LBL Premier Planner--Post Effective Amendment No.2 to Form S-1

CONSULTANT SOLUTIONS (CLASSIC, PLUS, ELITE, SELECT) PROSPECTUS DATED MAY 1, 2014

The following information supplements the prospectus for your variable annuity contract issued by Lincoln Benefit Life Company.

This document contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. We assume no obligation to update any forward-looking statements as a result of new information or future events or developments.

These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. These statements may address, among other things, our strategy for growth, product development, investment results, regulatory approvals, market position, expenses, financial results, litigation and reserves. We believe that these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements.

In addition to the normal risks of business, we are subject to significant risks and uncertainties, including those listed below, which apply to us as an insurer and a provider of other products and financial services. These risks constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995 and readers should carefully review such cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and historical trends. These cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this document, in our filings with the SEC or in materials incorporated therein by reference.

Changes in actual experience could materially affect the profitability of our business

Our product pricing includes long-term assumptions regarding investment returns, mortality, morbidity, persistency and operating costs and expenses of our business. We establish target returns for each product based upon these factors and the average amount of capital that we must hold to support in-force contracts taking into account rating agencies and regulatory requirements. Profitability emerges over a period of years depending on the nature and life of the product and is subject to variability as actual results may differ from pricing assumptions. Additionally, many of our products have fixed or guaranteed terms that limit our ability to increase revenues or reduce benefits, including credited interest, once the product has been issued.

Our profitability depends on the adequacy of investment spreads, the management of market and credit risks associated with investments, the sufficiency of premiums and contract charges to cover mortality and morbidity benefits, the persistency of policies to ensure recovery of acquisition expenses, and the management of operating costs and expenses within anticipated pricing allowances. Legislation and regulation of the insurance marketplace and products could also affect the profitability of our business.

The reserve for life-contingent contract benefits is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, persistency and expenses. We periodically review the adequacy of these reserves on an aggregate basis and if future experience differs significantly from assumptions, adjustments to reserves may be required which could have a material effect on our operating results.

Changes in market interest rates may lead to a significant decrease in the profitability of our spread-based products

Our ability to manage our fixed annuities is dependent upon maintaining profitable spreads between investment yields and interest crediting rates. When market interest rates decrease or remain at relatively low levels, proceeds from investments that have matured or have been prepaid or sold may be reinvested at lower yields, reducing investment spread. Lowering interest crediting rates on some products in such an environment can partially offset decreases in investment yield. However, these changes could be limited by market conditions, regulatory minimum rates or contractual minimum rate guarantees on many contracts and may not match the timing or magnitude of changes in investment yields. Decreases in the interest crediting rates offered on products could make those products less attractive, leading to changes in the level of policy loans, surrenders and withdrawals. Non-parallel shifts in interest rates, such as increases in short-term rates without accompanying increases in medium- and long-term rates, can influence customer demand for fixed annuities, which could impact the level and profitability of new customer deposits. Increases in market interest rates can also have negative effects on our business, for example by increasing the attractiveness of other investments to our customers, which can lead to increased surrenders at a time when our fixed income investment asset values are lower as a result of the increase in interest rates. This could lead to the sale of fixed income securities at a loss. For certain products, principally fixed annuity and interest-sensitive life products, the earned rate on assets could lag behind rising market yields. We may react to market conditions by increasing crediting rates, which could narrow spreads and reduce profitability on our business.

Changes in estimates of profitability on interest-sensitive life, fixed annuities and other investment products may adversely affect our profitability and financial condition through the amortization of DAC

DAC related to interest-sensitive life, fixed annuities and other investment contracts is amortized in proportion to actual historical gross profits and estimated future gross profits (“EGP”) over the estimated lives of the contracts. The principal assumptions for determining the amount of EGP are mortality, persistency, expenses, investment returns, including capital gains and losses on assets supporting contract liabilities, interest crediting rates to contractholders, and the effects of any hedges. Updates to these assumptions (commonly referred to as “DAC unlocking”) could adversely affect our profitability and financial condition.

We may not be able to mitigate the capital impact associated with statutory reserving requirements, potentially resulting in a return on equity below priced levels

To support statutory reserves for certain term and universal life insurance products with secondary guarantees, we currently utilize reinsurance and capital markets solutions for financing a portion of our statutory reserve requirements deemed to be non-economic. If we are not able to maintain sufficient financing as a result of market conditions or otherwise, this could result in a return on equity below priced levels.

Under current federal and state income tax law, certain of our products, primarily life insurance and annuities, receive favorable tax treatment. This favorable treatment may give certain of our products a competitive advantage over noninsurance products. Congress and various state legislatures from time to time consider legislation that would reduce or eliminate the favorable policyholder tax treatment currently applicable to life insurance and annuities. Congress and various state legislatures also consider proposals to reduce the taxation of certain products or investments that may compete with life insurance or annuities. Legislation that increases the taxation on insurance products or reduces the taxation on competing products could lessen the advantage or create a disadvantage for certain of our products making them less competitive. Such proposals, if adopted, could have a material effect on our profitability and financial condition and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning.

Our recent acquisition and further acquisitions by Resolution Life, Inc. could be disruptive to our operations

On April 1, 2014, Resolution Life, Inc. acquired all of our outstanding common stock from Allstate Life Insurance Company. The acquisition could subject our operations to risks and uncertainties that could have a material adverse effect on our financial condition and results of operations. Resolution Life, Inc. intends to acquire additional runoff books of business from unrelated insurers and may seek to combine portions of the related operations with ours to recognize efficiencies. The risks and uncertainties related to these transactions include, but are not limited to:

Our failure to address these risks could cause us to incur unanticipated liabilities, impose harmful disruptions to our customer service operations and harm our business generally.

We are subject to market risk and declines in credit quality which may adversely affect investment income and cause realized and unrealized losses

We are subject to the risk that we will incur losses due to adverse changes in interest rates or credit spreads. Adverse changes to these rates and spreads may occur due to changes in fiscal policy and the economic climate, the liquidity of a market or market segment, insolvency or financial distress of key market makers or participants, or changes in market perceptions of credit worthiness and/or risk tolerance.

We are subject to risks associated with potential declines in credit quality related to specific issuers or specific industries and a general weakening in the economy, which are typically reflected through credit spreads. Credit spread is the additional yield on fixed income securities above the risk-free rate (typically referenced as the yield on U.S. Treasury securities) that market participants require to compensate them for assuming credit, liquidity and/or prepayment risks. Credit spreads vary (i.e. increase or decrease) in response to the market’s perception of risk and liquidity in a specific issuer or specific sector and are influenced by the credit ratings, and the reliability of those ratings, published by external rating agencies. A decline in the quality of our investment portfolio as a result of adverse economic conditions or otherwise could cause additional realized and unrealized losses on securities.

A decline in market interest rates or credit spreads could have an adverse effect on our investment income as we invest cash in new investments that may earn less than the portfolio’s average yield. In a declining interest rate environment, borrowers may prepay or redeem securities more quickly than expected as they seek to refinance at lower rates. An increase in market interest rates or credit spreads could have an adverse effect on the value of our investment portfolio by decreasing the fair values of the fixed income securities that comprise a substantial majority of our investment portfolio.

Concentration of our investment portfolio in any particular segment of the economy may have adverse effects on our operating results and financial condition

The concentration of our investment portfolio in any particular industry, collateral type, group of related industries, geographic sector or risk type could have an adverse effect on our investment portfolio and consequently on our results of operations and financial condition. Events or developments that have a negative impact on any particular industry, group of related industries or geographic region may have a greater adverse effect on the investment portfolio to the extent that the portfolio is concentrated rather than diversified.

The determination of the amount of realized capital losses recorded for impairments of our investments is subjective and could materially impact our operating results and financial condition

The determination of the amount of realized capital losses recorded for impairments vary by investment type and is based on our ongoing evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. We update our evaluations regularly and reflect changes in other-than-temporary impairments in our results of operations. The assessment of whether other-than-temporary impairments have occurred is based on our case-by-case evaluation of the underlying reasons for the decline in fair value. Our conclusions on such assessments are judgmental and include assumptions and projections of future cash flows which may ultimately prove to be incorrect as assumptions, facts and circumstances change. Furthermore, historical trends may not be indicative of future impairments and additional impairments may need to be recorded in the future.

Deteriorating financial performance impacting securities collateralized by residential and commercial mortgage loans, collateralized corporate loans, and commercial mortgage loans may lead to write-downs and impact our results of operations and financial condition

Changes in residential or commercial mortgage delinquencies, loss severities or recovery rates, declining residential or commercial real estate prices, corporate loan delinquencies or recovery rates, changes in credit or bond insurer strength ratings and the quality of service provided by service providers on securities in our portfolio could lead us to determine that write-downs are necessary in the future.

The impact of our investment strategies may be adversely affected by developments in the financial markets

The impact of our investment management strategies may be adversely affected by unexpected developments in the financial markets. For example, derivative contracts may result in coverage that is not as effective as intended thereby leading to the recognition of losses without the recognition of gains expected to mitigate the losses.

The determination of the fair value of our fixed income and equity securities is subjective and could materially impact our operating results and financial condition

In determining fair values we principally use the market approach which utilizes market transaction data for the same or similar instruments. The degree of management judgment involved in determining fair values is inversely related to the availability of market observable information. The fair value of assets may differ from the actual amount received upon sale of an asset in an orderly transaction between market participants at the measurement date. Moreover, the use of different valuation assumptions may have a material effect on the assets’ fair values. The difference between amortized cost or cost and fair value, net of deferred income taxes, certain DAC, certain deferred sales inducement costs, and certain reserves for life-contingent contract benefits, is reflected as a component of accumulated other comprehensive income in shareholder’s equity. Changing market conditions could materially affect the determination of the fair value of securities and unrealized net capital gains and losses could vary significantly.

Difficult conditions in the global economy and capital markets generally could adversely affect our business and operating results and these conditions may not improve in the near future

As with most businesses, we believe difficult conditions in the global economy and capital markets, such as significant negative macroeconomic trends, including relatively high and sustained unemployment, reduced consumer spending, lower residential and commercial real estate prices, substantial increases in delinquencies on consumer debt, including defaults on home mortgages, and the relatively low availability of credit could have an adverse effect on our business and operating results.

Stressed conditions, volatility and disruptions in global capital markets, particular markets or financial asset classes could adversely affect our investment portfolio. Disruptions in one market or asset class can also spread to other markets or asset classes. Although the disruption in the global financial markets has moderated, not all global financial markets are functioning normally, and the rate of recovery from the U.S. recession has been below historic averages. Several governments around the world have announced austerity actions to address their budget deficits that may lead to a decline in economic activity. While European policy makers have developed mechanisms to address funding concerns, risks to the European economy and financial markets remain.

General economic conditions could adversely affect us in the form of consumer behavior and pressure investment results. Holders of some of our interest-sensitive life insurance and annuity products may engage in an elevated level of discretionary withdrawals of contractholder funds. Our investment results could be adversely affected as deteriorating financial and business conditions affect the issuers of the securities in our investment portfolio.

There can be no assurance that actions of the U.S. federal government, Federal Reserve and other regulatory bodies for the purpose of stabilizing the financial markets and stimulating the economy will achieve the intended effect

In response to the financial crises affecting the banking system, the financial markets and the broader economy in recent years, the U.S. federal government, the Federal Reserve and other regulatory bodies have taken actions such as purchasing mortgage-backed and other securities from financial institutions; investing directly in banks, thrifts, and bank and savings and loan holding companies; and increasing federal spending to stimulate the economy. There can be no assurance as to the long term impact such actions will have on the financial markets or on economic conditions, including potential inflationary effects. Continued volatility and any further economic deterioration could materially and adversely affect our business, financial condition and results of operations.

Losses from legal and regulatory actions may be material to our operating results or cash flows

We are involved in various legal actions, including class action litigation challenging a range of company practices and coverage provided by our insurance products, some of which involve claims for substantial or indeterminate amounts. We are also involved in various regulatory actions and inquiries, including market conduct exams by state insurance regulatory agencies. In the event of an unfavorable outcome in one or more of these matters, the ultimate liability may be in excess of amounts currently accrued and may be material to our operating results or cash flows for a particular annual period.

We are subject to extensive regulation and potential further restrictive regulation may increase our operating costs

As an insurance company with separate accounts that are regulated as investment companies, we are subject to extensive laws and regulations. These laws and regulations are complex and subject to change. Changes may sometimes lead to additional expenses and increased legal exposure. Moreover, laws and regulations are administered and enforced by a number of different governmental authorities, each of which exercises a degree of interpretive latitude, including state insurance regulators; state securities administrators; state attorneys general; and federal agencies including the SEC, the FINRA and the U.S. Department of Justice. Consequently, we are subject to the risk that compliance with any particular regulator’s or enforcement authority’s interpretation of a legal issue may not result in compliance with another’s interpretation of the same issue, particularly when compliance is judged in hindsight. In addition, there is risk that any particular regulator’s or enforcement authority’s interpretation of a legal issue may change over time to our detriment, or that changes in the overall legal environment may, even absent any particular regulator’s or enforcement authority’s interpretation of a legal issue changing, cause us to change our views regarding the actions we need to take from a legal risk management perspective, thus necessitating changes to our practices that may, in some cases, limit our ability to grow or to improve the profitability of our business. Furthermore, in some cases, these laws and regulations are designed to protect or benefit the interests of a specific constituency rather than a range of constituencies. For example, state insurance laws and regulations are generally intended to protect or benefit purchasers or users of insurance products. In many respects, these laws and regulations limit our ability to maintain the profitability of our business.

Regulatory reforms, and the more stringent application of existing regulations, may make it more expensive for us to conduct our business

The federal government has enacted comprehensive regulatory reforms for financial services entities. As part of a larger effort to strengthen the regulation of the financial services market, certain reforms are applicable to the insurance industry, including the Federal Insurance Office (“FIO”) established within the Treasury Department.

In recent years, the state insurance regulatory framework has come under public scrutiny, members of Congress have discussed proposals to provide for federal chartering of insurance companies, and the FIO and Financial Stability Oversight Council were established. We can make no assurances regarding the potential impact of state or federal measures that may change the nature or scope of insurance and financial regulation.

These regulatory reforms and any additional legislative change or regulatory requirements imposed upon us in connection with the federal government’s regulatory reform of the financial services industry, and any more stringent enforcement of existing regulations by federal authorities, may make it more expensive for us to conduct our business, or limit our ability to grow.

Market conditions beyond our control impact the availability and cost of the reinsurance we may purchase. No assurances can be made that reinsurance will remain continuously available to us to the same extent and on the same terms and rates as is currently available. If we were unable to purchase reinsurance protection in amounts that we consider sufficient and at prices that we consider acceptable, we may have to accept an increase in risk exposure or seek other alternatives.

Reinsurance subjects us to the credit risk of our reinsurers and may not be adequate to protect us against losses arising from ceded insurance, which could have a material effect on our operating results

The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including changes in market conditions, whether insured losses meet the qualifying conditions of the reinsurance contract and whether reinsurers, or their affiliates, have the financial capacity and willingness to make payments under the terms of a reinsurance treaty or contract. Our ceded insurance risks will include all new business generated in the thirty months following the closing of our acquisition by Resolution Life, Inc., which business will be entirely ceded to Allstate Life Insurance Company. Our inability to collect a material recovery from a reinsurer could have a material effect on our operating results.

Adverse capital and credit market conditions may significantly affect our ability to meet liquidity needs or our ability to obtain credit on acceptable terms

In periods of extreme volatility and disruption in the capital and credit markets, liquidity and credit capacity may be severely restricted. In such circumstances, our ability to obtain capital to fund operating expenses, financing costs, capital expenditures or acquisitions may be limited, and the cost of any such capital may be significant. Our access to additional financing will depend on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, as well as lenders’ perception of our long- or short-term financial prospects. Similarly, our access to funds may be impaired if regulatory authorities or rating agencies take negative actions against us. If a combination of these factors were to occur, our internal sources of liquidity may prove to be insufficient and in such case, we may not be able to successfully obtain additional financing on favorable terms.

A large scale pandemic, the continued threat of terrorism or military actions may have an adverse effect on the level of claim losses we incur, the value of our investment portfolio, our competitive position, marketability of product offerings, liquidity and operating results

A large scale pandemic, the continued threat of terrorism, within the United States and abroad, or military and other actions, and heightened security measures in response to these types of threats, may cause significant volatility and losses in our investment portfolio from interest rate changes, and result in loss of life, disruptions to commerce and reduced economic activity. Some of the assets in our investment portfolio may be adversely affected by reduced economic activity caused by a large scale pandemic or the continued threat of terrorism. Additionally, a large scale pandemic or terrorist act could have a material effect on the sales, profitability, competitiveness, marketability of product offerings, liquidity, and operating results.

Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our results of operations and financial condition

Our financial statements are subject to the application of generally accepted accounting principles, which are periodically revised, interpreted and/or expanded. Accordingly, we are required to adopt new guidance or interpretations, or could be subject to existing guidance as we enter into new transactions, which may have a material effect on our results of operations and financial condition that is either unexpected or has a greater impact than expected. For a description of changes in accounting standards that are currently pending and, if known, our estimates of their expected impact, see Note 2 of the financial statements.

The occurrence of events unanticipated in our disaster recovery systems and management continuity planning or a support failure from external providers during a disaster could impair our ability to conduct business effectively

The occurrence of a disaster such as a natural catastrophe, an industrial accident, a terrorist attack or war, cyber attack, events unanticipated in our disaster recovery systems, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of our managers were unavailable in the event of a disaster, our ability to effectively conduct our business could be severely compromised.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer systems could be subject to cyber attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Like other global companies, we have experienced threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties and/or customer dissatisfaction or loss.

Loss of key vendor relationships or failure of a vendor to protect personal information of our customers, claimants or employees could affect our operations

We rely on services and products provided by many vendors in the United States and abroad. These include, for example, vendors of computer hardware and software. In the event that one or more of our vendors suffers a bankruptcy or otherwise becomes unable to continue to provide products or services, or fails to protect personal information of our customers, claimants or employees, we may suffer operational impairments and financial losses.

We may not be able to protect our intellectual property and may be subject to infringement claims

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect our intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful. An inability to protect our intellectual property could have a material effect on our business.

We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights. Any such claims and any resulting litigation could result in significant expense and liability. If our third party providers or we are found to have infringed a third-party intellectual property right, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods,

processes, copyrights, trademarks, trade secrets or licenses. Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement a costly work around. Any of these scenarios could have a material effect on our business and results of our operations.

Lincoln Benefit Life Company (referred to in this document as “we,” “Lincoln Benefit,” “our,” “us” or the “Company”) was incorporated under the laws of the State of Nebraska in 1938. Lincoln Benefit is a wholly-owned subsidiary of Resolution Life, Inc., a Delaware corporation, which is a wholly-owned, indirect subsidiary of Resolution Life, L.P. (the “Limited Partnership”), a Bermuda limited partnership.

On April 1, 2014, after receiving all required regulatory approvals, Resolution Life, Inc. acquired all the outstanding capital stock in Lincoln Benefit from Allstate Life Insurance Company (“ALIC”) for approximately $587 million. Immediately prior to the closing of the transaction, Lincoln Benefit recaptured certain business previously reinsured to ALIC, including (a) all of the fixed deferred annuity, value adjusted deferred annuity and indexed deferred annuity business written by the Company that was previously reinsured to ALIC, (b) all of the life insurance business written by the Company through independent producers that was previously reinsured to ALIC, other than certain specified life business, and (c) all of the net liability of the Company with respect to the accident and health and long-term care insurance business written by the Company that was previously reinsured to ALIC ((a), (b) and (c) collectively, the “Recaptured Business”). In connection with the closing, Lincoln Benefit and ALIC entered into an Amended and Restated Reinsurance Agreement (the “ARRA”), pursuant to which ALIC continues to reinsure business that was ceded by Lincoln Benefit to ALIC before the closing, with the exception of the Recaptured Business (the “ALIC Reinsured Business”). The business reinsured under the ARRA is administered by ALIC pursuant to a new Administrative Services Agreement entered into between Lincoln Benefit and ALIC in connection with the closing (the “ASA”).

In our reports, we occasionally refer to statutory financial information. All domestic United States insurance companies are required to prepare statutory-basis financial statements. As a result, industry data is available that enables comparisons between insurance companies, including competitors that are not subject to the requirement to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”). We frequently use industry publications containing statutory financial information to assess our competitive position.

We provide interest-sensitive, traditional and variable life insurance products through exclusive financial specialists. Prior to July 18, 2013, we sold interest-sensitive traditional and variable life insurance and fixed annuities, including deferred and immediate, through independent master brokerage agencies. Effective January 1, 2014, we no longer offer fixed annuities such as deferred and immediate annuities.

We compete on a wide variety of factors, including product offerings, brand recognition, financial strength and ratings, prices, distribution and the level of customer service. The market for life insurance companies continues to be highly fragmented and competitive. As of December 31, 2012, there were approximately 420 groups of life insurance companies in the United States, most of which offered one or more similar products.

We have reinsurance agreements whereby certain premiums, contract charges, interest credited to contractholder funds, contract benefits and expenses are ceded to ALIC, Lincoln Benefit Reinsurance Company (“LB Re”) and other non-affiliated reinsurers.

Lincoln Benefit is subject to extensive regulation, primarily at the state level. The method, extent and substance of such regulation varies by state but generally has its source in statutes that establish standards and requirements for conducting the business of insurance and that delegate regulatory authority to a state agency. These rules have a substantial effect on our business and relate to a wide variety of matters, including insurer solvency, reserve adequacy, insurance company licensing and examination, agent licensing, policy forms, rate

setting, the nature and amount of investments, claims practices, participation in guaranty funds, transactions with affiliates, the payment of dividends, underwriting standards, statutory accounting methods, trade practices, and corporate governance. For a discussion of statutory financial information, see Note 11 of the financial statements. For a discussion of regulatory contingencies, see Note 9 of the financial statements. Notes 9 and 11 are incorporated in this Item 11(a) by reference.

In recent years, the state insurance regulatory framework has come under increased federal scrutiny. As part of an effort to strengthen the regulation of the financial services market, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) was enacted in 2010. Many regulations required pursuant to this law must still be finalized, and we cannot predict what the final regulations will require but do not expect a material impact on Lincoln Benefit’s operations. Dodd-Frank also created the Federal Insurance Office (“FIO”) within the Treasury Department. The FIO monitors the insurance industry, provides advice to the Financial Stability Oversight Council, represents the U.S. on international insurance matters and studies the current regulatory system. FIO submitted a report to Congress in December 2013 addressing how to improve and modernize the system of insurance regulation. In addition, state legislators and insurance regulators continue to examine the appropriate nature and scope of state insurance regulation. We cannot predict whether any specific state or federal measures will be adopted to change the nature or scope of the regulation of insurance or what effect any such measures would have on Lincoln Benefit.

Lincoln Benefit occupies office space in Lincoln, Nebraska and Northbrook, Illinois that is owned by Allstate Insurance Company. Expenses associated with these facilities are allocated to us on a direct basis.

Information required for Item 11(c) is incorporated by reference to the discussion under the heading “Regulation and Compliance” in Note 9 of the financial statements.

We have audited the accompanying Statements of Financial Position of Lincoln Benefit Life Company (the “Company”), an affiliate of The Allstate Corporation, as of December 31, 2013 and 2012, and the related Statements of Operations and Comprehensive Income, Shareholder’s Equity, and Cash Flows for each of the three years in the period ended December 31, 2013. Our audits also included Schedule I–Summary of Investments–Other than Investments in Related Parties and Schedule IV–Reinsurance. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, such financial statements present fairly, in all material respects, the financial position of Lincoln Benefit Life Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, Schedule I–Summary of Investments–Other than Investments in Related Parties and Schedule IV–Reinsurance, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

The accompanying financial statements include the accounts of Lincoln Benefit Life Company (the “Company”), a wholly owned subsidiary of Allstate Life Insurance Company (“ALIC”), which is wholly owned by Allstate Insurance Company (“AIC”). All of the outstanding common stock of AIC is owned by Allstate Insurance Holdings, LLC, a wholly owned subsidiary of The Allstate Corporation (the “Corporation”). These financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

To conform to the current year presentation, certain amounts in the prior year notes to financial statements have been reclassified.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

On July 17, 2013, ALIC entered into a definitive agreement with Resolution Life Holdings, Inc. to sell the Company, the Company’s life insurance business generated through independent master brokerage agencies, and all of the Company’s deferred fixed annuity and long-term care insurance business. The transaction is subject to regulatory approvals and other customary closing conditions. The Company expects the closing to occur in April 2014. On or before closing, the Company also expects to recapture the business being sold that was ceded to ALIC, subject to regulatory approval.

The Company sells interest-sensitive, traditional and variable life insurance products through Allstate exclusive agencies and exclusive financial specialists. Prior to July 18, 2013, the Company sold interest-sensitive, traditional and variable life insurance, and fixed annuities including deferred and immediate through independent master brokerage agencies. Effective January 1, 2014, the Company no longer offers fixed annuities such as deferred and immediate annuities.

The Company is authorized to sell life insurance and retirement products in all states except New York, as well as in the District of Columbia, the U.S. Virgin Islands and Guam. For 2013, the top geographic locations for statutory premiums and annuity considerations were California, Texas and Florida. No other jurisdiction accounted for more than 5% of statutory premiums and annuity considerations. All statutory premiums and annuity considerations are ceded under reinsurance agreements.

The Company has exposure to market risk as a result of its investment portfolio. Market risk is the risk that the Company will incur realized and unrealized net capital losses due to adverse changes in interest rates and credit spreads. The Company also has certain exposures to changes in equity prices in its equity-indexed annuities and separate accounts liabilities, which are transferred to ALIC in accordance with reinsurance agreements. Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of its interest bearing assets. This risk arises from the Company’s investment in interest-sensitive assets. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields. Credit spread risk is the risk that the Company will incur a loss due to adverse changes in credit spreads. This risk arises from the Company’s investment in spread-sensitive fixed income assets.

The Company monitors economic and regulatory developments that have the potential to impact its business. Federal and state laws and regulations affect the taxation of insurance companies and life insurance and annuity products. Congress and various state legislatures from time to time consider legislation that would reduce or eliminate the favorable policyholder tax treatment currently applicable to life insurance and annuities. Congress and various state legislatures also consider proposals to reduce the taxation of certain products or investments that may compete with life insurance or annuities. Legislation that increases the taxation on insurance products or reduces the taxation on competing products could lessen the advantage or create a disadvantage for certain of the Company’s products making them less competitive. Such proposals, if adopted, could have an adverse effect on the Company’s financial position or ability to sell such products and could result in the surrender of some existing contracts and policies. In addition, changes in the federal estate tax laws could negatively affect the demand for the types of life insurance used in estate planning.

Fixed income securities include bonds, residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”). Fixed income securities, which may be sold prior to their contractual maturity, are designated as available for sale and are carried at fair value. The difference between amortized cost and fair value, net of deferred income taxes, is reflected as a component of accumulated other comprehensive income. Cash received from calls, principal payments and make-whole payments is reflected as a component of proceeds from sales and cash received from maturities and pay-downs, including prepayments, is reflected as a component of investment collections within the Statements of Cash Flows.

Short-term investments, including money market funds, commercial paper and other short-term investments, are carried at fair value.

Investment income primarily consists of interest and is recognized on an accrual basis using the effective yield method. Interest income for RMBS and CMBS is determined considering estimated pay-downs, including prepayments, obtained from third party data sources and internal estimates. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the prepayments originally anticipated and the actual prepayments received and currently anticipated. For RMBS and CMBS of high credit quality with fixed interest rates, the effective yield is recalculated on a retrospective basis. For all others, the effective yield is recalculated on a prospective basis. Accrual of income is suspended for other-than-temporarily impaired fixed income securities when the timing and amount of cash flows expected to be received is not reasonably estimable.

Realized capital gains and losses include gains and losses on investment sales and write-downs in value due to other-than-temporary declines in fair value. Realized capital gains and losses on investment sales, including principal payments, are determined on a specific identification basis.

Recognition of premium revenues and contract charges, and related benefits and interest credited

The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, Lincoln Benefit Reinsurance Company (“LB Re”, an affiliate of the Company) and non-affiliated reinsurers (see Notes 3 and 8). Amounts reflected in the Statements of Operations and Comprehensive Income are presented net of reinsurance.

Traditional life insurance products consist principally of products with fixed and guaranteed premiums and benefits, primarily term and whole life insurance products. Premiums from these products are recognized as revenue when due from policyholders. Benefits are reflected in contract benefits and recognized in relation to premiums, so that profits are recognized over the life of the policy.

Immediate annuities with life contingencies provide insurance protection over a period that extends beyond the period during which premiums are collected. Premiums from these products are recognized as revenue when received at the inception of the contract. Benefits and expenses are recognized in relation to premiums. Profits from these policies come from investment income, which is recognized over the life of the contract.

