EXHIBIT (e)



                         MUNIYIELD INSURED FUND, INC.

                            TERMS AND CONDITIONS OF
                     AUTOMATIC DIVIDEND REINVESTMENT PLAN

     1. Appointment of Agent. You, ____________, will act as Agent for me, and
will open an account for me under the Dividend Reinvestment Plan (the "Plan")
in the same name as my present shares of common stock, par value $.10 per
share ("Common Stock"), of MUNIYIELD INSURED FUND, INC. (the "Fund") are
registered, and will automatically put into effect for me the dividend
reinvestment option of the Plan as of the first record date for a dividend or
capital gains distribution (collectively referred to herein as a "dividend"),
payable at the election of shareholders in cash or shares of Common Stock.

     2. Dividends Payable in Common Stock. My participation in the Plan
constitutes an election by me to receive dividends in shares of Common Stock
whenever the Fund declares a dividend. In such event, the dividend amount
shall automatically be made payable to me entirely in shares of Common Stock
which shall be acquired by the Agent for my account, depending upon the
circumstances described in paragraph 3, either (i) through receipt of
additional shares of unissued but authorized shares of Common Stock from the
Fund ("newly issued shares") as described in paragraph 6 or (ii) by purchase
of outstanding shares of Common Stock on the open market ("open-market
purchases") as described in paragraph 7.

     3. Determination of Whether Newly-Issued Shares or Open Market Purchases.
If on the payment date for the dividend (the "valuation date"), the net asset
value per share of the Common Stock, as defined in paragraph 8, is equal to or
less than the market price per share of the Common Stock, as defined in
paragraph 8, plus estimated brokerage commissions (such condition being
referred to herein as "market premium"), the Agent shall invest the dividend
amount in newly issued shares on my behalf as described in paragraph 6. If on
the valuation date, the net asset value per share is greater than the market
value (such condition being referred to herein as "market discount"), the
Agent shall invest the dividend amount in shares acquired on my behalf in
open-market purchases as described in paragraph 7.

     4. Purchase Period for Open-Market Purchases. In the event of a market
discount on the valuation date, the Agent shall have until the last business
day before the next ex-dividend date with respect to the shares of Common
Stock or in no event more than 30 days after the valuation date (the "last
purchase date") to invest the dividend amount in shares acquired in
open-market purchases except where temporary curtailment or suspension of
purchases is necessary to comply with applicable provisions of federal
securities laws.

     5. Failure to Complete Open-Market Purchases During Purchase Period. If
the Agent is unable to invest the full dividend amount in open-market
purchases during the purchase period because the market discount has shifted
to a market premium or otherwise, the Agent will invest the uninvested portion
of the dividend amount in newly issued shares at the close of business on the
last purchase date as described in paragraph 4; except that the Agent may not
acquire newly issued shares after the valuation date under the foregoing
circumstances unless it has received a legal opinion that registration of such
shares is not required under the Securities Act of 1933 or unless the shares
to be issued are registered under such Act.







     6. Acquisition of Newly-Issued Shares. In the event that all or part of
the dividend amount is to be invested in newly issued shares, you shall
automatically receive such newly-issued shares of Common Stock, including
fractions, for my account, and the number of additional newly-issued shares of
Common Stock to be credited to my account shall be determined by dividing the
dollar amount of the dividend on my shares to be invested in newly-issued
shares by the net asset value per share of Common Stock on the date the shares
are issued (the valuation date in the case of an initial market premium or the
last purchase date in case the Agent is unable to complete open-market
purchases during the purchase period); provided, that the maximum discount
from the then current market price per share on the date of issuance shall not
exceed 5%.

     7. Manner of Making Open-Market Purchases. In the event that the dividend
amount is to be invested in shares of Common Stock acquired in open-market
purchases, you shall apply the amount of such dividend on my shares (less my
pro rata share of brokerage commissions incurred with respect to your
open-market purchases) to the purchase on the open-market of shares of the
Common Stock for my account. Open-market purchases may be made on any
securities exchange where the Common Stock is traded, in the over-the-counter
market or in negotiated transactions and may be on such terms as to price,
delivery and otherwise as you shall determine. My funds held by you uninvested
will not bear interest, and it is understood that, in any event, you shall
have no liability in connection with any inability to purchase shares within
30 days after the initial date of such purchase as herein provided, or with
the timing of any purchases affected. You shall have no responsibility as to
the value of the Common Stock acquired for my account. For the purposes of
cash investments you may commingle my funds with those of other shareholders
of the Fund for whom you similarly act as Agent, and the average price
(including brokerage commissions) of all shares purchased by you as Agent in
the open market shall be the price per share allocable to me in connection
with open-market purchases.

