       95      162      339      32      97       166     350
AST Gabelli Small-Cap Value                28       87      148      311      31      94       160     335      31       94      160      335      32      97       165     347
AST Janus Mid-Cap Growth                   30       92      156      328      33      100      169     352      33       100     169      352      33      101      172     362
AST Neuberger Berman Mid-Cap Growth        28       86      147      310      31      94       159     334      31       94      159      334      31      96       163     344
AST Neuberger Berman Mid-Cap Value         30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     358
AST Alger All-Cap Growth                   30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     358
AST Gabelli All-Cap Value                  32       97      164      343      34      104      176     366      34       104     176      366      35      107      181     378
AST Kinetics Internet                      31       95      162      339      34      103      174     362      34       103     174      362      34      105      178     373
AST T.Rowe Price Natural Resources         29       89      152      320      32      97       164     343      32       97      164      343      32      99       168     354
AST Alliance Growth                        29       88      150      317      31      95       162     340      31       95      162      340      32      98       167     351
AST MFS Growth                             29       89      152      320      32      97       164     343      32       97      164      343      32      99       168     354
AST Marsico Capital Growth                 28       85      144      304      30      92       157     329      30       92      157      329      31      94       160     339
AST JanCap Growth                          27       83      142      300      30      91       154     324      30       91      154      324      30      93       158     335
AST Janus Strategic Value                  31       94      159      334      33      101      171     357      33       101     171      357      34      104      176     369
AST Alliance/Bernstein Growth + Value      29       88      150      317      31      96       163     341      31       96      163      341      32      98       167     351
AST Sanford Bernstein Core Value           27       84      143      302      30      91       155     327      30       91      155      327      31      94       160     338
AST Cohen & Steers Realty                  30       92      156      328      33      100      169     352      33       100     169      352      33      101      172     362
AST Sanford Bernstein Managed Index 500    25       76      130      277      27      84       143     303      27       84      143      303      28      86       147     313
AST American Century Income & Growth       27       82      139      295      29      89       152     319      29       89      152      319      30      91       156     330
AST Alliance Growth and Income             28       85      145      306      30      92       157     329      30       92      157      329      31      95       162     341
AST MFS Growth with Income                 30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     357
AST INVESCO Equity Income                  27       82      139      295      29      89       152     319      29       89      152      319      30      91       156     330
AST AIM Balanced                           27       82      140      296      29      89       152     320      29       89      152      320      30      91       156     331
AST American Century Strategic Balanced    28       86      147      310      31      94       159     334      31       94      159      334      31      96       163     345
AST T. Rowe Price Asset Allocation         28       86      146      308      31      94       159     332      31       94      159      332      31      95       162     343
AST T. Rowe Price Global Bond              28       87      148      311      31      94       160     335      31       94      160      335      32      97       165     347
AST Federated High Yield                   27       82      140      297      29      89       152     320      29       89      152      320      30      92       157     332
AST Lord Abbett Bond-Debenture             29       89      152      320      32      97       164     343      32       97      164      343      32      99       168     354
AST PIMCO Total Return Bond                25       78      133      282      28      85       145     307      28       85      145      307      28      87       149     317
AST PIMCO Limited Maturity Bond            26       79      135      287      28      87       148     311      28       87      148      311      29      89       152     323
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------






- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
surrender  your  Annuity  at the end of                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
the applicable period or you annuitize
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
AST Money Market                           23       71      122      260      26      79       134     286      26       79      134      286      26      81       138     295

MV Emerging Markets                        33      100      170      354      35      107      181     376      35       107     181      376      36      110      186     388

WFVT Equity Income                         27       83      142      300      30      91       154     324      30       91      154      324      30      93       158     335

INVESCO VIF Technology                     27       84      143      302      30      91       155     327      30       91      155      327      31      94       160     338
INVESCO VIF Health Sciences                28       85      145      307      30      93       158     331      30       93      158      331      31      95       162     343
INVESCO VIF Financial Services             28       86      147      310      31      94       159     334      31       94      159      334      31      96       163     344
INVESCO VIF Telecommunications             28       85      145      307      30      92       157     330      30       92      157      330      31      95       162     341
INVESCO VIF Dynamics                       28       86      147      310      31      94       159     334      31       94      159      334      31      96       163     344

Evergreen VA Global Leaders                27       83      142      300      30      91       155     327      30       91      155      327      30      93       158     335
Evergreen VA Omega                         24       73      125      268      26      81       138     293      26       81      138      293      27      83       142     303
Evergreen VA Special Equity                28       85      144      304      30      92       157     329      30       92      157      329      31      94       160     339

ProFund VP Europe 30                       35      106      179      371      37      113      191     395      37       113     191      395      38      116      196     406
ProFund VP UltraSmall-Cap                  38      115      194      399      40      122      206     421      40       122     206      421      41      125      210     431
ProFund VP UltraOTC                        35      106      179      371      37      113      191     395      37       113     191      395      38      116      196     406
ProFund VP OTC                             37      112      189      390      39      119      201     412      39       119     201      412      40      122      206     425
ProFund VP Bear                            37      112      189      390      39      119      201     412      39       119     201      412      40      122      206     425
ProFund VP Bull Plus                       37      112      189      390      39      119      201     412      39       119     201      412      40      122      206     425
ProFund VP Biotechnology                   37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Energy                          37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Financial                       37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Healthcare                      37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Real Estate                     37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Technology                      37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Telecommunications              37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427
ProFund VP Utilities                       37      113      191      395      40      121      203     416      40       121     203      416      41      124      208     427

First Trust(R)10 Uncommon Values            31       95      161      337      33      102      173     360      33       102     173      360      34      104      177     370

SP Jennison International Growth           34      104      176      366      37      112      189     390      37       112     189      390      37      114      193     401
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------







- ---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not      If you elect EBP and GRO          If you elect GMDB and GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
- ---------------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------
AST Founders Passport                      36      110      186      385      37      112      190     395
AST Scudder Japan                          40      121      203      416      41      124      208     428
AST Strong International Equity            34      103      174      363      34      105      178     373
AST American Century International         35      106      179      371      35      108      183     381
Growth
AST MFS Global Equity                      40      121      203      416      41      124      208     428
AST PBHG Small-Cap Growth                  33      101      171      356      34      103      175     367
AST DeAm Small-Cap Growth                  34      103      174      361      34      104      177     371
AST Federated Aggressive Growth            36      109      184      380      36      111      188     391
AST Goldman Sachs Small Cap Value          34      103      174      362      34      105      178     373
AST Gabelli Small-Cap Value                33      102      173      360      34      104      177     370
AST Janus Mid-Cap Growth                   35      107      181      375      36      109      185     387
AST Neuberger Berman Mid-Cap Growth        33      101      171      357      34      103      175     367
AST Neuberger Berman Mid-Cap Value         35      106      179      371      35      108      183     381
AST Alger All-Cap Growth                   35      106      179      371      35      108      183     381
AST Gabelli All-Cap Value                  37      112      189      390      37      114      193     401
AST Kinetics Internet                      36      110      186      385      37      113      191     396
AST T.Rowe Price Natural Resources         34      104      176      366      35      107      181     378
AST Alliance Growth                        34      103      174      363      34      105      178     373
AST MFS Growth                             34      104      176      366      35      107      181     378
AST Marsico Capital Growth                 33      100      169      352      33      102      173     363
AST JanCap Growth                          32       98      167      349      33      100      171     359
AST Janus Strategic Value                  36      109      184      380      36      111      188     391
AST Alliance/Bernstein Growth + Value      34      104      176      365      35      106      180     376
AST Sanford Bernstein Core Value           32       99      168      350      33      101      172     361
AST Cohen & Steers Realty                  35      107      181      375      36      109      185     387
AST Sanford Bernstein Managed Index 500    30       92      156      328      31      94       160     338
AST American Century Income & Growth       32       97      164      343      32      99       168     354
AST Alliance Growth and Income             33      100      169      353      33      102      173     364
AST MFS Growth with Income                 35      106      179      370      35      107      182     380
AST INVESCO Equity Income                  32       97      164      343      32      99       168     354
AST AIM Balanced                           32       97      164      344      32      99       168     354
AST American Century Strategic Balanced    33      101      171      357      34      103      175     368
AST T. Rowe Price Asset Allocation         33      101      171      356      34      103      175     367
AST T. Rowe Price Global Bond              33      102      173      360      34      104      177     370
AST Federated High Yield                   32       97      165      345      32      99       168     355
AST Lord Abbett Bond-Debenture             34      104      176      366      35      107      181     378
AST PIMCO Total Return Bond                30       93      158      331      31      95       162     342
AST PIMCO Limited Maturity Bond            31       95      161      336      32      97       165     347
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------

- ---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not      If you elect EBP and GRO          If you elect GMDB and GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Money Market                           28       86      147      310      29      88       151     321

MV Emerging Markets                        38      115      194      400      39      118      199     412

WFVT Equity Income                         32       98      167      349      33      100      171     359

INVESCO VIF Technology                     32       99      168      350      33      101      172     361
INVESCO VIF Health Sciences                33      101      171      356      34      103      175     367
INVESCO VIF Financial Services             33      101      171      357      34      103      175     367
INVESCO VIF Telecommunications             33      100      170      354      33      102      173     364
INVESCO VIF Dynamics                       33      101      171      357      34      103      175     367

Evergreen VA Global Leaders                32       98      167      349      33      101      172     360
Evergreen VA Omega                         29       89      151      318      30      91       155     328
Evergreen VA Special Equity                33      100      169      352      33      102      173     363

ProFund VP Europe 30                       40      121      203      416      41      124      208     428
ProFund VP UltraSmall-Cap                  43      129      217      441      44      132      222     453
ProFund VP UltraOTC                        40      121      203      416      41      124      208     428
ProFund VP OTC                             42      127      213      433      43      129      217     445
ProFund VP Bear                            42      127      213      433      43      129      217     445
ProFund VP Bull Plus                       42      127      213      433      43      129      217     445
ProFund VP Biotechnology                   42      128      215      438      43      130      219     449
ProFund VP Energy                          42      128      215      438      43      130      219     449
ProFund VP Financial                       42      128      215      438      43      130      219     449
ProFund VP Healthcare                      42      128      215      438      43      130      219     449
ProFund VP Real Estate                     42      128      215      438      43      130      219     449
ProFund VP Technology                      42      128      215      438      43      130      219     449
ProFund VP Telecommunications              42      128      215      438      43      130      219     449
ProFund VP Utilities                       42      128      215      438      43      130      219     449

First Trust(R)10 Uncommon Values            36      110      185      382      37      112      189     394

SP Jennison International Growth           39      119      201      412      40      121      205     424
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------







- ---------------------------------------- --------------------------------- ---------------------------------- --------------------------------- ----------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected       If you elect the Guaranteed     If you elect the Enhanced Death      If you elect the Guaranteed
your   Annuity   at  the   end  of  the                                           Return Option (GRO)                  Benefit (EBP)              Minimum Death Benefit (GMDB)
applicable period
- ---------------------------------------- --------------------------------- ---------------------------------- --------------------------------- ----------------------------------
- ---------------------------------------- -------- ------- -------- ------- -------- -------- -------- ------- -------- -------- ------- ------- -------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years            Years    Year                      Years    Year             Years   Years    Year                      Years
                                         -------- ------- --------         -------- -------- -------- -------
- ----------------------------------------                           -------                                    -------- -------- ------- ------- -------- -------- -------- -------
AST Founders Passport                      116     165      161     338      119      173      174     361      119      173     174     361      119      174      177     371
AST Scudder Japan                          120     176      179     371      122      183      191     395      122      183     191     395      123      186      196     406
AST Strong International Equity            114     158      150     317      116      165      162     340      116      165     162     340      117      168      167     351
AST American Century International         115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     358
Growth
AST MFS Global Equity                      120     176      179     371      122      183      191     395      122      183     191     395      123      186      196     406
AST PBHG Small-Cap Growth                  113     155      145     307      115      163      158     331      115      163     158     331      116      165      162     343
AST DeAm Small-Cap Growth                  113     157      148     313      116      165      161     338      116      165     161     338      117      167      165     348
AST Federated Aggressive Growth            116     164      159     334      118      171      171     357      118      171     171     357      119      174      176     369
AST Goldman Sachs Small Cap Value          114     158      149     314      116      165      162     339      116      165     162     339      117      167      166     350
AST Gabelli Small-Cap Value                113     157      148     311      116      164      160     335      116      164     160     335      117      167      165     347
AST Janus Mid-Cap Growth                   115     162      156     328      118      170      169     352      118      170     169     352      118      171      172     362
AST Neuberger Berman Mid-Cap Growth        113     156      147     310      116      164      159     334      116      164     159     334      116      166      163     344
AST Neuberger Berman Mid-Cap Value         115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     358
AST Alger All-Cap Growth                   115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     358
AST Gabelli All-Cap Value                  117     167      164     343      119      174      176     366      119      174     176     366      120      177      181     378
AST Kinetics Internet                      116     165      162     339      119      173      174     362      119      173     174     362      119      175      178     373
AST T.Rowe Price Natural Resources         114     159      152     320      117      167      164     343      117      167     164     343      117      169      168     354
AST Alliance Growth                        114     158      150     317      116      165      162     340      116      165     162     340      117      168      167     351
AST MFS Growth                             114     159      152     320      117      167      164     343      117      167     164     343      117      169      168     354
AST Marsico Capital Growth                 113     155      144     304      115      162      157     329      115      162     157     329      116      164      160     339
AST JanCap Growth                          112     153      142     300      115      161      154     324      115      161     154     324      115      163      158     335
AST Janus Strategic Value                  116     164      159     334      118      171      171     357      118      171     171     357      119      174      176     369
AST Alliance/Bernstein Growth + Value      114     158      150     317      116      166      163     341      116      166     163     341      117      168      167     351
AST Sanford Bernstein Core Value           112     154      143     302      115      161      155     327      115      161     155     327      116      164      160     338
AST Cohen & Steers Realty                  115     162      156     328      118      170      169     352      118      170     169     352      118      171      172     362
AST Sanford Bernstein Managed Index 500    110     146      130     277      112      154      143     303      112      154     143     303      113      156      147     313
AST American Century Income & Growth       112     152      139     295      114      159      152     319      114      159     152     319      115      161      156     330
AST Alliance Growth and Income             113     155      145     306      115      162      157     329      115      162     157     329      116      165      162     341
AST MFS Growth with Income                 115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     357
AST INVESCO Equity Income                  112     152      139     295      114      159      152     319      114      159     152     319      115      161      156     330
AST AIM Balanced                           112     152      140     296      114      159      152     320      114      159     152     320      115      161      156     331
AST American Century Strategic Balanced    113     156      147     310      116      164      159     334      116      164     159     334      116      166      163     345
AST T. Rowe Price Asset Allocation         113     156      146     308      116      164      159     332      116      164     159     332      116      165      162     343
AST T. Rowe Price Global Bond              113     157      148     311      116      164      160     335      116      164     160     335      117      167      165     347
AST Federated High Yield                   112     152      140     297      114      159      152     320      114      159     152     320      115      162      157     332
AST Lord Abbett Bond-Debenture             114     159      152     320      117      167      164     343      117      167     164     343      117      169      168     354
AST PIMCO Total Return Bond                110     148      133     282      113      155      145     307      113      155     145     307      113      157      149     317
AST PIMCO Limited Maturity Bond            111     149      135     287      113      157      148     311      113      157     148     311      114      159      152     323
- ---------------------------------------- -------- ------- -------- ------- -------- -------- -------- ------- -------- -------- ------- ------- -------- -------- -------- -------






- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
your   Annuity   at  the   end  of  the                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
applicable period
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
AST Money Market                           108     141      122      260     111      149      134     286      111      149     134      286     111      151      138     295

MV Emerging Markets                        118     170      170      354     120      177      181     376      120      177     181      376     121      180      186     388

WFVT Equity Income                         112     153      142      300     115      161      154     324      115      161     154      324     115      163      158     335

INVESCO VIF Technology                     112     154      143      302     115      161      155     327      115      161     155      327     116      164      160     338
INVESCO VIF Health Sciences                113     155      145      307     115      163      158     331      115      163     158      331     116      165      162     343
INVESCO VIF Financial Services             113     156      147      310     116      164      159     334      116      164     159      334     116      166      163     344
INVESCO VIF Telecommunications             113     155      145      307     115      162      157     330      115      162     157      330     116      165      162     341
INVESCO VIF Dynamics                       113     156      147      310     116      164      159     334      116      164     159      334     116      166      163     344

Evergreen VA Global Leaders                112     153      142      300     115      161      155     327      115      161     155      327     115      163      158     335
Evergreen VA Omega                         109     143      125      268     111      151      138     293      111      151     138      293     112      153      142     303
Evergreen VA Special Equity                113     155      144      304     115      162      157     329      115      162     157      329     116      164      160     339

ProFund VP Europe 30                       120     176      179      371     122      183      191     395      122      183     191      395     123      186      196     406
ProFund VP UltraSmall-Cap                  123     185      194      399     125      192      206     421      125      192     206      421     126      195      210     431
ProFund VP UltraOTC                        120     176      179      371     122      183      191     395      122      183     191      395     123      186      196     406
ProFund VP OTC                             122     182      189      390     124      189      201     412      124      189     201      412     125      192      206     425
ProFund VP Bear                            122     182      189      390     124      189      201     412      124      189     201      412     125      192      206     425
ProFund VP Bull Plus                       122     182      189      390     124      189      201     412      124      189     201      412     125      192      206     425
ProFund VP Biotechnology                   122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Energy                          122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Financial                       122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Healthcare                      122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Real Estate                     122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Technology                      122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Telecommunications              122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427
ProFund VP Utilities                       122     183      191      395     125      191      203     416      125      191     203      416     126      194      208     427

First Trust(R)10 Uncommon Values            116     165      161      337     118      172      173     360      118      172     173      360     119      174      177     370

SP Jennison International Growth           119     174      176      366     122      182      189     390      122      182     189      390     122      184      193     401
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------







- ---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender      If you elect EBP and GRO          If you elect GMDB and GRO
your   Annuity   at  the   end  of  the
applicable period
- ---------------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------
AST Founders Passport                      121     180      186      385     122      182      190     395
AST Scudder Japan                          125     191      203      416     126      194      208     428
AST Strong International Equity            119     173      174      363     119      175      178     373
AST American Century International         120     176      179      371     120      178      183     381
Growth
AST MFS Global Equity                      125     191      203      416     126      194      208     428
AST PBHG Small-Cap Growth                  118     171      171      356     119      173      175     367
AST DeAm Small-Cap Growth                  119     173      174      361     119      174      177     371
AST Federated Aggressive Growth            121     179      184      380     121      181      188     391
AST Goldman Sachs Small Cap Value          119     173      174      362     119      175      178     373
AST Gabelli Small-Cap Value                118     172      173      360     119      174      177     370
AST Janus Mid-Cap Growth                   120     177      181      375     121      179      185     387
AST Neuberger Berman Mid-Cap Growth        118     171      171      357     119      173      175     367
AST Neuberger Berman Mid-Cap Value         120     176      179      371     120      178      183     381
AST Alger All-Cap Growth                   120     176      179      371     120      178      183     381
AST Gabelli All-Cap Value                  122     182      189      390     122      184      193     401
AST Kinetics Internet                      121     180      186      385     122      183      191     396
AST T.Rowe Price Natural Resources         119     174      176      366     120      177      181     378
AST Alliance Growth                        119     173      174      363     119      175      178     373
AST MFS Growth                             119     174      176      366     120      177      181     378
AST Marsico Capital Growth                 118     170      169      352     118      172      173     363
AST JanCap Growth                          117     168      167      349     118      170      171     359
AST Janus Strategic Value                  121     179      184      380     121      181      188     391
AST Alliance/Bernstein Growth + Value      119     174      176      365     120      176      180     376
AST Sanford Bernstein Core Value           117     169      168      350     118      171      172     361
AST Cohen & Steers Realty                  120     177      181      375     121      179      185     387
AST Sanford Bernstein Managed Index 500    115     162      156      328     116      164      160     338
AST American Century Income & Growth       117     167      164      343     117      169      168     354
AST Alliance Growth and Income             118     170      169      353     118      172      173     364
AST MFS Growth with Income                 120     176      179      370     120      177      182     380
AST INVESCO Equity Income                  117     167      164      343     117      169      168     354
AST AIM Balanced                           117     167      164      344     117      169      168     354
AST American Century Strategic Balanced    118     171      171      357     119      173      175     368
AST T. Rowe Price Asset Allocation         118     171      171      356     119      173      175     367
AST T. Rowe Price Global Bond              118     172      173      360     119      174      177     370
AST Federated High Yield                   117     167      165      345     117      169      168     355
AST Lord Abbett Bond-Debenture             119     174      176      366     120      177      181     378
AST PIMCO Total Return Bond                115     163      158      331     116      165      162     342
AST PIMCO Limited Maturity Bond            116     165      161      336     117      167      165     347
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------