Interest-sensitive life contracts, such as universal life and single premium life, are insurance contracts whose terms are not fixed and guaranteed. The terms that may be changed include premiums paid by the contractholder, interest credited to the contractholder account balance and contract charges assessed against the contractholder account balance. Premiums from these contracts are reported as contractholder fund deposits. Contract charges consist of fees assessed against the contractholder account balance for the cost of insurance (mortality risk), contract administration and surrender of the contract prior to contractually specified dates. These contract charges are recognized as revenue when assessed against the contractholder account balance. Contract benefits include life-contingent benefit payments in excess of the contractholder account balance.

Contracts that do not subject the Company to significant risk arising from mortality or morbidity are referred to as investment contracts. Fixed annuities, including market value adjusted annuities, equity-indexed annuities and immediate annuities without life contingencies, are considered investment contracts. Consideration received for such contracts is reported as contractholder fund deposits. Contract charges for investment contracts consist of fees assessed against the contractholder account balance for maintenance, administration and surrender of the contract prior to contractually specified dates, and are recognized when assessed against the contractholder account balance.

Interest credited to contractholder funds represents interest accrued or paid on interest-sensitive life and investment contracts. Crediting rates for certain fixed annuities and interest-sensitive life contracts are adjusted periodically by the Company to reflect current market conditions subject to contractually guaranteed minimum rates. Crediting rates for indexed life and annuities are generally based on an equity index, such as the Standard & Poor’s (“S&P”) 500 Index.

Contract charges for variable life and variable annuity products consist of fees assessed against the contractholder account balances for contract maintenance, administration, mortality, expense and surrender of the contract prior to contractually specified dates. Contract benefits incurred for variable annuity products include guaranteed minimum death, income, withdrawal and accumulation benefits.

The Company has reinsurance agreements whereby all premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, LB Re and non-affiliated reinsurers (see Notes 3 and 8). Reinsurance recoverables and the related reserve for life-contingent contract benefits and contractholder funds are reported separately in the Statements of Financial Position. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers and establishes allowances for uncollectible reinsurance as appropriate.

Investment income earned on the assets that support contractholder funds and the reserve for life-contingent contract benefits is not included in the Company’s financial statements as those assets are owned and managed by ALIC under the terms of the reinsurance agreements.

The income tax provision is calculated under the liability method. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are unrealized capital gains

and losses, accrued expenses and reinsurance recoverables. A deferred tax asset valuation allowance is established when there is uncertainty that such assets will be realized.

The reserve for life-contingent contract benefits payable under insurance policies, including traditional life insurance and life-contingent immediate annuities, is computed on the basis of long-term actuarial assumptions of future investment yields, mortality, morbidity, policy terminations and expenses. These assumptions, which for traditional life insurance are applied using the net level premium method, include provisions for adverse deviation and generally vary by characteristics such as type of coverage, year of issue and policy duration.

Contractholder funds represent interest-bearing liabilities arising from the sale of products such as interest-sensitive life insurance and fixed annuities. Contractholder funds primarily comprise cumulative deposits received and interest credited to the contractholder less cumulative contract benefits, surrenders, withdrawals and contract charges for mortality or administrative expenses. Contractholder funds also include reserves for secondary guarantees on interest-sensitive life insurance and certain fixed annuity contracts and reserves for certain guarantees on variable annuity contracts.

Separate accounts assets are carried at fair value. The assets of the separate accounts are legally segregated and available only to settle separate account contract obligations. Separate accounts liabilities represent the contractholders’ claims to the related assets and are carried at an amount equal to the separate accounts assets. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and therefore are not included in the Company’s Statements of Operations and Comprehensive Income. Deposits to and surrenders and withdrawals from the separate accounts are reflected in separate accounts liabilities and are not included in cash flows.

Absent any contract provision wherein the Company provides a guarantee, variable annuity and variable life insurance contractholders bear the investment risk that the separate accounts’ funds may not meet their stated investment objectives. The risk and associated cost of these contract guarantees are ceded to ALIC in accordance with the reinsurance agreements.

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income

In February 2013, the Financial Accounting Standards Board issued guidance requiring expanded disclosures about the amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by income statement line item but only if the amount reclassified is required under accounting principles generally accepted in the United States of America (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about those amounts is required. The Company adopted the new guidance in 2013. The new guidance affects disclosures only and therefore had no impact on the Company’s results of operations or financial position.

The Company uses services performed by its affiliates, AIC, ALIC and Allstate Investments LLC, and business facilities owned or leased and operated by AIC in conducting its business activities. In addition, the

Company shares the services of employees with AIC. The Company reimburses its affiliates for the operating expenses incurred on behalf of the Company. The Company is charged for the cost of these operating expenses based on the level of services provided. Operating expenses allocated to the Company were $249.7 million, $241.8 million and $204.8 million in 2013, 2012 and 2011, respectively. Of these costs, the Company retains investment related expenses on the invested assets that are not transferred under the reinsurance agreements. All other costs are ceded to ALIC under the reinsurance agreements.

The Company has a service agreement with Allstate Distributors, LLC (“ADLLC”), a broker-dealer company owned by ALIC, whereby ADLLC promotes and markets products sold by the Company. In return for these services, the Company recorded expense of $71 thousand, $80 thousand and $7.2 million in 2013, 2012 and 2011, respectively, that was ceded to ALIC under the terms of the reinsurance agreements.

The Company receives distribution services from Allstate Financial Services, LLC, an affiliated broker-dealer company, for certain annuity and variable life insurance contracts sold by Allstate exclusive agencies. For these services, the Company incurred commission and other distribution expenses of $7.7 million, $6.4 million and $7.5 million in 2013, 2012 and 2011, respectively, that were ceded to ALIC.

The following table summarizes amounts that were ceded to ALIC under reinsurance agreements and reported net in the Statements of Operations and Comprehensive Income.

Reinsurance recoverables due from ALIC totaled $14.52 billion and $15.55 billion as of December 31, 2013 and 2012, respectively.

In September 2012, the Company entered into a coinsurance reinsurance agreement with LB Re to cede certain interest-sensitive life insurance policies to LB Re. Reinsurance recoverables due from LB Re totaled $1.9 million and $2.0 million as of December 31, 2013 and 2012, respectively.

The Company is a party to a federal income tax allocation agreement with the Corporation (see Note 10).

The Company has an intercompany loan agreement with the Corporation. The amount of intercompany loans available to the Company is at the discretion of the Corporation. The maximum amount of loans the Corporation will have outstanding to all its eligible subsidiaries at any given point in time is limited to $1 billion. The Corporation may use commercial paper borrowings, bank lines of credit and securities lending to fund intercompany borrowings. The Company had no amounts outstanding under the intercompany loan agreement as of December 31, 2013 or 2012.

The amortized cost, gross unrealized gains and losses and fair value for fixed income securities are as follows:

The scheduled maturities for fixed income securities are as follows as of December 31, 2013:

Actual maturities may differ from those scheduled as a result of calls and make-whole payments by the issuers. RMBS and CMBS are shown separately because of the potential for prepayment of principal prior to contractual maturity dates.

Realized capital gains and losses netted to zero in 2013 with gains from sales offsetting impairment write-downs. The Company recognized realized capital gains of $626 thousand and $2.1 million in 2012 and 2011, respectively. Realized capital gains and losses in 2013, 2012 and 2011 included $2 thousand, $19 thousand and $12 thousand, respectively, of other-than-temporary impairment losses related to RMBS, none of which were included in other comprehensive income. No other-than-temporary impairment losses were included in accumulated other comprehensive income as of December 31, 2013 or 2012.

Gross gains of $3 thousand, $645 thousand and $1.9 million and gross losses of $1 thousand, zero and $3 thousand were realized on sales of fixed income securities during 2013, 2012 and 2011, respectively.

Unrealized net capital gains and losses included in accumulated other comprehensive income are as follows:

The change in unrealized net capital gains and losses for the years ended December 31 is as follows:

The Company has a comprehensive portfolio monitoring process to identify and evaluate each fixed income security whose carrying value may be other-than-temporarily impaired.

For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings.

If the Company has not made the decision to sell the fixed income security and it is not more likely than not the Company will be required to sell the fixed income security before recovery of its amortized cost basis, the Company evaluates whether it expects to receive cash flows sufficient to recover the entire amortized cost basis of the security. The Company calculates the estimated recovery value by discounting the best estimate of future cash flows at the security’s original or current effective rate, as appropriate, and compares this to the amortized cost of the security. If the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the fixed income security, the credit loss component of the impairment is recorded in earnings, with the remaining amount of the unrealized loss related to other factors recognized in other comprehensive income.

The Company’s portfolio monitoring process includes a quarterly review of all securities to identify instances where the fair value of a security compared to its amortized cost is below established thresholds. The process also includes the monitoring of other impairment indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other securities for which the Company may have a concern, are evaluated for potential other-than-temporary impairment using all reasonably available information relevant to the collectability or recovery of the security. Inherent in the Company’s evaluation of other-than-temporary impairment for these fixed income securities are assumptions and estimates about the financial condition and future earnings potential of the issue or issuer. Some of the factors that may be considered in evaluating whether a decline in fair value is other than temporary are: 1) the financial condition, near-term and long-term prospects of the issue or issuer, including relevant industry specific market conditions and trends, geographic location and implications of rating agency actions and offering prices; 2) the specific reasons that a security is in an unrealized loss position, including overall market conditions which could affect liquidity; and 3) the length of time and extent to which the fair value has been less than amortized cost.

The following table summarizes the gross unrealized losses and fair value of fixed income securities by the length of time that individual securities have been in a continuous unrealized loss position.

As of December 31, 2013, $4.1 million of unrealized losses are related to investment grade securities with an unrealized loss position less than 20% of amortized cost, the degree of which suggests that these securities do not pose a high risk of being other-than-temporarily impaired. Investment grade is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from S&P, Fitch, Dominion, Kroll or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available. Unrealized losses on investment grade securities are principally related to increasing risk-free interest rates or widening credit spreads since the time of initial purchase.

As of December 31, 2013, the Company has not made the decision to sell and it is not more likely than not the Company will be required to sell fixed income securities with unrealized losses before recovery of the amortized cost basis.

All of the municipal bond issuers represented in the Company’s municipal bond portfolio were in Washington as of both December 31, 2013 and 2012.

As of December 31, 2013, the Company is not exposed to any credit concentration risk of a single issuer and its affiliates greater than 10% of the Company’s shareholder’s equity.

As of December 31, 2013, fixed income securities and short-term investments with a carrying value of $9.4 million were on deposit with regulatory authorities as required by law.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Assets and liabilities recorded on the Statements of Financial Position at fair value are categorized in the fair value hierarchy based on the observability of inputs to the valuation techniques as follows:

The availability of observable inputs varies by instrument. In situations where fair value is based on internally developed pricing models or inputs that are unobservable in the market, the determination of fair value requires more judgment. The degree of judgment exercised by the Company in determining fair value is typically greatest for instruments categorized in Level 3. In many instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments.

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance that assets and liabilities are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, the Company’s processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, the Company assesses the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. The Company performs procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. The Company performs ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

The Company has two types of situations where investments are classified as Level 3 in the fair value hierarchy. The first is where quotes continue to be received from independent third-party valuation service providers and all significant inputs are market observable; however, there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity such that the degree of market observability has declined to a point where categorization as a Level 3 measurement is considered appropriate. The indicators considered in determining whether a significant decrease in the volume and level of activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, the level of credit spreads over historical levels, applicable bid-ask spreads, and price consensus among market participants and other pricing sources.

The second situation where the Company classifies securities in Level 3 is where specific inputs significant to the fair value estimation models are not market observable. This primarily occurs in the Company’s use of broker quotes to value certain securities where the inputs have not been corroborated to be market observable, and the use of valuation models that use significant non-market observable inputs.

In determining fair value, the Company principally uses the market approach which generally utilizes market transaction data for the same or similar instruments. To a lesser extent, the Company uses the income approach which involves determining fair values from discounted cash flow methodologies. For the majority of Level 2 and Level 3 valuations, a combination of the market and income approaches is used.

Summary of significant valuation techniques for assets and liabilities measured at fair value on a recurring basis

U.S. government and agencies: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

Municipal: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

Corporate, including privately placed: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. Also included are privately placed securities valued using a discounted cash flow model that is widely accepted in the financial services industry and uses market observable inputs and inputs derived principally from, or corroborated by, observable market data. The primary inputs to the discounted cash flow model include an interest rate yield curve, as well as published credit spreads for similar assets in markets that are not active that incorporate the credit quality and industry sector of the issuer.

Foreign government: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads.

RMBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, prepayment speeds, collateral performance and credit spreads.

CMBS: The primary inputs to the valuation include quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, collateral performance and credit spreads.

Corporate: Valued based on models that are widely accepted in the financial services industry with certain inputs to the valuation model that are significant to the valuation, but are not market observable.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2013. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2013.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2012. There are no assets or liabilities measured at fair value on a non-recurring basis as of December 31, 2012.

The following table summarizes quantitative information about the significant unobservable inputs used in Level 3 fair value measurements.

If the projected option cost increased (decreased), it would result in a higher (lower) liability fair value.

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2013.

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012.

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011.

Transfers between level categorizations may occur due to changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask spreads. Transfers between level categorizations may also occur due to changes in the valuation source. For example, in situations where a fair value quote is not provided by the Company’s independent third-party valuation service provider and as a result the price is stale or has been replaced with a broker quote whose inputs have not been corroborated to be market observable, the security is transferred into Level 3. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized and changes in unrealized gains and losses in the quarter of transfer are reflected in the Level 3 rollforward table.

During 2011, certain RMBS and CMBS were transferred into Level 2 from Level 3 as a result of increased liquidity in the market and a sustained increase in market activity for these assets.

During 2011, a corporate fixed income security was transferred into Level 2 from Level 3 due to a change in the valuation model to use primarily market observable inputs. Transfers out of Level 3 during 2012 and 2011 included situations where a broker quote was used in the prior period and a fair value quote became available from the Company’s independent third-party valuation service provider in the current period. A quote utilizing the new pricing source was not available as of the prior period, and any gains or losses related to the change in valuation source for individual securities were not significant.

The following table provides the change in unrealized gains and losses included in net income for Level 3 assets and liabilities held as of December 31.

The amounts in the table above represent the change in unrealized gains and losses included in net income for the period of time that the asset or liability was determined to be in Level 3. The amounts attributable to fixed income securities are reported in net investment income. The amount attributable to derivatives embedded in life and annuity contracts is reported as follows: $33.0 million in interest credited to contractholder funds and $10.2 million in contract benefits in 2013, $125.9 million in interest credited to contractholder funds and $5.1 million in contract benefits in 2012 and $(106.6) million in interest credited to contractholder funds and $(4.3) million in contract benefits in 2011. These amounts are ceded in accordance with the Company’s reinsurance agreements.

As of December 31, 2013 and 2012, financial instruments not carried at fair value included contractholder funds on investment contracts. The carrying value and fair value of contractholder funds on investment contracts were $7.76 billion and $7.66 billion, respectively, as of December 31, 2013 and were $9.16 billion and $9.14 billion, respectively, as of December 31, 2012. The fair value of contractholder funds on investment contracts is based on the terms of the underlying contracts utilizing prevailing market rates for similar contracts adjusted for the Company’s own credit risk. Deferred annuities included in contractholder funds are valued using discounted cash flow models which incorporate market value margins, which are based on the cost of holding economic capital, and the Company’s own credit risk. Immediate annuities without life contingencies are valued at the present value of future benefits using market implied interest rates which include the Company’s own credit risk. The fair value measurements for contractholder funds on investment contracts are categorized as Level 3.

The Company has derivatives embedded in non-derivative host contracts that are required to be separated from the host contracts and accounted for at fair value. The Company’s embedded derivatives are equity options

in life and annuity product contracts, which provide equity returns to contractholders, and guaranteed minimum accumulation and withdrawal benefits in variable annuity contracts. The Company does not use derivatives for speculative purposes.

The following table provides a summary of the volume and fair value positions of embedded derivative financial instruments. None of these derivatives are designated as accounting hedging instruments and all are gross liabilities reported in contractholder funds.

Gains and losses from valuation and settlements of embedded derivative financial instruments were reported as $36.9 million in interest credited to contractholder funds and $10.2 million in contract benefits in 2013, and $186.6 million in interest credited to contractholder funds and $5.1 million in contract benefits in 2012, which in turn were ceded to ALIC.

There were no off-balance-sheet financial instruments as of December 31, 2013 or 2012.

As of December 31, the reserve for life-contingent contract benefits consists of the following:

The following table highlights the key assumptions generally used in calculating the reserve for life-contingent contract benefits:

The following table highlights the key contract provisions relating to contractholder funds:

The table below presents information regarding the Company’s variable annuity contracts with guarantees. The Company’s variable annuity contracts may offer more than one type of guarantee in each contract; therefore, the sum of amounts listed exceeds the total account balances of variable annuity contracts’ separate accounts with guarantees.

As of December 31, 2013, liabilities for guarantees included reserves for variable annuity death benefits of $8.4 million, variable annuity income benefits of $8.7 million, variable annuity accumulation benefits of $9.0 million, variable annuity withdrawal benefits of $0.5 million and interest-sensitive life and fixed annuity guarantees of $281.8 million. As of December 31, 2012, liabilities for guarantees included reserves for variable annuity death benefits of $9.4 million, variable annuity income benefits of $19.5 million, variable annuity accumulation benefits of $18.0 million, variable annuity withdrawal benefits of $1.6 million and interest-sensitive life and fixed annuity guarantees of $200.7 million.

The Company has reinsurance agreements under which it reinsures all of its business to ALIC, LB Re or non-affiliated reinsurers. Under the agreements, premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are reinsured. The Company purchases reinsurance to limit aggregate and single losses on large risks. The Company cedes a portion of the mortality risk on certain life policies under coinsurance agreements to a pool of twelve non-affiliated reinsurers.

As of December 31, 2013, 86.9% of the total reinsurance recoverables were related to ALIC and 13.1% were related to non-affiliated reinsurers. As of December 31, 2013 and 2012, 95% and 98%, respectively, of the Company’s non-affiliated reinsurance recoverables are due from companies rated A- or better by S&P.

The effects of reinsurance on premiums and contract charges for the years ended December 31 are as follows:

The effects of reinsurance on interest credited to contractholder funds, contract benefits and expenses for the years ended December 31 are as follows:

In the normal course of business, the Company provides standard indemnifications to contractual counterparties in connection with numerous transactions, including acquisitions and divestitures. The types of indemnifications typically provided include indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations.

The aggregate liability balance related to all guarantees was not material as of December 31, 2013.

The Company is subject to changing social, economic and regulatory conditions. From time to time, regulatory authorities or legislative bodies seek to impose additional regulations regarding agent and broker compensation, regulate the nature of and amount of investments, and otherwise expand overall regulation of insurance products and the insurance industry. The Company has established procedures and policies to facilitate

compliance with laws and regulations, to foster prudent business operations, and to support financial reporting. The Company routinely reviews its practices to validate compliance with laws and regulations and with internal procedures and policies. As a result of these reviews, from time to time the Company may decide to modify some of its procedures and policies. Such modifications, and the reviews that led to them, may be accompanied by payments being made and costs being incurred. The ultimate changes and eventual effects of these actions on the Company’s business, if any, are uncertain.

The Company is currently being examined by certain states for compliance with unclaimed property laws. It is possible that this examination may result in additional payments of abandoned funds to states and to changes in the Company’s practices and procedures for the identification of escheatable funds, which could impact benefit payments and reserves, among other consequences; however, it is not likely to have a material effect on the financial statements of the Company.

The Company joins the Corporation and its other subsidiaries (the “Allstate Group”) in the filing of a consolidated federal income tax return and is party to a federal income tax allocation agreement (the “Allstate Tax Sharing Agreement”). Under the Allstate Tax Sharing Agreement, the Company pays to or receives from the Corporation the amount, if any, by which the Allstate Group’s federal income tax liability is affected by virtue of inclusion of the Company in the consolidated federal income tax return. The Company also has a supplemental tax sharing agreement with respect to reinsurance ceded to ALIC to allocate the tax benefits and costs related to such reinsurance. Effectively, these agreements result in the Company’s annual income tax provision being computed, with adjustments, as if the Company filed a separate return, adjusted for the reinsurance ceded to ALIC.

The Internal Revenue Service (“IRS”) is currently examining the Allstate Group’s 2011 and 2012 federal income tax returns. The IRS has completed its examination of the Allstate Group’s 2009 and 2010 federal income tax returns and issued a Revenue Agent’s Report on April 15, 2013. The Allstate Group protested certain of the adjustments contained in the report and the case was forwarded to Appeals on June 13, 2013. The IRS has also completed its examinations of the Allstate Group’s federal income tax returns for the years 2005-2008 and a final settlement for those years has been approved by the Joint Committee on Taxation. The Allstate Group’s tax years prior to 2005 have been examined by the IRS and the statute of limitations has expired on those years. Any adjustments that may result from IRS examinations of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company.

The Company had no liability for unrecognized tax benefits as of December 31, 2013, 2012 or 2011, and believes it is reasonably possible that the liability balance will not significantly increase within the next twelve months. No amounts have been accrued for interest or penalties.

The components of the deferred income tax assets and liabilities as of December 31 are as follows:

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

The Company paid income taxes of $4.2 million, $4.8 million and $4.4 million in 2013, 2012 and 2011, respectively.

A reconciliation of the statutory federal income tax rate to the effective income tax rate on income from operations for the years ended December 31 is as follows:

The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of Nebraska. Prescribed statutory accounting practices include a variety of publications of the National Association of Insurance Commissioners (“NAIC”), as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed.

The State of Nebraska requires insurance companies domiciled in its state to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the State of Nebraska Insurance Commissioner. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition and certain sales inducement costs to expense as incurred, establishing life insurance reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis.

Statutory net income was $7.7 million, $8.5 million and $8.6 million in 2013, 2012 and 2011, respectively. Statutory capital and surplus was $332.5 million and $323.9 million as of December 31, 2013 and 2012, respectively.

The ability of the Company to pay dividends is dependent on business conditions, income, cash requirements and other relevant factors. The payment of shareholder dividends by the Company without the prior approval of the Nebraska Department of Insurance (“NE DOI”) is limited to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. The Company did not pay any dividends in 2013. The maximum amount of dividends the Company can pay without prior NE DOI approval during 2014 is $33.2 million. Any dividend must be paid out of unassigned surplus excluding unrealized appreciation from investments, which totaled $159.2 million as of December 31, 2013, and cannot result in capital and surplus being less than the minimum amount required by law.

Under state insurance laws, insurance companies are required to maintain paid up capital of not less than the minimum capital requirement applicable to the types of insurance they are authorized to write. Insurance companies are also subject to risk-based capital (“RBC”) requirements adopted by state insurance regulators. A company’s “authorized control level RBC” is calculated using various factors applied to certain financial balances and activity. Companies that do not maintain statutory capital and surplus at a level in excess of the company action level RBC, which is two times authorized control level RBC, are required to take specified actions. Company action level RBC is significantly in excess of the minimum capital requirements. Total statutory capital and surplus and authorized control level RBC of the Company were $332.5 million and $61.9 million, respectively, as of December 31, 2013.

The components of other comprehensive (loss) income on a pre-tax and after-tax basis for the years ended December 31 are as follows:

Item 11(h). Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion highlights significant factors influencing the financial position and results of operations of Lincoln Benefit. It should be read in conjunction with the financial statements and related notes found under Item 11(e) contained herein. We operate as a single segment entity, based on the manner in which we use financial information to evaluate business performance and to determine the allocation of resources.

The most important factors we monitor to evaluate the financial condition and performance of our company include:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the financial statements. The most critical estimates include those used in determining:

In making these determinations, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our business and operations. It is reasonably likely that changes in these estimates could occur from period to period and result in a material impact on our financial statements.

A brief summary of each of these critical accounting estimates follows. For a more detailed discussion of the effect of these estimates on our financial statements, and the judgments and assumptions related to these estimates, see the referenced sections of this document. For a complete summary of our significant accounting policies, see the notes to the financial statements.

Fair value of financial assets Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are responsible for the determination of fair value of financial assets and the supporting assumptions and methodologies. We use independent third-party valuation service providers, broker quotes and internal pricing methods to determine fair values. We obtain or calculate only one single quote or price for each financial instrument.

Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of proprietary models, produce valuation information in the form of a single fair value for individual securities for which a fair value has been requested under the terms of our agreements. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, liquidity spreads, currency rates, and other information, as applicable. Credit and liquidity spreads are

typically implied from completed transactions and transactions of comparable securities. Valuation service providers also use proprietary discounted cash flow models that are widely accepted in the financial services industry and similar to those used by other market participants to value the same financial instruments. The valuation models take into account, among other things, market observable information as of the measurement date, as described above, as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector, and where applicable, collateral quality and other issue or issuer specific information. Executing valuation models effectively requires seasoned professional judgment and experience. In cases where market transactions or other market observable data is limited, the extent to which judgment is applied varies inversely with the availability of market observable information.

For certain of our financial assets measured at fair value, where our valuation service providers cannot provide fair value determinations, we obtain a single non-binding price quote from a broker familiar with the security who, similar to our valuation service providers, may consider transactions or activity in similar securities among other information. The brokers providing price quotes are generally from the brokerage divisions of leading financial institutions with market making, underwriting and distribution expertise regarding the security subject to valuation.

The fair value of certain financial assets, including privately placed corporate fixed income securities, for which our valuation service providers or brokers do not provide fair value determinations, is determined using valuation methods and models widely accepted in the financial services industry. Our internal pricing methods are primarily based on models using discounted cash flow methodologies that develop a single best estimate of fair value. Our models generally incorporate inputs that we believe are representative of inputs other market participants would use to determine fair value of the same instruments, including yield curves, quoted market prices of comparable securities, published credit spreads, and other applicable market data as well as instrument-specific characteristics that include, but are not limited to, coupon rates, expected cash flows, sector of the issuer, and call provisions. Judgment is required in developing these fair values. As a result, the fair value of these financial assets may differ from the amount actually received to sell an asset in an orderly transaction between market participants at the measurement date. Moreover, the use of different valuation assumptions may have a material effect on the financial assets’ fair values.

For most of our financial assets measured at fair value, all significant inputs are based on or corroborated by market observable data and significant management judgment does not affect the periodic determination of fair value. The determination of fair value using discounted cash flow models involves management judgment when significant model inputs are not based on or corroborated by market observable data. However, where market observable data is available, it takes precedence, and as a result, no range of reasonably likely inputs exists from which the basis of a sensitivity analysis could be constructed.

We gain assurance that our financial assets are appropriately valued through the execution of various processes and controls designed to ensure the overall reasonableness and consistent application of valuation methodologies, including inputs and assumptions, and compliance with accounting standards. For fair values received from third parties or internally estimated, our processes and controls are designed to ensure that the valuation methodologies are appropriate and consistently applied, the inputs and assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are accurately recorded. For example, on a continuing basis, we assess the reasonableness of individual fair values that have stale security prices or that exceed certain thresholds as compared to previous fair values received from valuation service providers or brokers or derived from internal models. We perform procedures to understand and assess the methodologies, processes and controls of valuation service providers. In addition, we may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. We perform ongoing price validation procedures such as back-testing of actual sales, which corroborate the various inputs used in internal models to market observable data. When fair value determinations are expected to be more variable, we validate them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

We also perform an analysis to determine whether there has been a significant decrease in the volume and level of activity for the asset when compared to normal market activity, and if so, whether transactions may not be orderly. Among the indicators we consider in determining whether a significant decrease in the volume and level of market activity for a specific asset has occurred include the level of new issuances in the primary market, trading volume in the secondary market, level of credit spreads over historical levels, bid-ask spread, and price consensuses among market participants and sources. If evidence indicates that prices are based on transactions that are not orderly, we place little, if any, weight on the transaction price and will estimate fair value using an internal model. As of December 31, 2013 and 2012, we did not alter fair values provided by our valuation service providers or brokers or substitute them with an internal model for such securities.

The following table identifies fixed income securities and short-term investments as of December 31, 2013 by source of fair value determination.

For additional detail on fair value measurements, see Note 5 of the financial statements.

Impairment of fixed income securities For fixed income securities classified as available for sale, the difference between fair value and amortized cost, net of deferred income taxes, is reported as a component of accumulated other comprehensive income on the Statements of Financial Position and is not reflected in the operating results of any period until reclassified to net income upon the consummation of a transaction with an unrelated third party or when a write-down is recorded due to an other-than-temporary decline in fair value. We have a comprehensive portfolio monitoring process to identify and evaluate each fixed income security whose carrying value may be other-than-temporarily impaired.

For each fixed income security in an unrealized loss position, we assess whether management with the appropriate authority has made the decision to sell or whether it is more likely than not we will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, the security’s decline in fair value is considered other than temporary and is recorded in earnings.

