ASXT(S) 1/97

                   Supplement to Prospectus Dated May 1, 1996
                         as Supplemented January 2, 1997
                        Supplement Dated January 2, 1997


The  following  additional  portfolio of American  Skandia  Trust ("AST") is now
available  as a variable  investment  option for  Annuities  purchased  prior to
October 15, 1996: AST Putnam Value Growth & Income Portfolio.

On the cover  page of the  Prospectus  after the third  paragraph  and under the
caption "HIGHLIGHTS - (1) Investment Options" the following is added:

Please note that the AST Putnam Value Growth & Income Portfolio is not available
as a variable  investment option for Annuities purchased on or after October 15,
1996.

Under  the  caption  "INVESTMENT  OPTIONS -  Variable  Investment  Options"  the
following is added at the end of the chart:

Please  note  that  the AST  Putnam  Value  Growth &  Income  Portfolio  and its
corresponding  Sub-account is not available as a variable  investment option for
Annuities purchased on or after October 15, 1996.

The following information is added to the table entitled "Underlying Mutual Fund
Portfolio Annual Expenses (as a percentage of average net assets):

Unless  otherwise  shown,  the  expenses  shown  below  are for the year  ending
December  31,  1995.  "N/A" shown below  indicates  that no entity has agreed to
reimburse the particular expense indicated.



                                              Manage-        Manage-                                        Total           Total
                                               ment           ment            Other          Other         Annual          Annual
                                                Fee            Fee          Expenses       Expenses       Expenses        Expenses
                                               after         without          after         without         after          without
                                                any            any             any            any            any             any
                                            applicable     applicable      applicable     applicable     applicable      applicable
                                            reimburse-     reimburse-      reimburse-     reimburse-     reimburse-      reimburse-
                                               ment           ment            ment           ment           ment            ment
- ------------------------------------------------------------------------------------------------------------------------------------

American Skandia Trust
                                                                                                            
    AST Putnam Value Growth & Income(1)         N/A          0.75%            0.33%          0.33%           1.08%          1.08%


(1)  This Portfolio is first being offered as of the date of this Supplement.  
Expenses shown are estimated and annualized.

The following information is added to the table entitled "Expense Examples":

           Examples (amounts shown are rounded to the nearest dollar)






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If you  surrender  your Annuity at the end of the  applicable  time period,  you
would pay the following expenses on a $1,000.00  investment,  assuming 5% annual
return on assets:
- --------------------------------------------------------------------------------

                                                After:
Sub-accounts                          1 yr.  3 yrs.5 yrs.  10 yrs.
AST Putnam Value Growth & Income       112     167   215    297

If you do not surrender your Annuity at the end of the applicable time period or
begin taking annuity payments at such time, you would pay the following expenses
on a $1,000.00 investment, assuming 5% annual return on assets:
                                                After:
Sub-accounts                          1 yr.  3 yrs.5 yrs.  10 yrs.
- ------------
AST Putnam Value Growth & Income        27      82   140    297






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The following is added to the section entitled "INVESTMENT OPTIONS - Underlying Mutual Fund:  American Skandia Trust"

                                                                                              
Sub-account                                                                                     Underlying Mutual Fund Portfolio

AST Putnam Value Growth & Income                                                                AST Putnam Value Growth & Income







                         SHORT DESCRIPTIONS - APPENDIX B

The  following  short  description  of the AST  Putnam  Value  Growth  &  Income
Portfolio is contained in an Appendix to the Prospectus:

AST Putnam Value Growth & Income Portfolio:  The primary investment objective of
the AST  Putnam  Value  Growth & Income  Portfolio  is to seek  capital  growth.
Current  income is a  secondary  investment  objective.  The  Portfolio  invests
primarily in common  stocks that offer  potential for capital  growth,  and may,
consistent with its investment objectives, invest in stocks that offer potential
for current income.  The Portfolio may also purchase  corporate bonds, notes and
debentures,  preferred stocks,  or convertible  securities (both debt securities
and  preferred  stocks)  or  U.S.  government  securities,  if  the  Sub-advisor
determines  that their  purchase would help further the  Portfolio's  investment
objectives.  The  Portfolio  may  invest up to 20% of its  assets in  securities
denominated  in foreign  currency.  The Portfolio  may also purchase  Eurodollar
certificates  of deposit,  without  regard to the 20% limit.  The  Portfolio may
invest in  securities  principally  traded in, or issued by issuers  located in,
underdeveloped  and  developing  nations,  which are  sometimes  referred  to as
"emerging  markets." The Portfolio may buy or sell foreign  currencies,  foreign
currency futures  contracts and foreign  currency forward  contracts for hedging
purposes in connection with its foreign investments.  The Portfolio may invest a
portion  of  its  assets  in  fixed-income  securities,   including  lower-rated
fixed-income  securities,  which are  commonly  known as "junk  bonds,"  without
limitation  as to credit  rating.  The Portfolio may invest in zero coupon bonds
and  payment-in-kind  bonds.  The Portfolio may buy and sell stock index futures
contracts.  The Portfolio may buy and sell call and put options on index futures
or on stock indices in addition to or as an alternative to purchasing or selling
index futures or, to the extent  permitted by applicable law, to earn additional
income. The Portfolio may seek to increase its current return by writing covered
call and put  options  on  securities  it owns or in which  it may  invest.  The
Portfolio may also buy and sell put and call options for hedging  purposes.  The
aggregate  value of the securities  underlying the options may not exceed 25% of
Portfolio  assets.  The  Portfolio  may enter into  repurchase  agreements.  The
Portfolio may purchase  securities for future  delivery,  which may increase its
overall  investment  exposure  and  involves  a risk of loss if the value of the
securities  declines  prior  to the  settlement  date.  The  length  of time the
Portfolio  has held a particular  security is not generally a  consideration  in
investment decisions. As a result of the Portfolio's investment policies,  under
certain market conditions the Portfolio's  turnover rate may be higher than that
of other mutual funds.