- ---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender      If you elect EBP and GRO          If you elect GMDB and GRO
your   Annuity   at  the   end  of  the
applicable period
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Money Market                           113     156      147      310     114      158      151     321

MV Emerging Markets                        123     185      194      400     124      188      199     412

WFVT Equity Income                         117     168      167      349     118      170      171     359

INVESCO VIF Technology                     117     169      168      350     118      171      172     361
INVESCO VIF Health Sciences                118     171      171      356     119      173      175     367
INVESCO VIF Financial Services             118     171      171      357     119      173      175     367
INVESCO VIF Telecommunications             118     170      170      354     118      172      173     364
INVESCO VIF Dynamics                       118     171      171      357     119      173      175     367

Evergreen VA Global Leaders                117     168      167      349     118      171      172     360
Evergreen VA Omega                         114     159      151      318     115      161      155     328
Evergreen VA Special Equity                118     170      169      352     118      172      173     363

ProFund VP Europe 30                       125     191      203      416     126      194      208     428
ProFund VP UltraSmall-Cap                  128     199      217      441     129      202      222     453
ProFund VP UltraOTC                        125     191      203      416     126      194      208     428
ProFund VP OTC                             127     197      213      433     128      199      217     445
ProFund VP Bear                            127     197      213      433     128      199      217     445
ProFund VP Bull Plus                       127     197      213      433     128      199      217     445
ProFund VP Biotechnology                   127     198      215      438     128      200      219     449
ProFund VP Energy                          127     198      215      438     128      200      219     449
ProFund VP Financial                       127     198      215      438     128      200      219     449
ProFund VP Healthcare                      127     198      215      438     128      200      219     449
ProFund VP Real Estate                     127     198      215      438     128      200      219     449
ProFund VP Technology                      127     198      215      438     128      200      219     449
ProFund VP Telecommunications              127     198      215      438     128      200      219     449
ProFund VP Utilities                       127     198      215      438     128      200      219     449

First Trust(R)10 Uncommon Values            121     180      185      382     122      182      189     394

SP Jennison International Growth           124     189      201      412     125      191      205     424
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------







If your Account Value is less than $100,000, so that the Annual Maintenance Fee does apply.
- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
surrender  your  Annuity  at the end of                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
the applicable period or you annuitize
- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------                                   -------- -------- ------- -------- ------- -------- -------- -------
AST Founders Passport                      32       97      165      345      35      106      179     370      35       106     179      370      35      107      182     380
AST Scudder Japan                          36      109      184      380      38      116      196     402      38       116     196      402      39      118      199     413
AST Strong International Equity            30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     358
AST American Century International         31       94      159      332      33      101      171     355      33       101     171      355      34      103      175     367
Growth
AST MFS Global Equity                      36      109      184      380      38      116      196     402      38       116     196      402      39      118      199     413
AST PBHG Small-Cap Growth                  29       88      150      315      31      95       162     339      31       95      162      339      32      98       167     350
AST DeAm Small-Cap Growth                  29       90      153      321      32      97       165     345      32       97      165      345      33      100      170     357
AST Federated Aggressive Growth            32       97      164      342      34      104      176     365      34       104     176      365      35      106      180     377
AST Goldman Sachs Small Cap Value          30       91      154      323      32      98       166     347      32       98      166      347      33      100      170     357
AST Gabelli Small-Cap Value                29       89      152      320      32      97       164     343      32       97      164      343      32      99       168     354
AST Janus Mid-Cap Growth                   31       94      160      335      33      102      173     359      33       102     173      359      34      104      177     370
AST Neuberger Berman Mid-Cap Growth        29       89      151      318      32      97       164     342      32       97      164      342      32      98       167     351
AST Neuberger Berman Mid-Cap Value         31       94      159      332      33      101      171     355      33       101     171      355      34      103      175     367
AST Alger All-Cap Growth                   31       94      159      332      33      101      171     355      33       101     171      355      34      103      175     367
AST Gabelli All-Cap Value                  33      100      169      352      35      107      181     375      35       107     181      375      36      109      185     387
AST Kinetics Internet                      32       98      166      347      35      106      179     370      35       106     179      370      35      108      183     381
AST T.Rowe Price Natural Resources         30       92      156      328      33      100      169     352      33       100     169      352      33      102      173     363
AST Alliance Growth                        30       91      154      324      32      98       166     347      32       98      166      347      33      100      170     358
AST MFS Growth                             30       92      156      328      33      100      169     352      33       100     169      352      33      102      173     363
AST Marsico Capital Growth                 28       87      148      311      31      95       161     336      31       95      161      336      32      97       165     347
AST JanCap Growth                          28       86      146      308      31      94       159     333      31       94      159      333      31      96       163     344
AST Janus Strategic Value                  32       97      164      342      34      104      176     365      34       104     176      365      35      106      180     377
AST Alliance/Bernstein Growth + Value      30       91      155      325      32      98       167     348      32       98      167      348      33      101      172     360
AST Sanford Bernstein Core Value           28       86      147      310      31      94       160     335      31       94      160      335      31      96       163     345
AST Cohen & Steers Realty                  31       94      160      335      33      102      173     359      33       102     173      359      34      104      177     370
AST Sanford Bernstein Managed Index 500    26       79      135      287      28      87       148     311      28       87      148      311      29      89       152     322
AST American Century Income & Growth       27       84      143      301      30      92       156     328      30       92      156      328      31      94       160     338
AST Alliance Growth and Income             29       88      149      314      31      95       161     337      31       95      161      337      32      97       165     348
AST MFS Growth with Income                 30       93      158      331      33      100      170     354      33       100     170      354      34      103      174     365
AST INVESCO Equity Income                  27       84      143      301      30      92       156     328      30       92      156      328      31      94       160     338
AST AIM Balanced                           28       85      144      304      30      92       156     328      30       92      156      328      31      94       160     338
AST American Century Strategic Balanced    29       89      151      318      32      97       164     342      32       97      164      342      32      99       168     353
AST T. Rowe Price Asset Allocation         29       88      150      316      31      96       163     341      31       96      163      341      32      98       167     351
AST T. Rowe Price Global Bond              29       89      152      320      32      97       164     343      32       97      164      343      32      99       168     354
AST Federated High Yield                   28       85      144      304      30      92       157     329      30       92      157      329      31      94       161     339
AST Lord Abbett Bond-Debenture             30       92      156      328      33      100      169     352      33       100     169      352      33      102      173     363
AST PIMCO Total Return Bond                26       80      137      290      29      88       150     315      29       88      150      315      29      90       153     325
AST PIMCO Limited Maturity Bond            27       82      140      296      29      89       152     320      29       89      152      320      30      92       157     331
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------






- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
surrender  your  Annuity  at the end of                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
the applicable period or you annuitize
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
AST Money Market                           24       74      126      268      27      82       139     294      27       82      139      294      27      83       142     303

MV Emerging Markets                        34      103      174      362      36      110      186     385      36       110     186      385      37      113      191     396

WFVT Equity Income                         28       86      146      308      31      94       159     333      31       94      159      333      31      96       163     344

INVESCO VIF Technology                     28       86      147      310      31      94       160     335      31       94      160      335      31      96       163     345
INVESCO VIF Health Sciences                29       88      150      315      31      95       162     339      31       95      162      339      32      98       167     350
INVESCO VIF Financial Services             29       89      151      318      32      97       164     342      32       97      164      342      32      98       167     351
INVESCO VIF Telecommunications             29       88      149      314      31      95       161     338      31       95      161      338      32      97       165     348
INVESCO VIF Dynamics                       29       89      151      318      32      97       164     342      32       97      164      342      32      98       167     351

Evergreen VA Global Leaders                28       86      147      310      31      94       159     333      31       94      159      333      31      96       163     344
Evergreen VA Omega                         25       76      130      277      27      84       143     301      27       84      143      301      28      86       147     312
Evergreen VA Special Equity                28       87      148      311      31      95       161     336      31       95      161      336      32      97       165     347

ProFund VP Europe 30                       36      109      184      380      38      116      196     402      38       116     196      402      39      118      199     413
ProFund VP UltraSmall-Cap                  39      118      198      406      41      125      210     428      41       125     210      428      42      127      214     440
ProFund VP UltraOTC                        36      109      184      380      38      116      196     402      38       116     196      402      39      118      199     413
ProFund VP OTC                             38      115      194      398      40      122      205     419      40       122     205      419      41      124      209     430
ProFund VP Bear                            38      115      194      398      40      122      205     419      40       122     205      419      41      124      209     430
ProFund VP Bull Plus                       38      115      194      398      40      122      205     419      40       122     205      419      41      124      209     430
ProFund VP Biotechnology                   38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Energy                          38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Financial                       38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Healthcare                      38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Real Estate                     38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Technology                      38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Telecommunications              38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435
ProFund VP Utilities                       38      116      196      402      41      123      207     423      41       123     207      423      41      125      211     435

First Trust(R)10 Uncommon Values            32       97      165      344      34      104      176     367      34       104     176      367      35      107      181     378

SP Jennison International Growth           35      107      181      375      38      115      194     398      38       115     194      398      38      116      197     409
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------







- ---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not      If you elect EBP and GRO          If you elect GMDB and GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
- ---------------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------
AST Founders Passport                      37      112      189      390      38      115      194     403
AST Scudder Japan                          41      123      207      424      41      125      211     435
AST Strong International Equity            35      106      179      370      35      108      183     381
AST American Century International         36      109      184      380      36      110      187     389
Growth
AST MFS Global Equity                      41      123      207      424      41      125      211     435
AST PBHG Small-Cap Growth                  34      103      174      362      34      105      178     373
AST DeAm Small-Cap Growth                  35      106      179      370      35      107      182     380
AST Federated Aggressive Growth            37      112      189      390      37      113      192     399
AST Goldman Sachs Small Cap Value          35      106      179      370      35      107      182     380
AST Gabelli Small-Cap Value                34      104      176      367      35      107      181     378
AST Janus Mid-Cap Growth                   36      109      184      380      37      112      189     394
AST Neuberger Berman Mid-Cap Growth        34      104      176      365      35      106      180     377
AST Neuberger Berman Mid-Cap Value         36      109      184      380      36      110      187     389
AST Alger All-Cap Growth                   36      109      184      380      36      110      187     389
AST Gabelli All-Cap Value                  38      115      193      397      38      116      197     409
AST Kinetics Internet                      37      113      191      392      38      115      194     403
AST T.Rowe Price Natural Resources         35      107      181      375      36      109      185     387
AST Alliance Growth                        35      106      179      370      35      108      183     381
AST MFS Growth                             35      107      181      375      36      109      185     387
AST Marsico Capital Growth                 34      103      174      361      34      104      177     370
AST JanCap Growth                          33      101      171      356      34      103      175     367
AST Janus Strategic Value                  37      112      189      390      37      113      192     399
AST Alliance/Bernstein Growth + Value      35      106      179      372      36      109      184     384
AST Sanford Bernstein Core Value           33      101      171      357      34      104      177     370
AST Cohen & Steers Realty                  36      109      184      380      37      112      189     394
AST Sanford Bernstein Managed Index 500    31       94      160      335      32      97       165     347
AST American Century Income & Growth       33      100      169      351      33      101      172     361
AST Alliance Growth and Income             34      103      174      361      34      105      178     372
AST MFS Growth with Income                 36      108      182      378      36      110      186     388
AST INVESCO Equity Income                  33      100      169      351      33      101      172     361
AST AIM Balanced                           33      100      169      352      33      102      173     363
AST American Century Strategic Balanced    34      104      176      365      35      106      180     377
AST T. Rowe Price Asset Allocation         34      103      175      364      35      106      179     374
AST T. Rowe Price Global Bond              34      104      176      367      35      107      181     378
AST Federated High Yield                   33      100      169      353      33      102      173     363
AST Lord Abbett Bond-Debenture             35      107      181      375      36      109      185     387
AST PIMCO Total Return Bond                31       95      162      339      32      98       167     350
AST PIMCO Limited Maturity Bond            32       97      165      345      32      99       168     354
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------

- ---------------------------------------- ---------------------------------- ---------------------------------
These   Examples   assume  you  do  not      If you elect EBP and GRO          If you elect GMDB and GRO
surrender  your  Annuity  at the end of
the applicable period or you annuitize
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Money Market                           29       89      151      318      30      91       155     328

MV Emerging Markets                        39      118      198      407      39      120      203     419

WFVT Equity Income                         33      101      171      356      34      103      175     367

INVESCO VIF Technology                     33      101      171      357      34      104      177     370
INVESCO VIF Health Sciences                34      103      174      362      34      105      178     373
INVESCO VIF Financial Services             34      104      176      365      35      106      180     377
INVESCO VIF Telecommunications             34      103      174      362      34      105      178     373
INVESCO VIF Dynamics                       34      104      176      365      35      106      180     377

Evergreen VA Global Leaders                33      101      171      357      34      103      175     367
Evergreen VA Omega                         30       91      155      325      30      93       159     336
Evergreen VA Special Equity                34      103      174      361      34      104      177     370

ProFund VP Europe 30                       41      123      207      424      41      125      211     435
ProFund VP UltraSmall-Cap                  44      132      222      449      45      135      227     462
ProFund VP UltraOTC                        41      123      207      424      41      125      211     435
ProFund VP OTC                             43      129      217      440      43      131      221     452
ProFund VP Bear                            43      129      217      440      43      131      221     452
ProFund VP Bull Plus                       43      129      217      440      43      131      221     452
ProFund VP Biotechnology                   43      131      219      445      44      133      223     456
ProFund VP Energy                          43      131      219      445      44      133      223     456
ProFund VP Financial                       43      131      219      445      44      133      223     456
ProFund VP Healthcare                      43      131      219      445      44      133      223     456
ProFund VP Real Estate                     43      131      219      445      44      133      223     456
ProFund VP Technology                      43      131      219      445      44      133      223     456
ProFund VP Telecommunications              43      131      219      445      44      133      223     456
ProFund VP Utilities                       43      131      219      445      44      133      223     456

First Trust(R)10 Uncommon Values            37      112      189      390      38      115      194     402

SP Jennison International Growth           40      122      205      419      41      124      209     430
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------







- ---------------------------------------- --------------------------------- ---------------------------------- --------------------------------- ----------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected       If you elect the Guaranteed     If you elect the Enhanced Death      If you elect the Guaranteed
your   Annuity   at  the   end  of  the                                           Return Option (GRO)                  Benefit (EBP)              Minimum Death Benefit (GMDB)
applicable period
- ---------------------------------------- --------------------------------- ---------------------------------- --------------------------------- ----------------------------------
- ---------------------------------------- -------- ------- -------- ------- -------- -------- -------- ------- -------- -------- ------- ------- -------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years            Years    Year                      Years    Year             Years   Years    Year                      Years
                                         -------- ------- --------         -------- -------- -------- -------
- ----------------------------------------                           -------                                    -------- -------- ------- ------- -------- -------- -------- -------
AST Founders Passport                      117     167      165     345      120      176      179     370      120      176     179     370      120      177      182     380
AST Scudder Japan                          121     179      184     380      123      186      196     402      123      186     196     402      124      188      199     413
AST Strong International Equity            115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     358
AST American Century International         116     164      159     332      118      171      171     355      118      171     171     355      119      173      175     367
Growth
AST MFS Global Equity                      121     179      184     380      123      186      196     402      123      186     196     402      124      188      199     413
AST PBHG Small-Cap Growth                  114     158      150     315      116      165      162     339      116      165     162     339      117      168      167     350
AST DeAm Small-Cap Growth                  114     160      153     321      117      167      165     345      117      167     165     345      118      170      170     357
AST Federated Aggressive Growth            117     167      164     342      119      174      176     365      119      174     176     365      120      176      180     377
AST Goldman Sachs Small Cap Value          115     161      154     323      117      168      166     347      117      168     166     347      118      170      170     357
AST Gabelli Small-Cap Value                114     159      152     320      117      167      164     343      117      167     164     343      117      169      168     354
AST Janus Mid-Cap Growth                   116     164      160     335      118      172      173     359      118      172     173     359      119      174      177     370
AST Neuberger Berman Mid-Cap Growth        114     159      151     318      117      167      164     342      117      167     164     342      117      168      167     351
AST Neuberger Berman Mid-Cap Value         116     164      159     332      118      171      171     355      118      171     171     355      119      173      175     367
AST Alger All-Cap Growth                   116     164      159     332      118      171      171     355      118      171     171     355      119      173      175     367
AST Gabelli All-Cap Value                  118     170      169     352      120      177      181     375      120      177     181     375      121      179      185     387
AST Kinetics Internet                      117     168      166     347      120      176      179     370      120      176     179     370      120      178      183     381
AST T.Rowe Price Natural Resources         115     162      156     328      118      170      169     352      118      170     169     352      118      172      173     363
AST Alliance Growth                        115     161      154     324      117      168      166     347      117      168     166     347      118      170      170     358
AST MFS Growth                             115     162      156     328      118      170      169     352      118      170     169     352      118      172      173     363
AST Marsico Capital Growth                 113     157      148     311      116      165      161     336      116      165     161     336      117      167      165     347
AST JanCap Growth                          113     156      146     308      116      164      159     333      116      164     159     333      116      166      163     344
AST Janus Strategic Value                  117     167      164     342      119      174      176     365      119      174     176     365      120      176      180     377
AST Alliance/Bernstein Growth + Value      115     161      155     325      117      168      167     348      117      168     167     348      118      171      172     360
AST Sanford Bernstein Core Value           113     156      147     310      116      164      160     335      116      164     160     335      116      166      163     345
AST Cohen & Steers Realty                  116     164      160     335      118      172      173     359      118      172     173     359      119      174      177     370
AST Sanford Bernstein Managed Index 500    111     149      135     287      113      157      148     311      113      157     148     311      114      159      152     322
AST American Century Income & Growth       112     154      143     301      115      162      156     328      115      162     156     328      116      164      160     338
AST Alliance Growth and Income             114     158      149     314      116      165      161     337      116      165     161     337      117      167      165     348
AST MFS Growth with Income                 115     163      158     331      118      170      170     354      118      170     170     354      119      173      174     365
AST INVESCO Equity Income                  112     154      143     301      115      162      156     328      115      162     156     328      116      164      160     338
AST AIM Balanced                           113     155      144     304      115      162      156     328      115      162     156     328      116      164      160     338
AST American Century Strategic Balanced    114     159      151     318      117      167      164     342      117      167     164     342      117      169      168     353
AST T. Rowe Price Asset Allocation         114     158      150     316      116      166      163     341      116      166     163     341      117      168      167     351
AST T. Rowe Price Global Bond              114     159      152     320      117      167      164     343      117      167     164     343      117      169      168     354
AST Federated High Yield                   113     155      144     304      115      162      157     329      115      162     157     329      116      164      161     339
AST Lord Abbett Bond-Debenture             115     162      156     328      118      170      169     352      118      170     169     352      118      172      173     363
AST PIMCO Total Return Bond                111     150      137     290      114      158      150     315      114      158     150     315      114      160      153     325
AST PIMCO Limited Maturity Bond            112     152      140     296      114      159      152     320      114      159     152     320      115      162      157     331
- ---------------------------------------- -------- ------- -------- ------- -------- -------- -------- ------- -------- -------- ------- ------- -------- -------- -------- -------






- ---------------------------------------- ---------------------------------- --------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender    No Optional Benefits Elected       If you elect the Guaranteed      If you elect the Enhanced Death     If you elect the Guaranteed
your   Annuity   at  the   end  of  the                                           Return Option (GRO)                   Benefit (EBP)              Minimum Death Benefit (GMDB)
applicable period
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10         1     3 Years  5       10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years    Year             Years    Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------
AST Money Market                           109     144      126      268     112      152      139     294      112      152     139      294     112      153      142     303

MV Emerging Markets                        119     173      174      362     121      180      186     385      121      180     186      385     122      183      191     396

WFVT Equity Income                         113     156      146      308     116      164      159     333      116      164     159      333     116      166      163     344

INVESCO VIF Technology                     113     156      147      310     116      164      160     335      116      164     160      335     116      166      163     345
INVESCO VIF Health Sciences                114     158      150      315     116      165      162     339      116      165     162      339     117      168      167     350
INVESCO VIF Financial Services             114     159      151      318     117      167      164     342      117      167     164      342     117      168      167     351
INVESCO VIF Telecommunications             114     158      149      314     116      165      161     338      116      165     161      338     117      167      165     348
INVESCO VIF Dynamics                       114     159      151      318     117      167      164     342      117      167     164      342     117      168      167     351