If we have not made the decision to sell the fixed income security and it is not more likely than not we will be required to sell the fixed income security before recovery of its amortized cost basis, we evaluate whether we expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. We use our best estimate of future cash flows expected to be collected from the fixed income security, discounted at the security’s original or current effective rate, as appropriate, to calculate a recovery value and determine whether a credit loss exists. The determination of cash flow estimates is inherently subjective and methodologies may vary depending on facts and circumstances specific to the security. All reasonably available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable assumptions and forecasts, are considered when developing the estimate of cash flows expected to be collected. That information generally includes, but is not limited to, the remaining payment terms of the security, prepayment speeds, foreign exchange rates, the financial condition and future earnings potential of the issue or issuer, expected defaults, expected recoveries, the value of underlying collateral, vintage, geographic concentration, available reserves or escrows, current subordination levels, third party guarantees and other credit enhancements. Other information, such as industry analyst reports and forecasts, sector credit ratings, financial condition of the bond insurer for insured fixed income securities, and other market data relevant to the

realizability of contractual cash flows, may also be considered. The estimated fair value of collateral will be used to estimate recovery value if we determine that the security is dependent on the liquidation of collateral for ultimate settlement. If the estimated recovery value is less than the amortized cost of the security, a credit loss exists and an other-than-temporary impairment for the difference between the estimated recovery value and amortized cost is recorded in earnings. The portion of the unrealized loss related to factors other than credit remains classified in accumulated other comprehensive income. If we determine that the fixed income security does not have sufficient cash flow or other information to estimate a recovery value for the security, we may conclude that the entire decline in fair value is deemed to be credit related and the loss is recorded in earnings.

Once assumptions and estimates are made, any number of changes in facts and circumstances could cause us to subsequently determine that a fixed income security is other-than-temporarily impaired, including: 1) general economic conditions that are worse than previously forecasted or that have a greater adverse effect on a particular issuer or industry sector than originally estimated; 2) changes in the facts and circumstances related to a particular issue or issuer’s ability to meet all of its contractual obligations; and 3) changes in facts and circumstances that result in changes to management’s intent to sell or result in our assessment that it is more likely than not we will be required to sell before recovery of the amortized cost basis. Changes in assumptions, facts and circumstances could result in additional charges to earnings in future periods to the extent that losses are realized. The charge to earnings, while potentially significant to net income, would not have a significant effect on shareholder’s equity, since our securities are designated as available for sale and carried at fair value and as a result, any related unrealized loss, net of deferred income taxes, would already be reflected as a component of accumulated other comprehensive income in shareholder’s equity.

The determination of the amount of other-than-temporary impairment is an inherently subjective process based on periodic evaluations of the factors described above. Such evaluations and assessments are revised as conditions change and new information becomes available. We update our evaluations regularly and reflect changes in other-than-temporary impairments in results of operations as such evaluations are revised. The use of different methodologies and assumptions in the determination of the amount of other-than-temporary impairments may have a material effect on the amounts presented within the financial statements.

For additional detail on investment impairments, see Note 4 of the financial statements.

Overview and strategy We provide interest-sensitive, traditional and variable life insurance products through exclusive financial specialists. Prior to July 18, 2013, we sold interest-sensitive, traditional and variable life insurance, and fixed annuities including deferred and immediate through independent master brokerage agencies. Effective January 1, 2014, we no longer offer fixed annuities such as deferred and immediate annuities.

On April 1, 2014, all of the capital stock in Lincoln Benefit was acquired by Resolution Life, Inc., pursuant to a Stock Purchase Agreement by and among ALIC, Resolution Holdings, Inc. (“Resolution Holdings”) and the Limited Partnership. Immediately prior to that closing, Lincoln Benefit signed a Partial Commutation Agreement with ALIC (the “Partial Commutation Agreement”), whereby we recaptured certain business previously reinsured to ALIC, including (a) all of the fixed deferred annuity, value adjusted deferred annuity and indexed deferred annuity business written by the Company that was previously reinsured to ALIC, (b) all of the life insurance business written by the Company through independent producers that was previously reinsured to ALIC, other than certain specified life business, and (c) all of the net liability of the Company with respect to the accident and health and long-term care insurance business written by the Company that was previously reinsured to ALIC.

The primary impacts related to the commutation of the reinsurance agreement with ALIC were the receipt of investments, the reduction of the related reinsurance recoverable and the reestablishment of deferred acquisition costs. Based on estimates at February 28, 2014, the Company’s assets increased by $1.3 billion, liabilities

increased by $0.2 billion and shareholder’s equity increased by $1.1 billion. The statutory capital of the Company subsequent to the recapture and prior to the sale closing is estimated to have increased by approximately $99 million from $332.5 million at December 31, 2013.

Immediately after the announcement of the execution of the Purchase Agreement, we ceased soliciting and selling new policies through our independent agent channel. We continued to sell new policies provided through the Allstate exclusive agency channel for a transitional period following the execution of the Purchase Agreement. ALIC continues to reinsure the ALIC Reinsured Business pursuant to the ARRA or certain existing reinsurance agreements. In addition, ALIC continues to administer the ALIC Reinsured Business pursuant to the ASA or certain existing administrative service agreements.

In connection with the acquisition, Resolution Life, Inc. and ALIC entered into a Transition Services Agreement (the “TSA”), pursuant to which ALIC will continue to provide certain administrative services for the Recaptured Business for a period of twelve to twenty-four months after the closing. Following termination of the TSA, we plan to outsource the administration of the Recaptured Business to third-party administrators. In particular, we expect to outsource the long-term administration of our deferred annuity business to se², an unaffiliated third-party service provider. We expect this transition to third-party administrators to be completed within twelve months of the closing.

At the closing, Lincoln Benefit entered into two transactions with Hannover Re. The first transaction provided financing for a portion of our statutory reserves associated with our universal life business with no-lapse guarantees and our level premium term life business (the “AXXX/XXX Financing”). The second transaction involved a reinsurance agreement with Hannover Re, structured on a combined modified coinsurance and monthly renewable term reinsurance basis.

Following the closing, Resolution Life, Inc., as sole shareholder of Lincoln Benefit, acted by written consent to appoint W. Weldon Wilson, Clive Cowdery, Jonathan Hack, Ann Frohman, Robert Stein, Grace Vandecruze and Richard Carbone as new directors of Lincoln Benefit (the “Board”). Pursuant to a meeting of the Board held on April 1, 2014, the Board appointed W. Weldon Wilson as CEO and Secretary, Keith Gubbay as President and Chief Actuarial Officer, Robyn Wyatt as Chief Financial Officer, Executive Vice President and Treasurer, Karl Chappell as Managing Director, Investments & Mergers and Acquisitions and Simon Packer as Chief Transformation Officer.

Our parent company, Resolution Life, Inc., is focused on the management of in-force policies of life insurance companies. Pursuant to this strategy, Resolution Life, Inc. intends to acquire additional life insurance companies or runoff blocks of business from unrelated insurers. Resolution Life, Inc. may seek to combine portions of its acquired businesses in order to recognize efficiencies.

Net income Net income for the years ended December 31 is presented in the following table.

We have reinsurance agreements whereby certain premiums, contract charges, interest credited to contractholder funds, contract benefits and substantially all expenses are ceded to ALIC, LB Re and other non-affiliated reinsurers, and are reflected net of such reinsurance in the Statements of Operations and Comprehensive Income. Our results of operations include net investment income and realized capital gains and losses recognized in connection with the assets that are not transferred under the reinsurance agreements.

Net income decreased 10.5% in 2013 compared to 2012 due to lower net investment income and the absence of net realized capital gains in 2013. Net income decreased 12.2% in 2012 compared to 2011 due to lower net realized capital gains.

Financial Position The financial position as of December 31 is presented in the following table.

Total investments decreased to $346.8 million as of December 31, 2013, from $354.8 million as of December 31, 2012, primarily due to lower fixed income valuations.

As of December 31, 2013, all of the fixed income securities portfolio was rated investment grade, which is defined as a security having a rating of Aaa, Aa, A or Baa from Moody’s, a rating of AAA, AA, A or BBB from Standard & Poor’s (“S&P”), Fitch, Dominion, Kroll or Realpoint, a rating of aaa, aa, a or bbb from A.M. Best, or a comparable internal rating if an externally provided rating is not available. All of our fixed income securities are rated by third party credit rating agencies, the National Association of Insurance Commissioners (“NAIC”), and/or are internally rated. Our initial investment decisions and ongoing monitoring procedures for fixed income securities are based on a thorough due diligence process which includes, but is not limited to, an assessment of the credit quality, sector, structure, and liquidity risks of each issue.

The following table summarizes the fair value and unrealized net capital gains and losses for fixed income securities by credit rating as of December 31, 2013.

RMBS and CMBS are structured securities that are primarily collateralized by residential and commercial real estate loans. The cash flows from the underlying collateral paid to the securitization trust are generally applied in a pre-determined order and are designed so that each security issued by the trust, typically referred to as a “class”, qualifies for a specific original rating. For example, the “senior” portion or “top” of the capital structure, or rating class, which would originally qualify for a rating of Aaa typically has priority in receiving principal repayments on the underlying collateral and retains this priority until the class is paid in full. In a sequential structure, underlying collateral principal repayments are directed to the most senior rated Aaa class in the structure until paid in full, after which principal repayments are directed to the next most senior Aaa class in the structure until it is paid in full. Senior Aaa classes generally share any losses from the underlying collateral on a pro-rata basis after losses are absorbed by classes with lower original ratings. The payment priority and class subordination included in these securities serves as credit enhancement for holders of the senior or top portions of the structures. These securities continue to retain the payment priority features that existed at the origination of the securitization trust. Other forms of credit enhancement may include structural features embedded in the

securitization trust, such as overcollateralization, excess spread and bond insurance. The underlying collateral can have fixed interest rates, variable interest rates (such as adjustable rate mortgages) or may contain features of both fixed and variable rate mortgages.

RMBS totaled $14.5 million as of December 31, 2013, with an unrealized net capital gain of $584 thousand. The RMBS portfolio is subject to interest rate risk, but unlike other fixed income securities, is additionally subject to significant prepayment risk from the underlying residential mortgage loans. RMBS consists of a U.S. Agency portfolio having collateral issued or guaranteed by U.S. government agencies and a non-agency portfolio consisting of securities collateralized by Prime and Alt-A loans. The non-agency portfolio totaled $3.8 million as of December 31, 2013, with an unrealized net capital gain of $74 thousand.

CMBS totaled $2.7 million as of December 31, 2013, with an unrealized net capital gain of $88 thousand. The CMBS portfolio is subject to credit risk and has a sequential paydown structure. All of the CMBS investments are traditional conduit transactions collateralized by commercial mortgage loans, broadly diversified across property types and geographical area.

Short-term investments Our short-term investment portfolio was $56.0 million as of December 31, 2013.

Unrealized net capital gains totaled $6.0 million as of December 31, 2013 compared to $21.2 million as of December 31, 2012. The decline was primarily due to increasing risk-free interest rates. The following table presents unrealized net capital gains and losses as of December 31.

The unrealized net capital gain for the fixed income portfolio totaled $6.0 million and comprised $10.0 million of gross unrealized gains and $4.1 million of gross unrealized losses as of December 31, 2013. This is compared to an unrealized net capital gain for the fixed income portfolio totaling $21.2 million, comprised of $21.3 million of gross unrealized gains and $29 thousand of gross unrealized losses as of December 31, 2012.

Gross unrealized gains and losses on fixed income securities by type and sector as of December 31, 2013 are provided in the following table.

The consumer goods, capital goods and technology sectors had the highest concentration of gross unrealized losses in our corporate fixed income securities portfolio as of December 31, 2013. In general, the gross unrealized losses are principally related to increasing risk-free interest-rates or widening credit spreads remain since the time of initial purchase.

Net investment income The following table presents net investment income for the years ended December 31.

Net investment income decreased 5.7% or $655 thousand in 2013 compared to 2012, after decreasing 2.1% or $246 thousand in 2012 compared to 2011. The decline in both years was due to lower yields.

Realized capital gains and losses Realized capital gains and losses netted to zero in 2013 with gains from sales offsetting impairment write-downs. We recognized realized capital gains of $626 thousand and $2.1 million in 2012 and 2011, respectively, primarily related to sales of investments.

Cash As of December 31, 2013, our cash balance was $5.1 million compared to $13.1 million as of December 31, 2012. Fluctuations in our cash flows generally result from differences in the timing of reinsurance payments to and from ALIC and payments to affiliates.

Reinsurance recoverable, contractholder funds and reserve for life-contingent contract benefits Under GAAP, when reinsurance contracts do not relieve the ceding company of legal liability to contractholders, the ceding company is required to report reinsurance recoverables arising from these contracts separately as assets. The liabilities for the contracts are reported as contractholder funds, reserve for life-contingent contract benefits, or separate accounts liabilities depending on the characteristics of the contracts. We reinsure certain reserve liabilities with ALIC, LB Re or non-affiliated reinsurers. Reinsurance recoverables and the related reserve for life-contingent contract benefits and contractholder funds are reported separately in the Statements of Financial Position, while the assets which support the separate accounts liabilities are reflected as separate accounts assets.

As of December 31, 2013, contractholder funds decreased to $13.12 billion from $14.26 billion as of December 31, 2012 as a result of new and additional deposits on fixed annuities and interest-sensitive life policies and interest credited to contractholder funds being more than offset by surrenders, withdrawals, benefit payments and related contract charges. The reserve for life-contingent contract benefits increased to $3.56 billion as of December 31, 2013 from $3.42 billion as of December 31, 2012 primarily due to increases in long-term care insurance reserves and sales of traditional life insurance, partially offset by benefits paid and policy lapses. Reinsurance recoverables from ALIC and affiliates decreased by $1.04 billion and reinsurance recoverables from non-affiliates increased $42.9 million.

We purchase reinsurance after evaluating the financial condition of the reinsurer, as well as the terms and price of coverage. As of December 31, 2013, 95% of reinsurance recoverables due from non-affiliated companies were reinsured under uncollateralized reinsurance agreements with companies that had a financial strength rating of A- or above, as measured by S&P. In certain cases, these ratings refer to the financial strength of the affiliated group or parent company of the reinsurer. We continuously monitor the creditworthiness of reinsurers in order to determine our risk of recoverability on an individual and aggregate basis, and a provision for uncollectible reinsurance is recorded if needed. No amounts have been deemed unrecoverable in the three years ended December 31, 2013.

Market risk is the risk that we will incur losses due to adverse changes in interest rates and credit spreads. We also have certain exposures to changes in equity prices in our equity-indexed annuities and separate accounts liabilities.

Overview In formulating and implementing guidelines for investing funds, we seek to earn returns that contribute to attractive and stable profits and long-term capital growth.

We use quantitative and qualitative market-based approaches to measure, monitor and manage market risk. We evaluate our exposure to market risk through the use of multiple measures including but not limited to duration, value-at-risk, scenario analysis and sensitivity analysis. Duration measures the price sensitivity of assets to changes in interest rates. For example, if interest rates increase 100 basis points, the fair value of an asset with a duration of 5 is expected to decrease in value by 5%. Value-at-risk is a statistical estimate of the probability that the change in fair value of a portfolio will exceed a certain amount over a given time horizon. Scenario analysis estimates the potential changes in the fair value of a portfolio that could occur under different hypothetical market conditions defined by changes to multiple market risk factors: interest rates and credit spreads. Sensitivity analysis estimates the potential changes in the fair value of a portfolio that could occur under different hypothetical shocks to a market risk factor. In general, we establish investment portfolio asset allocation and market risk limits based upon a combination of duration, value-at-risk, scenario analysis and sensitivity analysis. The asset allocation limits place restrictions on the total funds that may be invested within an asset class. Comprehensive day-to-day management of market risk within defined tolerance ranges occurs as portfolio managers buy and sell within their respective markets based upon the acceptable boundaries established by investment policies.

Interest rate risk is the risk that we will incur a loss due to adverse changes in interest rates relative to the characteristics of our interest bearing assets. This risk arises from our investment in interest-sensitive assets. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key risk-free reference yields.

One of the measures used to quantify interest rate exposure is duration. To calculate duration, we project asset cash flows and calculate their net present value using a risk-free market interest rate adjusted for credit quality, sector attributes, liquidity and other specific risks. Duration is calculated by revaluing these cash flows at alternative interest rates and determining the percentage change in aggregate fair value. The projections include assumptions (based upon historical market experience and our experience) that reflect the effect of changing interest rates on the prepayment, lapse, leverage and/or option features of instruments, where applicable. The preceding assumptions relate primarily to mortgage-backed securities, and municipal and corporate obligations. Our asset duration was 3.87 and 3.88 as of December 31, 2013 and 2012, respectively.

Based upon the information and assumptions used in the duration calculation, and interest rates in effect as of December 31, 2013, we estimate that a 100 basis point immediate, parallel increase in interest rates (“rate shock”) would decrease the net fair value of the assets by $11.2 million, compared to $12.4 million as of December 31, 2012. The selection of a 100 basis point immediate, parallel change in interest rates should not be construed as our prediction of future market events, but only as an illustration of the potential effect of such an event.

To the extent that conditions differ from the assumptions we used in these calculations, duration and rate shock measures could be significantly impacted. Additionally, our calculations assume that the current relationship between short-term and long-term interest rates (the term structure of interest rates) will remain constant over time. As a result, these calculations may not fully capture the effect of non-parallel changes in the term structure of interest rates and/or large changes in interest rates.

Credit spread risk is the risk that we will incur a loss due to adverse changes in credit spreads (“spreads”). This risk arises from our investment in spread-sensitive fixed income assets.

We manage the spread risk in our assets. One of the measures used to quantify this exposure is spread duration. Spread duration measures the price sensitivity of the assets to changes in spreads. For example, if spreads increase 100 basis points, the fair value of an asset exhibiting a spread duration of 5 is expected to decrease in value by 5%.

Spread duration is calculated similarly to interest rate duration. As of December 31, 2013, the spread duration of assets was 3.98, compared to 3.86 as of December 31, 2012. Based upon the information and assumptions we use in this spread duration calculation, and spreads in effect as of December 31, 2013, we estimate that a 100 basis point immediate, parallel increase in spreads across all asset classes, industry sectors and credit ratings (“spread shock”) would decrease the net fair value of the assets by $10.6 million, compared to $10.9 million as of December 31, 2012. The selection of a 100 basis point immediate parallel change in spreads should not be construed as our prediction of future market events, but only as an illustration of the potential effect of such an event.

Equity price risk is the risk that we will incur losses due to adverse changes in the general levels of the equity markets. As of December 31, 2013 and 2012, we had separate accounts assets related to variable annuity and variable life contracts with account values totaling $1.70 billion and $1.63 billion, respectively. Equity risk exists for contract charges based on separate account balances and guarantees for death and/or income benefits provided by our variable products. All variable life and annuity contract charges and fees, liabilities and benefits, including guarantees for death and/or income benefits, are ceded to ALIC in accordance with the reinsurance agreements, thereby limiting our equity risk exposure. In 2006, ALIC disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial Inc. and therefore mitigated this aspect of ALIC’s risk. The Company was not a direct participant of this agreement and its reinsurance agreements with ALIC remain unchanged.

As of December 31, 2013 and 2012 we had $2.26 billion and $2.85 billion, respectively, in equity-indexed annuity liabilities that provide customers with interest crediting rates based on the performance of the S&P 500. All contract charges and fees, and liabilities and benefits related to the equity-indexed annuity liabilities are ceded to ALIC in accordance with the reinsurance agreements, thereby limiting our equity risk exposure.

Capital resources consist of shareholder’s equity. The following table summarizes our capital resources as of December 31.

Shareholder’s equity decreased in 2013 due to decreased unrealized net capital gains, partially offset by net income. Shareholder’s equity increased in 2012 due to net income and increased unrealized net capital gains.

Financial ratings and strength Prior to the July 17, 2013 announcement of the pending sale of Lincoln Benefit to Resolution Life Holdings, Inc, we shared the insurance financial strength ratings of our parent, ALIC, as the majority of our business is reinsured to ALIC. ALIC’s financial strength ratings as of December 31, 2013 are A+ from A.M. Best Company, Inc., A+ from Standard & Poor’s Ratings Services, and A1 from Moody’s Investors Service, Inc. ALIC’s ratings are influenced by many factors including operating and financial performance, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage (i.e., debt), exposure to risks, the current level of operating leverage and Allstate Insurance Company’s ratings.

Subsequent to the announcement of the pending sale of Lincoln Benefit, the rating agencies initiated reviews of Lincoln Benefit’s ratings and outlook. Moody’s downgraded Lincoln Benefit from A1 to Baa1 and revised the rating outlook from stable to negative. Both the rating and outlook will be finalized after the transaction closes. S&P downgraded Lincoln Benefit from A+ to BBB+ and placed LBL on CreditWatch negative. Both the rating and CreditWatch will be finalized after the transaction closes. A.M. Best placed Lincoln Benefit’s rating under review with negative implications, pending a final determination on both the rating and outlook after the transaction closes.

The NAIC has developed a set of financial relationships or tests known as the Insurance Regulatory Information System to assist state regulators in monitoring the financial condition of insurance companies and identifying companies that require special attention or actions by insurance regulatory authorities. The NAIC analyzes financial data provided by insurance companies using prescribed ratios, each with defined “usual ranges”. Generally, regulators will begin to monitor an insurance company if its ratios fall outside the usual ranges for four or more of the ratios. If an insurance company has insufficient capital, regulators may act to reduce the amount of insurance it can issue. Our ratios are within these ranges.

Liquidity sources and uses Our potential sources of funds principally include the following.

Cash flows As reflected in our Statements of Cash Flows, net cash provided by operating activities was $16 thousand, $15.0 million and $10.9 million in 2013, 2012 and 2011, respectively. Fluctuations in net cash provided by operating activities primarily occur as a result of changes in net investment income and differences in the timing of reinsurance payments to and from ALIC and payments to affiliates.

Under the terms of reinsurance agreements, all premiums and deposits, excluding variable annuity and life contract deposits allocated to separate accounts and those reinsured to non-affiliated reinsurers, are transferred to ALIC, which maintains the investment portfolios supporting our products. Payments of contractholder claims, benefits, contract surrenders and withdrawals and certain operating costs (excluding investment-related expenses), are reimbursed by ALIC, under the terms of the reinsurance agreements. We continue to have primary liability as a direct insurer for risks reinsured. Our ability to meet liquidity demands is dependent on reinsurers’ ability to meet those obligations under the reinsurance programs.

Our ability to pay dividends is dependent on business conditions, income, cash requirements and other relevant factors. The payment of shareholder dividends without the prior approval of the state insurance regulator is limited by Nebraska law to formula amounts based on net income and capital and surplus, determined in conformity with statutory accounting practices, as well as the timing and amount of dividends paid in the preceding twelve months. The maximum amount of dividends that we can pay during 2014 without prior approval of the Nebraska Department of Insurance is $33.2 million.

Contractual obligations Due to the reinsurance agreements that we have in place, certain contractual obligations are ceded to ALIC, LB Re and other non-affiliated reinsurers.

We are subject to extensive regulation and we are involved in various legal and regulatory actions, all of which have an effect on specific aspects of our business. For a detailed discussion of the legal and regulatory actions in which we are involved, see Note 9 of the financial statements.

There are several pending accounting standards that we have not implemented because the implementation date has not yet occurred. For a discussion of these pending standards, see Note 2 of the financial statements.

The effect of implementing certain accounting standards on our financial results and financial condition is often based in part on market conditions at the time of implementation of the standard and other factors we are

unable to determine prior to implementation. For this reason, we are sometimes unable to estimate the effect of certain pending accounting standards until the relevant authoritative body finalizes these standards or until we implement them.

Information required for Item 11(j) is incorporated by reference to the material under the caption “Market Risk” in Item 11(h) of this report.

The directors of Lincoln Benefit are elected at each annual meeting of shareholders, for a term of one year. The biographies of each of the directors and executive officers as of April 4, 2014 are included below.

Clive Cowdery, 50, has been a director since April 2014. Mr. Cowdery is also a director and President of Resolution Life GP Ltd and a director of both Resolution Life Holdings, Inc. and Resolution Life, Inc. He is the founder of The Resolution Group and a director of Resolution Limited. Before founding Resolution in 2003, Mr. Cowdery served as Chairman and Chief Executive of GE Insurance Holdings. Mr. Cowdery currently serves as a director of Friends Life Group PLC and Prospect Publishing Limited, and he is the founder and chairman of the Resolution Foundation, a charitable organization dedicated to improving living standards for the 15 million people in Britain on low and middle incomes.

Jon Hack, 46, has been a director since April 2014. Mr. Hack is also a director of Resolution Life Holdings, Inc. and a director of Resolution Life, Inc. He currently serves as the Managing Partner for The Resolution Group. Prior to joining Resolution in 2009, Mr. Hack was a Managing Director and Head of European Financial Institutions Group for Lazard. Mr. Hack qualified as a chartered accountant in 1992 and is a member of The Institute of Chartered Accountants in England & Wales.

Ann Frohman, 50, has been a director since April 2014. Ms. Frohman is also a director of Resolution Life Holdings, Inc. and a director of Resolution Life, Inc. Ms. Frohman is currently self-employed at Frohman Law Office LLC, a law and government relations firm. From December 2010 to March 2012, Ms. Frohman served as Senior Vice President, Government and Industry for Physicians Mutual and Physicians Life Insurance Companies. Prior to that, Ms. Frohman held a number of leadership positions with the Nebraska Department of Insurance, including Director. Ms. Frohman is a licensed attorney with the Nebraska State Bar Association. Ms. Frohman has advised Resolution on issues of Nebraska law from time to time and expects to do so in the future.

Robert Stein, 65, has been a director since April 2014. Mr. Stein is also a director of Resolution Life Holdings, Inc. and a director of Resolution Life, Inc. From November 1976 to September 2011, Mr. Stein held various positions at Ernst & Young, including Partner. He currently serves on the boards of directors of Assurant, Inc. and Aviva plc. Mr. Stein is an actuary and a Certified Public Accountant. He is a Fellow of the Society of Actuaries and a member of the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants.

Grace Vandecruze, 50, has been a director since April 2014. Ms. Vandecruze is also a director of Resolution Holdings, Inc. and Resolution Life, Inc. Since 2006, Ms. Vandecruze has been employed with Grace Global Capital LLC, where she currently serves as Managing Director. Prior to that, she served as Managing Director at Fox-Pitt, Kelton and Vice President at Head & Company LLC. Ms. Vandecruze is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

Richard Carbone, 66, has been a director since April 2014. Mr. Carbone is also a director of Resolution Life Holdings, Inc. and a director of Resolution Life, Inc. Prior to joining Lincoln Benefit, Mr. Carbone served as Executive Vice President and Chief Financial Officer at Prudential Financial, Inc. and The Prudential Insurance Company of America. He also served as Senior Vice President and Chief Financial Officer of Prudential Financial, Inc. from November 2001 to January 2008 and Senior Vice President and Chief Financial Officer of The Prudential Insurance Company of America from July 1997 to January 2008. Prior to that, Mr. Carbone held various leadership roles at Salomon, Inc., Bankers Trust New York Corporation and Bankers Trust Company. Mr. Carbone is a member of the board of directors for E*Trade Financial Corporation.

W. Weldon Wilson, 53, has been a director, Chief Executive Officer and Secretary since 2014. Mr. Wilson also serves as a director, Chief Executive Officer and Secretary for Resolution Life Holdings, Inc. and Resolution Life, Inc. He is currently self-employed with Wilson Roberts Consulting, Inc. From July 1991 to December 2009, Mr. Wilson held various positions at Swiss Reinsurance Company, including Chief Executive Officer, President and Director of Swiss Re Life & Health America, Inc. Mr. Wilson also serves as a director of the American Council of Life Insurers. He is a licensed attorney with the State Bar of Texas.

Robyn Wyatt, 49, has been Executive Vice President, Chief Financial Officer and Treasurer since 2014. Ms. Wyatt also serves as Executive Vice President, Chief Financial Officer and Treasurer of both Resolution Life Holdings, Inc. and Resolution Life, Inc. From March 2002 to September 2013, Ms. Wyatt held positions with various affiliates of Swiss Reinsurance Company, including Managing Director and Chief Financial Officer of Swiss Re Life & Health America Inc. Prior to that, she served as Vice President and Chief Accountant of Manulife Financial Corporation. Ms. Wyatt is a member of the Institute of Chartered Accountants in Australia and The Canadian Institute of Chartered Accountants.

Prior to the transaction with Resolution, executive officers of Lincoln Benefit also served as officers of other subsidiaries of The Allstate Corporation (“Allstate”) and received no compensation directly from Lincoln Benefit. They were employees of an Allstate subsidiary. Allocations were made for each named executive based on the amount of the named executive’s compensation allocated to Lincoln Benefit under the Amended and Restated Service and Expense Agreement among Allstate Insurance Company, Allstate, and certain affiliates, as amended effective January 1, 2009 (the “Service and Expense Agreement”). Those allocations are reflected in the Summary Compensation Table set forth below and in this disclosure, except where noted. The named executives may have received additional compensation for services rendered to other Allstate subsidiaries, and those amounts are not reported.