     8. Meaning of Market Price and Net Asset Value. For all purposes of the
Plan: (a) the market price of the Common Stock on a particular date shall be
the last sales price on the New York Stock Exchange (the "Exchange") on that
date, or, if there is no sale on the Exchange on that date, then the mean
between the closing bid and asked quotations for such stock on the Exchange on
such date and (b) net asset value per share of the Common Stock on a
particular date shall be as determined by or on behalf of the Fund.

     9. Registration of Shares Acquired Pursuant to the Plan. You may hold my
shares of Common Stock acquired pursuant to the Plan, together with the shares
of other shareholders of the Fund acquired pursuant to the Plan, in
noncertificated form in your name or that of your nominee. You will forward to
me any proxy solicitation material and will vote any shares so held for me
only in accordance with the proxy returned by me to the Fund. Upon my written
request, you will deliver to me, without charge, a certificate or certificates
for the full shares held by you for my account.

     10. Confirmations. You will confirm to me each acquisition made for my
account as soon as practicable but not later than 60 days after the date
thereof.



                                      2







     11. Fractional Interests. Although I may from time to time have an
undivided fractional interest (computed to three decimal places) in a share of
the Fund, no certificates for a fractional share will be issued. However,
dividends and distributions on fractional shares will be credited to my
account. In the event of termination of my account under the Plan, you will
adjust for any such undivided fractional interest in cash at the market value
of the Fund's shares at the time of termination less the pro rata expense of
any sale required to make such an adjustment.

     12. Stock Dividends or Share Purchase Rights. Any stock dividends or
split shares distributed by the Fund on shares held by you for me will be
credited to my account. In the event that the Fund makes available to its
shareholders rights to purchase additional shares or other securities, the
shares held for me under the Plan will be added to other shares held by me in
calculating the number of rights to be issued to me.

     13. Service Fee. Your service fee for handling capital gains
distributions or income dividends will be paid by the Fund. I will be charged
for my pro rata share of brokerage commissions on all open market purchases.

     14. Termination of Account. I may terminate my account under the Plan by
notifying you in writing. Such termination will be effective immediately if my
notice is received by you not less than ten days prior to any dividend or
distribution record date; otherwise such termination will be effective on the
first trading day after the payment date for such dividend or distribution
with respect to any subsequent dividend or distribution. The Plan may be
terminated by you or the Fund upon notice in writing mailed to me at least 90
days prior to any record date for the payment of any dividend or distribution
by the Fund. Upon any termination you will cause a certificate or certificates
for the full shares held for me under the Plan and cash adjustment for any
fraction to be delivered to me without charge. If I elect by notice to you in
writing in advance of such termination to have you sell part or all of my
shares and remit the proceeds to me, you are authorized to deduct brokerage
commissions for this transaction from the proceeds.

     15. Amendment of Plan. These terms and conditions may be amended or
supplemented by you or the Fund at any time or times but, except when
necessary or appropriate to comply with applicable law or the rules or
policies of the Securities and Exchange Commission or any other regulatory
authority, only by mailing to me appropriate written notice at least 90 days
prior to the effective date thereof. The amendment or supplement shall be
deemed to be accepted by me unless, prior to the effective date, thereof, you
receive written notice of the termination of my account under the Plan. Any
such amendment may include an appointment by you in your place and stead of a
successor Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Agent under
these terms and conditions. Upon any such appointment of an Agent for the
purpose of receiving dividends and distributions, the Fund will be authorized
to pay to such successor Agent, for my account, all dividends and
distributions payable on Common Stock of the Fund held in my name or under the
Plan for retention or application by such successor Agent as provided in these
terms and conditions.

     16. Extent of Responsibility of Agent. You shall at all times act in good
faith and agree to use your best efforts within reasonable limits to insure
the accuracy of all services



                                      3







performed under this Agreement and to comply with applicable law, but assume
no responsibility and shall not be liable for loss or damage due to errors
unless such error is caused by your negligence, bad faith, or will willful
misconduct or that of your employees.

     17. Governing Law. These terms and conditions shall be governed by the
laws of the State of New York without regard to its conflicts of laws
provisions.



                                      4