Evergreen VA Global Leaders                113     156      147      310     116      164      159     333      116      164     159      333     116      166      163     344
Evergreen VA Omega                         110     146      130      277     112      154      143     301      112      154     143      301     113      156      147     312
Evergreen VA Special Equity                113     157      148      311     116      165      161     336      116      165     161      336     117      167      165     347

ProFund VP Europe 30                       121     179      184      380     123      186      196     402      123      186     196      402     124      188      199     413
ProFund VP UltraSmall-Cap                  124     188      198      406     126      195      210     428      126      195     210      428     127      197      214     440
ProFund VP UltraOTC                        121     179      184      380     123      186      196     402      123      186     196      402     124      188      199     413
ProFund VP OTC                             123     185      194      398     125      192      205     419      125      192     205      419     126      194      209     430
ProFund VP Bear                            123     185      194      398     125      192      205     419      125      192     205      419     126      194      209     430
ProFund VP Bull Plus                       123     185      194      398     125      192      205     419      125      192     205      419     126      194      209     430
ProFund VP Biotechnology                   123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Energy                          123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Financial                       123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Healthcare                      123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Real Estate                     123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Technology                      123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Telecommunications              123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435
ProFund VP Utilities                       123     186      196      402     126      193      207     423      126      193     207      423     126      195      211     435

First Trust(R)10 Uncommon Values            117     167      165      344     119      174      176     367      119      174     176      367     120      177      181     378

SP Jennison International Growth           120     177      181      375     123      185      194     398      123      185     194      398     123      186      197     409
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- ------- -------- -------- ------- -------- ------- -------- -------- -------







- ---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender      If you elect EBP and GRO          If you elect GMDB and GRO
your   Annuity   at  the   end  of  the
applicable period
- ---------------------------------------- ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
                                         -------- ------- --------          ------- -------- -------- -------
- ----------------------------------------                           --------
AST Founders Passport                      122     182      189      390     123      185      194     403
AST Scudder Japan                          126     193      207      424     126      195      211     435
AST Strong International Equity            120     176      179      370     120      178      183     381
AST American Century International         121     179      184      380     121      180      187     389
Growth
AST MFS Global Equity                      126     193      207      424     126      195      211     435
AST PBHG Small-Cap Growth                  119     173      174      362     119      175      178     373
AST DeAm Small-Cap Growth                  120     176      179      370     120      177      182     380
AST Federated Aggressive Growth            122     182      189      390     122      183      192     399
AST Goldman Sachs Small Cap Value          120     176      179      370     120      177      182     380
AST Gabelli Small-Cap Value                119     174      176      367     120      177      181     378
AST Janus Mid-Cap Growth                   121     179      184      380     122      182      189     394
AST Neuberger Berman Mid-Cap Growth        119     174      176      365     120      176      180     377
AST Neuberger Berman Mid-Cap Value         121     179      184      380     121      180      187     389
AST Alger All-Cap Growth                   121     179      184      380     121      180      187     389
AST Gabelli All-Cap Value                  123     185      193      397     123      186      197     409
AST Kinetics Internet                      122     183      191      392     123      185      194     403
AST T.Rowe Price Natural Resources         120     177      181      375     121      179      185     387
AST Alliance Growth                        120     176      179      370     120      178      183     381
AST MFS Growth                             120     177      181      375     121      179      185     387
AST Marsico Capital Growth                 119     173      174      361     119      174      177     370
AST JanCap Growth                          118     171      171      356     119      173      175     367
AST Janus Strategic Value                  122     182      189      390     122      183      192     399
AST Alliance/Bernstein Growth + Value      120     176      179      372     121      179      184     384
AST Sanford Bernstein Core Value           118     171      171      357     119      174      177     370
AST Cohen & Steers Realty                  121     179      184      380     122      182      189     394
AST Sanford Bernstein Managed Index 500    116     164      160      335     117      167      165     347
AST American Century Income & Growth       118     170      169      351     118      171      172     361
AST Alliance Growth and Income             119     173      174      361     119      175      178     372
AST MFS Growth with Income                 121     178      182      378     121      180      186     388
AST INVESCO Equity Income                  118     170      169      351     118      171      172     361
AST AIM Balanced                           118     170      169      352     118      172      173     363
AST American Century Strategic Balanced    119     174      176      365     120      176      180     377
AST T. Rowe Price Asset Allocation         119     173      175      364     120      176      179     374
AST T. Rowe Price Global Bond              119     174      176      367     120      177      181     378
AST Federated High Yield                   118     170      169      353     118      172      173     363
AST Lord Abbett Bond-Debenture             120     177      181      375     121      179      185     387
AST PIMCO Total Return Bond                116     165      162      339     117      168      167     350
AST PIMCO Limited Maturity Bond            117     167      165      345     117      169      168     354
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------


- ---------------------------------------- ---------------------------------- ---------------------------------
These  Examples  assume  you  surrender      If you elect EBP and GRO          If you elect GMDB and GRO
your   Annuity   at  the   end  of  the
applicable period
                                         ---------------------------------- ---------------------------------
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
Sub-Account:                                1     3       5 Years  10         1     3 Years  5 Years  10
                                          Year    Years             Years    Year                     Years
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------
AST Money Market                           114     159      151      318     115      161      155     328

MV Emerging Markets                        124     188      198      407     124      190      203     419

WFVT Equity Income                         118     171      171      356     119      173      175     367

INVESCO VIF Technology                     118     171      171      357     119      174      177     370
INVESCO VIF Health Sciences                119     173      174      362     119      175      178     373
INVESCO VIF Financial Services             119     174      176      365     120      176      180     377
INVESCO VIF Telecommunications             119     173      174      362     119      175      178     373
INVESCO VIF Dynamics                       119     174      176      365     120      176      180     377

Evergreen VA Global Leaders                118     171      171      357     119      173      175     367
Evergreen VA Omega                         115     161      155      325     115      163      159     336
Evergreen VA Special Equity                119     173      174      361     119      174      177     370

ProFund VP Europe 30                       126     193      207      424     126      195      211     435
ProFund VP UltraSmall-Cap                  129     202      222      449     130      205      227     462
ProFund VP UltraOTC                        126     193      207      424     126      195      211     435
ProFund VP OTC                             128     199      217      440     128      201      221     452
ProFund VP Bear                            128     199      217      440     128      201      221     452
ProFund VP Bull Plus                       128     199      217      440     128      201      221     452
ProFund VP Biotechnology                   128     201      219      445     129      203      223     456
ProFund VP Energy                          128     201      219      445     129      203      223     456
ProFund VP Financial                       128     201      219      445     129      203      223     456
ProFund VP Healthcare                      128     201      219      445     129      203      223     456
ProFund VP Real Estate                     128     201      219      445     129      203      223     456
ProFund VP Technology                      128     201      219      445     129      203      223     456
ProFund VP Telecommunications              128     201      219      445     129      203      223     456
ProFund VP Utilities                       128     201      219      445     129      203      223     456

First Trust(R)10 Uncommon Values            122     182      189      390     123      185      194     402

SP Jennison International Growth           125     192      205      419     126      194      209     430
- ---------------------------------------- -------- ------- -------- -------- ------- -------- -------- -------






INVESTMENT OPTIONS

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?

Each variable investment option is a Class 9 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.

The Portfolios are not publicly traded mutual funds.  They are only available as investment  options in variable annuity  contracts and
variable life insurance  policies issued by insurance  companies,  or in some cases, to  participants in certain  qualified  retirement
plans.  However,  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 of the same or similar  name that the  Portfolio  may have been modeled  after at its  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.  Contract Owners should not compare the performance
of a publicly  traded mutual fund with the performance of any similarly  named  Portfolio  offered as a Sub-account.  Details about the
investment  objectives,  policies,  risks,  costs and  management of the Portfolios  are found in the  prospectuses  for the underlying
mutual  funds.  The current  prospectus  and statement of  additional  information  for the  underlying  Portfolios  can be obtained by
calling 1-800-752-6342.

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      Wells Capital
                    maturity  of not  more  than 90 days  and by  investing  in  securities  which  have  effective     Management, Inc.
                    maturities of not more than 397 days.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Lord Abbett  Bond-Debenture:  seeks high  current  income and the  opportunity  for capital
                    appreciation  to produce a high total return.  The Portfolio  pursues its objective by normally
                    investing in high yield and  investment  grade debt  securities,  securities  convertible  into
                    common stock and preferred stocks. Under normal  circumstances,  the Portfolio invests at least
                    65% of its total assets in fixed income  securities  of various  types.  The Portfolio may find
                    good value in high yield securities,  sometimes called "lower-rated bonds" or "junk bonds," and
                    frequently  may have more than half of its assets  invested in those  securities.  At least 20%    Lord, Abbett & Co.
                    of the  Portfolio's  assets  must be  invested  in any  combination  of  investment  grade debt
                    securities,  U.S.  Government  securities  and cash  equivalents.  The  Portfolio may also make
                    significant  investments  in  mortgage-backed  securities.  Although the  Portfolio  expects to
                    maintain  a  weighted  average  maturity  in the  range of seven to nine  years,  there  are no
                    restrictions on the overall Portfolio or on individual securities.
       BOND
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST PIMCO Limited  Maturity Bond: seeks to maximize total return  consistent with  preservation
                    of capital  and prudent  investment  management.  The  Portfolio  will invest in a  diversified    Pacific Investment
                    portfolio of fixed-income  securities of varying maturities.  The average portfolio duration of    Management Company
                    the  Portfolio  generally  will  vary  within  a one- to  three-year  time  frame  based on the
                    Sub-advisor's forecast for interest rates.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST PIMCO Total Return Bond:  seeks to maximize total return  consistent  with  preservation of
                    capital  and  prudent  investment  management.  The  Portfolio  will  invest  in a  diversified    Pacific Investment
                    portfolio of fixed-income  securities of varying maturities.  The average portfolio duration of    Management Company
                    the  Portfolio  generally  will  vary  within a three-  to  six-year  time  frame  based on the
                    Sub-advisor's forecast for interest rates.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    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
                    lower-rated  corporate fixed income  securities  ("junk bonds").  These fixed income securities
 HIGH YIELD BOND    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.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST T. Rowe Price Global Bond (f/k/a AST T. Rowe Price  International  Bond):  seeks to provide
                    high  current  income  and  capital  growth  by  investing  in  high-quality  foreign  and U.S.
                    dollar-denominated  bonds.  The  Portfolio  will invest in all types of bonds  including  those
                    issued  or  guaranteed  by U.S.  or  foreign  governments  or  their  agencies  and by  foreign
                    authorities,  provinces  and  municipalities  as  well as  investment  grade  corporate  bonds,
   GLOBAL BOND      mortgage and  asset-backed  securities and high-yield  bonds of U.S. and foreign  issuers.  The
                    Sub-advisor bases its investment decisions on fundamental market factors,  currency trends, and      T. Rowe Price
                    credit  quality.  The  Portfolio  generally  invests  in  countries  where the  combination  of   International, Inc.
                    fixed-income returns and currency exchange rates appears attractive,  or, if the currency trend
                    is unfavorable,  where the Sub-advisor believes that the currency risk can be minimized through
                    hedging.  The  Portfolio  may also  invest up to 20% of its  assets in the  aggregate  in below
                    investment-grade,  high-risk bonds ("junk bonds"). In addition,  the Portfolio may invest up to
                    30% of its assets in mortgage-backed  (including  derivatives,  such as collateralized mortgage
                    obligations and stripped mortgage securities) and asset-backed securities.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST T. Rowe Price Asset Allocation:  seeks a high level of total return by investing  primarily
                    in a  diversified  portfolio  of fixed income and equity  securities.  The  Portfolio  normally
ASSET ALLOCA-TION   invests  approximately  60% of its total  assets in equity  securities  and 40% in fixed income
                    securities.  The Sub-advisor  concentrates common stock investments in larger, more established      T. Rowe Price
                    companies,  but the  Portfolio may include small and  medium-sized  companies  with good growth     Associates, Inc.
                    prospects.  The fixed income portion of the Portfolio will be allocated among  investment grade
                    securities, high yield or "junk" bonds, foreign high quality debt securities and cash reserves.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- -------------------
                    AST AIM Balanced:  seeks to provide a well-diversified  portfolio of stocks and bonds that will
                    produce both capital growth and current  income.  The Portfolio  attempts to meet its objective
                    by  investing,  normally,  a minimum of 30% and a maximum of 70% of its total  assets in equity      A I M Capital
                    securities  and a minimum  of 30% and a maximum of 70% of its total  assets in  non-convertible     Management, Inc.
                    debt  securities.  The  Sub-advisor  will primarily  purchase  equity  securities for growth of
                    capital and debt securities for income purposes.
     BALANCED

- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST  American  Century  Strategic  Balanced:  seeks  capital  growth and  current  income.  The
                    Sub-advisor  intends  to  maintain  approximately  60%  of the  Portfolio's  assets  in  equity
                    securities and the remainder in bonds and other fixed income  securities.  Both the Portfolio's     American Century
                    equity and fixed  income  investments  will  fluctuate  in value.  The equity  securities  will        Investment
                    fluctuate  depending on the  performance of the companies that issued them,  general market and     Management, Inc.
                    economic  conditions,  and investor  confidence.  The fixed income investments will be affected
                    primarily by rising or falling interest rates and the credit quality of the issuers.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- -------------------
                    AST INVESCO  Equity  Income:  seeks capital  growth and current  income while  following  sound
                    investment  practices.  The Portfolio seeks to achieve its objective by investing in securities
                    that are expected to produce  relatively high levels of income and consistent,  stable returns.   INVESCO Funds Group,
                    The  Portfolio  normally will invest at least 65% of its assets in  dividend-paying  common and           Inc.
                    preferred  stocks of domestic and foreign issuers.  Up to 30% of the Portfolio's  assets may be
  EQUITY INCOME     invested in equity securities that do not pay regular dividends.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    WFVT Equity Income:  seeks long-term capital  appreciation and  above-average  dividend income.
                    The  Portfolio  pursues its  objective  primarily by  investing in the common  stocks of large,
                    high-quality  domestic  companies with  above-average  return potential based on current market
                    valuations and above-average  dividend income.  Under normal market  conditions,  the Portfolio    Wells Fargo Funds
                    invests at least 65% of its total assets in income  producing  equity  securities and in issues     Management, LLC
                    of companies with market capitalizations greater than the median of the Russell 1000 Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST  Alliance  Growth and Income  (f/k/a AST Lord Abbett  Growth and Income):  seeks  long-term
                    growth of capital and income while attempting to avoid excessive  fluctuations in market value.
                    The Portfolio  normally will invest in common stocks (and  securities  convertible  into common
                    stocks). The Sub-advisor will take a value-oriented  approach,  in that it will try to keep the     Alliance Capital
                    Portfolio's  assets  invested  in  securities  that are  selling at  reasonable  valuations  in     Management, L.P.
                    relation to their fundamental  business prospects.  The stocks that the Portfolio will normally
      GROWTH        invest in are those of seasoned  companies that are expected to show  above-average  growth and
        &           that the Sub-advisor believes are in sound financial condition.
      INCOME

- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST American  Century Income & Growth:  seeks capital growth with current income as a secondary
                    objective.  The Portfolio  invests  primarily in common stocks that offer potential for capital
                    growth,  and may,  consistent  with its  investment  objective,  invest  in stocks  that  offer     American Century
                    potential for current income.  The  Sub-advisor  utilizes a quantitative  management  technique        Investment
                    with a goal of building an equity  portfolio  that  provides  better  returns  than the S&P 500     Management, Inc.
                    Index without taking on significant  additional risk and while  attempting to create a dividend
                    yield that will be greater than the S&P 500 Index.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS Growth with  Income:  seeks long term growth of capital  with a secondary  objective to
                    seek  reasonable  current  income.  Under normal market  conditions,  the Portfolio  invests at
                    least 65% of its total  assets in common  stocks  and  related  securities,  such as  preferred
      GROWTH        stocks,  convertible  securities  and  depositary  receipts.  The stocks in which the Portfolio      Massachusetts
        &           invests  generally  will pay  dividends.  While the  Portfolio  may invest in  companies of any    Financial Services
      INCOME        size, the Portfolio generally focuses on companies with larger market  capitalizations that the         Company
     (Cont.)        Sub-advisor  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.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Cohen & Steers Realty:  seeks to maximize  total return  through  investment in real estate
                    securities.  The Portfolio  pursues its  investment  objective by seeking,  with  approximately
   REAL ESTATE      equal emphasis,  capital growth and current income. Under normal  circumstances,  the Portfolio
      (REIT)        will invest  substantially all of its assets in the equity securities of real estate companies,      Cohen & Steers
                    i.e., a company that derives at least 50% of its  revenues  from the  ownership,  construction,   Capital Management,
                    financing,  management  or sale of real  estate or that has at least 50% of its  assets in real           Inc.
                    estate. Real estate companies may include real estate investment trusts or REITs.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- -------------------
                    AST  Sanford  Bernstein  Managed  Index  500:  seeks to  outperform  the  Standard & Poor's 500
                    Composite  Stock Price Index (the "S&P 500(R)")  through stock  selection  resulting in different
                    weightings of common stocks relative to the index.  The Portfolio will invest  primarily in the
                    common  stocks of companies  included in the S&P 500(R).  In seeking to  outperform  the S&P 500,
                    the  Sub-advisor  starts  with a  portfolio  of stocks  representative  of the  holdings of the
  MANAGED INDEX     index.  It then uses a set of fundamental  quantitative  criteria that are designed to indicate   Sanford C. Bernstein
                    whether a particular  stock will  predictably  perform  better or worse than the S&P 500. Based        & Co., LLC
                    on these  criteria,  the  Sub-advisor  determines  whether the  Portfolio  should  over-weight,
                    under-weight or hold a neutral  position in the stock relative to the proportion of the S&P 500
                    that the stock  represents.  In addition,  the Sub-advisor also may determine that based on the
                    quantitative  criteria,  certain equity  securities that are not included in the S&P 500 should
                    be held by the Portfolio.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- -------------------
                    AST Alliance/Bernstein  Growth + Value: seeks capital growth by investing  approximately 50% of
                    its assets in growth  stocks of large  companies and  approximately  50% of its assets in value
                    stocks of large  companies.  The Portfolio will invest primarily in commons tocks of large U.S.
                    companies  included in the  Russell  1000 Index (the  "Russell  1000").  The Russell  1000 is a
                    market  capitalization-weighted  index that measures the  performance of the 1,000 largest U.S.     Alliance Capital
                    companies.  Normally,  about 60-85  companies will be represented in the Portfolio,  with 25-35     Management, L.P.
                    companies  primarily from the Russell 1000 Growth Index  constituting  approximately 50% of the
                    Portfolio's  net  assets and 35-50  companies  primarily  from the  Russell  1000  Value  Index
    LARGE CAP       constituting  the  remainder  of  the  Portfolio's  net  assets.   There  will  be  a  periodic
      EQUITY        rebalancing  of each  segment's  assets  to take  account  of market  fluctuations  in order to
                    maintain the approximately equal allocation.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Alliance  Growth:  seeks long-term  capital growth.  The Portfolio  invests at least 80% of
                    its total assets in the equity  securities of a limited  number of large,  carefully  selected,
                    high-quality  U.S.  companies  that are judged  likely to  achieve  superior  earnings  growth.     Alliance Capital
                    Normally,  about 40-60  companies will be  represented in the Portfolio,  with the 25 companies     Management, L.P.
                    most  highly  regarded  by  the  Sub-advisor  usually  constituting  approximately  70%  of the
                    Portfolio's  net assets.  An emphasis is placed on identifying  companies  whose  substantially
                    above average prospective earnings growth is not fully reflected in current market valuations.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    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
     (Cont.)
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Janus  Strategic  Value:  seeks  long-term  growth of capital.  The  Portfolio  pursues its
                    objective by investing  primarily in common stocks with the  potential for long-term  growth of
                    capital using a "value" approach.  This value approach emphasizes  investments in companies the
                    Sub-advisor believes are undervalued  relative to their intrinsic worth.  Realization of income      Janus Capital
                    is not a significant  consideration when choosing investments for the Portfolio.  The Portfolio       Corporation
                    will  generally  focus on the  securities of larger  companies,  however,  it may invest in the
                    securities of smaller  companies,  including  start-up  companies offering emerging products or
                    services.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Marsico  Capital  Growth:  seeks capital  growth.  Income  realization is not an investment
                    objective  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 larger,  more  established  companies.  In selecting  investments
                    for the Portfolio,  the Sub-advisor uses an approach that combines "top down" economic analysis     Marsico Capital
                    with "bottom up" stock selection.  The "top down" approach identifies  sectors,  industries and     Management, LLC
                    companies that should benefit from the trends the  Sub-advisor  has observed.  The  Sub-advisor
                    then looks for individual  companies with earnings growth  potential that may not be recognized
                    by the market at large. This is called "bottom up" stock selection.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    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.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Sanford  Bernstein Core Value:  seeks  long-term  capital growth by investing  primarily in
                    common stocks.  The  Sub-advisor  expects that the majority of the  Portfolio's  assets will be
                    invested in the common stocks of large  companies  that appear to be  undervalued.  Among other
                    things, the Portfolio seeks to identify compelling buying opportunities  created when companies   Sanford C. Bernstein
                    are undervalued on the basis of investor  reactions to near-term problems or circumstances even        & Co., LLC
                    though their long-term  prospects  remain sound. The Sub-advisor  seeks to identify  individual
                    companies with earnings growth potential that may not be recognized by the market at large.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Alger All-Cap Growth:  seeks long-term  capital growth.  The Portfolio invests primarily in
                    equity securities,  such as common or preferred stocks, that are listed on U.S. exchanges or in
      ALL-CAP       the  over-the-counter  market.  The Portfolio may invest in the equity  securities of companies        Fred Alger
      EQUITY        of all sizes,  and may emphasize  either  larger or smaller  companies at a given time based on     Management, Inc.
                    the Sub-advisor's assessment of particular companies and market conditions.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Gabelli  All-Cap  Value:  seeks  capital  growth.  The  Portfolio  pursues its objective by
                    investing primarily in readily marketable equity securities including common stocks,  preferred
      ALL-CAP       stocks and  securities  that may be converted at a later time into common stock.  The Portfolio
      EQUITY        may invest in the  securities  of companies of all sizes,  and may  emphasize  either larger or  GAMCO Investors, Inc.
      (Cont.)       smaller  companies  at a  given  time  based  on the  Sub-advisor's  assessment  of  particular
                    companies and market  conditions.  The Portfolio  focuses on companies that appear  underpriced
                    relative  to their  private  market  value  ("PMV").  PMV is the  value  that  the  Portfolio's
                    Sub-advisor believes informed investors would be willing to pay for a company.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Janus Mid-Cap Growth:  seeks long-term  capital growth.  The Portfolio invests primarily in
                    common stocks,  selected for their growth  potential,  and normally invests at least 65% of its
                    equity  assets  in  medium-sized  companies.  For  purposes  of  the  Portfolio,   medium-sized
                    companies  are those whose market  capitalizations  (measured at the time of  investment)  fall      Janus Capital
                    within the range of  companies  in the  Standard & Poor's  MidCap  400 Index.  The  Sub-advisor       Corporation
                    seeks  to  identify  individual  companies  with  earnings  growth  potential  that  may not be
                    recognized by the market at large.