This CD&A describes the executive compensation program at Allstate and specifically describes total 2013 compensation for the following named executives of Lincoln Benefit:

The following table lists the elements of target direct compensation for Allstate’s 2013 executive compensation program. The program uses a mix of fixed and variable compensation elements and provides alignment with both short- and long-term business goals through annual and long-term incentives. Allstate’s incentives are designed to drive overall corporate performance, specific business unit strategies, and individual performance using performance and operational measures that Allstate correlates to stockholder value, and these incentives align with Allstate’s strategic vision and operating priorities. The Compensation and Succession Committee (the “Committee”) of the Allstate Board of Directors establishes the performance measures and ranges of performance for the variable compensation elements for overall company incentive compensation awards. An individual’s participation in Allstate incentives is based on market based compensation levels, leadership responsibilities, and experience.

Allstate monitors performance toward goals throughout the year and reviews executive compensation program design and executive pay levels annually. As part of that evaluation, Allstate considers available data regarding compensation paid to similarly-situated executives at companies against which it competes for executive talent. With respect to the compensation program for 2013, the Committee considered compensation data for the peer companies listed below for Mr. Civgin as well as compensation information from certain S&P 100 companies with fiscal 2012 revenue of between $15 billion and $60 billion with which Allstate competes for executive talent. The Committee reviews the composition of the peer group annually with the assistance of its compensation consultant, Compensation Advisory Partners. The following table reflects the peer group used for 2013 compensation benchmarking.

With respect to the named executives other than Mr. Civgin, Allstate management considered compensation surveys that provided information on companies of broadly similar size and business mix as Allstate, as well as companies with a broader market context. The compensation surveys considered include the McLagan Insurance Sales & Marketing Survey, Towers Watson Diversified Insurance Survey, the Towers Watson General Industry Study, and the Frederic W. Cook General Industry Study. The weight given to information obtained from these sources varied depending on the position being evaluated. The Towers Watson Diversified Insurance Survey includes insurance companies with assets greater than $125 billion. The Towers Watson General Industry Study includes companies with revenues greater than $20 billion.

The salary of Mr. Civgin is set by the Allstate Board of Directors based on the Committee’s recommendations, as was Mr. Chandra’s during his tenure as Executive Vice President of Lincoln Benefit. The salaries of the other named executives are set by Allstate management. In recommending executive base salary levels, Allstate uses the 50th percentile of its peer insurance companies as a guideline for Mr. Civgin and the 50^th percentile of insurance and general industry data as a guideline for the other named executives, which enables Allstate to compete effectively for executive talent. Annual merit increases for the named executives are based on evaluations of their performance using the enterprise-wide merit increase budget as a guideline.

In 2013 named executives could earn an annual cash incentive award based on Allstate’s achievement of performance measures during the year and assessments of individual performance.

For Mr. Civgin, the maximum award that could be earned was an amount equal to 15% of the 162(m) pool (but in no event greater than the $8.5 million maximum set forth in the Annual Executive Incentive Plan). The Committee retained complete discretion to pay less than this maximum amount. None of the named executive other than Mr. Civgin participate in the 162(m) pool. For a description of how the 162(m) pool is calculated, see page 63.

Allstate grants equity awards to executives based on scope of responsibility, consistent with Allstate’s philosophy that a significant amount of executive compensation should be in the form of equity and that a greater percentage of compensation should be tied to performance for executives who bear higher levels of responsibility for Allstate’s performance. Additionally, from time to time, equity awards are also granted to attract new executives. Allstate annually reviews the mix of equity incentives provided to the named executives. For Messrs. Civgin, and Chandra, beginning with awards made in 2012, the mix of equity incentives changed to 50% performance stock awards and 50% stock options. Allstate believes stock options are a form of performance-based incentive compensation because they require stock price appreciation to deliver any value to an executive, while performance stock awards provide direct alignment with stockholder interests. Other employees eligible for equity incentive awards, including the named executives other than Messrs. Civgin and Chandra, had the choice of receiving the value of their February equity incentive awards in the following proportions between stock options and restricted stock units:

The elections are reflected in the Grants of Plan-Based Awards at Fiscal Year-End 2013 table.

Typically, the Committee approves grants of equity awards during a meeting in the first fiscal quarter. The timing allows the Committee to align awards with Allstate’s annual performance and business goals. Throughout the year, the Committee may grant equity incentive awards to newly hired or promoted Allstate executive officers.

The Committee approves grants of equity awards to Allstate executive officers. Under authority delegated by Allstate’s Board of Directors and the Committee, an equity award committee may grant to employees other than Allstate executive officers restricted stock units and stock options to newly hired and promoted executives and in recognition of outstanding achievements. At each regularly scheduled meeting the Committee reviews equity awards granted by the equity award committee. The grant date for awards to newly hired or promoted executives is fixed as the first business day of a month following the later of committee action or the date of hire or promotion.

Since Allstate created a corporate funding pool for annual executive incentive awards in 2011, the Committee has not exercised discretion to increase the amount of the pool beyond the calculated amount. During the first quarter of the year, the Committee establishes the measures that determine the aggregate amount of funds in the pool available to be paid as awards for that year. The Committee used discretion to determine the amount of Mr. Civgin’s award paid from the pool. The amount of the award, if any, paid from the pool to each other named executive was determined by Allstate senior management. Awards are paid in the following year.

The total funding for 2013 annual incentive awards was calculated based on three measures: Adjusted Operating Income, Total Premiums, and Net Investment Income. All of these measures are defined on pages 85-86.

The Committee set performance measure targets based on Allstate’s 2013 operating plan, after extensive review. Its decisions on threshold and maximum ranges were then informed by probability testing and operational performance scenarios.

In the event of a net loss, the corporate funding pool would have been reduced by 50% of actual performance for Mr. Civgin. For example, if performance measures ordinarily would fund the corporate pool at 60% and there was a net loss then the corporate pool would be funded at 30%. This mechanism would have prevented a misalignment between pay and performance in the event of a natural catastrophe or extreme financial market conditions.

Actual performance on the three performance measures determines the overall funding level of the corporate pool and the aggregate total award budget for eligible employees. Individual awards are based on individual performance in comparison to position-specific compensation targets and overall company performance. The sum of individual awards did not exceed the total corporate pool. (See statement regarding awards in chart on page 63.)

The ranges of performance and 2013 actual results for the three performance measure are shown in the following table.

In 2013 Allstate granted Messrs. Civgin and Chandra performance stock awards (PSAs), tied to achievement of performance measures, that align compensation with stockholder interests.

In March 2012 and February 2013, Messrs. Civgin and Chandra were awarded a target number of PSAs. The PSAs have a three-year performance cycle. For the 2012-2014 and 2013-2015 performance cycles, the number of PSAs which become earned and vested at the end of each three-year performance cycle depends on Allstate’s annual adjusted operating income return on equity attained during each year of the performance cycle. Annual adjusted operating income return on equity measure (“Adjusted Operating Income ROE”) is defined on page 87. Adjusted Operating Income for PSAs includes a minimum or maximum amount of after-tax catastrophe losses if actual catastrophe losses are less than or exceed those amounts, respectively, which serves to decrease volatility and stabilize the measure by limiting the impact of catastrophe losses. The Committee selected Adjusted Operating Income ROE as the performance measure because it -

For the 2012-2014 and 2013-2015 performance cycles, performance is measured in three separate one-year periods. The actual number of PSAs earned for each measurement period varies from 0% to 200% of that period’s target PSAs based on Adjusted Operating Income ROE for the performance cycle and measurement period.

The Committee required positive net income in order for the executives to earn PSAs based on Adjusted Operating Income ROE above target. If Allstate has a net loss in a measurement period, the number of PSAs earned would not exceed target, regardless of the Adjusted Operating Income ROE. This hurdle was included to prevent misalignment between Allstate reported net income and the PSAs earned based on the Adjusted Operating Income ROE result. This situation could occur if, for example, catastrophe losses or capital losses that are not included in Adjusted Operating Income ROE caused Allstate to report a net loss for the period.

At the end of each measurement period, the Committee certifies the level of Allstate’s Adjusted Operating Income ROE achievement, as well as the resulting number of PSAs earned by each named executive for that measurement period. The Committee does not have the discretion to adjust the performance achievement upward for any measurement period. PSAs earned will vest following the end of the three year performance cycle, subject to continued employment (other than in the event of death, disability, retirement, or a qualifying termination following a change in control).

Adjusted Operating Income ROE is the measure used for PSAs. For a description of how this measure is calculated for each performance cycle, see page 87. The measurement periods and levels of Adjusted Operating Income ROE needed to earn the threshold, target, and maximum number of PSAs for the measurement period as well as actual results are set forth in the table below. The annually increasing performance goals are consistent with Allstate’s return objectives and recognize the inherent earnings volatility of Allstate’s business.

The following table shows the target number of PSAs granted to Messrs. Civgin, Merten, Chandra, Dahl, Kavanaugh, and Miller for the 2013-2015 and 2012-2014 performance cycles, the target number of PSAs for the 2013 and 2012 measurement periods, and the number of PSAs earned based on achievement of the performance measure.

To remain competitive with other employers and to attract, retain, and motivate highly talented executives and other employees, Allstate offers the benefits listed in the following table.

Each named executive participates in two different defined benefit pension plans. The Allstate Retirement Plan (ARP) is a tax qualified defined benefit pension plan available to all of Allstate’s regular full-time and regular part-time employees who meet certain age and service requirements. The ARP provides an assured retirement income based on an employee’s level of compensation and length of service at no cost to the employee. As the ARP is a tax qualified plan, federal tax law limits (1) the amount of an individual’s compensation that can be used to calculate plan benefits and (2) the total amount of benefits payable to a plan participant on an annual basis. For certain employees, these limits may result in a lower benefit under the ARP than would have been payable otherwise. Therefore, the Supplemental Retirement Income Plan (SRIP) is used to provide ARP-eligible employees whose compensation or benefit amount exceeds the federal limits with an additional defined benefit in an amount equal to what would have been payable under the ARP if the federal limits did not exist.

Consistent with Allstate’s compensation objectives, Allstate offers these benefits to attract, motivate, and retain executives. A change-in-control of Allstate could have a disruptive impact on both Allstate and its executives. Change-in-control benefits and post-termination benefits are designed to mitigate that impact and to maintain alignment between the interests of Allstate’s executives and Allstate stockholders.

Mr. Civgin is a participant in Allstate’s change-in-control severance plan (CIC Plan). The other named executives are not participants in the CIC Plan and are not party to change-in-control agreements.

The change-in-control and post-termination arrangements which are described in the Potential Payments as a Result of Termination or Change-in-Control section are not provided exclusively to the named executives. A larger group of management employees is eligible to receive many of the post-termination benefits described in that section.

Stock ownership guidelines were instituted in 1996 that require each of the named executives to own Allstate common stock worth a multiple of base salary to link management and stockholders’ interests. The guidelines provide that an executive must hold 75% of net after-tax shares received as a result of equity compensation awards until his or her salary multiple guideline is met. The chart below shows the salary multiple guidelines and the equity holdings that count towards the requirement.

Allstate also has a policy on insider trading that prohibits all officers, directors, and employees from engaging in transactions in securities issued by Allstate or any of its subsidiaries that might be considered speculative or hedging, such as selling short or buying or selling options.

The following table summarizes the compensation of the named executives for all services rendered to Lincoln Benefit for the last three fiscal years, allocated to Lincoln Benefit in a manner consistent with the allocation of compensation under the Service and Expense Agreement.

This amount reflects an accounting expense and does not correspond to actual value that will be realized by the named executives. The number of options granted in 2013 to each named executive is provided in the Grants of Plan-Based Awards table.

The following table describes the incremental cost of other benefits provided in 2013 that are included in the “All Other Compensation” column.

The following table provides information about non-equity incentive plan awards and equity awards granted to the named executives during fiscal year 2013 to the extent the expense was allocated to Lincoln Benefit under the Service and Expense Agreement.

Stock options represent an opportunity to buy shares of Allstate’s stock at a fixed exercise price at a future date. Allstate uses them to align the interests of Allstate’s executives with long-term stockholder value, as the stock price must appreciate from the grant date for the executives to profit. Under Allstate’s stockholder-approved equity incentive plan, the exercise price cannot be less than the fair market value of a share on the grant date. Stock option repricing is not permitted. In other words, without an event such as a stock split, if the Committee cancels an award and substitutes a new award, the exercise price of the new award cannot be less than the exercise price of the cancelled award. All stock option awards have been made in the form of nonqualified stock options. The options granted to the named executives in 2013 become exercisable over four years: 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates, and expire in ten years, except in certain change-in-control situations or under other special circumstances approved by the Committee.

Performance stock awards (PSAs) represent Allstate’s promise to transfer shares of common stock in the future if certain performance measures are met. Each PSA represents Allstate’s promise to transfer one fully vested share in the future for each PSA that vests. PSAs earned will vest following the end of the three year performance cycle, subject to continued employment (other than in the event of death, disability, retirement, or a qualifying termination following a change in control). Vested PSAs will be converted into shares of Allstate common stock and dividend equivalents accrued on these shares will be paid in cash. No dividend equivalents will be paid prior to vesting. Performance stock awards were granted to Messrs. Civgin and Chandra.

Messrs. Merten, Dahl, Kavanaugh, and Miller received awards of restricted stock units in 2013. Each restricted stock unit represents Allstate’s promise to transfer one fully vested share of stock in the future if and when the restrictions expire (when the unit “vests”). Because restricted stock units are based on and payable in stock, they reinforce the alignment of interests of Allstate’s executives and Allstate’s stockholders. In addition, restricted stock units provide a retention incentive because they have a real, current value that is forfeited in most circumstances if an executive terminates employment before the restricted stock units vest. Under the terms of the restricted stock unit awards, the executives have only the rights of general unsecured creditors of Allstate and no rights as stockholders until delivery of the underlying shares. The restricted stock units granted to Messrs. Merten, Dahl, Kavanaugh, and Miller in 2013 vest over four years: 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates, except in certain change-in-control situations or under other special circumstances approved by the Committee. The restricted stock units granted to Messrs. Merten, Dahl, Kavanaugh, and Miller in 2013 include the right to receive previously accrued dividend equivalents when the underlying restricted stock unit vests.

The following table summarizes the outstanding equity awards of the named executives as of December 31, 2013, allocated in a manner consistent with the allocation of compensation expenses to Lincoln Benefit under the Service and Expense Agreement for 2013. The percentage of each equity award actually allocated to Lincoln Benefit has varied over the years during which these awards were granted depending on the extent of services rendered by such executive to Lincoln Benefit and the arrangements in place at the time of such equity awards between Lincoln Benefit and the executive’s Allstate-affiliated employer. Because the aggregate amount of such equity awards attributable to services rendered to Lincoln Benefit by each named executive cannot be calculated without unreasonable effort, the allocated amount of each equity award provided for each named executive in the following table is the amount determined by multiplying each named executive’s equity award for services rendered to Allstate and all of its affiliates by the percentage used for allocating such named executive’s compensation to Lincoln Benefit in 2013 under the Service and Expense Agreement.

The following table summarizes the options exercised by the named executives during 2013 and the restricted stock unit awards that vested during 2013, allocated in a manner consistent with the allocation of compensation expenses to Lincoln Benefit under the Service and Expense Agreement for 2013.

The following table provides information about the pension plans in which the named executives participate. Each of the named executive participates in the Allstate Retirement Plan (ARP) and the Supplemental Retirement Income Plan (SRIP). Pension expense for each named executive under these plans has been accrued annually over the course of the executive’s career with Allstate. The aggregate amount of the annual accrual specifically allocated to Lincoln Benefit over that period of time has varied depending on the extent of services rendered by such executive to Lincoln Benefit and the arrangements in place at the time of accrual between Lincoln Benefit and the executive’s Allstate affiliated employer. Because the aggregate amount of such annual accruals earned prior to 2013 attributable to services rendered to Lincoln Benefit by each named executive cannot be calculated without unreasonable effort, the present value of accumulated benefit provided for each named executive in the following table is the amount determined by multiplying the present value of such named executive’s accumulated pension benefit for services rendered to Allstate and all of its affiliates over the course of such named executive’s career with Allstate by the percentage used for allocating such named executive’s compensation to Lincoln Benefit under the Service and Expense Agreement in 2013.

These amounts are estimates and do not necessarily reflect the actual amounts that will be paid to the named executives, which will be known only at the time they become eligible for payment. The present value of the accumulated benefit was determined using the same measurement date (December 31, 2013) and material assumptions that we use for year-end financial reporting purposes, except that we made no assumptions for early termination, disability, or pre-retirement mortality. Other assumptions include the following:

See note 18 to Allstate’s audited financial statements for 2013 for additional information.

The amount shown for all executives other than Mr. Dahl is based on the lump sum methodology used by the Allstate pension plans in 2014, as required under the Pension Protection Act. Specifically, the interest rate for 2014 is based on 100% of the average corporate bond segmented yield curve from August of the prior year. The mortality table for 2014 is the 2014 combined static Pension Protection Act funding mortality table with a blend of 50% males and 50% females, as required under the Internal Revenue Code. The amount shown for Mr. Dahl is based on the lump sum methodology used by the Allstate pension plans in 2013, as required under the Pension Protection Act.

The benefits and value of benefits shown in the Pension Benefits table are based on the following material factors:

Contributions to the ARP are made entirely by Allstate and are paid into a trust fund from which benefits are paid. Before January 1, 2014, ARP participants earned benefits under one of two formulas (final average pay or cash balance) based on their date of hire or their choice at the time Allstate introduced the cash balance formula. In order to better align our pension benefits with market practices, provide future pension benefits more equitably to Allstate employees, and reduce costs, final average pay benefits were frozen as of December 31, 2013. Beginning on January 1, 2014, all eligible participants earn benefits under a new cash balance formula only.

Messrs. Civgin, Merten, Chandra, Kavanaugh and Miller earned benefits under the cash balance formula. Under this formula, participants receive pay credits while employed at Allstate, based on a percentage of eligible annual compensation and years of service, plus interest credits. Pay credits are allocated to a hypothetical account in an amount equal to 0% to 7% of eligible annual compensation, depending on years of vesting service. Interest credits are allocated to the hypothetical account based on the interest crediting rate in effect for that plan year as published by the Internal Revenue Service. The interest crediting rate is set annually and is currently based on the average yield for 30-year U.S. Treasury securities for August of the prior year.

Mr. Dahl earned benefits under the final average pay formula. Benefits under the final average pay formula were earned and are stated in the form of a straight life annuity payable at the normal retirement age of 65. Mr. Dahl earned final average pay benefits equal to the sum of a Base Benefit and an Additional Benefit. The Base Benefit equals 1.55% of the participant’s average annual compensation, multiplied by credited service after 1988 through 2013. The Additional Benefit equals 0.65% of the amount of the participant’s average annual compensation that exceeds the participant’s covered compensation, multiplied by credited service after 1988 through 2013. Covered compensation is the average of the maximum annual salary taxable for Social Security over the 35-year period ending the year the participant would reach Social Security retirement age. Mr. Dahl is eligible for a reduced early retirement benefit which would reduce his Base Benefit by 4.8% for each year of early payment before age 65 and his Additional Benefit by 8% for each year of early payment from age 62 to age 65 and 4% for each year of early payment from age 55 to age 62, prorated on a monthly basis based on age at the date payments begin.

Since Mr. Dahl earned benefits between January 1, 1978, and December 31, 1988, one component of his ARP benefit will be based on the following benefit formula:

Mr. Dahl is eligible for a reduced early retirement benefit, which would reduce his pre-1989 ARP benefit by 4.8% for each year of early payment prior to age 60, prorated on a monthly basis based on his age on the date payment begins.

SRIP benefits are generally determined using a two-step process: (1) determine the amount that would be payable under the ARP formula specified above if Internal Revenue Code limits did not apply, then (2) reduce the amount described in (1) by the amount actually payable under the applicable ARP formula. The normal retirement date under the SRIP is age 65. If eligible for early retirement under the ARP, the employee also is eligible for early retirement under the SRIP. SRIP benefits are not funded and are paid out of Allstate’s general assets.

No additional service credit beyond service with Allstate or its predecessors is granted under the ARP or the SRIP to any named executive.

Under both the ARP and SRIP, eligible compensation consists of salary, annual cash incentive awards, and certain other forms of compensation, but does not include long-term cash incentive awards or income related to equity awards. Compensation used to determine benefits under the ARP is limited in accordance with the Internal Revenue Code. For final average pay benefits, average annual compensation is the average compensation of the five highest consecutive calendar years within the last ten consecutive calendar years through 2013.

Payment options under the ARP include a lump sum, straight life annuity, and various survivor annuity options. The lump sum under the final average pay benefit is calculated in accordance with the applicable interest rate and mortality as required under the Internal Revenue Code. The lump sum payment under the cash balance benefit is generally equal to a participant’s cash balance account balance. Payments from the SRIP are paid in the form of a lump sum using the same interest rate and mortality assumptions used under the ARP.

Eligible employees are vested in the normal ARP and SRIP retirement benefits on the earlier of the completion of five years of service or upon reaching age 65 (for participants whose benefits are calculated under the final average pay formula) or the completion of three years of service or upon reaching age 65 (for participants whose benefits are calculated under the cash balance formula).

Final average pay benefits are payable at age 65. A participant with final average pay benefits may be entitled to a reduced early retirement benefit on or after age 55 if he or she terminates employment after completing 20 or more years of vesting service. A participant earning cash balance benefits who terminates employment with at least three years of vesting service is entitled to a lump sum benefit equal to his or her cash balance account balance.

The following SRIP payment dates assume a retirement or termination date of December 31, 2013:

The following table summarizes the non-qualified deferred compensation contributions, earnings, and account balances of the named executives in 2013. All amounts relate to The Allstate Corporation Deferred Compensation Plan.

The aggregate amount of the annual accrual specifically allocated to Lincoln Benefit over each named executive’s career with Allstate has varied depending on the extent of services rendered by such executive to Lincoln Benefit and the arrangements in place at the time of accrual between Lincoln Benefit and the executive’s Allstate affiliated employer. Because the aggregate earnings and balance attributable to services rendered to Lincoln Benefit by each named executive cannot be calculated without unreasonable effort, the aggregate earnings and aggregate balance provided for each named executive in the following table is the amount determined by multiplying the value of such named executive’s non-qualified deferred compensation benefit for services rendered to Allstate and all of its affiliates over the course of such named executive’s career with Allstate by the percentage used for allocating such named executive’s compensation to Lincoln Benefit under the Service and Expense Agreement in 2013.

In order to remain competitive with other employers, Allstate allows employees, including the named executives and other employees whose annual compensation exceeds the amount specified in the Internal Revenue Code ($255,000 in 2013), to defer up to 80% of their salary and/or up to 100% of their annual cash incentive award that exceeds that amount under the Deferred Compensation Plan. Allstate does not match participant deferrals and does not guarantee a stated rate of return.

Deferrals under the Deferred Compensation Plan are credited with earnings or debited for losses based on the results of the investment option or options selected by the participants. The investment options available in 2013 under the Deferred Compensation Plan are: Stable Value, S&P 500, International Equity, Russell 2000, Mid-Cap, and Bond Funds. Under the Deferred Compensation Plan, deferrals are not actually invested in these

funds, but instead are credited with earnings or debited for losses based on the funds’ investment returns. Because the rate of return is based on actual investment measures in Allstate’s 401(k) plan, no above market earnings are paid. Allstate’s Deferred Compensation Plan and 401(k) plan allow participants to change their investment elections daily. Investment changes are effective the next business day. The Deferred Compensation Plan is unfunded. This means that Allstate does not set aside funds for the plan in a trust or otherwise. Participants have only the rights of general unsecured creditors and may lose their balances in the event of the company’s bankruptcy. Account balances are 100% vested at all times.

An irrevocable distribution election is required before making any deferrals into the plan. Generally, a named executive may elect to begin receiving a distribution of his or her account balance immediately upon separation from service or in one of the first through fifth years after separation from service. The earliest distribution date for Post 409A balances is six months following separation from service. The named executive may elect to receive payment in a lump sum or in annual cash installment payments over a period of two to ten years. In addition, a named executive may elect an in-service withdrawal of his or her entire Pre 409A balance, subject to forfeiture of 10% of such balance. Upon proof of an unforeseen emergency, a plan participant may be allowed to access certain funds in a deferred compensation account earlier than the dates specified above.

The following table lists the compensation and benefits that Allstate would provide to the named executives in various scenarios involving a termination of employment, other than compensation and benefits generally available to salaried employees. The table describes equity granting practices for the 2013 equity incentive awards. Relevant prior practices are described in the footnotes.

Historical retirement definitions and treatment for purposes of stock options and restricted stock units is as follows:

The table below describes the value of compensation and benefits payable to each named executive upon termination, calculated in a manner consistent with the allocation of compensation expenses to Lincoln Benefit under the Service and Expense Agreement for 2013, that would exceed the compensation or benefits generally available to salaried employees in each termination scenario. The total column in the following table does not reflect compensation or benefits previously accrued or earned by the named executives such as deferred compensation and non-qualified pension benefits. The payment of the 2013 annual cash incentive award and any 2013 salary earned but not paid in 2013 due to Allstate’s payroll cycle are not included in these tables because these are payable regardless of termination, death, or disability. Benefits and payments are calculated assuming a December 31, 2013, employment termination date.

A review and assessment of potential compensation-related risks was conducted by Allstate’s chief risk executive and reviewed by the compensation and succession committee of Allstate. Allstate believes that its compensation policies and practices are appropriately structured, and that they avoid providing incentives for employees to engage in unnecessary and excessive risk taking. Allstate believes that executive compensation has to be examined in the larger context of an effective risk management framework and strong internal controls. The Allstate Board and its risk and return committee both play an important role in risk management oversight, including reviewing how management measures, evaluates, and manages the corporation’s exposure to risks posed by a wide variety of events and conditions. In addition, the compensation and succession committee of Allstate employs an independent compensation consultant each year to review and assess Allstate’s executive pay levels, practices, and overall program design.

The following are descriptions of the performance measures used for executive incentive compensation. These measures are not GAAP measures. They were developed uniquely for incentive compensation purposes and are not reported items in our financial statements. The Committee has approved the use of non-GAAP measures when appropriate to drive executive focus on particular strategic, operational, or financial factors or to exclude factors over which our executives have little influence or control.

Adjusted Operating Income: This measure is calculated differently for annual cash incentive awards, the 162(m) pool, and each PSA performance cycle.

For each plan, Adjusted Operating Income is equal to net income available to common shareholders adjusted to exclude the after-tax effect of the items indicated below for the respective plan:

Adjusted Operating Income: This measure is used to assess financial performance. For a description of how this measure is calculated, see page 63.

The impact of catastrophe losses on annual cash incentive awards is recognized through a modifier to the Adjusted Operating Income performance measure payout percentage.

In 2013, actual after-tax catastrophe losses of $813 million were less than planned after-tax catastrophe losses by more than 20%, which would have triggered a 20% increase in the Adjusted Operating Income performance measure payout percentage. However, the maximum Adjusted Operating Income performance measure payout percentage had been achieved without application of the modifier.

Net Investment Income: This measure is used to assess the financial operating performance provided from investments. It is equal to net investment income as reported in the consolidated statement of operations, adjusted to eliminate the effects of differences between actual monthly average assets under management (actual AUM) and the monthly average assets under management assumed in determining the company’s performance measure target for net investment income (target AUM). In 2013, the AUM adjustment resulted in a decrease to the net investment income measure.

Actual net investment income is adjusted based on the difference between the target and actual amounts of AUM, excluding the difference between target and actual amounts of securities lending assets. Net investment income will be increased using the target portfolio rate if the actual AUM is below the target amounts and decreased using market rates at which new investments were originated during the month if the actual AUM is above the target amount.

Actual AUM equals the average of the 13 month-end total investments, including the beginning and end of the annual period, adjusted to exclude the unrealized gain (loss) for fixed income, equity, and short term securities for each month. Total investments is reported quarterly in the consolidated statement of financial position.

Total Premiums: This measure is used to assess growth within the Allstate Protection and Allstate Financial businesses. It is equal to the sum of Allstate Protection premiums written and Allstate Financial premiums and contract charges as adjusted and described below.

Allstate Protection premiums written is equal to the Allstate Protection segment net premiums written. Allstate Protection premiums written is reported in management’s discussion and analysis in the annual report on Form 10-K.

Allstate Financial premiums and contract charges is equal to life and annuity premiums and contract charges reported in the consolidated statement of operations adjusted to exclude premiums and contract charges related to structured settlement annuities.

Performance Stock Award Performance Measures for the 2012-2014 Performance Cycle and the 2013-2015 Performance Cycle

Annual Adjusted Operating Income Return on Equity: This measure is used to assess financial performance. It is calculated as the ratio of annual Adjusted Operating Income for the applicable PSA performance cycle divided by the average of stockholders’ equity excluding the effects of unrealized net capital gains and losses at the beginning and at the end of the year. For a description of how Adjusted Operating Income is calculated, see page 85.