  MID-CAP EQUITY
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Neuberger Berman Mid-Cap Growth:  seeks capital growth. The Portfolio  primarily invests in
                    the common stocks of mid-cap  companies,  i.e.,  companies  with equity market  capitalizations     Neuberger Berman
                    from $300 million to $10 billion at the time of investment.  The Portfolio is normally  managed        Management
                    using a growth-oriented  investment approach.  The Sub-advisor looks for fast-growing companies       Incorporated
                    that are in new or rapidly evolving industries.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Neuberger Berman Mid-Cap Value:  seeks capital growth.  The Portfolio  primarily invests in
                    the  common  stocks of  mid-cap  companies.  Under the  Portfolio's  value-oriented  investment
                    approach,  the Sub-advisor looks for well-managed  companies whose stock prices are undervalued     Neuberger Berman
                    and that may rise in price  before  other  investors  realize  their  worth.  Factors  that the        Management
                    Sub-advisor may use to identify these companies  include strong  fundamentals,  including a low       Incorporated
                    price-to-earnings  ratio,  consistent cash flow, and a sound track record through all phases of
                    the market cycle.
                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    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.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- --------------------------------------------------------------------------------------------------------------------------------------------
Although investments in securities of smaller companies are generally  considered to offer greater opportunity for appreciation,  they also
involve  greater risk of  depreciation  than  securities of larger  companies.  Smaller  companies may lack depth of management,  financial
resources,  or they may be  developing  or  marketing  products or services  for which there is not an  established  market.  Additionally,
smaller  companies  normally have fewer shares  outstanding and trade less frequently than large  companies.  Therefore,  the securities of
smaller companies may be subject to wider price fluctuations.
- --------------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST DeAm  Small-Cap  Growth (f/k/a AST Scudder  Small-Cap  Growth;  f/k/a AST Kemper  Small-Cap
                    Growth):  seeks  maximum  growth of  investors'  capital from a portfolio  of growth  stocks of
                    smaller  companies.  At least 80% of the Portfolio's  total assets normally will be invested in
                    the equity securities of smaller  companies,  i.e., those having a market  capitalization of $2      Deutsche Asset
                    billion or less at the time of investment,  many of which would be in the early stages of their     Management, Inc.
                    life cycle.  The Portfolio  intends to invest  primarily in stocks of companies  whose earnings
                    per share are expected by the Sub-advisor to grow faster than the market average.













    SMALL CAP
      EQUITY

                    ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Federated  Aggressive  Growth:  seeks capital growth.  The Portfolio pursues its investment
                    objective by investing  in equity  securities  of companies  offering  superior  prospects  for
                    earnings  growth.  The Portfolio  focuses its  investments on the equity  securities of smaller
                    companies,  but it is not  subject to any  specific  market  capitalization  requirements.  The   Federated Investment
                    Portfolio may invest in foreign issuers through American Depositary  Receipts.  The Portfolio's        Counseling
                    strategies with respect to security analysis,  market  capitalization and sector allocation are
                    designed to produce a portfolio of stocks whose long-term  growth  prospects are  significantly
                    above those of the S&P 500 Index.
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Gabelli  Small-Cap  Value (f/k/a AST T. Rowe Price Small Company  Value):  seeks to provide
                    long-term capital growth by investing primarily in  small-capitalization  stocks that appear to
                    be  undervalued.  The Portfolio will normally invest at least 65% of its total assets in stocks
                    and   equity-related   securities   of  small   companies   ($1   billion  or  less  in  market          GAMCO
                    capitalization).  Reflecting a value approach to investing,  the Portfolio will seek the stocks     Investors, Inc.
                    of companies  whose current stock prices do not appear to adequately  reflect their  underlying
                    value as measured by assets, earnings, cash flow or business franchises.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Goldman  Sachs  Small-Cap  Value (f/k/a AST Lord Abbett Small Cap Value):  seeks  long-term
                    capital  appreciation.  The Portfolio will seek its objective through investments  primarily in
                    equity  securities  that are  believed to be  undervalued  in the  marketplace.  The  Portfolio
                    primarily  seeks  companies  that  are  small-sized,  based on the  value of their  outstanding   Goldman Sachs Asset
                    stock. Specifically,  under normal circumstances,  at least 65% of the Portfolio's total assets        Management
                    will be invested in common stocks issued by smaller,  less  well-known  companies  (with market
                    capitalizations of less than $4 billion at the time of investment).
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST PBHG  Small-Cap  Growth  (f/k/a AST Janus  Small-Cap  Growth):  seeks capital  growth.  The
                    Portfolio  pursues its objective by normally  investing at least 80% of its total assets in the     Pilgrim Baxter &
                    common stocks of small-sized  companies,  i.e., whose market capitalizations or annual revenues     Associates, Ltd.
                    are less than $1 billion at the time of purchase.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    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)
                    Portfolio may purchase stocks in initial public offerings (IPOs).
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST MFS Global Equity:  seeks capital  growth.  Under normal market  conditions,  the Portfolio
                    invests at least 65% of its total  assets in common  stocks  and  related  securities,  such as
                    preferred stock,  convertible  securities and depositary receipts,  of U.S. and foreign issuers      Massachusetts
                    (including  issuers  in  developing  countries).  The  Portfolio  generally  seeks to  purchase    Financial Services
                    securities of companies with relatively large market capitalizations  relative to the market in         Company
                    which they are traded.

  GLOBAL EQUITY
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    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,
                    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.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
Investments in securities of foreign issuers may involve risks that are not present with domestic  investments.  Some of these risks may be
fluctuations in currency exchange rates, less liquid and more volatile  securities  markets,  unstable  political and economic  structures,
reduced  availability of public information and lack of uniform financial  reporting and regulatory  practices compared to those that apply
to U.S. issuers.
- --------------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST American Century  International  Growth:  seeks capital growth.  The Portfolio will seek to
                    achieve its  investment  objective  by  investing  primarily  in equity  securities  of foreign
                    companies  that the  Sub-advisor  believes  will  increase  in value  over time.  Under  normal
                    conditions,  the  Portfolio  will  invest at least 65% of its  assets in equity  securities  of     American Century
                    issuers from at least three  countries  outside of the United States.  The  Sub-advisor  uses a        Investment
                    growth  investment  strategy it developed  that looks for  companies  with earnings and revenue     Management, Inc.
                    growth.  The  Sub-advisor  will  consider  a  number  of other  factors  in  making  investment
                    selections,  including the prospects for relative  economic  growth among countries or regions,
                    economic and political  conditions,  expected inflation rates,  currency exchange  fluctuations
                    and tax considerations.




      INTER-
     NATIONAL
      EQUITY
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------





                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Founders  Passport:  seeks capital  growth.  The Portfolio  normally  invests  primarily in
                    equity  securities  issued by foreign  companies  that have  market  capitalizations  or annual
                    revenues  of  $1.5  billion  or  less.  These  securities  may  represent   companies  in  both
                    established  and  emerging  economies  throughout  the world.  At least 65% of the  Portfolio's      Founders Asset
                    total assets  normally will be invested in foreign  securities  representing a minimum of three      Management LLC
                    countries.  Foreign  securities  are  generally  considered  to involve more risk than those of
                    U.S.  companies,  and  securities of smaller  companies are generally  considered to be riskier
                    than those of larger companies.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Scudder  Japan:  seeks  long-term  capital  growth.  The Portfolio  pursues its  investment
                    objective  by  investing  at least 80% of net assets in Japanese  securities  (those  issued by
                    Japan-based  companies  or their  affiliates,  or by any company that derives more than half of      Scudder Kemper
                    its revenues from Japan).  The Portfolio may invest in stocks of any size,  including up to 30%    Investments, Inc.
                    of its net  assets in  smaller  companies  that are traded  over-the-counter.  The  Portfolio's
                    focus on a single  country could give rise to increased  risk, as the  Portfolio's  investments
                    will not be diversified among countries having varying characteristics and market performance.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    AST Strong  International  Equity (f/k/a 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  companies that are listed on a recognized  foreign      Strong Capital
                    securities  exchange  or  traded in a  foreign  over-the-counter  market.  The  Portfolio  will     Management, Inc.
                    normally  invest  in a  diversified  portfolio  that  includes  companies  from at  least  four
                    countries  outside the United States,  emphasizing  countries of Western Europe and the Pacific
                    Basin.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------





- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Europe 30: seeks daily  investment  results that  correspond to the  performance  of
                    the ProFunds Europe 30 Index.  The ProFunds Europe 30 Index,  created by ProFund  Advisors,  is
                    composed of 30 European  companies  whose  securities  are traded on U.S.  exchanges  or on the   ProFund Advisors LLC
                    NASDAQ as ADRs with the highest market capitalization, as determined annually.




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

                    ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    The  Prudential  Series  Fund,  Inc.  - SP  Jennison  International  Growth:  seeks to  provide
                    long-term   growth  of  capital.   The   Portfolio   pursues  its  objective  by  investing  in
                    equity-related  securities of foreign  issuers that the  Sub-advisor  believes will increase in        Prudential
                    value over a period of years.  The  Portfolio  invests  primarily  in the common stock of large     Investments Fund
                    and  medium-sized  foreign  companies.  Under normal  circumstances,  the Portfolio  invests at     Management, LLC/
                    least 65% of its total  assets in common  stock of foreign  companies  operating or based in at   Jennison Associates
                    least five different  countries.  The Portfolio  looks  primarily for stocks of companies whose           LLC
                    earnings are growing at a faster rate than other companies and that have  above-average  actual
                    and  potential  earnings  growth  over  the long  term and  strong  financial  and  operational
                    characteristics.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    Montgomery  Variable Series - Emerging  Markets:  seeks long-term capital  appreciation,  under
                    normal  conditions  by investing at least 65% of its total assets in stocks of companies of any     Montgomery Asset
 EMERGING MARKETS   size based in the world's  developing  economies.  Under  normal  conditions,  investments  are     Management, LLC
                    maintained  in at least six  countries at all times and no more than 35% of total assets in any
                    single one of them.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- --------------------------------------------------------------------------------------------------------------------------------------------
Sector funds generally  diversify their  investments  across  particular  economic  sectors or a single  industry.  However,  because those
investments  are limited to a  comparatively  narrow  segment of the economy,  the  Portfolios  are generally not as  diversified  as other
Portfolios.  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.  Each ProFunds VP sector Portfolio will concentrate its investments in a particular  industry or group of industries to
approximately  the same extent the applicable Index is so  concentrated.  Please read the prospectus for the Portfolios for further details
about the risks of the particular sector of the economy.
- --------------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST Kinetics  Internet:  seeks long-term  growth of capital.  Under normal  circumstances,  the
                    Portfolio  invests at least 65% of its total assets in common stocks,  convertible  securities,
                    warrants and other equity  securities  having the  characteristics  of common  stocks,  such as
                    American Depositary  Receipts and International  Depositary  Receipts,  of domestic and foreign
                    companies  that are engaged in the  Internet and  Internet-related  activities.  The  Portfolio
                    also may make  investments  directly in foreign  companies that are engaged in the Internet and      Kinetics Asset
                    Internet-related  activities and whose equity  securities  trade outside of the U.S.  Portfolio     Management, Inc.
                    securities  will be  selected  by the  Sub-advisor  from  companies  that  are  engaged  in the
                    development of hardware, software and telecommunications  solutions that enable the transaction
                    of business on the Internet by  individuals  and  companies,  as well as  companies  that offer
                    products and services  primarily via the Internet.  The Portfolio seeks to invest in the equity
      SECTOR        securities  of  companies  whose  research and  development  efforts may result in higher stock
                    values.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    AST T. Rowe Price Natural  Resources:  seeks  long-term  capital growth  primarily  through the
                    common stocks of companies  that own or develop  natural  resources  (such as energy  products,
                    precious  metals,  and forest  products) and other basic  commodities.  The Portfolio  normally
                    invests  primarily (at least 65% of its total assets) in the common stocks of natural  resource      T. Rowe Price
                    companies whose earnings and tangible  assets could benefit from  accelerating  inflation.  The     Associates, Inc.
                    Portfolio looks for companies that have the ability to expand production,  to maintain superior
                    exploration  programs  and  production   facilities,   and  the  potential  to  accumulate  new
                    resources.  At least 50% of Portfolio assets will be invested in U.S. securities,  up to 50% of
                    total assets also may be invested in foreign securities.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    INVESCO  Variable  Investment  Funds - Financial  Services:  seeks  capital  appreciation.  The
                    Portfolio  invests  primarily in the equity  securities of companies  involved in the financial
                    services sector.  These companies include,  among others,  banks (regional and  money-centers),
                    insurance  companies  (life,  property  and  casualty,  and  multiline),   and  investment  and   INVESCO Funds Group,
                    miscellaneous   industries   (asset  managers,   brokerage   firms,  and   government-sponsored           Inc.
                    agencies).  The investment  advisor seeks  companies  which it believes can grow their revenues
                    and  earnings  in a variety of  interest  rate  environments  - although  securities  prices of
                    financial services companies generally are interest rate-sensitive.














      SECTOR
     (Cont.)
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    INVESCO  Variable  Investment  Funds  -  Health  Sciences:  seeks  capital  appreciation.   The
                    Portfolio  invests  primarily in the equity  securities of companies  that develop,  produce or
                    distribute  products or services related to health care. These companies  include,  but are not
                    limited to,  medical  equipment  or  supplies,  pharmaceuticals,  health care  facilities,  and   INVESCO Funds Group,
                    applied research and development of new products or services.  The investment  advisor attempts           Inc.
                    to blend  well-established  healthcare  firms with  faster-growing,  more  dynamic  health care
                    companies, which have new products or are increasing their market share of existing products.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    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,
                    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.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    INVESCO  Variable  Investment  Funds -  Telecommunications:  seeks  capital  appreciation.  The
                    Portfolio  invests  primarily in the equity  securities  of  companies  that are engaged in the
                    design,  development,  manufacture,  distribution,  or  sale  of  communications  services  and
                    equipment,  and  companies  that are  involved  in  supplying  equipment  or  services  to such   INVESCO Funds Group,
                    companies.  The  telecommunications  sector includes  companies that offer telephone  services,           Inc.
                    wireless   communications,   satellite   communications,   television  and  movie  programming,
                    broadcasting  and Internet access.  Normally,  the Portfolio will invest primarily in companies
                    located in at least three different  countries,  although U.S.  issuers will often dominate the
                    holdings.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund  VP  Biotechnology:  seeks  daily  investment  results  that  correspond  to the  daily
                    performance  of the Dow Jones  U.S.  Biotechnology  Index  ("Index").  The Index  measures  the
                    performance  of the  biotechnology  sector of the U.S.  equity  market.  The Portfolio  invests
                    primarily in equity  securities of, or in instruments that provide  exposure to,  biotechnology   ProFund Advisors LLC
                    companies engaged in genetic research,  and/or the marketing and development of recombinant DNA
                    products.  Companies  represented in this sector may include companies that may be newly formed
                    and that have relatively small market capitalizations.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Energy:  seeks daily investment  results that correspond to the daily performance of
                    the Dow Jones U.S.  Energy Sector Index  ("Index").  The Index measures the  performance of the
                    energy sector of the U.S. equity market.  The Portfolio  invests primarily in equity securities   ProFund Advisors LLC
                    of, or in instruments  that provide  exposure to, energy  companies  engaged in the business of
                    oil equipment and services, oil-major, oil-secondary and pipelines.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Financial:  seeks daily investment  results that correspond to the daily performance
                    of the Dow Jones U.S.  Financial Sector Index ("Index").  The Index measures the performance of
                    the financial  economic sector of the U.S. equity market.  The Portfolio  invests  primarily in
                    equity  securities  of,  or  in  instruments  that  provide  exposure  to,  financial  services
                    companies,  including regional banks, major international banks, insurance companies, companies   ProFund Advisors LLC
                    that invest,  directly or indirectly in real estate,  Fannie Mae,  credit card insurers,  check
                    cashing companies,  mortgage lenders,  investment  advisors,  savings and loans, savings banks,
                    thrifts,  building  associations  and  societies,  credit  unions,  securities  broker-dealers,
                    including investment banks and merchant banks, online brokers,  publicly traded stock exchanges
                    and specialty finance companies.