Adjusted Operating Income is adjusted to include a minimum or maximum amount of catastrophe losses if actual catastrophe losses are less than or exceed those amounts, respectively. In 2013, Adjusted Operating Income was adjusted to include a minimum amount of catastrophe losses.

Net Income: This measure is used to assess Allstate’s financial performance. It is equal to net income available to common shareholders as reported in The Allstate Corporation annual report on Form 10-K.

The following table shows the number of Lincoln Benefit shares owned by any beneficial owner who owns more than five percent of any class of Lincoln Benefit’s voting securities.

The following table shows the number of shares of stock in Lincoln Benefit or its parents beneficially owned by each director and named executive officer of Lincoln Benefit individually, and by all executive officers and directors of Lincoln Benefit as a group. Shares reported as beneficially owned include certain shares held indirectly, as well as shares subject to stock options exercisable on or prior to April 4, 2014 and restricted stock units for which restrictions expire on or prior to April 4, 2014. The following share amounts are as of April 4, 2014.

On December 31, 2013, Resolution Life Holdings, Inc. and Resolution Life, Inc. entered into a Credit Agreement with Royal Bank of Canada (“RBC”), The Royal Bank of Scotland, PLC, RBC Capital Markets, RBS Securities Inc. and Lloyds Securities Inc. (the “Credit Agreement”). On April 1, 2014, Resolution Life Holdings, Inc. and Resolution Life, Inc. entered into a Guarantee and Collateral Agreement with Royal Bank of Canada (the “Guarantee and Collateral Agreement”). Pursuant to the Guarantee and Collateral Agreement, Resolution Life Holdings, Inc. pledged the securities of Resolution Life, Inc. to the Secured Parties (as defined in the Guarantee and Collateral Agreement) in order to secure a term loan to Resolution Life, Inc. for the acquisition of Lincoln Benefit. Pursuant to the Credit Agreement and the Guarantee and Collateral Agreement, Resolution Life, Inc. also pledged the securities of Lincoln Benefit to the Secured Parties (as defined in the Guarantee and Collateral Agreement).

If Resolution Life, Inc. defaults on its obligations under the Credit Agreement, RBC (as collateral agent), will have the option to receive all of the Resolution Life, Inc. and Lincoln Benefit stock pledged the Credit Agreement and Guarantee and Collateral Agreement, including all voting and corporate rights to such stock.

Item 11(n) Transactions with Related Persons, Promoters and Certain Control Persons.

On April 1, 2014, after receiving all required regulatory approvals, all of the capital stock in Lincoln Benefit was acquired by Resolution Life, Inc., pursuant to a Stock Purchase Agreement by and among ALIC, Resolution Holdings, Inc. and the Limited Partnership signed July 17, 2013. Prior to this transaction, Lincoln Benefit was a wholly-owned subsidiary of ALIC.

The table below describes certain intercompany agreements involving amounts greater than $120,000, in place before the transaction with Resolution, between Lincoln Benefit and certain of its then affiliates as described below:

Following the transaction, Lincoln Benefit entered into a Services Agreement with Resolution Life, Inc., dated April 1, 2014, whereby Resolution Life, Inc. agreed to provide certain administrative services to the Company and the Company agreed to provide certain administrative services to Resolution Life, Inc. Amounts payable under the agreement will be determined based on monthly services rendered.

All intercompany agreements to which Lincoln Benefit was a party before the transaction with Resolution were approved by Lincoln Benefit’s Board of Directors as well as by the board of any other affiliate of The Allstate Corporation which was a party to the agreement. When required, intercompany agreements are submitted for approval to the Nebraska Department of Insurance, Lincoln Benefit’s domestic regulator, and any additional states in which Lincoln Benefit might be commercially domiciled pursuant to the applicable state’s insurance holding company systems act. This process is documented in an internal procedure that captures the review and approval process of all intercompany agreements. All approvals are maintained in Lincoln Benefit’s corporate records.

Although not subject to the independence standards of the New York Stock Exchange, for purposes of this S-1 registration statement, Lincoln Benefit has applied the independence standards required for listed companies of the New York Stock Exchange to the Board of Directors. Applying these standards, Lincoln Benefit has determined that four of its directors are independent: Richard Carbone, Ann Frohman, Robert Stein and Grace Vandecruze.

The Board of Directors of Lincoln Benefit does not have a compensation committee. Prior to the transaction with Resolution, all compensation decisions were made by The Allstate Corporation, as the ultimate parent company of Lincoln Benefit. No executive officer of Lincoln Benefit served as a member of the compensation committee of another entity for which any executive officer served as a director for Lincoln Benefit.

The financial statements and financial statement schedules included in this Prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial statement schedules are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The following change is made to the prospectuses for the LBL Advantage, Consultant II and Premier Planner:

Under the “More Information” section, the subsection entitled “Legal Matters” is deleted and replaced with the following:

Prior to the transaction with Resolution, matters of Nebraska law pertaining to the Contracts, including the validity of the Contracts and Lincoln Benefit’s right to issue such Contracts under Nebraska insurance law, were passed upon by Angela K. Fontana, former General Counsel of Lincoln Benefit.

Allstate Distributors, LLC (“ADLLC”) serves as the principal underwriter and distributor of the securities registered herein. The securities offered herein are sold on a continuous basis, and there is no specific end date for the offering. ADLLC is a wholly owned subsidiary of Allstate Life Insurance Company. ADLLC is a registered broker dealer under the Securities and Exchange Act of 1934, as amended, and is a member of the Financial Industry Regulatory Authority. ADLLC is not required to sell any specific number or dollar amount of securities, but will use its best efforts to sell the securities offered.

We have primary responsibility for all administration of the Contracts and the Variable Account. We entered into an administrative services agreement with The Prudential Insurance Company of America (“PICA”) whereby, PICA or an affiliate provides administrative services to the Variable Account and the Contracts on our behalf. In addition, PICA entered into a master services agreement with se 2, inc., of 5801 SW 6th Avenue,

Topeka, Kansas 66636, whereby se 2, inc. provides certain business process outsourcing services with respect to the Contracts. se 2, inc. may engage other service providers to provide certain administrative functions. These service providers may change over time, and as of December 31, 2013, consisted of the following: Keane BPO, LLC (administrative services) located at 100 City Square, Boston, MA 02129; RR Donnelly Global Investment Markets (compliance printing and mailing) located at 111 South Wacker Drive, Chicago, IL 60606; Jayhawk File Express, LLC (file storage and document destruction) located at 601 E. 5th Street, Topeka, KS 66601-2596; Co-Sentry.net, LLC (back-up printing and disaster recovery) located at 9394 West Dodge Rd, Suite 100, Omaha, NE 68114; Convey Compliance Systems, Inc. (withholding calculations and tax statement mailing) located at 3650 Annapolis Lane, Suite 190, Plymouth, MN 55447; Spangler Graphics, LLC (compliance mailings) located at 29305 44th Street, Kansas City, KS 66106; Veritas Document Solutions, LLC (compliance mailings) located at 913 Commerce Ct, Buffalo Grove, IL 60089; Records Center of Topeka, a division of Underground Vaults & Storage, Inc. (back-up tapes storage) located at 1540 NW Gage Blvd. #6, Topeka, KS 66618; EquiSearch Services, Inc. (lost shareholder search) located at 11 Martime Avenue, Suite 665, White Plains, NY 10606; ZixCorp Systems, Inc. (email encryption) located at 2711 N. Haskell Ave., Suite 2300, Dallas, TX 75204; DST Systems, Inc. (FAN mail, positions, prices) located at 333 West 11 Street, 5th Floor, Kansas City, MO 64105.

In connection with the Resolution Life’s acquisition of Lincoln Benefit, Resolution Life, Inc. and ALIC entered into a Transition Services Agreement (the “TSA”), pursuant to which ALIC will continue to provide certain administrative services for the Recaptured Business for a period of twelve to twenty-four months after the closing. Following termination of the TSA, we plan to outsource the administration of the Recaptured Business to third-party administrators. In particular, we expect to outsource the long-term administration of our deferred annuity business to se², inc., an unaffiliated third-party service provider. We expect this transition to third-party administrators to be completed within twelve to twenty-four months of the closing.

In administering the Contracts, the following services are provided, among others:


                         LINCOLN BENEFIT LIFE COMPANY

                      Supplement Dated September 30, 2013
                To the following Prospectuses, as supplemented

CONSULTANT SOLUTIONS (CLASSIC, PLUS, ELITE, SELECT) PROSPECTUS DATED MAY 1, 2013
                   CONSULTANT I PROSPECTUS DATED MAY 1, 2013
                  LBL ADVANTAGE PROSPECTUS DATED MAY 1, 2004
                  CONSULTANT II PROSPECTUS DATED MAY 1, 2004
                 PREMIER PLANNER PROSPECTUS DATED MAY 1, 2004
                INVESTOR'S SELECT PROSPECTUS DATED MAY 1, 2007

The following information supplements the prospectus for your variable annuity
contract issued by Lincoln Benefit Life Company.

THE FOLLOWING PARAGRAPHS ARE ADDED TO THE "LINCOLN BENEFIT LIFE COMPANY"
PROVISION UNDER THE "MORE INFORMATION" SECTION OR THE "DESCRIPTION OF LINCOLN
BENEFIT LIFE COMPANY AND THE SEPARATE ACCOUNT" SECTION OF YOUR PROSPECTUS:

On July 17, 2013, Allstate Life entered into an agreement with Resolution Life
Holdings, Inc. ("Resolution"), a Delaware corporation established by Resolution
Life L.P., pursuant to which Allstate Life agreed to sell Lincoln Benefit to
Resolution or a wholly-owned subsidiary of Resolution (the "Transaction"). The
Prudential Insurance Company of America or an affiliate will continue to
reinsure and administer the Variable Account and the Contracts. The benefits
and provisions of the Contracts will not be changed by the Transaction. Also,
the Transaction will not change the fact that Lincoln Benefit is the named
insurer under your Contract. Following the Transaction, Lincoln Benefit will no
longer be an affiliate of Allstate Life.

The Transaction and certain related agreements are subject to required
regulatory approvals. Subject to the receipt of such regulatory approvals, the
Transaction is targeted to close in the 4 th quarter of 2013.

Upon receipt of regulatory approvals, Lincoln Benefit will amend and restate
its existing reinsurance arrangements with Allstate Life. Lincoln Benefit will
recapture, and Allstate Life no longer will reinsure: (i) all fixed deferred
annuity, value adjusted deferred annuity and indexed deferred annuity business
written by Lincoln Benefit, (ii) all of the life insurance business written by
Lincoln Benefit through independent life insurance producers other than certain
specified life insurance policies and (iii) all of the net liability of Lincoln
Benefit with respect to the accident and health and long-term care insurance
business written by Lincoln Benefit (the "Recapture"). The benefits and
provisions of the Contracts will not be changed by the Recapture, and the
Recapture will not change the fact that Lincoln Benefit is the named insurer
under your Contract.

Pursuant to the Recapture, Allstate Life will transfer to Lincoln Benefit, for
inclusion in its general account reserves, cash and specified assets with an
aggregate statutory book value equal to net statutory general account reserves
attributable to the recaptured business, adjusted for the final settlement
amount under the applicable existing reinsurance agreements between Lincoln
Benefit and Allstate Life that are being amended and restated in connection
with the Transaction.

If you have any questions, please contact your financial representative or our
Variable Annuity Service Center at (800) 457-7617. Our representatives are
available to assist you from 7:30 a.m. to 5 p.m. Central time.

Please read the prospectus supplement carefully and then file it with your
important papers. No other action is required of you.

                          Lincoln Benefit Life Company
                        Supplement dated August 14, 2009
                 To the following Prospectuses, as supplemented:

               Consultant Solutions, Prospectus Dated May 1, 2009
                   Consultant I, Prospectus Dated May 1, 2009
                   LBL Advantage, Prospectus Dated May 1, 2004
                   Consultant II, Prospectus Dated May 1, 2004
                  Premier Planner, Prospectus Dated May 1, 2004

This prospectus supplement amends certain disclosure contained in the
prospectuses referenced above for your variable annuity contract issued by
Lincoln Benefit Life Company ("Lincoln Benefit").

The "Annual Reports and Other Documents" section is deleted and replaced with
the following:

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Securities and Exchange Commission ("SEC") recently adopted rule 12h-7 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Rule 12h-7
exempts an insurance company from filing reports under the Exchange Act when the
insurance company issues certain types of insurance products that are registered
under the Securities Act of 1933 and such products are regulated under state
law. Each of the variable annuities described in the prospectuses referenced
above fall within the exemption provided under rule 12h-7. Lincoln Benefit is
hereby providing notice that it is electing to rely on the exemption provided
under rule 12h-7 effective as of the date of this prospectus supplement or as
soon as possible thereafter, and will be suspending filing reports under the
Exchange Act.

The SEC allows us to "incorporate by reference" information that we file with
the SEC into this prospectus supplement which means that incorporated documents
are considered part of this prospectus supplement. We can disclose important
information to you by referring you to those documents. This prospectus
supplement incorporates by reference our Annual Report on Form 10-K for the year
ended December 31, 2008, filed with the SEC on March 18, 2009, and our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2009, filed with the SEC on
May 12, 2009.

Lincoln Benefit will provide to each person, including any beneficial owner, to
whom a prospectus is delivered, a copy of any or all of the information that has
been incorporated by reference into the prospectus but not delivered with the
prospectus. Such information will be provided upon written or oral request at no
cost to the requester by writing to Lincoln Benefit, P.O. Box 758565, Topeka, KS
66675-8565 or by calling 1-800- 457- 7617. The public may read and copy any
materials that Lincoln Benefit files with the SEC at the SEC's Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy,
and information statements, and other information regarding issuers that file
electronically with the SEC (see http://www.sec.gov).



                          Lincoln Benefit Life Company
                  Lincoln Benefit Life Variable Annuity Account

                       Supplement, dated January 14, 2005,
                                       to
                 The Premier Planner Variable Annuity Prospectus
                                dated May 1, 2004

This supplement amends certain disclosure contained in the above-referenced
prospectus for certain variable annuity contracts issued by Lincoln Benefit Life
Company.

We have received notice that the Board of Trustees ("Board") of PIMCO Advisors
VIT has approved the liquidation, on or about April 29, 2005 (the "Closing
Date"), of the PEA Science and Technology Portfolio (the "PEA Portfolio").

The Board based its decision, in part, upon the fact that the PEA Portfolio is
relatively small in asset size and has failed to garner significant exposure in
the variable contract market. In addition, the Board believes the outlook for
future growth of the PEA Portfolio is not encouraging.

Due to the liquidation of the PEA Portfolio, we will no longer accept new
premiums for investment in, nor will we permit transfers to, the PEA Science and
Technology Portfolio Sub-Account ("PEA Sub-Account") on or after April 29, 2005.

Because the PEA Sub-Account will no longer be offered as an investment
alternative as of the Closing Date, you may wish to transfer, prior to April 29,
2005, some or all of your interest in the PEA Sub-Account to the other
investment alternatives currently offered by your Contract. Any value remaining
in the PEA Sub-Account will be transferred automatically, as of the Closing
Date, to the PIMCO VIT Money Market Sub-Account, an investment alternative
already available under your Contract. These transfers are not subject to a
transfer fee.

If you currently have allocations made to the PEA Sub-Account through automatic
additions, automatic portfolio rebalancing, dollar cost averaging or systematic
withdrawal programs, your allocation in the PEA Sub-Account will also need to be
changed in these programs. If you do not change this allocation to other
investment alternatives currently available under your Policy, any allocation to
the PEA Sub-Account will be automatically allocated, as of the Closing Date, to
the PIMCO VIT Money Market Sub-Account.

If your interest in the PEA Sub-Account is transferred automatically on the
Closing Date to the PIMCO VIT Money Market Sub-Account, for 60 days following
the Closing Date, you may transfer your interest in the PIMCO VIT Money Market
Sub-Account to any other investment alternative(s) available under your
Contract. This transfer is not subject to a transfer fee.

We will send you a confirmation that shows the amount that we credited to the
PIMCO VIT Money Market Sub-Account or to the investment alternative that you
chose and the date of the transaction. For additional information on how to
transfer to another investment alternative, or how to make a change to your
current allocation(s), please contact your financial representative or call our
Customer Service Center at the number listed below.

Attached, as Appendix A, is a list of the Portfolios and Fixed Account
Investment Alternatives currently available under your Contract.

Please keep this supplement for future reference together with your
prospectuses.

Number for Customer Service Center: 1-800-865-5237

                                   Appendix A

The Premier Planner Variable Annuity contract offers a variety of Investment
Alternatives that encompass investment choices ranging from aggressive to
conservative. Below is a listing of the Portfolios and Fixed Account Investment
Alternatives currently available. Also included is the investment objective for
each Portfolio.

For more complete information about each Portfolio, including expenses and risks
associated with the Portfolio, please refer to the relevant prospectus for the
Portfolio.

                                   PORTFOLIOS

AIM V.I. Basic Value Fund - Series I Seeks long-term growth of capital.

Alger American Growth Portfolio - Class S Seeks long-term capital appreciation.

Fidelity VIP Growth Portfolio - Service Class 2 Seeks capital appreciation.



Fidelity VIP Investment Grade Bond Portfolio - Service Class 2 Seeks as high a
level of current income as is consistent with the preservation of capital.

Fidelity VIP Overseas Portfolio - Service Class 2 Seeks long-term growth of
capital.

Goldman Sachs VIT CORESM Small Cap Equity Fund Seeks long-term growth of
capital.

Goldman Sachs VIT International Equity Fund Seeks long-term capital
appreciation.

Janus Aspen Series Capital Appreciation Portfolio: Institutional Shares Seeks
long-term growth of capital.

Janus Aspen Series Foreign Stock Portfolio: Service Shares Seeks long-term
growth of capital.

Janus Aspen Series Worldwide Growth Portfolio: Service Shares Seeks long-term
growth of capital in a manner consistent with the preservation of capital.

Lazard Emerging Markets Portfolio Seeks long-term capital appreciation

Lazard International Equity Portfolio Seeks long-term capital appreciation

MFS New Discovery Series - Service Class Seeks capital appreciation.

MFS Utilities Series - Service Class Seeks capital growth and current income.

Oppenheimer Main Street Small Cap Fund/VA - Service Shares Seeks capital
appreciation.

PAVIT OpCap Balanced Portfolio Seeks growth of capital and investment income.

PAVIT OpCap Equity Portfolio Seeks long-term capital appreciation.

PAVIT OpCap Small Cap Portfolio Seeks capital appreciation.

PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged) - Administrative Shares
Seeks to maximize total return, consistent with preservation of capital and
prudent investment management.

PIMCO VIT Money Market Portfolio - Administrative Shares Seeks to obtain maximum
current income consistent with preservation of capital and daily liquidity.

PIMCO VIT Total Return Portfolio - Administrative Shares Seeks to maximize total
return, consistent with preservation of capital and prudent investment
management.

Putnam VT High Yield Fund - Class IB

Seeks high current income. Capital growth is a secondary goal when consistent
with achieving high current income. The fund seeks its goal by investing at
least 80% in U.S. corporate rated below investment grade (junk bonds) and that
have intermediate to long-term maturities (three years or longer.)

Rydex VT OTC Fund

Seeks investment results that correspond to a benchmark for over-the-counter
securities. The Portfolio's current benchmark is the NASDAQ 100 Index.

Salomon Brothers Variable All Cap Fund - Class I Seeks capital appreciation.

Salomon Brothers Variable Investors Fund - Class I Seeks long-term growth of
capital with current income as a secondary objective.

Van Kampen UIF Equity Growth Portfolio, Class I Seeks long-term capital
appreciation by investing primarily in growth-oriented equity securities of
large capitalization companies.

Van Kampen UIF High Yield Portfolio, Class I Seeks above-average total return
over a market cycle of three to five years by investing primarily in high yield
securities (commonly referred to as "junk bonds").

Van Kampen UIF Mid Cap Growth Portfolio, Class I Seeks above-average total
return over a market cycle of three to five years by investing in common stocks
and other equity securities.



                   PREMIER PLANNER VARIABLE ANNUITY PROSPECTUS

                                FLEXIBLE PREMIUM

                 INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACTS

                                    ISSUED BY

                          LINCOLN BENEFIT LIFE COMPANY

                               IN CONNECTION WITH

                  LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT

             STREET ADDRESS: 2940 SOUTH 84TH ST., LINCOLN, NE 68506

            MAILING ADDRESS: P. O. BOX 80469, LINCOLN, NE 68501-0469

                        TELEPHONE NUMBER: 1-800-865-5237

The Contract is a deferred annuity contract designed to aid you in long-term
financial planning. You may purchase it on either a tax qualified or non-tax
qualified basis. Lincoln Benefit Life no longer offers this Contract in most
states. If you have already purchased the Contract you may continue to make
purchase payments according to the Contract.

Because this is a flexible premium annuity contract, you may pay multiple
premiums. We allocate your premium to the investment options under the Contract
and our Fixed Account in the proportions that you choose. The Contract currently
offers thirty-four investment options, each of which is a Subaccount of the
Lincoln Benefit Life Variable Annuity Account ("Separate Account"). Each
Subaccount invests exclusively in shares of one of the following Portfolios:

AIM VARIABLE INSURANCE FUNDS

                      AIM V.I. Basic Value Fund - Series I

THE ALGER AMERICAN FUND:

                    Alger American Growth Portfolio - Class S

FIDELITY(R) VARIABLE INSURANCE PRODUCTS:

Fidelity VIP Growth Portfolio - Service Class 2 Fidelity VIP Investment Grade
Bond Portfolio - Service Class 2 Fidelity VIP Overseas Portfolio - Service
Class 2

GOLDMAN SACHS VARIABLE INSURANCE TRUST:

Goldman Sachs VIT CORE(SM) Small Cap Equity Fund Goldman Sachs VIT International
Equity Fund

JANUS ASPEN SERIES:

Janus Aspen Series Capital Appreciation Portfolio -Institutional Shares Janus
Aspen Series Foreign Stock Portfolio - Service Shares (formerly International
Value Portfolio)

Janus Aspen Series Worldwide Growth Portfolio - Service Shares

J.P. MORGAN SERIES TRUST II:

                        JPMorgan Small Company Portfolio

LAZARD RETIREMENT SERIES, INC.:

Lazard Emerging Markets Portfolio
Lazard International Equity Portfolio

MFS(R) VARIABLE INSURANCE TRUST(SM):

MFS New Discovery Series - Service Class MFS Utilities Series - Service Class

OPPENHEIMER VARIABLE ACCOUNT FUNDS:

           Oppenheimer Main Street Small Cap Fund/VA - Service Shares

PIMCO ADVISORS VIT:

PAVIT OpCap Balanced Portfolio
PAVIT OpCap Equity Portfolio
PAVIT OpCap Small Cap Portfolio
PAVIT PEA Science and Technology Portfolio

PIMCO VARIABLE INSURANCE TRUST:

PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged) - Administrative Shares
PIMCO VIT Money Market Portfolio - Administrative Shares PIMCO VIT StocksPLUS
Growth and Income Portfolio - Administrative Shares PIMCO VIT Total Return
Portfolio - Administrative Shares

PUTNAM VARIABLE TRUST:

                      Putnam VT High Yield Fund - Class 1B

THE RYDEX VARIABLE TRUST:

                                Rydex VT OTC Fund

SALOMON BROTHERS VARIABLE SERIES FUNDS INC:

Salomon Brothers Variable All Cap Fund - Class I Salomon Brothers Variable
Investors Fund - Class I

VAN KAMPEN LIFE INVESTMENT TRUST:

Van Kampen LIT Aggressive Growth Portfolio, Class II Van Kampen LIT Growth and
Income Portfolio, Class II

                                  1 PROSPECTUS



THE UNIVERSAL INSTITUTIONAL FUNDS, INC.:

Van Kampen UIF Equity Growth Portfolio, Class I* Van Kampen UIF High Yield
Portfolio, Class I* Van Kampen UIF Mid Cap Growth Portfolio, Class I* Van Kampen
UIF U.S. Mid Cap Value Portfolio, Class I**

*    Morgan Stanley Investment Management, Inc., the advisor for the UIF
     Portfolios, does business in certain instances using the name Van Kampen.

**   Effective 9/20/2003, the Van Kampen UIF Mid Cap Core Portfolio, Class I
     changed its name to Van Kampen UIF Mid Cap Value Portfolio, Class I.

Some of the portfolios described in this Prospectus may not be available in your
Contract. We may make available other investment options in the future.

Your Contract Value will vary daily as a function of the investment performance
of the Subaccounts to which you have allocated Purchase Payments and any
interest credited to the Fixed Account. We do not guarantee any minimum Contract
Value for amounts allocated to the Subaccounts. Benefits provided by this
Contract, when based on the Fixed Account, are subject to a Market Value
Adjustment, which may result in an upward or downward adjustment in withdrawal
benefits, death benefits, settlement values, and transfers to the Subaccounts.

The maximum age of the oldest Contract Owner and Annuitant is age 85 as of the
date we receive the completed application. The maximum age of the oldest
Contract Owner and Annuitant for purchasing the Contract with the Enhanced Death
Benefit Rider is age 80.

Each time you pay a Premium, we will credit your Contract Value with a Credit
Enhancement. In addition to this Contract, we also offer other annuity contracts
that do not provide for Credit Enhancements. The expenses for this Contract may
be higher than the expenses for an annuity contract that does not provide for
Credit Enhancements. Over time, the amount of the Credit Enhancements may be
more than offset by the higher expenses. You and your agent should decide if
this Contract is right for you.

In certain states the Contract may be offered as a group contract with
individual ownership represented by Certificates. The discussion of Contracts in
this prospectus applies equally to Certificates under group contracts, unless
the content specifies otherwise.

This prospectus sets forth the information you ought to know about the Contract.
You should read it before investing and keep it for future reference.

We have filed a Statement of Additional Information with the Securities and
Exchange Commission ("SEC"). The current Statement of Additional Information is
dated May 1, 2004. The information in the Statement of Additional Information is
incorporated by reference in this prospectus. You can obtain a free copy by
writing us or calling us at the telephone number given above. The Table of
Contents of the Statement of Additional Information appears on page 44 of this
prospectus.

At least once each year we will send you an annual statement. The annual
statement details values and specific information for your Contract. It does not
contain our financial statements. Our financial statements are set forth in the
Statement of Additional Information. Lincoln Benefit Life Company ("Lincoln
Benefit") will file annual and quarterly reports and other information with the
SEC. You may read and copy any reports, statements or other information we file
at the SEC's public reference room in Washington, D.C. You can obtain copies of
these documents by writing to the SEC and paying a duplicating fee. Please call
the SEC at 1-800-SEC-0330 for further information as to the operation of the
public reference room. Our SEC filings are also available to the public on the
SEC Internet site (http:// www.sec.gov).

The Date of this Prospectus is May 1, 2004.

EFFECTIVE MAY 1, 2004, THIS PRODUCT IS NO LONGER BEING OFFERED FOR SALE.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES NOR HAS IT PASSED ON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED OR PRECEDED BY CURRENT PROSPECTUSES
FOR THE PORTFOLIOS LISTED ABOVE. IF ANY OF THESE PROSPECTUSES IS MISSING OR
OUTDATED, PLEASE CONTACT US AND WE WILL SEND YOU THE PROSPECTUS YOU NEED.

PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR YOUR FUTURE REFERENCE.

                                  2 PROSPECTUS



DEFINITIONS

Please refer to this list for the meaning of the following terms:

ACCUMULATION PERIOD - The period of time beginning on the day money is put into
an annuity contract and ending when the contract is annuitized or surrendered.

ACCUMULATION UNIT - A unit of measurement which we use to calculate Contract
Value.

ANNUITANT - The living person named on an annuity contact whose life expectancy
is used to calculate the annuity payments when the contract is annuitized.

ANNUITIZATION - The process by which the accumulation phase of the contract is
terminated and the conteract is converted to the payoout phase. This is
accomplished by paying the entire contract value over a period of time.

ANNUITIZED VALUE - The Contract Value adjusted by any applicable Market Value
Adjustment and less any applicable taxes.

ANNUITY DATE - The date on which annuity payments are scheduled to begin.

ANNUITY PERIOD - The period during which annuity payments are paid. The Annuity
Period begins on the Annuity Date.

ANNUITY UNIT - A unit of measurement which we use to calculate the amount of
Variable Annuity payments.

BENEFICIARY(IES) - The person designated to receive the death benefit in the
event of all of the owners' deaths.

COMPANY ("WE," "US," "OUR," "LINCOLN BENEFIT") - Lincoln Benefit Life Company.

CONTRACT ANNIVERSARY - Each anniversary of the Issue Date.

CONTRACT OWNER ("YOU," "YOUR") - The person(s) or entity having the privileges
of ownership defined in the Contract. If your Contract is issued as part of a
retirement plan, your ownership privileges may be modified by the plan.