      SECTOR
     (Cont.)
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund  VP  Healthcare:   seeks  daily  investment   results  that  correspond  to  the  daily
                    performance of the Dow Jones U.S.  Healthcare  Sector Index  ("Index").  The Index measures the
                    performance  of the  healthcare  sector  of the  U.S.  equity  market.  The  Portfolio  invests
                    primarily in equity  securities  of, or in  instruments  that provide  exposure to, health care   ProFund Advisors LLC
                    providers,  biotechnology  companies and  manufacturers of medical  supplies,  advanced medical
                    devices and pharmaceuticals.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund  VP  Real  Estate:  seeks  daily  investment  results  that  correspond  to  the  daily
                    performance  of the Dow  Jones  U.S.  Real  Estate  Index  ("Index").  The Index  measures  the
                    performance  of the real  estate  industry  sector of the U.S.  equity  market.  The  Portfolio
                    invests  primarily in equity  securities of, or in instruments  that provide exposure to, hotel   ProFund Advisors LLC
                    and resort  companies  and real estate  investment  trusts  (REITs) that invest in  apartments,
                    office and retail properties.  REITs are passive  investment  vehicles that invest primarily in
                    income-producing real estate or real estate related loans or interests.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Technology:  seeks daily investment results that correspond to the daily performance
                    of the Dow Jones U.S.  Technology  Sector Index  ("Index").  The Index measures the performance
                    of the technology  sector of the U.S. equity market.  The Portfolio invests primarily in equity
                    securities  of,  or in  instruments  that  provide  exposure  to,  companies  involved  in  the   ProFund Advisors LLC
                    development and production of technology  products,  including  computer hardware and software,
                    telecommunications  equipment,  microcomputer  components,  integrated  computer  circuits  and
                    office equipment utilizing technology.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP  Telecommunications:  seeks daily  investment  results that  correspond to the daily
                    performance  of the Dow  Jones  U.S.  Telecommunications  Sector  Index  ("Index").  The  Index
                    measures the  performance  of the  telecommunications  sector of the U.S.  equity  market.  The
                    Portfolio  invests  primarily in equity  securities of, or in instruments that provide exposure   ProFund Advisors LLC
                    to,   telecommunications   companies   including   fixed  line   communications   and  wireless
                    communications.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Utilities:  seeks daily investment  results that correspond to the daily performance
                    of the Dow Jones U.S.  Utilities Sector Index ("Index").  The Index measures the performance of
                    the utilities  sector of the U.S.  equity  market.  The Portfolio  invests  primarily in equity   ProFund Advisors LLC
                    securities  of, or in  instruments  that provide  exposure  to,  utility  companies,  including
                    electric utilities, gas utilities and water utilities.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------






- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                                                                                                                           PORTFOLIO
      STYLE/                                        INVESTMENT OBJECTIVES/POLICIES                                          ADVISOR/
       TYPE                                                                                                               SUB-ADVISOR
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- --------------------------------------------------------------------------------------------------------------------------------------------
The First Trust(R)10 Uncommon Values Portfolio of the First Defined  Portfolio Fund LLC invests in the securities of a relatively few number
of issuers.  Since the assets of the  Portfolio  are invested in a limited  number of issuers,  the net asset value of the Portfolio may be
more susceptible to a single adverse economic,  political or regulatory occurrence.  The Portfolio may also be subject to additional market
risk due to its policy of investing  based on an investment  strategy and generally not buying or selling  securities in response to market
fluctuations.  The  Portfolio's  relative lack of diversity and limited  ongoing  management may subject Owners to greater market risk than
other portfolios.
- --------------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    First Trust(R)10 Uncommon  Values:  seeks to provide  above-average  capital  appreciation.  The
                    Portfolio  pursues its objective by investing  primarily in the ten common  stocks  selected by
                    the  Investment  Policy  Committee  of  Lehman  Brothers  Inc.  ("Lehman  Brothers")  with  the   First Trust Advisors
                    assistance  of the Research  Department  of Lehman  Brothers  which,  in their opinion have the           L.P.
     STRATEGY       greatest  potential for capital  appreciation  during the next year. The stocks included in the
                    Portfolio  are adjusted  annually on or about July 1st in  accordance  with the  selections  of
                    Lehman Brothers.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- --------------------------------------------------------------------------------------------------------------------------------------------
The ProFund VP Bear,  Bull Plus,  OTC,  UltraOTC and  UltraSmall-Cap  portfolios are available to all Owners.  It is recommended  that only
those Owners who engage a financial  advisor to allocate their funds in strategic or tactical asset allocation  strategies  invest in these
portfolios. There can be no assurance that any financial advisor will successfully predict market fluctuations.
- --------------------------------------------------------------------------------------------------------------------------------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Bear:  seeks daily investment  results that correspond to the inverse  (opposite) of
                    the daily  performance  of the S&P 500(R)Index.  The S&P 500(R)Index is  comprised  of  diverse,
                    widely traded,  large capitalization  companies.  If the Portfolio is successful in meeting its
                    objective,  it should  increase in value in direct  proportion  to any decrease in the level of   ProFund Advisors LLC
                    the S&P 500(R)Index.  Conversely,  its value will  decrease in direct  proportion  to any daily
                    increase in the level of the S&P 500(R)Index.







   STRATEGIC OR
     TACTICAL
   ALLOCA-TION
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP Bull Plus:  seeks daily  investment  results that correspond to one and a half times
                    (150%)  the  daily  performance  of the S&P(R)500  Index.  The S&P 500(R)Index is  comprised  of
                    diverse,  widely  traded,  large  capitalization  companies.  If the Portfolio is successful in
                    meeting its  objective,  it should gain  approximately  one and a half times as much as the S&P   ProFund Advisors LLC
                    500(R)Index  when the  prices of the  securities  in the S&P 500(R)Index rise on a given day and
                    should lose approximately one and a half times as much when such prices decline on a given day.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP OTC: seeks daily investment  results that correspond to the daily performance of the
                    NASDAQ  100  Index(TM).  The  NASDAQ 100 Index(TM)is  comprised  primarily  of large  capitalization
                    companies,  most with a technology  or growth  orientation.  If the  Portfolio is successful in   ProFund Advisors LLC
                    meeting its  objective,  it should  increase or decrease in value in direct  proportion  to any
                    increase or decrease in the daily value of the NASDAQ 100 Index(TM).
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP UltraOTC:  seeks daily investment  results that correspond to twice (200%) the daily
                    performance of the NASDAQ 100 Index(TM).  The Portfolio  principally  invests in futures contracts
                    on stock  indexes and options on futures  contracts and  financial  instruments  such as equity
                    caps,  collars,  floors and options on  securities  and stock  indexes of large  capitalization   ProFund Advisors LLC
                    companies.   If  the  Portfolio  is  successful  in  meeting  its  objective,  it  should  gain
                    approximately  twice as much as the growth  oriented  NASDAQ 100 Index(TM)when the prices of the
                    securities in that index rise on a given day and should lose  approximately  twice as much when
                    such prices decline on that day.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------
                    ProFund VP  UltraSmall-Cap  (f/k/a ProFund VP Small Cap): seeks daily  investment  results that
                    correspond  to twice (200%) the daily  performance  of the Russell  2000(R)Index.  The Portfolio
                    principally  invests in futures contracts on stock indexes and options on futures contracts and
                    financial instruments such as equity caps, collars,  floors and options on securities and stock   ProFund Advisors LLC
                    indexes of  diverse,  widely  traded,  small  capitalization  companies.  If the  Portfolio  is
                    successful in meeting its objective,  it should gain approximately  twice as much as the growth
                    oriented  Russell  2000(R)Index when the prices of the  securities in that index rise on a given
                    day and should lose approximately twice as much when such prices decline on that day.
- ------------------- ------------------------------------------------------------------------------------------------ -----------------------

"Standard & Poor's(R),"  "S&P(R)," "S&P 500(R),"  "Standard & Poor's 500," and "500" are trademarks of the  McGraw-Hill  Companies,  Inc. and
have been licensed for use by American Skandia Investment Services,  Incorporated.  The Portfolio is not sponsored,  endorsed,  sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Portfolio.

The First Trust(R)10 Uncommon  Values  portfolio is not  sponsored  or created by Lehman  Brothers,  Inc.  ("Lehman  Brothers").  Lehman
Brothers' only  relationship  to First Trust is the licensing of certain  trademarks and trade names of Lehman  Brothers and of the "10
Uncommon  Values" which is determined,  composed and calculated by Lehman Brothers without regard to First Trust or the First Trust(R)10
Uncommon Values portfolio.

Dow Jones has no  relationship  to the ProFunds VP, other than the licensing of the Dow Jones sector  indices and its service marks for
use in  connection  with the  ProFunds  VP. The  ProFunds VP are not  sponsored,  endorsed,  sold,  or promoted by Standard & Poor's or
NASDAQ, and neither Standard & Poor's nor NASDAQ makes any representations regarding the advisability of investing in the ProFunds VP.

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 movement of applicable
interest  rates  payable on Strips of the  appropriate  duration.  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 do not deduct a sales charge from Purchase  Payments you make to your Annuity.  However,  we may
deduct a Contingent  Deferred  Sales Charge or CDSC if you  surrender  your  Annuity or when you make a partial  withdrawal.  This CDSC
reimburses us for expenses  related to sales and  distribution of the Annuity,  including  commissions,  marketing  materials and other
promotional  expenses.  The CDSC is  calculated as a percentage of your Purchase  Payment  being  surrendered  or withdrawn  during the
applicable  Annuity Year. For purposes of  calculating  the CDSC, we consider the year following the Issue Date of your Annuity as Year
1.  The amount of the CDSC decreases over time, measured from the Issue Date of the Annuity.  The CDSC percentages are shown below.

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

                           YEARS                   1             2             3            4             5+
                           ------------------ ------------- ------------- ------------ ------------- -------------
                           ------------------ ------------- ------------- ------------ ------------- -------------

                           CHARGE (%)             8.5%          8.0%         7.0%          6.0%          0.0%
                           ------------------ ------------- ------------- ------------ ------------- -------------


The CDSC period is based on the Issue Date of the Annuity,  not on the date each Purchase  Payment is applied to the Annuity.  Purchase
Payments  applied to the  Annuity  after the Issue Date do not have their own CDSC  period.  Under  certain  circumstances,  during the
first four (4) Annuity  Years,  you can withdraw a limited  amount from your Annuity  without  paying a CDSC.  This is referred to as a
"Free  Withdrawal."  Free  Withdrawals  are not treated as a withdrawal of Purchase  Payments for purposes of calculating the CDSC on a
subsequent  withdrawal  or  surrender.  The maximum  Free  Withdrawal  amount  during  each of Annuity  Years 1 through 4 is 10% of all
Purchase  Payments.  Withdrawals  of amounts  greater than the maximum Free  Withdrawal  amount are treated as a withdrawal of Purchase
Payments  and will be assessed a CDSC during  Annuity  Years 1 through 4. If,  during  Annuity  Years 1 through 4, all of the  Purchase
Payments  withdrawn are subject to a CDSC, then any subsequent  withdrawals will be withdrawn from any gain in the Annuity.  After four
(4) complete Annuity Years, you can surrender your Annuity or make a partial  withdrawal  without a CDSC being deducted from the amount
being withdrawn.

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 $35.00 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.  Currently,  the Annual  Maintenance  Fee is only  deducted  if your  Account  Value is less than  $100,000  on the
anniversary  of the Issue Date or 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.  The
charge is deducted  in addition to the  Insurance  Charge due to the  increased  insurance  risk  associated  with the  optional  Death
Benefits.  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 SUB-ACCOUNTS?

Insurance Charge:  We deduct an Insurance Charge daily against the average assets allocated to the  Sub-accounts.  The Insurance Charge
is the  combination of the Mortality & Expense Risk Charge (1.50%) and the  Administration  Charge  (0.15%).  The total charge is equal
to 1.65% 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 mortality  risks and expenses  under this Annuity are incorrect and that we
have agreed not to increase  these  charges over time  despite our actual  costs.  We may  increase the portion of the total  Insurance
Charge that is deducted as an Administrative  Charge.  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 promoting, distributing, issuing and administering the Annuity.

The  Insurance  Charge  is not  deducted  against  assets  allocated  to a Fixed  Allocation.  However,  the  amount we credit to Fixed
Allocations may also reflect similar assumptions about the insurance guarantees provide 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.  These fees are deducted
daily by each  Portfolio  before it provides  American  Skandia  with the net asset value as of the close of  business  each day.  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 $10,000.  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 $10,000 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,  limiting the right to make additional Purchase Payments,  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.

Except as noted below,  Purchase  Payments  must be  submitted  by check drawn on a U.S.  bank,  in U.S.  dollars,  and made payable to
American  Skandia.  Purchase  Payments  may  also  be  submitted  via  1035  exchange  or  direct  transfer  of  funds.  Under  certain
circumstances,  Purchase  Payments may be  transmitted  to American  Skandia via wiring funds  through your  investment  professional's
broker-dealer  firm.  Our acceptance of a check is subject to our ability to collect funds.  Additional  Purchase  Payments may also be
                                                                                             ----------
applied to your Annuity under an  arrangement  called "bank  drafting"  where you authorize us to deduct money  directly from your bank
account.  We may reject any payment if it is received in an unacceptable form.

Age Restrictions:  The Owner must be age 85 or under as of the Issue Date of the Annuity.  If the Annuity is owned jointly,  the oldest
of the Owners must be age 85 or under on the Issue Date. If the Annuity is owned by an entity,  the  Annuitant  must be age 85 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. The  availability of certain  optional  benefits may vary based on the age of the Owner on the Issue
Date.

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, including the CDSC when applicable.

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.

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.

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  $10,000  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 $10,000.

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.

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.

We  may  impose  specific  restrictions  on  financial  transactions  for  certain  Portfolios  based  on  the  Portfolio's  investment
restrictions.  Currently,  any purchase,  redemption or transfer involving the ProFunds VP Sub-accounts must be received by us no later
than one hour  prior to any  announced  closing  of the  applicable  securities  exchange  (generally,  3:00 p.m.  Eastern  time) to be
processed on the current  Valuation Day. The "cut-off" time for such financial  transactions  involving a ProFunds VP Sub-account  will
be extended to1/2hour prior to any announced  closing  (generally,  3:30 p.m. Eastern time) for transactions  submitted  electronically
through American Skandia's Internet website (www.americanskandia.com).

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 OptionSM
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 it
                            ----
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.  NOTE: If a significant  amount of your Account Value is systematically  transferred
to Fixed Allocations  during prolonged market declines,  less of your Account Value may be immediately  available to participate in the
upside potential of the Sub-accounts if there is a subsequent market recovery.

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 INVESTMENT PROFESSIONAL TO MANAGE MY ACCOUNT?
Yes.  You may  authorize  your  investment  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 investment  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  investment
professional  if you fail to inform us that such  person's  authority  has been  revoked.  We may also  suspend,  cancel or limit 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 investment  professionals or investment advisors
who you authorize to make financial  transactions on your behalf.  These investment  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  investment  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 investment  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  investment  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 investment  professional's  or investment  advisor's  ability to
request  financial  transactions on your behalf.  These  limitations  are intended to minimize the detrimental  impact of an investment
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 investment  professional.  Your  investment  professional  will be informed of all such  restrictions on an ongoing
basis.  We may also require that your  investment  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 investment
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 more than 30 days 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 amount of any Market Value
Adjustment  can be either  positive  or  negative,  depending  on the  movement  of a  combination  of Strip  Yields  on Strips  and an
Option-adjusted  Spread  (each as defined  below)  between  the time that you  purchase  the Fixed  Allocation  and the time you make a
transfer  or  withdrawal.  The  Market  Value  Adjustment  formula  compares  the  combination  of  Strip  Yields  for  Strips  and the
Option-adjusted  Spreads  as of the  date the  Guarantee  Period  began  with  the  combination  of Strip  Yields  for  Strips  and the
Option-adjusted Spreads as of the date the MVA is being calculated.

|X|      "Strips" are a form of security where  ownership of the interest  portion of United States  Treasury  securities are separated
     from ownership of the underlying principal amount or corpus.
|X|      "Strip Yields" are the yields payable on coupon Strips of United States Treasury securities.
|X|      "Option-adjusted  Spread" is the difference between the yields on corporate debt securities  (adjusted to disregard options on
     such  securities)  and  government  debt  securities  of  comparable  duration.  We currently  use the Merrill  Lynch 1 to 10 year
     Investment Grade Corporate Bond Index of Option-adjusted Spreads.





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/365
                                                                where:

                  I is the Strip  Yield as of the start date of the  Guarantee  Period for coupon  Strips  maturing at
                  the end of the  applicable  Guarantee  Period  plus the  Option-adjusted  Spread.  If  there  are no
                  Strips  maturing  at that  time,  we will use the Strip  Yield for the  Strips  maturing  as soon as
                  possible after the Guarantee Period ends.

                  J is the Strip Yield as of the date the MVA formula is being applied for coupon  Strips  maturing at
                  the end of the  applicable  Guarantee  Period  plus the  Option-adjusted  Spread.  If  there  are no
                  Strips  maturing  at that  time,  we will use the Strip  Yield for the  Strips  maturing  as soon as
                  possible after the Guarantee Period ends.

                  N is the number of days 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/365.

MVA Examples
The following hypothetical examples show the effect of the MVA in determining Account Value.  Assume the following:
|X|      On December 31, 2000,  you allocate  $50,000 into a Fixed  Allocation  with a Guarantee  Period of 5 years (e.g.  the Maturity
         Date is December 31, 2005).
|X|      The Strip Yields for coupon Strips  beginning on December 31, 2000 and maturing on December 31, 2005 plus the  Option-adjusted
         Spread is 5.50% (I = 5.50%).
|X|      You make no  withdrawals  or transfers  until you decided to withdraw  the entire Fixed  Allocation  after  exactly  three (3)
         years, therefore 730 days remain before the Maturity Date (N = 730).

Example of Positive MVA
Assume  that at the  time  you  request  the  withdrawal,  the  Strip  Yields  for  Strips  maturing  on  December  31,  2005  plus the
Option-adjusted Spread is 4.00%  (J = 4.00%).  Based on these assumptions, the MVA would be calculated as follows:

                                  MVA Factor = [(1+I)/(1+J+0.0010)]N/365 = [1.055/1.041]2 = 1.027078
                                                      Interim Value = $57,881.25
                                   Account Value after MVA = Interim Value X MVA Factor = $59,448.56

Example of Negative MVA
Assume  that at the  time  you  request  the  withdrawal,  the  Strip  Yields  for  Strips  maturing  on  December  31,  2005  plus the
Option-adjusted Spread is 7.00% (J = 7.00%).  Based on these assumptions, the MVA would be calculated as follows:

                                  MVA Factor = [(1+I)/(1+J+0.0010)]N/365 = [1.055/1.071)]2 = 0.970345
                                                      Interim Value = $57,881.25
                                  Account Value after MVA = Interim Value X MVA Factor = $56,164.78.

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 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.  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.

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.

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.  The CDSC will be  assessed  on the  amount of  Purchase  Payments  being
withdrawn,  not on the Account  Value at the time of the  withdrawal or surrender.  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 from your Annuity during each of Annuity Years 1-4 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.  Amounts  withdrawn  as a Free  Withdrawal  do not  reduce  the amount of CDSC that may apply upon a
         subsequent withdrawal or surrender of the 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. The maximum Free  Withdrawal  amount during each of Annuity
Years 1 through 4 is 10% of all Purchase  Payments.  Withdrawals of amounts greater than the maximum Free Withdrawal amount are treated
as a  withdrawal  of Purchase  Payments  and will be assessed a CDSC  during  Annuity  Years 1 through 4. If,  during  Annuity  Years 1
through 4, all Purchase  Payments  withdrawn are subject to a CDSC, then any subsequent  withdrawals will be withdrawn from any gain in
the  Annuity.  After the 4th Annuity  Year,  there is no CDSC on any  withdrawals.  You may request a  withdrawal  for an exact  dollar
amount after deduction of any CDSC that applies  (called a net withdrawal) or request a gross  withdrawal from which we will deduct any
CDSC that applies,  resulting in less money being payable to you than the amount you requested.  If you request a net  withdrawal,  the
amount deducted from your Account Value to pay the CDSC may also 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?

Annuity Year 1-4
The maximum Free  Withdrawal  amount  during each of Annuity  Year 1 through  Annuity  Year 4 (when a CDSC would  otherwise  apply to a
partial  withdrawal or surrender of your initial Purchase  Payments) is 10% of all Purchase  Payments.  The 10% Free Withdrawal  amount
is not  cumulative.  If you do not  make a Free  Withdrawal  during  an  Annuity  Year,  you are not  allowed  to  carry  over the Free
Withdrawal amount to the next Annuity Year.

Annuity Year 5+
After Annuity Year 4, you can surrender your Annuity or make a partial  withdrawal  without a CDSC being deducted from the amount being
withdrawn.

NOTE:  Amounts  that you have  withdrawn  as a Free  Withdrawal  will not reduce  the amount of any CDSC that we deduct if,  during the
first four (4) Annuity Years, you make a partial withdrawal or choose to surrender the Annuity.

Examples
1.       Assume  you make an  initial  Purchase  Payment  of  $10,000  and make no  additional  Purchase  Payments.  The  maximum  Free
     Withdrawal amount during each of the first four Annuity Years would be 10% of $10,000, or $1,000.

2.       Assume you make an initial  Purchase  Payment of $10,000 and make an additional  Purchase Payment of $5,000 in Annuity Year 2.
     The maximum  Free  Withdrawal  amount  during  Annuity  Year 3 and 4 would be 10% of $15,000,  or $1,500.  From Annuity Year 5 and
     thereafter,  you can  surrender  your Annuity or make a partial  withdrawal  without a CDSC being  deducted  from the amount being
     withdrawn.

3.       Assume you make an initial  Purchase  Payment of $10,000 and take a Free  Withdrawal  of $500 in Annuity  Year 2 and $1,000 in
     Annuity Year 3. If you surrender your Annuity in Annuity Year 4, the CDSC will be assessed  against the initial  Purchase  Payment
     amount  ($10,000),  not the amount of Purchase  Payments  reduced by the amounts  that were  withdrawn  under the Free  Withdrawal
     provision.

IS THERE A CHARGE FOR A PARTIAL WITHDRAWAL?
A CDSC may be assessed  against a Partial  Withdrawal  during the first four (4) Annuity  Years.  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 Issue Date of 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,  we  determine if a CDSC will apply to the Partial
     Withdrawal  based on the number of years that have  elapsed  since the Annuity was issued.  The  maximum  Free  Withdrawal  amount
     during each of Annuity Years 1 through 4 is 10% of all Purchase  Payments.  Withdrawals  of amounts  greater than the maximum Free
     Withdrawal  amount are treated as a  withdrawal  of Purchase  Payments and will be assessed a CDSC.  If,  during  Annuity  Years 1
     through 4, all Purchase Payments are withdrawn subject to a CDSC, then any subsequent  withdrawals will be withdrawn from any gain
     in the Annuity.
3.       If the amount  requested  exceeds the amounts  available under Item #2 above, we withdraw the remaining  amount from any other
     Account Value.
|X|      If the  Annuity has been in effect for less than four  complete  years,  a CDSC will be charged on the amount of the  Purchase
         Payment being withdrawn, according to the CDSC table.
|X|      If the Annuity has been in effect for more than four complete years, no CDSC will be charged on the amount being withdrawn.

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  during the first four (4)  Annuity  Years 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.

This waiver of any applicable CDSC is subject to our rules, including but not limited to the following:
|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.

The  Annuitant  must have been named or any  change of  Annuitant  must have been  accepted  by us,  prior to the  "Contingency  Event"
described above in order to qualify for a medically-related surrender.

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, or 15 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 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 6
- --------
Variable  Payments for Life with a Cash Value and Guarantee:  Under this option,  benefits are payable as described in Option 5; 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,  choosing an Annuity  Date within four (4)
years of the Issue Date of the Annuity may limit the available  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.  You will not  receive  annuity
payment until you choose an AIR. 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.  Within payment
options 1-3, if the Sub-accounts  you choose perform exactly the same as the AIR, then subsequent  annuity payments will be the same as
the first annuity  payment.  If the  Sub-accounts  you choose perform  better than the AIR, then  subsequent  annuity  payments will be
higher than the first.  If the  Sub-accounts  you choose  perform worse than the AIR, then  subsequent  annuity  payments will be lower
than the first.  Within payment  options 5 and 6, the 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 are  adjusted  based on the  performance  of the
Sub-accounts  relative to the AIR; however,  subsequent annuity payments do not always increase or decrease based on the performance of
the Sub-accounts relative to the AIR.

|X|      Variable Payments (Options 1-3)
         -----------------
         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 5)
         ----------------------------
         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,  meaning the AIR, 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 (Option 6)
         ------------------------------------------------------
         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%.

The variable  annuity  payment  options are described in greater detail in a separate  prospectus  which will be provided to you at the
time you elect one of the variable annuity payment options.

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.

The basic Death Benefit is the greater of:
|X|      The sum of all Purchase Payments less the sum of all proportional withdrawals.
|X|      The sum of your Account Value in the variable investment options and your Interim Value in the Fixed Allocations.

For purposes of the basic and optional Death Benefits,  "proportional  withdrawals" are determined by calculating the percentage of the
Account  Value that each prior  withdrawal  represented  when  withdrawn.  For example,  a withdrawal  of 50% of Account Value would be
considered as a 50% reduction in Purchase Payments.

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.

NOTE:  You may not elect the Enhanced Beneficiary Protection Optional Death Benefit if you have elected any other Optional Death
Benefit.

- ---------------------------------------------------------------------------------------------------------------------------------------
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.
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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 Annuity's 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.

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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.
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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.

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.

         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.

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.


AMERICAN SKANDIA'S ANNUITY REWARDS

What is the Annuity Rewards benefit?
The  Annuity  Rewards  benefit  offers  Owners the  ability to capture  any market  gains  since the Issue Date of their  Annuity as an
enhancement  to their current Death Benefit so their  Beneficiaries  will not receive less than the Annuity's  value as of the date the
Owner elects the benefit.

Under the Annuity Rewards benefit, American Skandia guarantees that the Death Benefit will not be less than:

         your Account  Value in the variable  investment  options plus the Interim Value in any Fixed  Allocations  as of the effective
                  date of the Owner's election

         MINUS any proportional withdrawals* following the date of election
         -----

         PLUS any additional Purchase Payments applied to the Annuity following the date of election.
         ----

*    "Proportional  withdrawals"  are determined by calculating  the percentage of the Account Value that each  withdrawal  represented
     when withdrawn.  For example,  a withdrawal of 50% of your Account Value would be treated as a 50% reduction in the amount payable
     under the Death Benefit.

The Annuity Rewards Death Benefit  enhancement  does not affect any Optional Death Benefits  available under the Annuity.  If the Death
Benefit  amount  payable  under your  Annuity's  basic Death  Benefit or any Optional  Death  Benefits you purchase is greater than the
enhanced Death Benefit under the Annuity Rewards  benefit on the date the Death Benefit is calculated,  your  Beneficiary  will receive
the higher amount.  If your Annuity includes the Enhanced  Beneficiary  Protection  Optional Death Benefit,  the enhanced Death Benefit
under the Annuity  Rewards  program  will be  considered  when  calculating  the amount due under the Enhanced  Beneficiary  Protection
Optional Death Benefit.

Who is eligible for the Annuity Rewards benefit?
Owners can elect the Annuity  Rewards Death Benefit  enhancement  following the fourth (4th)  anniversary of the Annuity's  Issue Date.
However,  the election is subject to the  requirement  that their  Account  Value on the election  date is greater than the amount that
would be payable to their  Beneficiary  under the Death  Benefit  provided  under the Annuity as of the election  date  (including  any
Optional Death Benefits other than the Enhanced  Beneficiary  Protection Optional Death Benefit).  If an Owner is ineligible when he or
she applies for the optional  benefit,  the Owner can elect the Annuity  Rewards Death Benefit  enhancement on any  subsequent  date if
they  otherwise  qualify.  The election must occur before annuity  payments  begin.  An Owner can only elect the Annuity  Rewards Death
Benefit enhancement once.  There is no additional charge for electing the Annuity Rewards Death Benefit enhancement.

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 Options 1-4) or as a series of variable  annuity  payments  (Annuity
Payment Options 1-3 or 5 and 6).  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.

IRA Beneficiary Continuation Option
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.  Upon the Owner's death under an IRA,  403(b) or other  "qualified  investment",  a
Beneficiary may generally elect to continue the Annuity and receive  Minimum  Distributions  under the Annuity instead of receiving the
death  benefit in a single  payment.  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  31st 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."

Upon election of this IRA Beneficiary Continuation option:

|X|      the Annuity contract will be continued in the Owner's name, for the benefit of the Beneficiary.
|X|      the Account Value will be equal to any Death Benefit  (including  any optional  Death Benefit) that would have been payable to
              the Beneficiary if they had taken a lump sum distribution.
|X|      the Beneficiary may request  transfers among  Sub-Accounts,  subject to the same limitations and restrictions  that applied to
              the Owner.  NOTE: The Sub-Accounts offered under the IRA Beneficiary Continuation option may be limited.
|X|      no additional Purchase Payments can be applied to the Annuity.
|X|      the basic Death Benefit and any optional Death Benefits elected by the Owner will no longer apply to the Beneficiary.
|X|      the Beneficiary can request a withdrawal of all or a portion of the Account Value at any time without application of a CDSC.
|X|      upon the death of the  Beneficiary,  any  remaining  Account  Value will be paid in a lump sum to the  person(s)  named by the
              Beneficiary.
|X|      all amounts in the Annuity must be paid out to the Beneficiary according to the Minimum Distribution rules described above.

Please contact  American  Skandia for additional  information on the  availability,  restrictions  and limitations that will apply to a
Beneficiary under the IRA Beneficiary Continuation option.

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",  any  instructions we require to determine
the method of payment 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.


Plus40(TM)OPTIONAL LIFE INSURANCE RIDER

NOTE:  You may not elect the Plus40(TM)Optional Life Insurance Rider if you have elected the Enhanced Beneficiary Protection Optional
Death Benefit.

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The life insurance  coverage  provided under the Plus40(TM)Optional Life Insurance Rider ("Plus40(TM)rider" or the "Rider") is supported by
American  Skandia's general account and is not subject to, or registered as a security under,  either the Securities Act of 1933 or the
Investment  Company Act of 1940.  Information  about the Plus40(TM)rider is included in this  Prospectus to help you understand the Rider
and the  relationship  between the Rider and the value of your Annuity.  It is also included because you can elect to pay for the Rider
with taxable  withdrawals  from your Annuity.  The staff of the Securities and Exchange  Commission has not reviewed this  information.
However,  the information may be subject to certain generally  applicable  provisions of the Federal securities laws regarding accuracy
and completeness.
- ---------------------------------------------------------------------------------------------------------------------------------------

The Plus40(TM)rider provides an income  tax-free life  insurance  benefit to your  Beneficiary(ies)  equal to 40% of the Account Value of
your Annuity as of the date we receive due proof of death,  subject to certain  adjustments,  restrictions and  limitations.  The Rider
may be  especially  useful in  offsetting  federal and state taxes  payable on any  taxable  gains in your  Annuity at the time of your
death.  The Rider is available in addition to the death benefit  payable under the Annuity.  Whether the Rider is  appropriate  for you
may depend on your particular  circumstances,  including other financial  resources that may be available to your  Beneficiary(ies)  to
pay taxes on the gain in your Annuity  should you die during the  accumulation  period.  No amounts are payable  under the Rider if you
die on or after the date your Account Value is applied to begin  receiving  annuity  payments or after you  surrender the Annuity.  The
Rider has no cash value.

Currently,  the  Plus40(TM)rider is 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 the Plus40(TM)rider subject to our rules and any changes or restrictions.

Please refer to Appendix D for a more complete description of the Plus40(TM)rider.


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.  When  determining
the Account  Value on a day more than 30 days prior to 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 and the charge for any optional  Death Benefit.  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 or within 30 days prior
to 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?
American  Skandia is generally open to process  financial  transactions  on those days that the New York Stock Exchange  (NYSE) is open
for trading.  There may be  circumstances  where the NYSE does not open on a regularly  scheduled  date or time or closes at an earlier
time  than  scheduled  (normally  4:00 p.m.  EST).  Financial  transactions  requested  before  the  close of the NYSE  which  meet our
requirements  will be  processed  according  to the value next  determined  following  the close of  business.  Financial  transactions
requested  on a  non-business  day or after the close of the NYSE  will be  processed  based on the  value  next  computed  on the next
business day. There may be  circumstances  when the opening or closing time of the NYSE is different than other major stock  exchanges,
such as NASDAQ or the American Stock  Exchange.  Under such  circumstances,  the closing time of the NYSE will be used when valuing and
processing transactions.

There may be circumstances where the NYSE is open, however,  due to inclement weather,  natural disaster or other circumstances  beyond
our control,  our offices may be closed or our business  processing  capabilities may be restricted.  Under those  circumstances,  your
Account  Value may  fluctuate  based on  changes in the Unit  Values,  but you may not be able to  transfer  Account  Value,  or make a
purchase or redemption request.

The NYSE is closed on the following  nationally  recognized  holidays:  New Year's Day, Martin Luther King, Jr. Day,  Presidents'  Day,
Good Friday,  Memorial  Day,  Independence  Day,  Labor Day,  Thanksgiving,  and  Christmas.  On those  dates,  we will not process any
financial transactions involving purchase or redemption orders.

American Skandia will also not process financial transactions involving purchase or redemption orders or transfers on any day that:
|X|      trading on the NYSE is restricted;
|X|      an emergency exists making redemption or valuation of securities held in the separate account impractical; or
|X|      the SEC, by order, permits the suspension or postponement for the protection of security holders.

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 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 allocation 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 and have all of the required information.

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 supporting  documentation  we
require for such transaction and that are satisfactory to us.

Transactions in ProFunds VP Sub-accounts:  Generally,  purchase or redemption  orders or transfer requests must be received by us by no
later  than the close of the New York  Stock  Exchange  to be  processed  on the  current  Valuation  Day.  However,  any  purchase  or
redemption  order or transfer  request  involving the ProFunds VP  Sub-accounts  must be received by us no later than one hour prior to
any  announced  closing of the  applicable  securities  exchange  (generally,  3:00 p.m.  Eastern  time) to be processed on the current
Valuation  Day. The "cut-off"  time for such  financial  transactions  involving a ProFunds VP  Sub-account  will be extended to1/2hour
prior to any announced  closing  (generally,  3:30 p.m.  Eastern  time) for  transactions  submitted  electronically  through  American
Skandia's Internet website  (www.americanskandia.com).  You cannot request a transaction involving the purchase, redemption or transfer
of units in one of the ProFunds VP Sub-account  between the applicable  "cut-off" time and 4:00 p.m.  Transactions  received after 4:00
p.m. will be treated as received by us on the next Valuation Day.

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 1/2withdrawals.  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:
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|X|      After the participating employee attains age 59 1/2;
- ---------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------------
|X|      Upon separation from service, death or disability; or
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- ---------------------------------------------------------------------------------------------------------------------------------------
|X|      In the case of financial hardship (subject to restrictions).
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- ---------------------------------------------------------------------------------------------------------------------------------------

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 first  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  for the Separate  Account and the  Portfolios,  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.,
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. No company other than American  Skandia has any legal  responsibility  to pay
amounts that it owes under its variable annuity and variable life insurance contracts.

WHAT ARE SEPARATE ACCOUNTS?
The  separate  accounts are where  American  Skandia sets aside and invests the assets of some of our  Annuities.  In the  accumulation
period,  assets  supporting  Account Values of the Annuities 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  period,  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 Annuities  issued by American  Skandia.  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 9 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.  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  of this Annuity are all Class 9 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.  The SEC does not supervise  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.  There is no assurance  that the Account  Value of
your Annuity will equal or be greater than the total of the Purchase Payments you make to us.

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 currently  employ  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) and have sole discretion over the investment managers we retain.

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  proxy  materials  and the  necessary  forms to  provide  us with  their  voting
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 5.5%.  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.

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.  This  information  may help you review the
performance of the investment  options and provide a basis for comparison  with other  annuities.  This  information 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 a hypothetical  initial  investment of $1,000  allocated to a Sub-account  during the
most recent one,  five and ten year periods (or since the  inception  date that the  Portfolio  has been offered as a  Sub-account,  if
less).  "Standard  Total Return"  figures  assume that the Insurance  Charge and the Annual  Maintenance  Fee are deducted and that the
Annuity is  surrendered at the end of the applicable  period,  meaning that any Contingent  Deferred Sales Charge that would apply upon
surrender is also deducted.  "Non-standard  Total Return" figures include any performance  figures that do not meet the SEC's rules for
Standard  Total  Returns.  "Non-standard  Total Return"  figures may be used that do not reflect all fees and charges.  In  particular,
they may assume no  redemption  at the end of the  applicable  period so that the  Contingent  Deferred  Sales  Charge  does not apply.
"Non-standard  Total Returns" are calculated in the same manner as standardized  returns.  "Non-standard Total Returns" may also assume
that the Annual  Maintenance  Fee does not apply due to the average  Account  Value being  greater than  $100,000,  where the charge is
waived.  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.

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.

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.

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  during our normal business hours, 8:30 a.m. EST to 8:00 p.m. EST, Monday
       through Friday, or Skandia's Telephone Automated Response System (STARS) at 1-800-766-4530.
|X|      writing to us via regular mail at American Skandia - Variable Annuities,  P.O. Box 7040,  Bridgeport,  Connecticut  06601-7040
       OR for express mail American Skandia - Variable  Annuities,  One Corporate Drive,  Shelton,  Connecticut 06484. NOTE: Failure to
       send mail to the proper address may result in a delay in our receiving and processing your request.
|X|      sending an email to customerservice@skandia.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 Skandia's  Telephone Automated 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 an investment  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 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,  facsimile,  Internet or any other electronic  information or that we will be
able to accept  transaction  instructions  via such means at all times.  Regular and/or express mail will be the only means by which we
will accept  transaction  instructions when telephonic,  facsimile,  Internet or any other electronic means are unavailable or delayed.
American  Skandia  reserves  the  right to limit,  restrict  or  terminate  telephonic,  facsimile,  Internet  or any other  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,  American  Skandia and its  affiliates  are not  involved in any legal  proceedings  outside of the
ordinary  course of business.  American  Skandia and its  affiliates are involved in pending and  threatened  legal  proceedings in the
normal  course of its business,  however,  we do not  anticipate  that the outcome of any such legal  proceedings  will have a material
adverse  affect  on the  Separate  Account,  or  American  Skandia's  ability  to meet its  obligations  under the  Annuity,  or on the
distribution of the Annuity.

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                                                                                                                 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                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

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

Carl Cavaliere                                                Vice President, Corporate Treasurer          Vice President, Corporate
38       and Business Controller                              Treasurer and Business Controller:
                                                                                                               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.

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                                                            Chief Operating Officer and               and Chief Operating Officer:
                                                              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                                                                                                          Chief Executive Officer:
                                                                                                              American Skandia, Inc.

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

Lisa Foote                                                    Vice President                                         Vice President:
43                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Ms. Foote joined us in 2001. She previously held the positions of Vice President with Gateway  Computer  Corporation  from January 2000
until August 2000;  Director,  AmericaOne  Operations  with Capital one from July 1998 until  December  1999; and Senior Vice President
with Recovery Retailer Financial Services (a division of GE Capital) from December 1994 until July 1998.






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

N. David Kuperstock                                           Vice President                                         Vice President:
49                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Robert K. Leach                                               Vice President,                                        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,                    Executive Vice President,
48                                                            Treasurer , Corporate Controller,      Treasurer, Corporate Controller
                                                              and Chief Financial Officer               and Chief Financial Officer:
                                                              Director (since September, 1994)                 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 various actuarial positions 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                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Bayard F. Tracy                                               Senior Vice President and                       Senior Vice President:
53                                                                                                                  American Skandia
                                                                                                             Marketing, Incorporated

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

Robert G. Whitcher                                            Director (since October, 2001)                               Director:
55                                                                                                             American Skandia Life
                                                                                                               Assurance Corporation

Kirk Wickman                                                  Senior Vice President and                    Senior Vice President and
                                                              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                           Senior Vice President:
45                                                                                                            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 9 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

Annuitization

Independent Auditors

Legal Experts

Financial Statements
|X|      Appendix A - American Skandia Life Assurance Corporation Variable Account B (Class 9 Sub-accounts)






A-15





                                       APPENDIX A - FINANCIAL INFORMATION ABOUT AMERICAN SKANDIA
















                                            Unaudited Consolidated Financial Statements of
                                              American Skandia Life Assurance Corporation









                                  AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                        (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)
                                Consolidated Statements of Financial Condition
                                                (in thousands)

                                                                      September 30,               December 31,
                                                                          2001                        2000
                                                                    ----------------            ----------------
                                                                       (unaudited)
ASSETS
- ------

Investments:
  Fixed maturities - at fair value                                  $       335,292             $       285,708
  Equity securities - at fair value                                          41,658                      20,402
  Derivative instruments
                                                                              6,700                       3,015
  Policy loans                                                                5,999                       3,746
                                                                      --------------              --------------

    Total investments                                                       389,649                     312,871

Cash and cash equivalents                                                    44,751                      76,499
Accrued investment income                                                     4,716                       5,209
Deferred acquisition costs                                                1,375,960                   1,398,192
Reinsurance receivable                                                       24,825                       3,642
Receivable from affiliates                                                                                3,327
                                                                                  -
Income tax receivable
                                                                             34,154                      34,620
State insurance licenses                                                      4,000                       4,113
Fixed assets                                                                 17,708                      10,737
Other assets                                                                102,027                      96,403
Separate account assets                                                  23,946,470                  29,757,092
                                                                    ----------------            ----------------

  Total assets                                                      $    25,944,260             $    31,702,705
                                                                    ================            ================

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

Liabilities:
Reserves for future insurance policy and contract benefits          $       109,904             $       135,545
Drafts outstanding                                                           72,639                      63,758
Accounts payable and accrued expenses                                       130,636                     137,040
Income tax payable - deferred
                                                                             64,516                       8,949
Payable to affiliates
                                                                             64,264                           -
Future fees payable to parent                                               837,949                     934,410
Short-term borrowing                                                         10,000                      10,000
Surplus notes                                                               159,000                     159,000
Separate account liabilities                                             23,946,470                  29,757,092
                                                                    ----------------            ----------------

  Total Liabilities                                                      25,395,378                  31,205,794
                                                                    ----------------            ----------------

Shareholder's equity:
Common stock, $100 par value, 25,000 shares authorized,
    issued and outstanding                                                    2,500                       2,500
Additional paid-in capital                                                  305,329                     287,329
Retained earnings                                                           238,587                     205,979
Accumulated other comprehensive income                                        2,466                       1,103
                                                                    ----------------            ----------------

    Total Shareholder's equity                                              548,882                     496,911
                                                                    ----------------            ----------------

    Total liabilities and shareholder's equity                      $    25,944,260             $    31,702,705
                                                                    ================            ================


                                  See notes to unaudited financial statements
                               AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                      (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)
                                    Consolidated Statements of Income
                                              (in thousands)
                                               (unaudited)




                                                                        Nine Months Ended September 30,
                                                                         2001                     2000
                                                                    -------------            --------------

REVENUES
- --------

Annuity and life insurance charges and fees                         $                        $
                                                                         287,875                   325,052
Fee income                                                                84,936                    95,130
Net investment income                                                     37,664                    10,690
Premium income                                                               717                     7,804
Net realized capital gains/(losses)                                        2,651                   (1,565)
Other                                                                        947                     1,610
                                                                    -------------            --------------