CONTRACT VALUE - The sum of the values of your investment in the Subaccounts of
the Separate Account and the Fixed Account.

CONTRACT YEAR - Each twelve-month period beginning on the Issue Date and each
Contract Anniversary.

CONTRIBUTION YEAR - Each twelve-month period beginning on the date a Purchase
Payment is allocated to a Subaccount, or each anniversary of that date.

CREDIT ENHANCEMENT - An amount we add to your Contract Value when a Purchase
Payment is received. Each Credit Enhancement will be counted as earnings under
your Contract.

FIXED ACCOUNT - The portion of the Contract Value allocated to our general
account.

FIXED ANNUITY - A series of annuity payments that are fixed in amount.

GUARANTEE PERIODS - A period of years for which we have guaranteed a specific
effective annual interest rate on an amount allocated to the Fixed Account.

ISSUE DATE - The date when the Contract becomes effective.

LATEST ANNUITY DATE - The latest date by which you must begin annuity payments
under the Contract.

LOAN ACCOUNT - An account established for amounts transferred from the
Subaccounts or the Fixed Account as security for outstanding Contract loans.

MARKET VALUE ADJUSTMENT - An amount added to or subtracted from certain
transactions involving your interest in the Fixed Account, to reflect the impact
of changing interest rates.

NET INVESTMENT FACTOR - The factor used to determine the value of an
Accumulation Unit and Annuity Unit in any Valuation Period. We determine the Net
Investment Factor separately for each Subaccount.

NON-QUALIFIED PLAN - A retirement plan which does not receive special tax
treatment under Sections 401, 403(b), 408, 408A or 457 of the Tax Code.

PORTFOLIO(S) - The underlying funds in which the Subaccounts invest. Each
Portfolio is an investment company registered with the SEC or a separate
investment series of a registered investment company.

PURCHASE PAYMENTS - Amounts paid to us as premium for the Contract by you or on
your behalf.

QUALIFIED PLAN - A retirement plan which receives special tax treatment under
Sections 401, 403(b), 408 or 408A of the Tax Code or a deferred compensation
plan for a state and local government or another tax exempt organization under
Section 457 of the Tax Code.

SEPARATE ACCOUNT - The Lincoln Benefit Life Variable Annuity Account, which is a
segregated investment account of the Company.

SUBACCOUNT - A subdivision of the Separate Account, which invests wholly in
shares of one of the Portfolios.

SURRENDER VALUE - The amount paid upon complete surrender of the Contract, equal
to the Contract Value, less any applicable premium taxes, Withdrawal Charge, and
the contract maintenance charge and increased or decreased by any Market Value
Adjustment.

TAX CODE - The Internal Revenue Code of 1986, as amended.

                                  5 PROSPECTUS



specified limits. The range of expenses shown in this table does not show the
effect of any such fee waiver or expense reimbursement. More detail concerning
each Portfolio's fees and expenses appears in the prospectus for each Portfolio.

                                                 Minimum   Maximum
------------------------------------------------------------------
Total Portfolio Annual Operating Expenses/(1)/
(expenses that are deducted
from Portfolio assets, which may include
management fees, distribution and/or
service (12b-1) fees and other expenses)          0.50%     4.31%
------------------------------------------------------------------

(1)  Expenses are shown as a percentage of Portfolio average daily net assets
     before any waiver or reimbursement as of December 31, 2003.

EXAMPLE 1

This Example is intended to help you compare the cost of investing in the
Contracts with the cost of investing in other variable annuity contracts. These
costs include Contract owner transaction expenses, Contract fees, Separate
Account annual expenses, and Portfolio fees and expenses and assumes no
transfers or exchanges were made. The example shows the dollar amount of expense
that you would bear directly or indirectly if you:

.    invested $10,000 in the Contract for the time periods indicated,

.    earned a 5% annual return on your investment,

.    surrendered your Contract, or began receiving income payments for a
     specified period of less than 120 months, at the end of each time period,
     and

.    elected the Enhanced Death Benefit Rider (with total Separate Account
     expenses of 1.60%)

The first line of the example assumes that the maximum fees and expenses of any
of the Portfolios are charged. The second line of the example assumes that the
minimum fees and expenses of any of the Portfolios are charged. Your actual
expenses may be higher or lower than those shown below.

THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY BE REQUIRED TO
PAY IF YOU SURRENDER YOUR CONTRACT.

                                                   1 Year   3 Years   5 Years   10 Years
----------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses   $1,236    $2,406    $3,544    $6,033
----------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses   $  845    $1,277    $1,731    $2,763
----------------------------------------------------------------------------------------

EXAMPLE 2

This Example uses the same assumptions as Example 1 above, except that it
assumes you decided not to surrender your Contract, or you began receiving
income payments for a specified period of at least 120 months, at the end of
each time period.

                                                   1 Year    3 Years  5 Years   10 Years
----------------------------------------------------------------------------------------
Costs Based on Maximum Annual Portfolio Expenses    $641     $1,896   $3,119     $6,033
----------------------------------------------------------------------------------------
Costs Based on Minimum Annual Portfolio Expenses    $250     $  767   $1,306     $2,763
----------------------------------------------------------------------------------------

EXPLANATION OF EXPENSE EXAMPLES

PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A REPRESENTATION OF
PAST OR FUTURE EXPENSES. YOUR RATE OF RETURN MAY BE HIGHER OR LOWER THAN 5%,
WHICH IS NOT GUARANTEED. THE EXAMPLES DO NOT ASSUME THAT ANY PORTFOLIO EXPENSE
WAIVERS OR REIMBURSEMENT ARRANGEMENTS ARE IN EFFECT FOR THE PERIODS PRESENTED.
EXAMPLES 1 AND 2 ASSUME THE ELECTION OF THE ENHANCED DEATH BENEFIT RIDER (TOTAL
SEPARATE ACCOUNT EXPENSES OF 1.60%). IF THIS RIDER WAS NOT ELECTED, THE EXPENSE
FIGURES SHOWN WOULD BE SLIGHTLY LOWER.

THE EXAMPLES REFLECT THE FREE WITHDRAWAL AMOUNTS, IF APPLICABLE AND AN ANNUAL
CONTRACT ADMINISTRATIVE CHARGE OF $35.

                                  7 PROSPECTUS



QUESTIONS AND ANSWERS ABOUT YOUR CONTRACT

The following are answers to some of the questions you may have about some of
the more important features of the Contract. The Contract is more fully
described in the rest of the Prospectus. Please read the Prospectus carefully.

1.   WHAT IS THE CONTRACT?

The Contract is a flexible premium deferred variable annuity contract. It is
designed for tax-deferred retirement investing. The Contract is available for
non-qualified or qualified retirement plans. The Contract, like all deferred
annuity contracts, has two phases: the Accumulation Period and the Annuity
Period. During the Accumulation Period, earnings accumulate on a tax-deferred
basis and are taxed as income when you make a withdrawal. The Annuity Period
begins when you begin receiving payments under one of the annuity payment
options described in the answer to Question 2. The amount of money accumulated
under your Contract during the Accumulation Period will be used to determine the
amount of your annuity payments during the Annuity Period.

Your premiums are invested in one or more of the Subaccounts of the Separate
Account or allocated to the Fixed Account, as you instruct us. If we offer
additional Subaccounts in the future, we may limit your right to allocate your
Contract Value to up to twenty-three options under the Contract, counting each
Subaccount and the Fixed Account as one option. We will treat all of your
Contract Value allocated to the Fixed Account as one option for purposes of this
limit, even if you have chosen more than one Guarantee Period. The value of your
Contract will depend on the investment performance of the Subaccounts and the
amount of interest we credit to the Fixed Account.

Each Subaccount will invest in a single investment portfolio (a "Portfolio") of
an underlying fund. The Portfolios offer a range of investment objectives, from
conservative to aggressive. You bear the entire investment risk on amounts
allocated to the Subaccounts. The investment policies and risks of each
Portfolio are described in the accompanying prospectuses for the Portfolios.

In some states, you may also allocate all or part of your Contract Value to the
"Fixed Account", as described in the answer to Question 5.

2.   WHAT ANNUITY OPTIONS DOES THE CONTRACT OFFER?

You may receive annuity payments on a fixed or a variable basis or a combination
of the two. We offer a variety of annuity options including:

.    a life annuity with payments guaranteed for five to twenty years;

.    a joint and full survivorship annuity, with payments guaranteed for five to
     twenty years; and

.    fixed payments for a specified period of five to thirty years.

Call us to inquire about other options.

You may change your annuity option at any time before annuitization. You may
select the date to annuitize the Contract. The date you select, however, may be
no later than the later of the tenth Contract Anniversary or the Annuitant's
90/TH/ birthday. If your Contract was issued in connection with a qualified
plan, different deadlines may apply.

If you select annuity payments on a variable basis, the amount of our payments
to you will be affected by the investment performance of the Subaccounts you
have selected. The fixed portion of your annuity payments, on the other hand,
generally will be equal in amount to the initial payment we determine. As
explained in more detail below, however, during the Annuity Period you will have
a limited ability to change the relative weighting of the Subaccounts on which
your variable annuity payments are based or to increase the portion of your
annuity payments consisting of Fixed Annuity payments.

3.   HOW DO I BUY A CONTRACT?

You can obtain a Contract application from your Lincoln Benefit agent. You must
pay at least $10,000 in Purchase Payments during the first Contract Year.
Purchase Payments must be at least $500, unless you enroll in an automatic
payment plan. Your periodic payments in an automatic payment plan must be at
least $100 per month. We may lower these minimums at our sole discretion. The
maximum age of the oldest Contract Owner and Annuitant is age 85 as of the date
we receive the completed application. The maximum age of the oldest Contract
Owner and Annuitant for purchasing the Contract with the Enhanced Death Benefit
Rider is age 80.

4.   WHAT ARE MY INVESTMENT CHOICES UNDER THE CONTRACT?

You can allocate and reallocate your investment among the Subaccounts, each of
which in turn invests in a single Portfolio. Under the Contract, the Separate
Account currently invests in the following Portfolios:

                                                                            PORTFOLIO(S)
--------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds                   AIM V.I. Basic Value Fund - Series I
--------------------------------------------------------------------------------------------------------------------
The Alger American Fund                        Alger American Growth Portfolio - Class S
--------------------------------------------------------------------------------------------------------------------
Fidelity(R) Variable Insurance Products Fund   Fidelity VIP Growth Portfolio - Service Class 2
--------------------------------------------------------------------------------------------------------------------
                                               Fidelity VIP Investment Grade Bond Portfolio - Service Class 2
--------------------------------------------------------------------------------------------------------------------
                                               Fidelity VIP Overseas Portfolio - Service Class 2
--------------------------------------------------------------------------------------------------------------------
Goldman Sachs Variable Insurance Trust         Goldman Sachs VIT CORE(SM) Small Cap Equity
--------------------------------------------------------------------------------------------------------------------
                                               Goldman Sachs VIT International Equity Fund
--------------------------------------------------------------------------------------------------------------------
Janus Aspen Series                             Janus Aspen Series Capital Appreciation Portfolio: Institutional
                                                Shares
--------------------------------------------------------------------------------------------------------------------
                                               Janus Aspen Series Foreign Stock Portfolio: Service Shares
--------------------------------------------------------------------------------------------------------------------
                                               Janus Aspen Series Worldwide Growth Portfolio: Service Shares
--------------------------------------------------------------------------------------------------------------------
J.P. Morgan Series Trust II                    JPMorgan Small Company Portfolio
--------------------------------------------------------------------------------------------------------------------
Lazard Retirement Series, Inc.                 Lazard Emerging Markets Portfolio
--------------------------------------------------------------------------------------------------------------------
                                               Lazard International Equity Portfolio
--------------------------------------------------------------------------------------------------------------------
MFS(R) Variable Insurance Trust(SM)            MFS New Discovery Series - Service Class
--------------------------------------------------------------------------------------------------------------------
                                               MFS Utilities Series - Service Class
--------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds             Oppenheimer Main Street Small Cap Fund/VA - Service Shares
--------------------------------------------------------------------------------------------------------------------
PIMCO Advisors VIT                             PAVIT OpCap Balanced Portfolio
--------------------------------------------------------------------------------------------------------------------
                                               PAVIT OpCap Equity Portfolio
--------------------------------------------------------------------------------------------------------------------
                                               PAVIT OpCap Small Cap Portfolio
--------------------------------------------------------------------------------------------------------------------
                                               PAVIT PEA Science and Technology Portfolio
--------------------------------------------------------------------------------------------------------------------
PIMCO Variable Insurance Trust                 PIMCO VIT Foreign Bond Portfolio (U.S. Dollar-Hedged) -
                                                Administrative Shares
--------------------------------------------------------------------------------------------------------------------
                                               PIMCO VIT Money Market Portfolio - Administrative Shares
--------------------------------------------------------------------------------------------------------------------
                                               PIMCO VIT StocksPLUS Growth and  Income Portfolio - Administrative
                                                Shares
--------------------------------------------------------------------------------------------------------------------
                                               PIMCO VIT Total Return Portfolio - Administrative Shares
--------------------------------------------------------------------------------------------------------------------
Putnam Variable Trust                          Putnam VT High Yield Fund - Class 1B
--------------------------------------------------------------------------------------------------------------------
The Rydex Variable Trust                       Rydex VT OTC Fund
--------------------------------------------------------------------------------------------------------------------
Salomon Brothers Variable Series Funds Inc     Salomon Brothers Variable All Cap Fund - Class I
--------------------------------------------------------------------------------------------------------------------
                                               Salomon Brothers Variable Investors Fund - Class I
--------------------------------------------------------------------------------------------------------------------
The Universal Institutional Funds, Inc.*       Van Kampen UIF Equity Growth Portfolio - Class I
--------------------------------------------------------------------------------------------------------------------
                                               Van Kampen UIF High Yield  Portfolio - Class I
--------------------------------------------------------------------------------------------------------------------
                                               Van Kampen UIF Mid Cap Growth Portfolio - Class I
--------------------------------------------------------------------------------------------------------------------
                                               Van Kampen UIF U.S. Mid Cap Value Portfolio - Class I
--------------------------------------------------------------------------------------------------------------------
Van Kampen Life Investment Trust               Van Kampen LIT Aggressive Growth Portfolio - Class II
--------------------------------------------------------------------------------------------------------------------
                                               Van Kampen LIT Growth and Income Portfolio - Class II
--------------------------------------------------------------------------------------------------------------------

*    Morgan Stanley Investment Management, Inc., the advisor for the UIF
     Portfolios, does business in certain instances using the name Van Kampen.

Some of the Portfolios described in this prospectus may not be available in your
Contract.

Each Portfolio holds its assets separately from the assets of the other
Portfolios. Each Portfolio has distinct investment objectives and policies which
are described in the accompanying prospectuses for the Portfolios.

5.   WHAT IS THE FIXED ACCOUNT OPTION?

We offer two Fixed Account interest crediting options: the Guaranteed Maturity
Fixed Account Option and the Dollar Cost Averaging Fixed Account Option.

You may allocate Purchase Payments to the Subaccount(s) and the Fixed
Account(s). Loan payments may not be allocated to the Fixed Account(s). You may
not transfer amounts into the DCA Fixed Account. The minimum amount that may be
transferred into any one of the Guaranteed Maturity Fixed Account Options is
$500.

We will credit interest to amounts allocated to the Guaranteed Maturity Fixed
Account Option at a specified rate for a specified Guarantee Period. You select
the Guarantee Period for each amount that you allocate to the Guaranteed
Maturity Fixed Account Option. We will tell you what interest rates and
Guarantee Periods we are offering at a particular time. At the end of each
Guarantee Period, you may select a new Guarantee Period from among the choices
we are then making available or transfer or withdraw the relevant amount from
the Fixed Account without any Market Value Adjustment.

                                  9 PROSPECTUS



We may offer Guarantee Periods ranging from one to ten years in length. We are
currently offering Guarantee Periods of one, three, five, seven, and ten years
in length. In the future we may offer Guarantee Periods of different lengths or
stop offering some Guarantee Periods.

We will not change the interest rate credited to a particular allocation until
the end of the relevant Guarantee Period. From time to time, however, we may
change the interest rate that we offer to credit to new allocations to the
Guaranteed Maturity Fixed Account Option and to amounts rolled over in the Fixed
Account for new Guarantee Periods.

In addition, if you participate in our dollar cost averaging program, you may
designate amounts to be held in the Dollar Cost Averaging Fixed Account Option
until they are transferred monthly to the Subaccounts or Guarantee Periods of
your choosing. When you make an allocation to the Fixed Account for this
purpose, we will set an interest rate applicable to that amount. We will then
credit interest at that rate to that amount until it has been entirely
transferred to your chosen Subaccounts or Guarantee Periods. We will complete
the transfers within one year of the allocation. In our discretion we may change
the rate that we set for new allocations to the Fixed Account for the dollar
cost averaging program. We will never, however, set a rate less than an
effective annual rate of 3%.

A Market Value Adjustment may increase or decrease the amount of certain
transactions involving the Guaranteed Maturity Fixed Account, to reflect changes
in interest rates. As a general rule, we will apply a Market Value Adjustment to
the following transactions:

1)   when you withdraw funds from the Guaranteed Maturity Fixed Account Option
     in an amount greater than the Free Withdrawal Amount (which is described in
     the answer to Question 6);

2)   when you transfer funds from the Guaranteed Maturity Fixed Account Option
     to the Subaccounts;

3)   when you allocate part of your balance in the Guaranteed Maturity Fixed
     Account Option to a new Guarantee Period before the end of the existing
     Guarantee Period;

4)   when you annuitize your Contract; and

5)   when we pay a death benefit.

We will not apply a Market Value Adjustment to a transaction to the extent that:

1)   it occurs within 30 days after the end of a Guarantee Period applicable to
     the funds involved in the transaction; or

2)   it is necessary to meet IRS minimum withdrawal requirements.

We determine the amount of a Market Value Adjustment using a formula that takes
into consideration:

1)   whether current interest rates differ from interest rates at the beginning
     of the applicable Guarantee Period; and

2)   how many years are left until the end of the Guarantee Period.

As a general rule, if interest rates have dropped, the Market Value Adjustment
will be an addition; if interest rates have risen, the Market Value Adjustment
will be a deduction. It is therefore possible that if you withdraw an amount
from the Fixed Account during a Guarantee Period, a Market Value Adjustment may
cause you to receive less than you initially allocated to the Fixed Account.

6.   WHAT ARE MY EXPENSES UNDER THE CONTRACT?

Contract Maintenance Charge. During the Accumulation Period, each year we
subtract an annual contract maintenance charge of $35 from your Contract Value
allocated to the Subaccounts. We will waive this charge if you pay $50,000 or
more in Purchase Payments or if you allocate all of your Contract Value to the
Fixed Account.

During the Annuity Period, if allowed in your state, we will subtract the annual
contract maintenance charge in equal parts from your annuity payments. We waive
this charge if on the Annuity Date your Contract Value is $50,000 or more or if
all payments are Fixed Annuity payments.

Administrative Expense Charge and Mortality and Expense Risk Charge. We impose a
mortality and expense risk charge at an annual rate of 1.30% of average daily
net assets and an administrative expense charge at an annual rate of .10% of
average daily net assets. If you select our optional enhanced death benefit
rider, however, we may charge you a higher mortality and expense risk charge.
These charges are assessed each day during the Accumulation Period and the
Annuity Period. We guarantee that we will not raise these charges.

Transfer Fee. Although we currently are not charging a transfer fee, depending
on your state, the Contract permits us to charge you up to $10 per transfer for
each transfer after the first transfer in each month, or for each transfer in
excess of twelve within a calendar year. The Contract also permits us to impose
a minimum size on transfer amounts although the minimum size may be limited to
$25 in some states.

Withdrawal Charge (Contingent Deferred Sales Charge). During the Accumulation
Period, you may withdraw all or part of the value of your Contract before your
death or, if the Contract is owned by a company or other legal entity, before
the Annuitant's death. Certain withdrawals may be made without payment of any
Withdrawal Charge, which is a contingent deferred sales charge. Other
withdrawals are subject to the Withdrawal Charge.

The Withdrawal Charge will vary depending on how many complete years have passed
since you paid the Purchase Payment being withdrawn.

The Withdrawal

                                  10 PROSPECTUS



Charge applies to each Purchase Payment for eight complete years from the date
of the Payment (each a "Contribution Year") as follows:

Contribution   Applicable
    Year         Charge
------------   ----------
     1             8%
    2-3            7%
    4-5            6%
     6             5%
     7             4%
     8             3%
    9+             0%

In determining Withdrawal Charges, we will deem your Purchase Payments to be
withdrawn on a first-in first-out basis.

Each year, free of Withdrawal Charge or any otherwise applicable Market Value
Adjustment, you may withdraw the Free Withdrawal Amount, which equals:

(a)  the greater of:

.    earnings not previously withdrawn; or

.    15% of your total Purchase Payments made in the most recent eight years;
     plus

(b)  an amount equal to your total Purchase Payments made more than eight years
     ago, to the extent not previously withdrawn.

In most states, we also may waive the Withdrawal Charge if you: (1) require
long-term medical or custodial care outside the home; or (2) are diagnosed with
a terminal illness. These provisions will apply to the Annuitant, if the
Contract is owned by a company or other legal entity. Additional restrictions
and costs may apply to Contracts issued in connection with qualified plans.
Withdrawals of earnings are taxed as ordinary income and, if taken prior to age
59 1/2, may be subject to an additional 10% federal tax penalty. You should
consult with your tax counselor to determine what effect a withdrawal might have
on your tax liability. As described in the answer to Question 5, we may increase
or decrease certain withdrawals by a Market Value Adjustment.

Premium Taxes. Certain states impose a premium tax on annuity purchase payments
received by insurance companies. Any premium taxes relating to the Contract may
be deducted from Purchase Payments or the Contract Value when the tax is
incurred or at a later time. State premium taxes generally range from 0% to
3.5%.

Other Expenses. In addition to our charges under the Contract, each Portfolio
deducts amounts from its assets to pay its investment advisory fees and other
expenses.

7.   HOW WILL MY INVESTMENT IN THE CONTRACT BE TAXED?

You should consult a qualified tax advisor for personalized answers. Generally,
earnings under variable annuities are not taxed until amounts are withdrawn or
distributions are made. This deferral of taxes is designed to encourage
long-term personal savings and supplemental retirement plans.

Withdrawals taken prior to annuitization are generally considered to come from
the earnings in the Contract first. If the Contract is tax-qualified, generally
all withdrawals are treated as distributions of earnings. Withdrawal of earnings
are taxed as ordinary income and, if taken prior to age 59 1/2, may be subject
to an additional 10% federal tax penalty.

Special rules apply if the Contract is owned by a company or other legal entity.
Generally, such an owner must include in income any increase in the excess of
the Contract Value over the "investment in the contract" during the taxable
year.

8.   DO I HAVE ACCESS TO MY MONEY?

At any time during the Accumulation Period, we will pay you all or part of the
value of your Contract, minus any applicable charge, if you surrender your
Contract or request a partial withdrawal. Under some qualified plans, you may
also take a loan against the value of your Contract. Generally, a partial
withdrawal must equal at least $50, and after the withdrawal your remaining
Contract Value must at least equal $500.

Although you have access to your money during the Accumulation Period, certain
charges, such as the contract maintenance charge, the Withdrawal Charge, and
premium tax charges, may be deducted on a surrender or withdrawal. You may also
incur federal income tax liability or tax penalties. In addition, if you have
allocated some of the value of your Contract to the Fixed Account, the amount of
your surrender proceeds or withdrawal may be increased or decreased by a Market
Value Adjustment.

After annuitization, under certain settlement options you may be entitled to
withdraw the commuted value of the remaining payments.

9.   WHAT IS THE DEATH BENEFIT?

We will pay a death benefit while the Contract is in force and before the
Annuity Date, if the Contract Owner dies, or if the Annuitant dies and the
Contract Owner is not a living person. To obtain payment of the Death Benefit,
the Beneficiary must submit to us a complete request for payment of the Death
Benefit, which includes due proof of death as specified in the Contract.

The standard death benefit is the greatest of the following:

1)   your total Purchase Payments reduced proportionately for any prior partial
     withdrawals;

2)   your Contract Value;

3)   the amount you would have received by surrendering your Contract; or

4)   your Contract Value on each Contract Anniversary evenly divisible by eight,
     increased by the total

                                  11 PROSPECTUS



Purchase Payments since that anniversary and reduced proportionately by any
partial withdrawals since that anniversary.

We also offer an optional enhanced death benefit rider, which is described later
in this prospectus.

We will determine the value of the death benefit on the day that we receive all
of the information that we need to process the claim.

10.  WHAT ELSE SHOULD I KNOW?

Allocation of Purchase Payments. You allocate your initial Purchase Payment
among the Subaccounts and the Fixed Account in your Contract application. You
may make your allocations in specific dollar amounts or percentages, which must
be whole numbers that add up to 100%. When you make subsequent Purchase
Payments, you may again specify how you want your payments allocated. If you do
not, we will automatically allocate the payment based on your most recent
instructions. You may not allocate Purchase Payments to the Fixed Account if it
is not available in your state.

Credit Enhancements. We will credit your Contract Value with a Credit
Enhancement of 4% of each Purchase Payment before we allocate that Purchase
Payment among the Subaccounts or to the Fixed Account. The Credit Enhancements
will be allocated in the same proportions as the corresponding Purchase Payment.
As described in "Free Look Period" on page 13, if you cancel your Contract
during the free look period we may deduct any Credit Enhancement from the amount
paid you.

Transfers. During the Accumulation Period, you may transfer Contract Value among
the Subaccounts and from the Subaccounts to the Fixed Account. If we offer
additional Subaccounts in the future, we may limit your right to allocate your
Contract Value to no more than twenty-one options under the Contract. While you
may also transfer amounts from the Fixed Account, a Market Value Adjustment may
apply. You may instruct us to transfer Contract Value by writing or calling us.

You may also use our Automatic Dollar Cost Averaging or Portfolio Rebalancing
programs. You may not use both programs at the same time.

Under the Dollar Cost Averaging program, amounts are automatically transferred
at regular intervals from the Fixed Account or a Subaccount of your choosing,
including other Subaccounts or the Fixed Account. Transfers from the Dollar Cost
Averaging Fixed Account may be made monthly only. Transfers from Subaccounts may
be made monthly, quarterly, or annually.

Under the Portfolio Rebalancing program, you can maintain the percentage of your
Contract Value allocated to each Subaccount at a pre-set level. Investment
results will shift the balance of your Contract Value allocations. If you elect
rebalancing, we will automatically transfer your Contract Value back to the
specified percentages at the frequency (monthly, quarterly, semiannually,
annually) that you specify. We will automatically terminate this program if you
request a transfer outside of the program. You may not include the Fixed Account
in a Portfolio Rebalancing program. You also may not elect rebalancing after
annuitization.

During the Annuity Period, you may not make any transfers for the first six
months after the Annuity Date. Thereafter, you may make transfers among the
Subaccounts or from the Subaccounts to increase your Fixed Annuity payments.
Your transfers, however, must be at least six months apart. You may not,
however, convert any portion of your right to receive Fixed Annuity payments
into Variable Annuity payments.

Free-Look Period. You may cancel the Contract by returning it to us within 10
days after you receive it, or after whatever longer period may be permitted by
state law. You may return it by delivering it or mailing it to us. If you return
the Contract, the Contract terminates. In most states, we will pay you an amount
equal to the Contract Value minus the Credit Enhancement. The Owner will also
bear any expenses charged with respect to the Credit Enhancement amount incurred
prior to the return of the Contract such as any mortality and expense charge.
The Contract Value may be more or less than your Purchase Payments. In some
states, we are required to send you the amount of your Purchase Payments. Since
state laws differ as to the consequences of returning a Contract, you should
refer to your Contract for specific information about your circumstances. If
your Contract is qualified under Section 408 of the Internal Revenue Code, we
will refund the greater of any purchase payments or the Contract Value.

11.  WHO CAN I CONTACT FOR MORE INFORMATION?

You can write to us at Lincoln Benefit Life Company, P.O. Box 80469, Lincoln,
Nebraska 68501-0469, or call us at (800) 865-5237.

FINANCIAL INFORMATION

Attached as Appendix A is a table showing selected information concerning
Accumulation Unit Values for each Subaccount for each year since we started
offering the Contracts. Accumulation Unit Value is the unit of measure that we
use to calculate the value of your interest in a Subaccount. Accumulation Unit
Value does not reflect the deduction of certain charges that are subtracted from
your Contract Value, such as the Annual Contract Maintenance Charge. The
information in the table is included in the Separate Account's financial
statements. To obtain a fuller picture of each Subaccount's finances and
performance, you should review the Separate Account's financial statements,
which are in the Separate Account's Annual Statement dated as

                                  12 PROSPECTUS



of December 31, 2003, contained in the Statement of Additional Information. The
Statement of Additional Information also includes a brief explanation of how
performance of the Subaccounts is calculated.