  Total revenues                                                         414,790                   438,721
                                                                    -------------            --------------

EXPENSES
- --------

Benefits:
  Annuity and life insurance benefits                                      1,406                       533
  Change in annuity and life insurance policy reserves                  (35,459)                    12,024
Return credited to contract owners                                        10,431                    11,085
                                                                    -------------            --------------

                                                                        (23,622)                    23,642

Expenses:
  Underwriting, acquisition and other insurance
    expenses                                                             330,877                   262,626
  Interest expense                                                        63,922                    84,344
                                                                    -------------            --------------

                                                                         394,799                   346,970
                                                                    -------------            --------------

  Total benefits and expenses                                            371,177                   370,612
                                                                    -------------            --------------

    Income from operations before income tax                              43,613                    68,109

      Income tax expense
                                                                          11,005                    18,430
                                                                    -------------            --------------

        Net income                                                  $                        $
                                                                          32,608                    49,679
                                                                    =============            ==============








                                       See notes to unaudited consolidated financial statements






                                             AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                                   (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)
                                                  Consolidated Statements of Income
                                                           (in thousands)
                                                             (unaudited)

                                                                         Three Months Ended September 30,
                                                                     2001                               2000
                                                        -----------------------------    -------------------------------

              REVENUES
              --------

              Annuity and life insurance charges and    $                     87,729      $                     113,844
              fees
              Fee income                                                      26,960                             33,074
              Net investment income                                           26,303                              4,186
              Premium income                                                   (295)                              5,545
              Net realized capital gains/(losses)                                376                              (858)
              Other                                                              320                                492
                                                        ---                              -------------------------------
                                                           --------------------------

                Total revenues                                               141,393                            156,283
                                                        -----------------------------    -------------------------------


              EXPENSES
              --------

              Benefits:
                Annuity and life insurance benefits                              647                                255
                Change in annuity and life insurance                         (5,642)                              2,519
              policy reserves
                Return credited to contract owners                               258                             13,447
                                                        ---                              -------------------------------
                                                           --------------------------

                                                                             (4,737)                             16,221

              Expenses:
                Underwriting, acquisition and other
              insurance
                  expenses                                                   111,529                             98,201
                Interest expense                                              29,818                             28,124
                                                        ---                              -------------------------------
                                                           --------------------------

                                                                             141,347                            126,325
                                                        -----------------------------    -------------------------------

                Total benefits and expenses                                  136,610                            142,546
                                                        -----------------------------    -------------------------------

                  Income from operations before income                         4,783                             13,737
              tax

                    Income tax (benefit) expense                               (480)                              3,167
                                                        -----------------------------    -------------------------------

                      Net income                         $                     5,263      $                      10,570
                                                           ==========================        ===========================













                                      See notes to unaudited consolidated financial statements







                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                    (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)
                            Consolidated Statements of Shareholder's Equity
                                            (in thousands)



                                                                   September 30,        December 31,
                                                                     2001                   2000
                                                               ---------------      --------------------
                                                                 (unaudited)

Common stock:
  Beginning and ending balance                                 $                    $
                                                                        2,500                     2,500

Additional paid in capital:
  Beginning balance                                                   287,329                   215,879
  Additional contributions                                             18,000                    71,450
                                                               ---------------      --------------------

    Ending balance                                                    305,329                   287,329
                                                               ---------------      --------------------

Retained earnings:
  Beginning balance                                                   205,979                   141,162
  Net income                                                           32,608                    64,817
                                                               ---------------      --------------------

    Ending balance                                                    238,587                   205,979
                                                               ---------------      --------------------

Accumulated other comprehensive (loss) income:
  Beginning balance
                                                                        1,103                     (107)
  Other comprehensive income
                                                                        1,363                     1,210
                                                               ---------------      --------------------

    Ending balance
                                                                        2,466                     1,103
                                                               ---------------      --------------------

      Total shareholder's equity                               $                    $
                                                                      548,882                   496,911
                                                               ===============      ====================























                       See notes to unaudited consolidated financial statements






                              AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
                    (a wholly-owned subsidiary of Skandia Insurance Company, Ltd.)
                                 Consolidated Statements of Cash Flows
                                            (in thousands)
                                              (unaudited)
                                                                      Nine Months Ended September 30,
                                                                        2001                  2000
                                                                    -------------      -----------------
Cash flow from operating activities:

  Net income                                                                           $                                                                                                                  $
                                                                          32,608                 49,679
  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
      Amortization and depreciation
                                                                           1,407                  2,790
      Deferred tax expense
                                                                          54,833                 14,325
      (Decrease)/increase in policy reserves
                                                                        (28,821)                 12,587
      Increase in payable to affiliates, net
                                                                          67,591                137,723
      Change in income tax payable/receivable
                                                                             467               (26,243)
      Increase in other assets
                                                                         (5,624)               (53,684)
      Decrease in accrued investment income
                                                                             493                     91
      (Increase)/decrease in reinsurance receivable
                                                                        (21,183)                  1,390
      Net increase in deferred acquisition costs
                                                                          22,231              (289,126)
      Decrease in accounts payable and accrued expenses
                                                                         (6,404)               (19,887)
      Increase in drafts outstanding
                                                                           8,880                    981
      Change in foreign currency translation, net
                                                                             559                   (78)
      Investment gains on derivatives
                                                                           5,342                      -
      Net realized capital gains/(losses) on investments
                                                                         (2,651)                  1,565
                                                                    -------------      -----------------

        Net cash provided by (used in) operating activities
                                                                         129,728              (167,887)
                                                                    -------------      -----------------

Cash flow from investing activities:

      Purchase of fixed maturity investments
                                                                       (313,676)              (283,490)
      Proceeds from sale and maturity of fixed
        maturity investments
                                                                         276,788                283,586
      Purchase of derivatives
                                                                        (52,629)                (3,277)
      Proceeds from exercise of derivative instruments
                                                                          43,602                      -
      Purchase of shares in mutual funds
                                                                        (50,528)               (12,615)
      Proceeds from sale of shares in mutual funds
                                                                          20,321                  4,063
      Purchase of fixed assets
                                                                         (7,821)                (2,851)
      Increase in policy loans
                                                                         (2,253)                (1,478)
                                                                    -------------      -----------------

        Net cash used in investing activities
                                                                        (86,196)               (16,062)
                                                                    -------------      -----------------

Cash flow from financing activities:

      Capital contribution from parent
                                                                          18,000                  2,450
      (Decrease)/increase in future fees payable to parent, net
                                                                        (96,461)                195,495
Net deposits to contract owner accounts
                                                                           3,181                  8,049
                                                                    -------------      -----------------

        Net cash (used in)/provided by financing activities
                                                                        (75,280)                205,994
                                                                    -------------      -----------------

          Net (decrease)/increase in cash and cash
            equivalents
                                                                        (31,748)                 22,045

          Cash and cash equivalents at beginning of period
                                                                          76,499                 89,212
                                                                    -------------      -----------------

            Cash and cash equivalents at end of period                                 $                                                                                                                  $
                                                                          44,751                111,257
                                                                    =============      =================

     Income taxes (received) paid                                                      $                                                                                                                  $
                                                                        (44,294)                 30,349
                                                                    =============      =================

      Interest paid                                                                    $                                                                                                                  $
                                                                          34,087                 85,902
                                                                    =============      =================

                                      See notes to unaudited consolidated financial statements
                  --------------------------------------------------------------------------------------------------






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


                                         NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                                          September 30, 2001


1.       BASIS OF PRESENTATION

         The accompanying  unaudited  consolidated  financial statements of American Skandia Life Assurance Corporation ("the Company")
         have been prepared in accordance  with accounting  principles  generally  accepted in the United States for interim  financial
         information  and with the  instructions to Form 10-Q and Article 10 of Regulation  S-X.  Accordingly,  they do not include all
         of the  information  and footnotes  required by  accounting  principles  generally  accepted in the United States for complete
         financial  statements.  In the opinion of management,  all adjustments  (consisting of normal recurring  accruals)  considered
         necessary for a fair  presentation  have been included.  Operating  results for the nine-month period ended September 30, 2001
         are not  necessarily  indicative  of the results  that may be expected  for the year ending  December  31,  2001.  For further
         information,  refer to the  consolidated  financial  statements and footnotes  thereto in the Company's  audited  consolidated
         financial statements on Form 10-K for the year ended December 31, 2000.

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


2.       NEW ACCOUNTING STANDARD

         Effective  January 1, 2001,  the Company  adopted  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").  Derivative
         instruments held by the Company consist of equity option  contracts  utilized to manage the economic risks associated with the
         guaranteed  minimum death  benefits  ("GMDB").  These  derivative  instruments  are carried at fair market  value.  Unrealized
         gains and losses are  reported  in  investment  income.  The  adoption  of SFAS No. 133 did not have a material  effect on the
         Company's financial statements.


3.       RESERVES FOR FUTURE INSURANCE POLICY AND CONTRACT BENEFITS

         Included in reserves  for future  insurance  policy and  contract  benefits are  reserves  related to annuity  contracts  with
         mortality  risks as well as the Company's  GMDB  liability.  Certain  reserve  assumptions  were updated during the first nine
         months of 2001 to reflect more realistic  expectations as to risks inherent in the GMDB  liability.  These changes reduced the
         GMDB liability  significantly.  Previous  assumptions had been based on statutory valuation principles as an approximation for
         accounting  principles  generally  accepted in the United States.  In addition,  future  mortality  rates have been lowered to
         reflect favorable past experience.

         However,  offsetting the reduction in the GMDB  liability,  certain  assumptions  were also updated in the  calculation of the
         deferred  acquisition  cost  asset.  The  amortizations  of  such  costs  are  determined  in  large  part by  changes  in the
         expectations of future gross profits of the variable  annuity  business.  In 2001, the decline in equity markets resulted in a
         significantly lower estimate of future gross profits, thereby decreasing the deferred acquisition cost asset.






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


                                   NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                                          September 30, 2001


4.       SEGMENT REPORTING

         In recent years,  in order to broaden the array of products  offered by the Company and its  affiliates to meet a wide variety
         of financial  planning  needs,  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 yet been  significant
         enough to warrant full segment  disclosures as required by SFAS 131,  "Disclosures about Segments of an Enterprise and Related
         Information."


5.       COMPREHENSIVE INCOME

         The components of comprehensive (loss) income, net of tax, for the nine months ended September 30, 2001 and 2000 were as follows:

                  (in thousands)                                           2001              2000
                                                                           ----              ----

         Net income                                                       $32,608          $49,679
         Other comprehensive income (loss):
           Net unrealized investment loss on
               available for sale securities                                1,000            2,493

           Foreign currency translation                                       363              (50)
                                                                       ----------       -----------

         Other comprehensive income                                         1,363            2,443
                                                                        ---------        ---------

         Comprehensive income                                            $ 33,971          $52,122
                                                                         ========          =======

         The components of accumulated other comprehensive income, net of tax, as of September 30, 2001 and December 31, 2000 were as
         follows:

                  (in thousands)                                           2001              2000
                                                                           ----              ----

         Unrealized investment (losses)/gains                            $  2,021          $ 1,021
         Foreign currency translation                                         445               82
                                                                       ----------       ----------

         Accumulated other comprehensive (loss) income                   $  2,466          $ 1,103
                                                                         ========          =======


6.       FOREIGN ENTITY

         The Company has a 99.9% ownership in Skandia Vida, S.A. de C.V.  ("Skandia Vida") which is a life insurance  company domiciled
         in Mexico,  selling  long-term savings products within Mexico.  Skandia Vida, which is fully  consolidated in the accompanying
         financial  statements,  had total  shareholders'  equity of $4,815,000 as of September 30, 2001 and  $4,402,000 as of December
         31, 2000 and has  generated  losses of  $2,146,000  and  $1,410,000  for the nine months  ended  September  30, 2001 and 2000,
         respectively.







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


                                   NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

                                                          September 30, 2001


7.       RESTRUCTURING CHARGES

         In  March  2001,  the  Company  recorded  a  pre-tax  restructuring  charge  of  $3,500,000  to  better  align  its  operating
         infrastructure  with anticipated  sales volumes under the current equity market  environment.  These charges related primarily
         to a reduction in the  workforce  of  approximately  140  employees.  At  September  30,  2001,  the  remaining  restructuring
         liability was approximately $600,000.

         As a result of the continued  volatility in equity markets and lower than  anticipated  sales volumes,  the Company expects to
         implement  further cost cutting  initiatives  in the fourth  quarter of 2001.  The charge for such  restructuring  has not yet
         been determined.









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


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

                                                 Nine months ended September 30, 2001


Management's  Discussion  and  Analysis  of  Financial  Condition  and Results of  Operations  should be read in  conjunction  with the
September 30, 2001 financial statements and the notes included herein.

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.

American Skandia Life Assurance  Corporation  ("the Company"),  with its principal offices in Shelton,  Connecticut,  is a wholly-owned
subsidiary  of  American  Skandia,  Inc.  ("ASI"),  whose  ultimate  parent is  Skandia  Insurance  Company  Ltd.  ("SICL"),  a Swedish
corporation.  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.

The Company is primarily in the business of issuing  long-term  savings and retirement  products to  individuals,  groups and qualified
pension  plans.  The Company is one of the largest  providers of variable  annuity  contracts for the  individual  market in the United
States according to Info-One's Variable Annuity Research & Data Service ("VARDS").

Since its business inception in 1988, the Company has offered an increasingly wide array of annuities,  including:  a) certain deferred
and immediate  annuities  that are  registered  with the Securities and Exchange  Commission,  including  variable  annuities and fixed
interest rate  annuities  that include a market value  adjustment  feature;  b) certain  other fixed  deferred  annuities  that are not
registered with the Securities and Exchange  Commission;  c) non-registered  group variable  annuities designed as funding vehicles for
various types of qualified retirement plans; and d) fixed, adjustable and variable immediate annuities.

The Company also offers  modified  single  premium and flexible  premium  variable life  insurance  products and a term life  insurance
product offered to shareholders of an affiliate's mutual fund products.

Certain variable annuity products contain a benefit feature  (referred to as "Performance  Advantage")  which provides certain benefits
if the policyowner's  account value has not reached a "target value" on its tenth  anniversary.  At the option of the policyowner,  the
benefit will be  distributed  in the form of an annual or, if  annuitization  is  selected,  a lump-sum  credit to the  contractowner's
account.

The Company's products are sold to individuals,  businesses and pension plans to provide for long-term savings and retirement  purposes
and to address the economic impact of premature death, estate and business planning concerns and supplemental retirement needs.

The Company markets its products to independent  financial  planners and  broker-dealers  through an internal field marketing staff. In
addition,  the Company markets through and in conjunction with financial  institutions  such as banks that are permitted  directly,  or
through affiliates, to sell annuities and life insurance.






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

Annuity  and life  insurance  sales  volume  for the  nine  months  ended  September  30,  2001  totaled  $2,994,000,000,  compared  to
$6,864,000,000  for the first nine months of 2000. The decrease in sales was consistent  with the general  decline in sales  throughout
the variable annuity  industry,  attributed in large part to the decline in the equity markets.  Favorable market conditions and strong
performance  of the  underlying  mutual  funds in the first half of 2000 drove the sales to record  levels for the first nine months of
2000. In  particular,  due to the closure of markets as a result of the September 11, 2001  terrorist  attacks,  no new contracts  were
issued for four days.  Following  September 11, and through the end of the third quarter,  equity markets  remained  unstable,  further
reducing sales volume.

Contractowner  fees and  charges  and  charges  generated  from  transfer  agency-type  and  investment  support  activities  decreased
$47,371,000  or 11% for the first nine months of 2001  compared to the same period in 2000.  Management  attributes  this  decline to a
15% drop in average  assets  under  management  partially  offset by  increases  in fee rates  earned on the assets from  certain  fund
managers.

Net investment  income  increased  $26,974,000  for the first nine months of 2001 compared to the same period in 2000. The increase was
primarily  attributable  to realized and unrealized  gains on derivative  instruments  held to mitigate the market risk embedded in the
guaranteed  minimum death benefit reserve ("GMDB") on variable annuity  contracts.  Investment income earned on a higher level of fixed
maturity securities also contributed to the increase.

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.  Although sales of these products were lower in
the first nine  months of 2001  compared  to the first nine  months of 2000,  management  expects  premium  income  from  supplementary
contracts and immediate annuities to grow over time with the maturing of core business lines.

Net realized  investment  gains totaled  $2,651,000  for the first nine months of 2001,  compared to losses of $1,565,000 for the first
nine months of 2000.  The increase is primarily attributable to gains recognized on sales of fixed maturity securities.

Annuity and life insurance  benefits  increased  $873,000 over the first nine months of 2000 as an increase in  supplementary  contract
and variable immediate annuity payments, which has increased as this relatively young segment of the Company's annuity business ages.

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.  Certain  reserve  assumptions  were updated during the first nine months of 2001 to reflect more realistic
expectations  as to  risks  inherent  in the  GMDB  liability.  These  changes  reduced  the  GMDB  liability  significantly.  Previous
assumptions had been based on statutory valuation  principles as an approximation for accounting  principles  generally accepted in the
United  States.  In addition,  future  mortality  rates have been lowered to reflect  favorable past  experience.  As a result of these
changes,  the GMDB reserve  decreased  $39,150,000 in 2001. The GMDB reserve  increased  $8,021,000 for the same  nine-month  period in
2000.

However,  offsetting the resulting  increase in earnings and equity as a result of changes in the GMDB liability,  certain  assumptions
were also updated in the  calculation  of the deferred  acquisition  cost asset.  The  amortizations  of such costs are determined in a
large part by changes in the  expectations  of future gross profits of the variable  annuity  business.  In 2001, the decline in equity
markets  resulted in a  significantly  lower  estimate of future gross profits,  thereby  increasing  the expenses  recognized  through
amortization.






 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.  During the first nine months of 2001, the Separate  Account  investment  returns on the assets
supporting  the market value  adjusted  annuities  were less than the expected  returns as  calculated  in the  reserves,  leading to a
significant increase in the return credited to contractholders' benefit through September 30, 2001.

 Further  contributing to the increase in return credited to contractowners were increases in the amortization of unearned  Performance
Advantage  target value credits over the nine month period ended  September 30, 2001.  Additionally,  guaranteed  minimum death benefit
payments  on variable  annuities  were  driven  higher due to equity  market  declines.  Offsetting  this  charge,  the Company  booked
experience-rating  refunds due from a  reinsurer  during the first nine  months of 2001.  Through  the first nine  months of 2000,  the
Company had not recognized such refunds due.

 Underwriting, acquisition and other insurance expenses for the nine months ended September 30, 2001 and 2000 were as follows:

                       (in thousands)                        2001               2000             Change
                                                             ----               ----             ------

         Commissions and purchase credits                  $190,162            $362,371         ($172,209)
         General operating expenses                         118,484             186,307           (67,823)

         Acquisition costs deferred                        (173,238)         (  430,195)          256,957
         Acquisition costs amortized                        195,469             144,143            51,326
                                                            -------         -----------        ----------

         Net capitalization of
           deferred acquisition costs                        22,231          (  286,052)          308,283
                                                         ----------           ----------        ---------

         Underwriting, acquisition and other
           insurance expenses                              $330,877            $262,626         $  68,251
                                                           ========            ========         =========



 Lower sales and asset  levels for the nine months  ended  September  30,  2001,  compared  with the same period in 2000,  led to a 48%
decrease in commissions and purchase credits.  Partially  offsetting this decline,  the Company launched a commission promotion program
during 2001 which  increased  commissions as a percentage of new sales.  In addition,  there has been a steady  increase in asset based
commissions relative to sales based commissions.

 General  operating  expenses  decreased  36% from a year ago as a result of lower  sales-based  compensation  and certain cost savings
measures  implemented  in 2001 (see  Note 6 of the  Notes to  Unaudited  Consolidated  Financial  Statements).  In  addition,  variable
compensation and long-term incentive plan expenses have decreased due to the slowdown in sales and decline in equity markets.

 The decline in capitalized  deferred  acquisition costs is attributable to a significant drop in acquisition related costs as a result
of lower sales and shifts in sales trends to asset based commission agreements.

 As mentioned in the Company's  discussion of changes in annuity  policy  reserves,  the Company  updated  certain  assumptions  in the
calculation of expected gross profits used to develop deferred  acquisition cost  amortization  rates to reflect more recent experience
and current equity market  conditions,  specifically with regard to future GMDB  profitability.  As a result of this and the decline in
equity markets, the amortization of such costs increased significantly over the nine months ended September 30, 2000.






Interest expense decreased  $20,422,000,  or 24%, over the nine months ended September 30, 2000 primarily due to lower interest expense
related to the reduction of future fees payable to parent  liability which in turn was the result of lower market value  assumptions in
the underlying securitized contracts.

The effective  income tax rate for the nine months ended  September  30, 2001,  and 2000 was 25% and 27%,  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 2000 and the first nine months of 2001, the Company will
produce sufficient taxable income in the future to realize its deferred tax assets.

 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 $2,146,000 and $1,410,000
for the nine months ended September 30, 2001 and 2000, respectively.

 Total assets  declined  $5,758,445,000  or 18.2% since  December 31, 2000 as a result of market  declines  combined with slowing sales
volume.  Liabilities  declined  $5,810,416,000  or 18.6%,  since December 31, 2000 as a result of the lower required  separate  account
reserves.  Separate account assets represent 92% of total assets and separate account liabilities represent 94% of total liabilities.

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

 The Company's liquidity requirement has been met in recent years by cash from insurance operations,  investment activities, borrowings
from ASI and the transfer of rights to future fees and charges to ASI.

The Company  received  advances of $63,000,000 and capital  contributions  of $15,500,000  from ASI to support the capital needs of its
U.S.  operations  during the first nine months of 2001. In addition,  the Company  received  capital  contributions  of $2,500,000  and
$2,450,000 from ASI to support its investment in Skandia Vida for the nine months ended September 30, 2001 and 2000, respectively.

 As an additional  means of obtaining  funding,  the Company  periodically  has transferred  rights to receive future fees and contract
charges  expected to be realized on variable  portions of  designated  blocks of deferred  annuity  contracts  to ASI  ("securitization
transactions").  The Company did not enter into any new  securitization  transactions in the first nine months of 2001.  Funds received
from new securitization transactions for the first nine months of 2000 amounted to $261,858,000.

The Company  continues  to extend its  reinsurance  agreements  for new blocks of business.  The  reinsurance  agreements  are modified
coinsurance  arrangements  where the  reinsurer  shares in the  experience  of a specific  book of business.  During 2001,  the company
amended  certain  reinsurance  agreements  and recorded  amounts due from  reinsurers  based on favorable  experience.  The  amendments
resulted in a receivable of $2,213,000 and the experience rating refund resulted in an additional receivable of $9,679,000.

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

 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 risk and
business  risk.  The  Company has  complied  with the NAIC's RBC  reporting  requirements  and has total  adjusted  capital  well above
required capital.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material  changes to the  Company's  market risk  during the first nine months of 2001.  The Company has  provided a
discussion of its market risks in Item 7A of Part II of the December 31, 2000 Form 10-K.





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*         $             $     289,989   $              $     121,158   $     69,780
                                                     424,578                       186,211
Fee income                                                                                                               16,420
                                                     130,610       83,243          50,839         27,593
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                                       $             $     387,361   $              $     158,014   $     88,051
                                                     ======        =============   =======        =============   ============
                                                     571,622                       249,540
                                                     =======                       =======

Benefits and Expenses:
Annuity and life insurance benefits                  $             $               $              $               $
                                                     751           612             558            2,033           613
Change in annuity and life insurance
   policy reserves
                                                     45,018        3,078           1,053          37              635
Cost of minimum death benefit reinsurance                                                                                 2,867
                                                     -             2,945           5,144          4,545
Return credited to contractowners
                                                     9,046         (1,639)         (8,930)        (2,018)         673
Underwriting, acquisition and other insurance
   expenses                                                                                                             49,887
                                                     335,213       206,350         167,790        90,496
Interest expense                                                                                                        10,791
                                                     ---------     ---------       ---------      ---------       ------------
                                                     85,998        69,502          41,004         24,895
                                                     ------        ------          ------         ------

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

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

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

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                        $             $     576,034   $     368,978  $     233,034   $     47,112
                                                     ======        =============   =============  =============   ============
                                                     934,410
                                                     =======

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

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

*    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                                                           (10,903)
                                                                   60,023                               (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                                                       (32,954)
                                                                 (59,987)                                (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                                    (366,198)          (174,804)
                                                                (310,487)
      (Decrease) increase in accounts payable and accrued
expenses                                                         (21,550)              66,763             20,637
      Increase in drafts outstanding                                                                       9,663
                                                                   12,699              22,118
      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                                       (148,808)          (114,308)
                                                                (330,562)
                                                             -------------      --------------      -------------

Cash flow from investing activites:
      Purchase of fixed maturity investments                                         (99,250)
                                                                (380,737)                               (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                                             (17,703)
                                                                 (18,136)                                (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                                        (74,923)
                                                                (103,338)                               (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                             261,432
                                                                                             450,059

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

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

                  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                                                               456        (22)
                                                                                    -------     ---------- -----------
                                                                                    (66)
                                                                                    ----

         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)                                                          (10,904)     (14,230)
                                                                                  --       -     --------     -------
                                                                                 60,023
                                                                                 ------

         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                                                             883           880
                                                                                 889
            Meals and entertainment                                                                  664           487
                                                                                 841
            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                              966
                                                                                      4,186
        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                            27,487
                                                                                      13,737
        Income taxes                                         10,038             5,225                           12,349
                                                  --         ------         ---------          ----    --       ------
                                                                                      3,167
                                                                                      -----
        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                           2,210
                                                                                       2,735
        Net realized capital gains                               295                                                52
                                                  -------        ---          --------         ------- ---------    --
                                                                     25                206
                                                                     --                ---
        Total revenues                                        81,458           91,302          100,896         113,705
        Benefits and expenses                                 64,204           67,803                           77,244
                                                  --          ------         --------         ---      --       ------
                                                                                       71,597
                                                                                       ------
        Pre-tax net income                                    17,254           23,499                           36,461
                                                                                       29,299
        Income taxes                                           3,844             7,142                          11,460
                                                  -----        -----        ----------        -----    --       ------
                                                                                       7,898
                                                                                       -----
        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                           2,989
                                                                                       2,469
        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
                                                              ======         =======          =======            =====













B-1

                                 APPENDIX B - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B

Separate Account B (Class 9 Sub-accounts) are first being offered as of the effective date of this Prospectus.  Therefore, no
financial information is available.






C-2

                                          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.

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.

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).

1.




D-3

                                          APPENSIX D - Plus40(TM)OPTIONAL LIFE INSURANCE RIDER

- ---------------------------------------------------------------------------------------------------------------------------------------
The life insurance  coverage  provided under the Plus40(TM)Optional Life Insurance Rider ("Plus40(TM)rider" or the "Rider") is supported by
American  Skandia's general account and is not subject to, or registered as a security under,  either the Securities Act of 1933 or the
Investment  Company Act of 1940.  Information  about the Plus40(TM)rider is  included  as an  Appendix  to this  Prospectus  to help you
understand the Rider and the  relationship  between the Rider and the value of your Annuity.  It is also included because you can elect
to pay for the Rider  with  taxable  withdrawals  from your  Annuity.  The staff of the  Securities  and  Exchange  Commission  has not
reviewed  this  information.  However,  the  information  may be subject to certain  generally  applicable  provisions  of the  Federal
securities laws regarding accuracy and completeness.
- ---------------------------------------------------------------------------------------------------------------------------------------

The income  tax-free life insurance  payable to your  Beneficiary(ies)  under the Plus40(TM)rider is equal to 40% of the Account Value of
your Annuity as of the date we receive due proof of death,  subject to certain  adjustments,  restrictions  and  limitations  described
below.

ELIGIBILITY
The Plus40(TM)rider may be  purchased as a rider on your  Annuity.  The Rider must cover those  persons  upon whose death the  Annuity's
death benefit  becomes  payable - the Annuity's  owner or owners,  or the  Annuitant (in the case of an entity owned  Annuity).  If the
Annuity has two Owners,  the  Rider's  death  benefit is payable  upon the first death of such  persons.  If the Annuity is owned by an
entity, the Rider's death benefit is payable upon the death of the Annuitant, even if a Contingent Annuitant is named.

The minimum  allowable  age to purchase  the Plus40(TM)rider is 40; the maximum  allowable  age is 75. If the Rider is  purchased on two
lives,  both persons must meet the age  eligibility  requirements.  The Plus40(TM)rider is not  available  to  purchasers  who use their
Annuity as a funding  vehicle for a Tax Sheltered  Annuity (or 403(b)) or as a funding  vehicle for a qualified  plan under Section 401
of the Internal Revenue Code ("Code").

ADJUSTMENTS, RESTRICTIONS & LIMITATIONS
|X|      If you die during the first 24 months  following the effective  date of the Plus40(TM)rider  (generally,  the Issue Date of your
         Annuity),  the death  benefit  will be limited to the amount of any charges  paid for the Rider while it was in effect.  While
         we will return the charges  you have paid  during the  applicable  period as the death  benefit,  your  Beneficiary(ies)  will
         receive no additional life insurance benefit from the Plus40(TM)rider if you die within 24 months of its effective date.
                    ----------

|X|      If you make a Purchase  Payment  within 24 months prior to the date of death,  the Account  Value used to determine the amount
         of the death  benefit  will be reduced by the  amount of such  Purchase  Payment(s).  If we reduce the death  benefit  payable
         under the  Plus40(TM)rider  based on this  provision,  we will  return  50% of any  charges  paid for the Rider  based on those
         Purchase Payments as an additional amount included in the death benefit under the Rider.

|X|      If we apply  Credits to your Annuity  based on Purchase  Payments,  such Credits are treated as Account  Value for purposes of
         determining  the death benefit  payable under the Plus40(TM)rider.  However,  if Credits were applied to Purchase  Payments made
         within 24 months  prior to the date of death,  the Account  Value used to  determine  the amount of the death  benefit will be
         reduced  by the  amount of such  Credits.  If we reduce  the death  benefit  payable  under the  Plus40(TM)rider  based on this
         provision,  we will return 50% of any charges paid for the Rider based on such  Credits as an  additional  amount  included in
         the death benefit under the Rider.

|X|      If you become  terminally  ill (as defined in the Rider) and elect to receive a portion of the Plus40(TM)rider's  death benefit
         under the  Accelerated  Death  Benefit  provision,  the amount  that will be  payable  under the Rider upon your death will be
         reduced.  Please refer to the Accelerated Death Benefit provision described below.

|X|      If charges for the Plus40(TM)rider are due and are unpaid as of the date the death  benefit is being  determined,  such charges
         will be deducted from the amount paid to your Beneficiary(ies).

|X|      If the age of any person  covered  under the  Plus40(TM)rider is  misstated,  we will  adjust any  coverage  under the Rider to
         conform to the facts.  For example,  if, due to the  misstatement,  we overcharged  you for coverage under the Rider,  we will
         add  any  additional  charges  paid  to the  amount  payable  to  your  Beneficiary(ies).  If,  due to  the  misstatement,  we
         undercharged  you for coverage  under the Rider,  we will reduce the death  benefit in  proportion  to the charges not paid as
         compared to the charges that would have been paid had there been no misstatement.

|X|




     On or after an Owner reaches the expiry date of the Rider (the  anniversary of the Annuity's  Issue Date on or  immediately  after
         the 95th  birthday),  coverage  will  terminate.  No charge will be made for an Owner  following the expiry date. If there are
         two Owners,  the expiry date applies  separately to each Owner;  therefore,  coverage may continue for one Owner and terminate
         as to the other Owner.

MAXIMUM BENEFIT
The Plus40(TM)rider is subject to a Maximum  Death Benefit  Amount based on the Purchase  Payments  applied to your Annuity.  The Plus40(TM)
rider may also be subject to a Per Life Maximum  Benefit  that is based on all amounts paid under any annuity  contract we issue to you
                                                                                                  ---
under which you have elected the Plus40(TM)rider or similar life insurance coverage.

|X|      The Maximum Death Benefit Amount is 100% of the Purchase  Payments  increasing at 5% per year following the date each Purchase
             ----------------------------
         Payment is applied to the Annuity until the date of death.  If Purchase  Payments are applied to the Annuity  within 24 months
         prior to the date of death, the Maximum Death Benefit Amount is decreased by the amount of such Purchase Payments.

|X|      The Per Life Maximum Benefit applies to Purchase  Payments applied to any such annuity  contracts more than 24 months from the
             ------------------------
         date of death that exceed  $1,000,000.  If you make Purchase  Payments in excess of  $1,000,000,  we will reduce the aggregate
         death  benefit  payable under all Plus40(TM)riders,  or similar  riders issued by us, based on the combined  amount of Purchase
         Payments  in excess of  $1,000,000  multiplied  by 40%. If the Per Life  Maximum  Benefit  applies,  we will reduce the amount
         payable under each  applicable  Plus40(TM)rider on a pro-rata  basis.  If the Per Life Maximum  Benefit applies upon your death,
         we will return any excess  charges  that you paid on the  portion of your  Account  Value on which no benefit is payable.  The
         Per Life Maximum Benefit does not limit the amount of Purchase Payments that you may apply to your Annuity.

ACCELERATED DEATH BENEFIT PROVISION
If you become  terminally  ill, you may request that a portion of the death benefit  payable under the Plus40(TM)rider be prepaid instead
of being paid to your  Beneficiary(ies)  upon your  death.  Subject to our  requirements  and where  allowed by law, we will make a one
time,  lump sum  payment.  Our  requirements  include  proof  satisfactory  to us, in writing,  of terminal  illness  after the Rider's
Effective Date.

The  maximum we will pay,  before any  reduction,  is the  lesser of 50% of the  Rider's  death  benefit or  $100,000.  If you elect to
accelerate  payment of a portion of the death benefit under the Plus40(TM)rider,  the amount of the remaining death benefit is reduced by
the prepaid amount  accumulating at an annualized  interest rate of 6.0%.  Eligibility  for an accelerated  payout of a portion of your
Plus40(TM)rider death benefit may be more  restrictive  than any  medically-related  waiver provision that may be applicable to you under
the Annuity.

CHARGES FOR THE PLUS40(TM)RIDER
The  Plus40(TM)rider has a current  charge and a  guaranteed  maximum  charge.  The current  charge for the Plus40(TM)rider is based on a
percentage of your Account Value as of the anniversary of the Issue Date of your Annuity.  The applicable  percentages  differ based on
the attained  age,  last  birthday of the Owner(s) or Annuitant  (in the case of an entity owned  Annuity) as of the date the charge is
due. We reserve the right to change the current  charge,  at any time,  subject to regulatory  approval  where  required.  If there are
two Owners,  we calculate the current charge that applies to each Owner  individually  and deduct the combined amount as the charge for
the Rider.  There is no charge based on a person's life after coverage  expires as to that person.  However,  a charge will still apply
to the second of two Owners (and coverage will continue for such Owner) if such Owner has not reached the expiry date.

                                           Attained Age                  Percentage of
                                                                         Account Value
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                             Age 40-75                       .80%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                             Age 76-80                       1.60%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                             Age 81-85                       3.20%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                             Age 86-90                       4.80%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                              Age 91                         6.50%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                              Age 92                         7.50%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                              Age 93                         8.50%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                              Age 94                         9.50%
                                   ------------------------------ ----------------------------
                                   ------------------------------ ----------------------------
                                              Age 95                        10.50%
                                   ------------------------------ ----------------------------

The charge for the  Plus40(TM)rider may also be subject to a  guaranteed  maximum  charge that will apply if the  current  charge,  when
applied to the Account Value,  exceeds the guaranteed  maximum  charge.  The guaranteed  maximum charge is based on a charge per $1,000
of insurance.

We determine the charge for the Rider  annually,  in arrears.  We deduct the charge:  (1) upon your death;  (2) on each  anniversary of
the  Issue  Date;  (3) on the date  that you  begin  receiving  annuity  payments;  (4) if you  surrender  your  Annuity  other  than a
medically-related  surrender;  or (5) if you choose to terminate the Rider.  If the Rider  terminates for any of the preceding  reasons
on a date other than the  anniversary  of the  Annuity's  Issue  Date,  the charge  will be  prorated.  During the first year after the
Annuity's  Issue Date, the charge will be prorated from the Issue Date. In all subsequent  years,  the charge will be prorated from the
last anniversary of the Issue Date.

You can elect to pay the annual  charge  through a  redemption  from your  Annuity's  Account  Value or through  funds other than those
within the  Annuity.  If you do not elect a method of payment,  we will  automatically  deduct the annual  charge  from your  Annuity's
Account Value.  The manner in which you elect to pay for the Rider may have tax implications.

|X|      If you elect to pay the charge through a redemption of your  Annuity's  Account  Value,  the  withdrawal  will be treated as a
         taxable  distribution,  and will generally be subject to ordinary  income tax on the amount of any investment  gain withdrawn.
         If you are under age 59 1/2,  the  distribution  may also be  subject to a 10%  penalty on any gain  withdrawn,  in  addition  to
         ordinary  income taxes.  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.

|X|      If you  elect to pay the  charge  through  funds  other  than  those  from your  Annuity,  we  require  that  payment  be made
         electronically  in U.S.  currency  through a U.S.  financial  institution.  If you elect to pay the charge through  electronic
         transfer  of funds  and  payment  has not been  received  within 31 days from the due date,  we will  deduct  the  charge as a
         redemption from your Annuity, as described above.

TERMINATION
You can  terminate  the Plus40(TM)rider at any time.  Upon  termination,  you will be  required to pay a pro-rata  portion of the annual
charge for the Rider.  The Plus40(TM)rider will  terminate  automatically  on the date your Account  Value is applied to begin  receiving
annuity  payments,  on the date you  surrender  the Annuity  or, on the expiry date with  respect to such person who reaches the expiry
date.  We may also  terminate  the  Plus40(TM)rider,  if  necessary,  to  comply  with  our  interpretation  of the Code and  applicable
regulations.  Once terminated, you may not reinstate your coverage under the Plus40(TM)rider.

CHANGES IN ANNUITY DESIGNATIONS
Changes in ownership and annuitant  designations  under the Annuity may result in changes in eligibility  and charges under the Plus40(TM)
rider.  These changes may include termination of the Rider.  Please refer to the Rider for specific details.

SPOUSAL ASSUMPTION
A  spousal  beneficiary  may elect to assume  ownership  of the  Annuity  instead  of taking  the  Annuity's  Death  Benefit.  However,
regardless of whether a spousal  beneficiary  assumes ownership of the Annuity,  the death benefit under the Plus40(TM)rider will be paid
despite the fact that the Annuity  will  continue.  The spousal  beneficiary  can apply the death  benefit  proceeds  under the Plus40(TM)
rider to the Annuity as a new Purchase  Payment,  can purchase a new annuity  contract or use the death benefit  proceeds for any other
purpose.  Certain  restrictions  may apply to an Annuity  that is used as a qualified  investment.  Spousal  beneficiaries  may also be
eligible to purchase the Plus40(TM)rider,  in which case the Annuity's  Account Value,  as of the date the assumption is effective,  will
be treated as the initial Purchase Payment under applicable provisions of the Rider.

TAX CONSIDERATION
The Plus40(TM)rider was designed to qualify as a life insurance  contract under the Code. As life  insurance,  under most  circumstances,
the Beneficiary(ies) does not pay any Federal income tax on the death benefit payable under the Rider.

If your Annuity is being used as an  Individual  Retirement  Annuity  (IRA),  we consider the Plus40(TM)rider to be outside of your IRA,
since premium for the Rider is paid for either with funds  outside of your Annuity or with  withdrawals  previously  subject to tax and
any applicable tax penalty.

We believe  payments under the accelerated  payout provision of the Rider will meet the requirements of the Code and the regulations in
order to qualify as tax-free  payments.  To the extent permitted by law, we will change our procedures in relation to the Rider, or the
definition of terminally  ill, or any other  applicable term in order to maintain the tax-free status of any amounts paid out under the
accelerated payout provision.



1.









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                  PLEASE SEND ME A STATEMENT  OF  ADDITIONAL  INFORMATION  THAT  CONTAINS  FURTHER  DETAILS  ABOUT THE
                  AMERICAN SKANDIA ANNUITY DESCRIBED IN PROSPECTUS ASAPEXII-PROS (1/2002).
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Variable Annuity Issued by:                                                                  Variable Annuity Distributed by:

AMERICAN SKANDIA LIFE                                                                                      AMERICAN SKANDIA
ASSURANCE CORPORATION                                                                               MARKETING, INCORPORATED
One Corporate Drive                                                                                     One Corporate Drive
Shelton, Connecticut 06484                                                                       Shelton, Connecticut 06484
Telephone: 1-800-752-6342                                                                           Telephone: 203-926-1888
http://www.americanskandia.com                                                               http://www.americanskandia.com



                                                          MAILING ADDRESSES:


                                                 AMERICAN SKANDIA - VARIABLE ANNUITIES
                                                             P.O. Box 7040
                                                       Bridgeport, CT 06601-7040



                                                             EXPRESS MAIL:
                                                 AMERICAN SKANDIA - VARIABLE ANNUITIES
                                                          One Corporate Drive
                                                           Shelton, CT 06484