DESCRIPTION OF THE CONTRACTS

SUMMARY. The Contract is a deferred annuity contract designed to aid you in
long-term financial planning. You may add to the Contract Value by making
additional Purchase Payments. In addition, the Contract Value will change to
reflect the performance of the Subaccounts to which you allocate your Purchase
Payments and your Contract Value, as well as to reflect Credit Enhancements and
interest credited to amounts allocated to the Fixed Account. You may withdraw
your Contract Value by making a partial withdrawal or by surrendering your
Contract. Upon annuitization, we will pay you benefits under the Contract in the
form of an annuity, either for the life of the Annuitant or for a fixed number
of years. All of these features are described in more detail below.

CONTRACT OWNER. As the Contract Owner, you are the person usually entitled to
exercise all rights of ownership under the Contract. You usually are also the
person entitled to receive benefits under the Contract or to choose someone else
to receive benefits. The Contract can also be purchased as an IRA or TSA (also
known as a 403(b)). The endorsements required to qualify these annuities under
the Code may limit or modify your rights and privileges under the Contract. The
maximum age of the oldest Contract Owner and Annuitant is age 85 as of the date
we receive the completed application. The Contract cannot be jointly owned by
both a non-living person and a living person. Changing ownership of this
Contract may cause adverse tax consequences and may not be allowed under
qualified plans. Please consult with a competent tax advisor prior to making a
request for a change of Contract Owner. If the Contract Owner is a grantor
trust, the Owner will be considered a non-living person for purposes of this
section and the Death Benefit section.

ANNUITANT. The Annuitant is the living person whose life span is used to
determine annuity payments. You initially designate an Annuitant in your
application. You may change the Annuitant at any time before annuity payments
begin. If your Contract was issued under a plan qualified under Section 403(b),
408 or 408A of the Tax Code, you must be the Annuitant. If the Contract is a
non-Qualified contract, you may also designate a Joint Annuitant, who is a
second person on whose life annuity payments depend. Additional restrictions may
apply in the case of Qualified Plans. If you are a living person and are not the
Annuitant and the Annuitant dies before annuity payments begin, then either you
become the new Annuitant or you must name another person as the new Annuitant.
If you are a non-living person and the Annuitant dies before annuity payments
begin, the Beneficiary may elect to receive a death benefit as discussed in
"Death of Annuitant" on page 28. You must attest that the Annuitant is alive in
order to annuitize your Contract.

MODIFICATION OF THE CONTRACT. Only a Lincoln Benefit officer may approve a
change in or waive any provision of the Contract. Any change or waiver must be
in writing. None of our agents has the authority to change or waive the
provisions of the Contract.

We are permitted to change the terms of the Contract if it is necessary to
comply with changes in the law. If a provision of the Contract is inconsistent
with state law, we will follow state law.

ASSIGNMENT. Before the Annuity Date, if the Annuitant is still alive, you may
assign an interest in the Contract if it is a non-Qualified Contract. If a
Contract is issued pursuant to a Qualified Plan, the law prohibits some types of
assignments, pledges and transfers and imposes special conditions on others. An
assignment may also result in taxes or tax penalties.

We will not be bound by any assignment until we receive written notice of it.
Accordingly, until we receive written notice of an assignment, we will continue
to act as though the assignment had not occurred. We are not responsible for the
validity of any assignment.

BECAUSE OF THE POTENTIAL TAX CONSEQUENCES AND ERISA ISSUES ARISING FROM AN
ASSIGNMENT, YOU SHOULD CONSULT WITH AN ATTORNEY BEFORE TRYING TO ASSIGN YOUR
CONTRACT.

FREE LOOK PERIOD. You may cancel the Contract by returning it to us within 10
days after you receive it, or within whatever longer period may be permitted by
state law. You may return it by delivering it to your agent or mailing it to us.
If you return the Contract, the Contract terminates. In most states, we will pay
you an amount equal to the Contract Value minus the Credit Enhancement. The
Contract Value at that time may be more or less than your Purchase Payments. The
Owner will also bear any expense charged with respect to the Credit Enhancement
amount incurred prior to the return of the Contract, such as any Mortality and
Expense Charge.

In some states, if you exercise your "free look" rights, we are required to
return the amount of your Purchase Payments. Currently, if you live in one of
those states, on the Issue Date we will allocate your Purchase Payment to the
Subaccounts and the Fixed Account Options as you specified in your application.
However, we reserve the right in the future to delay allocating your Purchase
Payments to the Subaccounts you have selected or to the Fixed Account until 20
days after the Issue Date or, if

                                  13 PROSPECTUS



your state's free look period is longer than ten days, for ten days plus the
period required by state law. During that time, we will allocate your Purchase
Payment to the PIMCO Money Market Subaccount. Your Contract will contain
specific information about your free-look rights in your state.

PURCHASES AND CONTRACT VALUE

MINIMUM PURCHASE PAYMENT. The minimum initial Purchase Payment for a Contract is
$10,000. You may pay it in a lump sum or in installments of your choice over the
first Contract Year. You may not pay more than $1 million in Purchase Payments
without our prior approval. As a general rule, subsequent Purchase Payments may
be made in amounts of $500 or more. Subsequent Purchase Payments made as part of
an Automatic Payment Plan, however, may be as small as $100 per month. However,
each Purchase Payment made to the Dollar Cost Averaging Fixed Account must be at
least $1200. If we receive Purchase Payments designated for the Dollar Cost
Averaging Fixed Account that are lower than the required minimum of $1200, or
purchase payments designated for the Guaranteed Maturity Fixed Account Option
that are lower than $500, such amounts will be allocated to the PIMCO Money
Market Portfolio. We may lower these minimums if we choose. We may refuse any
Purchase Payment at any time.

AUTOMATIC PAYMENT PLAN. You may make scheduled Purchase Payments of $100 or more
per month by automatic payment through your bank account. Call or write us for
an enrollment form.

CREDIT ENHANCEMENT. We will add a Credit Enhancement to your Contract Value when
each Purchase Payment is received. The Credit Enhancement is payable from our
general account. The amount of a Credit Enhancement is 4% of each Purchase
Payment. The Credit Enhancement will be allocated among the Subaccounts and
Fixed Account in the same proportion that the applicable Purchase Payment is
allocated. The amount returned if the Contract Owner exercises his or her right
to return the Contract during your Free Look period will be reduced by any
Credit Enhancements applied.

The expense charges for this Contract may be higher than the expense charges for
annuity contracts that do not offer Credit Enhancements. We expect to recoup the
cost of paying Credit Enhancements through collections of the Withdrawal Charges
on the Contract (which are contingent), as well as our legitimate profits on
this and other contracts we offer. In some circumstances - for example, if you
surrender your Contract while the Withdrawal Charge still applies to a
substantial proportion of your Premiums - your net proceeds may be lower than if
you had purchased one of our other annuity contracts that does not offer Credit
Enhancements. Likewise, over time the amount of the Credit Enhancements may be
offset by higher expenses.

Credit Enhancements are treated as "earnings" for purposes of determining
Withdrawal Charges and free withdrawal amounts on surrenders and partial
withdrawals. Similarly, Credit Enhancements are not treated as an "investment in
the contract" for tax purposes.

ALLOCATION OF PURCHASE PAYMENTS. Your Purchase Payments are allocated to the
Subaccount(s) and the Fixed Account in the proportions that you have selected.
You must specify your allocation in your Contract application, either as
percentages or specific dollar amounts. If you make your allocation in
percentages, the total must equal 100%. We will allocate your subsequent
Purchase Payments in those percentages, until you give us new allocation
instructions. You may not allocate Purchase Payments to the Fixed Account if it
is not available in your state.

If we offer additional Subaccounts in the future, we may limit your right to
allocate your Purchase Payments to up to twenty-three options, counting each
Subaccount and the Fixed Account as one option. For this purpose, we will treat
all of your allocations to the Fixed Account as one option, even if you choose
more than one Guarantee Period.

If your application is complete, we will issue your Contract within two business
days of its receipt at our P.O. Box shown on the first page of this prospectus.
If your application for a Contract is incomplete, we will notify you and seek to
complete the application within five business days. For example, if you do not
fill in allocation percentages, we will contact you to obtain the missing
percentages. If we cannot complete your application within five business days
after we receive it, we will return your application and your Purchase Payment,
unless you expressly permit us to take a longer time.

Usually, we will allocate your initial Purchase Payment to the Subaccounts and
the Fixed Account, as you have instructed us, on the Issue Date. We will
allocate your subsequent Purchase Payments on the date that we receive them at
the next computed Accumulation Unit Value.

In some states, however, we are required to return at least your Purchase
Payment if you cancel your Contract during the "free-look" period. In those
states, we currently will allocate your Purchase Payments on the Issue Date as
you have instructed us, as described above. In the future, however, we reserve
the right, if you live in one of those states, to allocate all Purchase Payments
received during the "free-look period" to the PIMCO

                                  14 PROSPECTUS



Money Market Subaccount. If we exercise that right and your state's free look
period is ten days, we will transfer your Purchase Payments to your specified
Subaccounts or the Fixed Account 20 days after the Issue Date; if your state's
free look period is longer, we will transfer your Purchase Payment after ten
days plus the period required by state law have passed.

We determine the number of Accumulation Units in each Subaccount to allocate to
your Contract by dividing that portion of your Purchase Payment allocated to a
Subaccount by that Subaccount's Accumulation Unit Value on the Valuation Date
when the allocation occurs.

CONTRACT VALUE. We will establish an account for you and will maintain your
account during the Accumulation Period. The total value of your Contract at any
time is equal to the sum of the value of your Accumulation Units in the
Subaccounts you have selected, plus the value of your investment in the Fixed
Account.

SEPARATE ACCOUNT ACCUMULATION UNIT VALUE. As a general matter, the Accumulation
Unit Value for each Subaccount will rise or fall to reflect changes in the share
price of the Portfolio in which the Subaccount invests. In addition, we subtract
from Accumulation Unit Value amounts reflecting the mortality and expense risk
charge, administrative expense charge, and any provision for taxes that have
accrued since we last calculated the Accumulation Unit Value. We determine
Withdrawal Charges, transfer fees and contract maintenance charges separately
for each Contract. They do not affect Accumulation Unit Value. Instead, we
obtain payment of those charges and fees by redeeming Accumulation Units.

We determine a separate Accumulation Unit Value for each Subaccount. We also
determine a separate set of Accumulation Unit Values reflecting the cost of the
enhanced death benefit rider. If we elect or are required to assess a charge for
taxes, we may calculate a separate Accumulation Unit Value for Contracts issued
in connection with Non-Qualified and Qualified Plans, respectively, within each
Subaccount. We determine the Accumulation Unit Value for each Subaccount Monday
through Friday on each day that the New York Stock Exchange is open for
business.

You should refer to the prospectuses for the Portfolios which accompany this
prospectus for a description of how the assets of each Portfolio are valued,
since that determination has a direct bearing on the Accumulation Unit Value of
the corresponding Subaccount and, therefore, your Contract Value.

TRANSFER DURING ACCUMULATION PERIOD. During the Accumulation Period, you may
transfer Contract Value among the Fixed Account and the Subaccounts in writing
or by telephone. Currently, there is no minimum transfer amount. The Contract
permits us to set a minimum transfer amount in the future. You may not make a
transfer that would result in your allocating your Contract Value to more than
twenty-three options under the Contract at one time.

As a general rule, we only make transfers on days when the NYSE is open for
business. If we receive your request on one of those days, we will make the
transfer that day. If you transfer an amount from the Fixed Account to a
Subaccount before the end of the applicable Guarantee Period or you allocate an
amount in the Fixed Account to a new Guarantee Period before the end of the
existing Guarantee Period, we usually will increase or decrease the amount by a
Market Value Adjustment. The calculation of the Market Value Adjustment is
described in "Market Value Adjustment" on page 23.

Transfers within 30 days after the end of the applicable Guarantee Period are
not subject to a Market Value Adjustment.

The Contract permits us to defer transfers from the Fixed Account for up to six
months from the date you ask us.

You may not transfer Contract Value into the Dollar Cost Averaging Fixed Account
Option. You may not transfer Contract Value out of the Dollar Cost Averaging
Fixed Account Option except as part of a Dollar Cost Averaging program.

TRANSFERS AUTHORIZED BY TELEPHONE. You may make transfers by telephone. The cut
off time for telephone transfer requests is 4:00 p.m. Eastern time. Calls
completed before 4:00 p.m. will be effected on that day at that day's price.
Calls completed after 4:00 p.m. will be effected on the next day on which the
NYSE is open for business, at that day's price.

We may charge you the transfer fee or impose a minimum transfer amount as
described on page 32, although we currently are waiving it. At any time, without
notice, we may suspend, modify or terminate your privilege to make transfers via
the telephone, or via other electronic or automated means previously approved by
the Company, including, but not limited to, automated telephone services,
facsimile machine, e-mail and electronic services via online access. Among other
things, we reserve the right to limit the number of such transfers among the
Separate Subaccounts in any Contract year, or to refuse any Separate Subaccount
transfer request. We also reserve the right to restrict such transfers in any
manner reasonably designed to prevent transfers that we consider disadvantageous
to other Contract owners.

We use procedures that we believe provide reasonable assurance that telephone
authorized transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.

                                  15 PROSPECTUS



MARKET TIMING & EXCESSIVE TRADING. The Contracts are intended for long-term
investment. Frequent trading in response to short-term fluctuations in the
market can disrupt management of a Portfolio and raise its expenses, which can
impair Portfolio performance. Lincoln Benefit's policy is not to knowingly
accept any money intended for the purpose of market timing. Lincoln Benefit does
not market the Contracts to persons for the purpose of their engaging in market
timing activity.

Lincoln Benefit defines market timing activity to be the movement in and out of
a Subaccount in a short period of time designed to take advantage of short-term
market fluctuations based upon expected increases in Subaccount unit values.
Lincoln Benefit defines excessive trading activity as purchase and sale
transactions of a Contract Owner that occur with such frequency and/or such size
as to affect the Portfolio's ability to meet its investment objective, in the
judgment of Lincoln Benefit or the Portfolio.

Service center personnel seek to detect and report market timing or excessive
trading transfer activity through monitoring and review of trading activities.
Portfolios may also report suspected market timing or excessive trading transfer
activity. However, not all market timing or excessive trading transfer activity
can be prevented, as it may not be possible to identify it unless and until a
trading pattern is established. If we identify suspected market timing or
excessive trading activity, we will make further inquiry and take corrective
action as appropriate. Corrective action may include, but is not limited to,
refusing transfer requests, or suspending, modifying or terminating any
telephone, automated or electronic transfer privileges.

TRADING LIMITATIONS. We reserve the right to limit transfers among the
investment alternatives in any Contract Year, or to refuse any transfer request,
if:

.    we believe, in our sole discretion, that certain trading practices, such as
     excessive trading or market timing ("Prohibited Trading Practices"), by, or
     on behalf of, one or more Contract Owners, or a specific transfer request
     or group of transfer requests, may have a detrimental effect on the
     Accumulation Unit Values of any Variable Subaccount or on the share prices
     of the corresponding Portfolio or otherwise would be to the disadvantage of
     other Contract Owners; or

.    we are informed by one or more of the Portfolios that they intend to
     restrict the purchase, exchange, or redemption of Portfolio shares because
     of Prohibited Trading Practices or because they believe that a specific
     transfer or group of transfers would have a detrimental effect on the
     prices of Portfolio shares.

We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract Owners.

AUTOMATIC DOLLAR COST AVERAGING PROGRAM. Under our Automatic Dollar Cost
Averaging program, you may authorize us to transfer a fixed dollar amount at
fixed intervals from the Dollar Cost Averaging Fixed Account Option or a
Variable Subaccount of your choosing. You may not use the Dollar Cost Averaging
program to transfer amounts from the Guaranteed Maturity Fixed Account Option.
The interval between transfers from the Dollar Cost Averaging Fixed Account may
be monthly only. The interval between transfers from Subaccounts may be monthly,
quarterly, or annually, at your option. The transfers will be made at the
Accumulation Unit Value on the date of the transfer. The transfers will continue
until you instruct us otherwise, or until your chosen source of transfer
payments is exhausted. Currently, the minimum transfer amount is $100 per
transfer. However, if you wish to Dollar Cost Average to a Guaranteed Maturity
Fixed Account Option, the minimum amount that must be transferred into any one
Option is $500. For each purchase payment allocated to this Option, your first
monthly transfer will occur 25 days after such purchase payment. If we do not
receive an allocation from you within 25 days of the purchase payment, we will
transfer the payment plus associated interest to the Money Market Subaccount in
equal monthly installments.Your request to participate in this program will be
effective when we receive your completed application at the P.O. Box given on
the first page of this prospectus. Call or write us for a copy of the
application. You may elect to increase, decrease or change the frequency or
amount of transfers under a Dollar Cost Averaging program. We will not charge a
transfer fee for Dollar Cost Averaging.

The theory of dollar cost averaging is that by spreading your investment over
time, you may be able to reduce the effect of transitory market conditions on
your investment. In addition, because a given dollar amount purchases more units
when the unit prices are relatively low rather than when the prices are higher,
in a fluctuating market, the average cost per unit may be less than the average
of the unit prices on the purchase dates. However, participation in this program
does not assure you of a greater profit from your purchases under the program,
nor will it prevent or necessarily reduce losses in a declining market.
Moreover, while we refer to this program of periodic transfers generally as
Dollar Cost Averaging, periodic transfers from a subaccount with more volatile
performance experience is unlikely to produce the desired effects of Dollar Cost
Averaging as would transfers from a less volatile subaccount.

PORTFOLIO REBALANCING. Portfolio Rebalancing allows you to maintain the
percentage of your Contract Value allocated to each Subaccount at a pre-set
level. Over time, the variations in each Subaccount's investment results will
shift the balance of your Contract Value allocations. Under the Portfolio
Rebalancing feature, each period, if the allocations change from your desired
percentages, we will automatically transfer your Contract Value, including new
Purchase Payments (unless you specify otherwise), back to the percentages you
specify. Portfolio Rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.

                                  16 PROSPECTUS



You may choose to have rebalances made monthly, quarterly, semi-annually, or
annually until your Annuity Date. Portfolio Rebalancing is not available after
you annuitize. We will not charge a transfer fee for Portfolio Rebalancing. A
one-time request to rebalance the amounts allocated to the Subaccounts is not
part of a Portfolio Rebalancing program and is subject to all of the
requirements that are applicable to transfers made during the Accumulation
Period. We will automatically terminate this option if you request any transfers
outside the Portfolio Rebalancing program. If you wish to resume the Portfolio
Rebalancing after it has been canceled, then you must complete a new Portfolio
Rebalancing form and send it to our home office. You may not include the Fixed
Account in a Portfolio Rebalancing program.

You may request Portfolio Rebalancing at any time before your Annuity Date by
submitting a completed written request to us at the P.O. Box given on the first
page of this prospectus. Please call or write us for a copy of the request form.
If you stop Portfolio Rebalancing, you must wait 30 days to begin again. In your
request, you may specify a date for your first rebalancing. If you specify a
date fewer than 30 days after your Issue Date, your first rebalance will be
delayed one month. If you request Portfolio Rebalancing in your Contract
application and do not specify a date for your first rebalancing, your first
rebalance will occur one period after the Issue Date. For example, if you
specify quarterly rebalancing, your first rebalance will occur three months
after your Issue Date. Otherwise, your first rebalancing will occur one period
after we receive your completed request form. All subsequent rebalancing will
occur at the intervals you have specified on the day of the month that coincides
with the same day of the month as your Contract Anniversary Date.

Generally, you may change the allocation percentages, frequency, or choice of
Subaccounts at any time. If your total Contract Value subject to rebalancing
falls below any minimum value that we may establish, we may prohibit or limit
your use of Portfolio Rebalancing. You may not use Dollar Cost Averaging and
Portfolio Rebalancing at the same time. We may change, terminate, limit, or
suspend Portfolio Rebalancing at any time.

THE INVESTMENT AND FIXED ACCOUNT OPTIONS

SEPARATE ACCOUNT INVESTMENTS

THE PORTFOLIOS. Each of the Subaccounts of the Separate Account invests in the
shares of one of the Portfolios. Each Portfolio is either an open-end management
investment company registered under the Investment Company Act of 1940 or a
separate investment series of an open-end management investment company. We have
briefly described the Portfolios below. You should consult the current
prospectuses for the Portfolios for more detailed and complete information
concerning the Portfolios. If you do not have a prospectus for a Portfolio,
contact us and we will send you a copy.

We do not promise that the Portfolios will meet their investment objectives.
Amounts you have allocated to Subaccounts may grow in value, decline in value,
or grow less than you expect, depending on the investment performance of the
Portfolios in which those Subaccounts invest. You bear the investment risk that
those Portfolios possibly will not meet their investment objectives. You should
carefully review their prospectuses before allocating amounts to the Subaccounts
of the Separate Account.

PORTFOLIO                PORTFOLIO OBJECTIVE           INVESTMENT ADVISER
-------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
-------------------------------------------------------------------------------
AIM V.I. Basic Value     Long-term growth of capital   A I M ADVISORS, INC.
 Fund - Series I (4)
-------------------------------------------------------------------------------
THE ALGER AMERICAN FUND
-------------------------------------------------------------------------------
Alger American Growth    Long-term capital             FRED ALGER  MANAGEMENT,
 Portfolio - Class S      appreciation                  INC.
-------------------------------------------------------------------------------
FIDELITY(R) VARIABLE INSURANCE PRODUCTS
-------------------------------------------------------------------------------
Fidelity VIP Growth      Capital appreciation          FIDELITY MANAGEMENT &
 Portfolio - Service                                    RESEARCH COMPANY
 Class 2
-------------------------------------------------------
Fidelity VIP Investment  As high a level of current
 Grade Bond Portfolio -   income as is consistent
 Service Class 2          with the preservation of
                          capital.
-------------------------------------------------------
Fidelity VIP Overseas    Long-term growth of capital
 Portfolio - Service
 Class 2
-------------------------------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST
-------------------------------------------------------------------------------
Goldman Sachs VIT        Long-term growth of capital   GOLDMAN SACHS ASSET
 CORE(SM) Small Cap                                     MANAGEMENT, L.P.
 Equity Fund
-------------------------------------------------------------------------------
Goldman Sachs VIT        Long-term capital             GOLDMAN SACHS ASSET
 International Equity    appreciation                  MANAGEMENT INTERNATIONAL
 Fund
-------------------------------------------------------------------------------
JANUS ASPEN SERIES
-------------------------------------------------------------------------------
Janus Aspen Series       Long-term growth of capital   JANUS CAPITAL MANAGEMENT
 Capital Appreciation                                   LLC
 Portfolio:
 Institutional Shares
 (5)
-------------------------------------------------------
Janus Aspen Series       Long-term growth of capital
 Foreign Stock
 Portfolio: Service
 Shares (6)
-------------------------------------------------------
Janus Aspen Series       Long-term growth of capital
 Worldwide Growth         in a manner consistent with
 Portfolio: Service       the preservation of capital.
 Shares
-------------------------------------------------------------------------------
J.P. MORGAN SERIES TRUST II
-------------------------------------------------------------------------------
JP Morgan Small Company  High total return from a      J.P. MORGAN INVESTMENT
 Portfolio                portfolio of small company     MANAGEMENT, INC.
                          stocks.
-------------------------------------------------------------------------------
LAZARD RETIREMENT SERIES INC.
-------------------------------------------------------------------------------
Lazard Emerging Markets  Long-term capital             LAZARD ASSET MANAGEMENT
 Portfolio                appreciation                  LLC
-------------------------------------------------------------------------------
Lazard International     Long-term capital
 Equity Portfolio         appreciation
-------------------------------------------------------------------------------
MFS(R) VARIABLE INSURANCE TRUST(SM)
-------------------------------------------------------------------------------
MFS New Discovery        Capital appreciation          MFS(TM) INVESTMENT
 Series - Service Class                                 MANAGEMENT
-------------------------------------------------------
MFS Utilities Series -   Capital growth and current
 Service Class           income
-------------------------------------------------------------------------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS
-------------------------------------------------------------------------------
Oppenheimer Main Street  Capital appreciation          OPPENHEIMERFUNDS, INC.
 Small Cap Fund/VA -
 Service Shares
-------------------------------------------------------------------------------
PIMCO ADVISORS VIT
-------------------------------------------------------------------------------
PAVIT OpCap Balanced     Growth of capital and         OPCAP ADVISORS LLC
 Portfolio (4)            investment income
-------------------------------------------------------
PAVIT OpCap Equity       Long-term capital
 Portfolio                appreciation
-------------------------------------------------------
PAVIT PEA Science and    Capital appreciation
 Technology Portfolio
 (3)
-------------------------------------------------------
PAVIT OpCap Small Cap    Capital appreciation
 Portfolio
-------------------------------------------------------------------------------
PIMCO VARIABLE INSURANCE TRUST
-------------------------------------------------------------------------------
PIMCO VIT Foreign Bond   To maximize total return,     PACIFIC INVESTMENT
 Portfolio (U.S.          consistent with               MANAGEMENT COMPANY LLC
 Dollar-Hedged) -         preservation of capital and
 Administrative Shares    prudent investment
                          management.
-------------------------------------------------------
PIMCO VIT Money Market   To obtain maximum current
 Portfolio -              income consistent with
 Administrative Shares    preservation of capital and
                          daily liquidity.
-------------------------------------------------------
StocksPLUS Growth and    A total return which exceeds
 Income Portfolio -       the total return
 Administrative Shares    performance of the S&P 500.
-------------------------------------------------------
PIMCO VIT Total Return   To maximize total return,
 Portfolio -              consistent with
 Administrative           Shares preservation of
                          capital and prudent
                          investment management.
-------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST
-------------------------------------------------------------------------------
Putnam VT High Yield     High current income. Capital  PUTNAM INVESTMENT
 Fund - Class IB          growth is a secondary goal    MANAGEMENT LLC
                          when consistent with
                          achieving high current
                          income. The fund seeks its
                          goal by investing at least
                          80% in U.S. corporate
                          bonds rated below investment
                          grade (junkbonds) and that
                          have intermediate to
                          long-term maturities (three
                          years or longer.)
-------------------------------------------------------------------------------
THE RYDEX VARIABLE TRUST
-------------------------------------------------------------------------------
Rydex VT OTC Fund         Investment results that      RYDEX INVESTMENTS
                          correspond to a benchmark for
                          over-the-counter
                          securities. The Portfolio's
                          current benchmark is the
                          NASDAQ 100 Index.
-------------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS INC
-------------------------------------------------------------------------------
Salomon Brothers         Capital appreciation through  SALOMON BROTHERS ASSET
 Variable All Cap Fund    investment in securities      MANAGEMENT INC
 (formerly Capital        that the investment manager
 Fund) - Class I          believes have above-average
                          capital appreciation
                          potential.
-------------------------------------------------------
Salomon Brothers         Long-term growth of capital
 Variable Investors       with current income as a
 Fund - Class I (4)       secondary objective
-------------------------------------------------------------------------------
THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
-------------------------------------------------------------------------------
Van Kampen UIF Equity    Seeks long-term capital       VAN KAMPEN(1)
 Growth Portfolio,        appreciation by investing
 Class I (7)              primarily in
                          growth-oriented equity
                          securities of large
                          capitalization companies.
-------------------------------------------------------
Van Kampen UIF High      Above-average total return
 Yield Portfolio,         over a market cycle of
 Class I                  three to five years by
                          investing primarily in high
                          yield securities.
-------------------------------------------------------
Van Kampen UIF Mid Cap   Seeks above-average total
 Growth Portfolio,        return over a market cycle
 Class I                  of three to five years by
                          investing in common stocks
                          and other equity
                          securities.

-------------------------------------------------------
Van Kampen UIF U.S. Mid  Seeks to provide
 Cap Value Portfolio,     above-average current
 Class I (formerly Mid    income and long-term
 Cap Core Portfolio)      capital appreciation by
 (2) (8)                  investing primarily in
                          equity securities of
                          com[panies in the U.S. real
                          estate industry, including
                          real estate investment
                          trusts.
-------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
-------------------------------------------------------------------------------
Van Kampen LIT           Capital Growth                VAN KAMPEN ASSET
 Aggressive Growth                                      MANAGEMENT
 Portfolio, Class II
 (9)
-------------------------------------------------------
Van Kampen LIT Growth    Long-term growth of capital
 and Income Portfolio,    and income
 Class II
-------------------------------------------------------------------------------

(1)  Morgan Stanley Investment Management Inc., the investment adviser to the
     Van Kampen UIF Portfolios, does business in certain instances as Van
     Kampen.

(2)  Effective September 30, 2003, The Universal Institutional Funds, Inc. U.S.
     Mid Cap Core Portfolio, Class I changed its name to The Universal
     Institutional Funds, Inc. U.S. Mid Cap Value Portfolio, Class I. The
     investment objective for this Portfolio has not changed.

(3)  Sub-advised by PIMCO Equity Advisers LLC.

(4)  Effective 4/30/04, the LSA Balance Fund, LSA Basic Value Fund and LSA Value
     Equity Fund were merged into the PAVIT OpCap Balanced Portfolio, AIM V.I.
     Basic Value Fund - Series I and Salomon Brothers Variable Investors Fund -
     Class I, respectively.

(5)  Effective 4/30/04, the LSA Capital Appreciation Fund was merged into the
     Janus Aspen Series Capital Appreciation Portfolio - Institutional Shares.

(6)  Effective 5/1/04 the Janus Aspen Series International Portfolio - Service
     Shares changed its name to the Janus Aspen Foreign Stock Portfolio -
     Service Shares.

(7)  Effective 4/30/04, the LSA Blue Chip Fund, LSA Equity Grown Fund and LSA
     Capital Growth Fund were merged into the Van Kampen UIF Equity Growth
     Portfolio, Class I.

(8)  Effective 4/30/04, the LSA Diversified Mid-Cap Growth Fund and LSA MidCap
     Value Fund were merged into the Van Kampen UIF U.S. Mid Cap Value
     Portfolio, Class I.

                                  19 PROSPECTUS



(9)  Effective 4/30/04, the LSA Aggressive Growth Fund and LSA Emerging Growth
     Fund were merged into the Van Kampen LIT Aggressive Growth Portfolio, Class
     II.

Each Portfolio is subject to certain investment restrictions and policies which
may not be changed without the approval of a majority of the shareholders of the
Portfolio. See the accompanying prospectuses of the Portfolios for further
information.

We automatically reinvest all dividends and capital gains distributions from the
Portfolios in shares of the distributing Portfolio at their net asset value. The
income and realized and unrealized gains or losses on the assets of each
Subaccount are separate and are credited to or charged against the particular
Subaccount without regard to income, gains or losses from any other Subaccount
or from any other part of our business. We will use the net Purchase Payments
you allocate to a Subaccount to purchase shares in the corresponding Portfolio
and will redeem shares in the Portfolios to meet Contract obligations or make
adjustments in reserves. The Portfolios are required to redeem their shares at
net asset value and to make payment within seven days.

Some of the Portfolios have been established by investment advisors which manage
publicly traded mutual funds having similar names and investment objectives.
While some of the Portfolios may be similar to, and may in fact be modeled after
publicly traded mutual funds, you should understand that the Portfolios are not
otherwise directly related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any similarly named
Portfolio may differ substantially.

Some of the Portfolios sell their shares to separate accounts underlying both
variable life insurance and variable annuity contracts. It is conceivable that
in the future it may be unfavorable for variable life insurance separate
accounts and variable annuity separate accounts to invest in the same Portfolio.
Although neither we nor any of the Portfolios currently foresees any such
disadvantages either to variable life insurance or variable annuity contract
owners, each Portfolio's Board of Directors intends to monitor events in order
to identify any material conflicts between variable life and variable annuity
contract owners and to determine what action, if any, should be taken in
response thereto. If a Board of Directors were to conclude that separate
investment funds should be established for variable life and variable annuity
separate accounts, Lincoln Benefit will bear the attendant expenses.

VOTING RIGHTS. As a general matter, you do not have a direct right to vote the
shares of the Portfolios held by the Subaccounts to which you have allocated
your Contract Value. Under current law, however, you are entitled to give us
instructions on how to vote those shares on certain matters. We will notify you
when your instructions are needed. We will also provide proxy materials or other
information to assist you in understanding the matter at issue. We will
determine the number of shares for which you may give voting instructions as of
the record date set by the relevant Portfolio for the shareholder meeting at
which the vote will occur.

As a general rule, before the Annuity Date, you are the person entitled to give
voting instructions. After the Annuity Date, the payee is that person.
Retirement plans, however, may have different rules for voting by plan
participants.

If you send us written voting instructions, we will follow your instructions in
voting the Portfolio shares attributable to your Contract. If you do not send us
written instructions, we will vote the shares attributable to your Contract in
the same proportions as we vote the shares for which we have received
instructions from other Contract Owners. We will vote shares that we hold in the
same proportions as we vote the shares for which we have received instructions
from other Contract Owners.

We may, when required by state insurance regulatory authorities, disregard
Contract Owner voting instructions if the instructions require that the shares
be voted so as to cause a change in the sub-classification or investment
objective of one or more of the Portfolios or to approve or disapprove an
investment advisory contract for one or more of the Portfolios.

In addition, we may disregard voting instructions in favor of changes initiated
by Contract Owners in the investment objectives or the investment advisor of the
Portfolios if we reasonably disapprove of the proposed change. We would
disapprove a proposed change only if the proposed change is contrary to state
law or prohibited by state regulatory authorities or we reasonably conclude that
the proposed change would not be consistent with the investment objectives of
the Portfolio or would result in the purchase of securities for the Portfolio
which vary from the general quality and nature of investments and investment
techniques utilized by the Portfolio. If we disregard voting instructions, we
will include a summary of that action and our reasons for that action in the
next semi-annual financial report to you.

This description reflects our view of currently applicable law. If the law
changes or our interpretation of the law changes, we may decide that we are
permitted to vote the Portfolio shares without obtaining instructions from our
Contract Owners, and we may choose to do so.

ADDITIONS, DELETIONS, AND SUBSTITUTIONS OF SECURITIES. If the shares of any of
the Portfolios are no longer available for investment by the Separate Account or
if, in the judgment of our Board of Directors, further investment in the shares
of a Portfolio is no longer appropriate in view of the purposes of the Contract,
we may add or substitute shares of another Portfolio or underlying fund for
Portfolio shares already purchased or to be purchased in the future by Purchase
Payments

                                  20 PROSPECTUS



under the Contract. Any substitution of securities will comply with the
requirements of the 1940 Act.

We also reserve the right to make the following changes in the operation of the
Separate Account and the Subaccounts:

(a)  to operate the Separate Account in any form permitted by law;

(b)  to take any action necessary to comply with applicable law or obtain and
     continue any exemption from applicable laws;

(c)  to transfer assets from one Subaccount to another, or from any subaccount
     to our general account;

(d)  to add, combine, or remove Subaccounts in the Separate Account; and

(e)  to change the way in which we assess charges, as long as the total charges
     do not exceed the maximum amount that may be charged the Separate Account
     and the Portfolios in connection with the Contracts.

If we take any of these actions, we will comply with the then applicable legal
requirements.

THE FIXED ACCOUNT

GENERAL. You may allocate part or all of your Purchase Payments to the Fixed
Account in states where it is available. Amounts allocated to the Fixed Account
become part of the general assets of Lincoln Benefit. Loan Payments may not be
allocated to the Fixed Account(s). Allstate Life invests the assets of the
general account in accordance with applicable laws governing the investments of
insurance company general accounts. The Fixed Account may not be available in
all states. Please contact us at 1-800-865-5237 for current information.

GUARANTEED MATURITY FIXED ACCOUNT OPTION. We will credit interest to each amount
allocated to the Guaranteed Maturity Fixed Account Option at a specified rate
for a specified Guarantee Period. You select the Guarantee Period for each
amount that you allocate to this option. We will declare the interest rate that
we will guarantee to credit to that amount for that Guarantee Period. Each
amount allocated to a Guarantee Period under this option must be at least $500.
We reserve the right to limit the number of additional Purchase Payments that
may be allocated to this option.

We will tell you what interest rates and Guarantee Periods we are offering at a
particular time. We may offer Guarantee Periods ranging from one to ten years in
length. We will decide in our discretion which Guarantee Periods to offer.
Currently, we offer Guarantee Periods of one, three, five, seven and ten years.
In the future we may offer Guarantee Periods of different lengths or stop
offering some Guarantee Periods.

We will credit interest daily to each amount allocated to a Guarantee Period
under this option at a rate which compounds to the effective annual interest
rate that we declared at the beginning of the applicable Guarantee Period. We
will not change the interest rate credited to a particular allocation until the
end of the relevant Guarantee Period. We may declare different interest rates
for Guarantee Periods of the same length that begin at different times.

The following example illustrates how a Purchase Payment allocated to this
option would grow, given an assumed Guarantee Period and effective annual
interest rate:

                                  21 PROSPECTUS



EXAMPLE
Purchase Payment        $10,000
Guarantee Period        5 years
Effective Annual Rate      4.50%
Credit Enhancement      $   400

                                            END OF CONTACT YEAR
                        -----------------------------------------------------------
                          YEAR 1      YEAR 2       YEAR 3      YEAR 4      YEAR 5
                        ----------  -----------  ----------  ----------  ----------
Beginning Contract
 Value                  $10,400.00
 x (1 + Effective
 Annual Rate)              x 1.045
                        ----------
                        $10,868.00
Contract Value at end
 of Contract Year                   $$10,868.00
 x (1 + Effective
 Annual Rate)                           x 1.045
                                    -----------
                                    $ 11,357.06
Contract Value at end
 of Contract Year                                $11,357.06
 x (1 + Effective
 Annual Rate)                                       x 1.045
                                                 ----------
                                                 $11,868.13
Contract Value at end
 of Contract Year                                            $11,868.13
 x (1 + Effective
 Annual Rate)                                                   x 1.045
                                                             ----------
                                                             $12,402.19
Contract Value at end
 of Contract Year                                                        $12,402.19
 x (1 + Effective
 Annual Rate)                                                               x 1.045
                                                                         ----------
                                                                         $12,960.29

TOTAL INTEREST CREDITED DURING GUARANTEE PERIOD = $2,560.29 ($12,960.29 -
$10,400)

NOTE: This example assumes no withdrawals during the entire five-year Guarantee
Period. If you were to make a partial withdrawal, you might be required to pay a
Withdrawal Charge and the amount withdrawn might be increased or decreased by a
Market Value Adjustment. The hypothetical interest rate is for illustrative
purposes only and is not intended to predict future interest rates to be
declared under the Contract.

We have no specific formula for determining the rate of interest that we will
declare initially or in the future. We will set those interest rates based on
relevant factors such as then current interest rates, regulatory and tax
requirements, our sales commission and administrative expenses, general economic
trends, and competitive factors. For current interest rate information, please
contact us at 1-800-865-5237.

WE WILL DETERMINE THE INTEREST RATES TO BE DECLARED IN OUR SOLE DISCRETION. WE
CAN NEITHER PREDICT NOR GUARANTEE WHAT THOSE RATES WILL BE IN THE FUTURE.

At the end of each Guarantee Period, we will mail you a notice asking you what
to do with the relevant amount, including the accrued interest. During the
30-day period after the end of the Guarantee Period, you may:

1)   take no action. If so, we will automatically keep the relevant amount in
     the Guaranteed Maturity Fixed Account Option. The new Guarantee Period will
     be the same length as the expiring Guarantee Period and will begin on the
     day the previous Guarantee Period ends. The new interest rate will be our
     then current declared rate for Guarantee Periods of that length; or

2)   allocate the relevant Contract Value to one or more new Guarantee Periods
     of your choice in the Guaranteed Maturity Fixed Account Option. The new
     Guarantee Period(s) will begin on the day the previous Guarantee Period
     ends. The new interest rate will be our then current declared rate for
     those Guarantee Periods; or

3)   instruct us to transfer all or a portion of the relevant amount to one or
     more Subaccounts. We will effect the transfer on the day we receive your
     instructions. We will not adjust the amount transferred to include a Market
     Value Adjustment; or

4)   withdraw all or a portion of the relevant amount through a partial
     withdrawal. You may be required to pay a Withdrawal Charge, but we will not
     adjust the amount withdrawn to include a Market Value Adjustment. The
     amount withdrawn will be deemed to have been withdrawn on the day the
     Guarantee Period ends.

Under our Automatic Laddering Program, you may choose, in advance, to use
Guarantee Periods of the same length for all renewals in the Guaranteed Maturity
Fixed Account Option. You can select this program at any time during the
Accumulation Period, including on the Issue Date. We will apply renewals to
Guarantee Periods of the

                                  22 PROSPECTUS



selected length until you direct us in writing to stop. We may stop offering
this program at any time.

MARKET VALUE ADJUSTMENT. If permitted by your state, we may increase or decrease
the amount of some transactions involving your investment in the Guaranteed
Maturity Fixed Account Option to include a Market Value Adjustment. The formula
for determining Market Value Adjustments reflects changes in interest rates
since the beginning of the relevant Guarantee Period. As a result, you will bear
some of the investment risk on amounts allocated to the Guaranteed Maturity
Fixed Account Option.

As a general rule, we will apply a Market Value Adjustment to the following
transactions involving your Fixed Account balance:

1)   when you withdraw funds from the Guaranteed Maturity Fixed Account Option
     in an amount greater than the Free Withdrawal Amount, as described on page
     33;

2)   when you transfer funds from the Guaranteed Maturity Fixed Account Option
     to the Subaccounts;

3)   when you allocate part of your balance in the Guaranteed Maturity Fixed
     Account Option to a new Guarantee Period before the end of the existing
     Guarantee Period;

4)   when you annuitize your Contract; and

5)   when we pay a death benefit.

We will not apply a Market Value Adjustment to a transaction, to the extent
that:

1)   it occurs within 30 days after the end of a Guarantee Period applicable to
     the funds involved in the transaction; or

2)   you make a withdrawal to satisfy the IRS' required minimum distribution
     rules for this Contract.

The formula for calculating Market Value Adjustments is set forth in Appendix B
to this prospectus, which also contains additional examples of the application
of the Market Value Adjustment. This formula primarily compares:

1)   the Treasury Rate at the time of the relevant transaction for a maturity
     equal in length to the relevant Guarantee Period; and

2)   the Treasury Rate at the beginning of the Guarantee Period for a maturity
     equal in length to the Guarantee Period.

Generally, if the Treasury Rate at the beginning of the Guarantee Period is
higher than the corresponding current Treasury Rate, then the Market Value
Adjustment will increase the amount payable to you or transferred. Similarly, if
the Treasury Rate at the beginning of the Guarantee Period is lower than the
corresponding current Treasury Rate, then the Market Value Adjustment will
reduce the amount payable to you or transferred.

For example, assume that you purchased a Contract and selected an initial
Guarantee Period of five years and the five-year Treasury Rate for that duration
is 4.50%. Assume that at the end of three years, you make a partial withdrawal.
If, at that later time, the current five-year Treasury Rate is 4.20%, then the
Market Value Adjustment will be positive, which will result in an increase in
the amount payable to you. Similarly, if the current five-year Treasury Rate is
4.80%, then the Market Value Adjustment will be negative, which will result in a
decrease in the amount payable to you.

DOLLAR COST AVERAGING FIXED ACCOUNT OPTION. If permitted by your state, you may
also allocate Purchase Payments to the Dollar Cost Averaging Fixed Account
Option. We will credit interest to Purchase Payments allocated to this option
for up to one year at the current rate that we declare when you make the
allocation. The effective annual rate will never be less than 3%. You may not
transfer funds to this option from the Subaccounts or the Guaranteed Maturity
Fixed Account Option. We will follow your instructions in transferring amounts
from this option to the Subaccounts or the Guaranteed Maturity Fixed Account
Option on a monthly basis only, as described in "Automatic Dollar Cost Averaging
Program" on page 16 of this prospectus.

ANNUITY BENEFITS

ANNUITY DATE. You may select the Annuity Date, which is the date on which
annuity payments are to begin, in your application. The Annuity Date must always
be the business day on or immediately following the tenth day of a calendar
month.

The Annuity Date may be no later than the Latest Annuity Date. As a general
rule, the Latest Annuity Date is the later of the 10th Contract Anniversary or
the youngest Annuitant's 90/TH/ birthday. If your Contract was issued pursuant
to a Qualified Plan, however, the Tax Code generally requires you to begin to
take at least a minimum distribution by the later of:

.    the year of your separation from service; or

.    April 1 of the calendar year following the calendar year in which you
     attain age 70 1/2 .

If your Contract is issued pursuant to Section 408 of the Tax Code (traditional
IRAs), you must begin taking minimum distributions by April 1 of the calendar
year following the calendar year in which you reach age 70 1/2. No minimum
distributions are required by the Tax Code for Contracts issued pursuant to
Section 408A (Roth IRAs).

                                  23 PROSPECTUS



If your Contract was purchased by a Qualified Plan, we may require you to
annuitize by the date required by the Tax Code, unless you show us that you are
meeting the minimum distribution requirements in some other way.

If you do not select an Annuity Date, the Latest Annuity Date will automatically
become the Annuity Date. You may change the Annuity Date by writing to us at the
address given on the first page of the prospectus.

ANNUITY OPTIONS. You may elect an Annuity Option at any time before the Annuity
Date. As part of your election, you may choose the length of the applicable
guaranteed payment period within the limits available for your chosen Option. If
you do not select an Annuity Option, we will pay monthly annuity payments in
accordance with the applicable default Option. The default Options are:

.    Option A with 10 years (120 months) guaranteed, if you have designated only
     one Annuitant; and

.    Option B with 10 years (120 months) guaranteed, if you have designated
     joint Annuitants.

You may freely change your choice of Annuity Option, as long as you request the
change at least thirty days before the Annuity Date. Three Annuity Options are
generally available under the Contract. Each is available in the form of:

.    a Fixed Annuity;

.    a Variable Annuity; or

.    a combination of both Fixed and Variable Annuity.

A portion of each payment will be considered taxable and the remaining portion
will be a non-taxable return of your investment in the Contract, which is also
called the "basis." Once the investment in the Contract is depleted, all
remaining payments will be fully taxable. If the Contract is tax-qualified,
generally, all payments will be fully taxable. Taxable payments taken prior to
age 59 1/2 may be subject to an additional 10% federal tax penalty.

The three Annuity Options are:

OPTION A, LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 5 TO 20 YEARS. We make
periodic payments at least as long as the Annuitant lives. If the Annuitant dies
before all of the guaranteed payments have been made, we will pay the remaining
guaranteed payments to the Beneficiary.

OPTION B, JOINT AND SURVIVOR ANNUITY, WITH PAYMENTS GUARANTEED FOR 5 TO 20
YEARS. We make periodic payments at least as long as either the Annuitant or the
Joint Annuitant is alive. If both the Annuitant and the Joint Annuitant die
before all of the guaranteed payments have been made, we will pay the remaining
guaranteed payments to the Beneficiary.

OPTION C, PAYMENTS FOR A SPECIFIED PERIOD CERTAIN OF 5 YEARS TO 30 YEARS. We
make periodic payments for the period you have chosen. If the Annuitant dies
before all of the guaranteed payments have been made, we will pay the remaining
guaranteed payments to the Beneficiary. If you elect this option, and request
Variable Annuity payments, you may at any time before the period expires request
a lump sum payment, subject to a Withdrawal Charge. We will charge a Withdrawal
Charge on any portion of your lump sum payment attributable to Purchase Payments
made within the prior eight years. The amount of the Withdrawal Charge will be
determined as described in "Withdrawal Charge" on page 32 below. If you elected
Variable Annuity payments, the lump sum payment after Withdrawal Charge will
depend on:

.    the investment results of the Subaccounts you have selected,

.    the Contract Value at the time you elected annuitization, and

.    the length of the remaining period for which the payee would be entitled to
     payments.

No lump sum payment is available if you request Fixed Annuity payments. If you
purchased your Contract under a retirement plan, you may have a more limited
selection of Annuity Options to choose from. You should consult your Plan
documents to see what is available.

You may not "annuitize" your Contract for a lump sum payment. Instead, before
the Annuity Date you may surrender your Contract for a lump sum. As described on
page 32 below, however, we will subtract any applicable Withdrawal Charge and
increase or decrease your surrender proceeds by any applicable Market Value
Adjustment.

OTHER OPTIONS. We may have other Annuity Options available. You may obtain
information about them by writing or calling us.

If your Contract is issued under Sections 401, 403(b), 408 or 408A of the Tax
Code, we will only make payments to you and/or your spouse.

ANNUITY PAYMENTS: GENERAL. On the Annuity Date, we will apply the Annuitized
Value of your Contract to the Annuity Option you have chosen. Your annuity
payments may consist of Variable Annuity payments or Fixed Annuity payments or a
combination of the two. We will determine the amount of your annuity payments as
described in "Variable Annuity Payments" and "Fixed Annuity Payments" on page
25.

You must notify us in writing at least 30 days before the Annuity Date how you
wish to allocate your Annuitized Value between Variable Annuity and Fixed
Annuity payments. You must apply at least the Contract Value in the Fixed
Account on the Annuity Date to Fixed Annuity payments. If you wish to apply any
portion of your Fixed Account balance to your Variable Annuity payments, you
should plan ahead and transfer that amount to the Subaccounts prior to the
Annuity Date. If you do not tell us how to allocate your Contract Value among
Fixed and

                                  24 PROSPECTUS



Variable Annuity payments, we will apply your Contract Value in the Separate
Account to Variable Annuity payments and your Contract Value in the Fixed
Account to Fixed Annuity payments.

Annuity payments begin on the Annuity Date. We make subsequent annuity payments
on the tenth of the month or, if the NYSE is closed on that day, the next day on
which the NYSE is open for business.

Annuity payments will be made in monthly, quarterly, semi-annual or annual
installments as you select. If the amount available to apply under an Annuity
Option is less than $5,000, however, and state law permits, we may pay you a
lump sum instead of the periodic payments you have chosen. In addition, if the
first annuity payment would be less than $50, and state law permits us, we may
reduce the frequency of payments so that the initial payment will be at least
$50.

We may defer for up to 15 days the payment of any amount attributable to a
Purchase Payment made by check to allow the check reasonable time to clear.

YOU MAY NOT WITHDRAW CONTRACT VALUE DURING THE ANNUITY PERIOD, IF WE ARE MAKING
PAYMENTS TO YOU UNDER ANY ANNUITY OPTION, SUCH AS OPTION A OR B ABOVE, INVOLVING
PAYMENT TO THE PAYEE FOR LIFE OR ANY COMBINATION OF PAYMENTS FOR LIFE AND
MINIMUM GUARANTEE PERIOD FOR A PREDETERMINED NUMBER OF YEARS.

VARIABLE ANNUITY PAYMENTS. One basic objective of the Contract is to provide
Variable Annuity Payments which will to some degree respond to changes in the
economic environment. The amount of your Variable Annuity Payments will depend
upon the investment results of the Subaccounts you have selected, any premium
taxes, the age and sex of the Annuitant, and the Annuity Option chosen. We
guarantee that the Payments will not be affected by: (1) actual mortality
experience; and (2) the amount of our administration expenses.

We cannot predict the total amount of your Variable Annuity payments. The
Variable Annuity payments may be more or less than your total Purchase Payments
because: (a) Variable Annuity payments vary with the investment results of the
underlying Portfolios; and (b) Annuitants may die before their actuarial life
expectancy is achieved.

The length of any guaranteed payment period under your selected Annuity Option
will affect the dollar amounts of each Variable Annuity payment. As a general
rule, longer guarantee periods result in lower periodic payments, all other
things being equal. For example, if a life Annuity Option with no minimum
guaranteed payment period is chosen, the Variable Annuity payments will be
greater than Variable Annuity payments under an Annuity Option for a minimum
specified period and guaranteed thereafter for life.

The investment results of the Subaccounts to which you have allocated your
Contract Value will also affect the amount of your periodic payment. In
calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3 1/2%. If the actual net
investment return is less than the assumed investment rate, then the dollar
amount of the Variable Annuity payments will decrease. The dollar amount of the
Variable Annuity payments will stay level if the net investment return equals
the assumed investment rate and the dollar amount of the Variable Annuity
payments will increase if the net investment return exceeds the assumed
investment rate. You should consult the Statement of Additional Information for
more detailed information as to how we determine Variable Annuity Payments.

FIXED ANNUITY PAYMENTS. You may choose to apply a portion of your Annuitized
Value to provide Fixed Annuity payments. We determine the Fixed Annuity payment
amount by applying the applicable Annuitized Value to the Annuity Option you
have selected.

As a general rule, subsequent Fixed Annuity payments will be equal in amount to
the initial payment. However, as described in "Transfers During the Annuity
Period" below, after the Annuity Date, you will have a limited ability to
increase the amount of your Fixed Annuity payments by making transfers from the
Subaccounts.

We may defer making Fixed Annuity payments for a period of up to six months or
whatever shorter time state law may require. During the deferral period, we
credit interest at a rate at least as high as state law requires.

TRANSFERS DURING THE ANNUITY PERIOD. During the Annuity Period, you will have a
limited ability to make transfers among the Subaccounts so as to change the
relative weighting of the Subaccounts on which your Variable Annuity payments
will be based. In addition, you will have a limited ability to make transfers
from the Subaccounts to increase the proportion of your annuity payments
consisting of Fixed Annuity payments. You may not, however, convert any portion
of your right to receive Fixed Annuity payments into Variable Annuity payments.

You may not make any transfers for the first six months after the Annuity Date.
Thereafter, you may make transfers among the Subaccounts or make transfers from
the Subaccounts to increase your Fixed Annuity payments. Your transfers must be
at least six months apart.

DEATH BENEFIT DURING ANNUITY PERIOD. If any Contract Owner dies after the
Annuity Date, the Successor Contract Owner will receive any guaranteed annuity
payments scheduled to continue. If the successor Owner dies before all of the
guaranteed payments have been made, we will continue the guaranteed payments to
the Beneficiary(ies). After annuity payments begin, upon the death of the
Annuitant and any Joint Annuitant, we will make any remaining guaranteed
payments to the

                                  25 PROSPECTUS



Beneficiary. The amount and number of these guaranteed payments will depend on
the Annuity Option in effect at the time of the Annuitant's death. After the
Annuitant's death, any remaining guaranteed payments will be distributed at
least as rapidly as under the method of distribution in effect at the
Annuitant's death.

CERTAIN EMPLOYEE BENEFIT PLANS. The Contracts offered by this prospectus contain
income payment tables that provide for different payments to men and women of
the same age, except in states that require unisex tables. We reserve the right
to use income payment tables that do not distinguish on the basis of sex to the
extent permitted by applicable law. In certain employment-related situations,
employers are required by law to use the same income payment tables for men and
women. Accordingly, if the Contract is to be used in connection with an
employment-related retirement or benefit plan and we do not offer unisex annuity
tables in your state, you should consult with legal counsel as to whether the
purchase of a Contract is appropriate.

OTHER CONTRACT BENEFITS

DEATH BENEFIT: GENERAL. We will pay a distribution on death, if:

1)   the Contract is in force;

2)   annuity payments have not begun; and

3)   either:

(a)  any Owner dies; or

(b)  any Annuitant dies and the Owner is a non-living person.

DUE PROOF OF DEATH. A complete request for settlement of the Death Proceeds must
be submitted before the Annuity Date. Where there are multiple beneficiaries, we
will value the Death Benefit at the time the first beneficiary submits a
complete request for settlement of the Death Proceeds. A complete request must
include "Due Proof of Death". We will accept the following documentation as Due
Proof of Death:

.    a certified original copy of the Death Certificate;

.    a certified copy of a court decree as to the finding of death; or

.    a written statement of a medical doctor who attended the deceased at the
     time of death.

In addition, in our discretion we may accept other types of proof.

DEATH PROCEEDS. If we receive a complete request for settlement of the Death
Proceeds within 180 days of the date of your death, the Death Proceeds are equal
to the Death Benefit as described below. Otherwise, the Death Proceeds are equal
to the greater of the Contract Value or the Surrender Value. We reserve the
right to waive or extend, on a nondiscriminatory basis, the 180-day period in
which the Death Proceeds will equal the Death Benefit as described below. This
right applies only to the amount payable as Death Proceeds and in no way
restricts when the claim may be filed.

DEATH BENEFIT AMOUNT. The standard Death Benefit under the Contract is the
greatest of the following:

1)   the total Purchase Payments, less a withdrawal adjustment for any prior
     partial withdrawals;

2)   the Contract Value on the date as of which we calculate the Death Benefit;

3)   the Surrender Value;

4)   the Contract Value on the eighth Contract Anniversary and each subsequent
     Contract Anniversary evenly divisible by eight, increased by the total
     Purchase Payments since that anniversary and reduced by a withdrawal
     adjustment for any partial withdrawals since that anniversary.

The withdrawal adjustment for the Death Benefit will equal (a) divided by (b),
with the result multiplied by (c), where:

(a) = the withdrawal amount;

(b) = the Contract Value immediately before the withdrawal; and

(c) = the value of the applicable Death Benefit immediately before the
      withdrawal.

As described in Enhanced Death Benefit Rider on page 28, you may add an optional
rider that in some circumstances may increase the Death Benefit under your
Contract.

DEATH BENEFIT PAYMENTS.

Death of Owner:

1.   If your spouse is the sole beneficiary:

a.   Your spouse may elect to receive the Death Proceeds in a lump sum; or

b.   Your spouse may elect to receive the Death Proceeds paid out under one of
     the annuity options, subject to the following conditions:

The Annuity Date must be within one year of your date of death.

                       Annuity payments must be payable:

i.   over the life of your spouse; or

ii.  for a guaranteed number of payments from 5 to 30 years but not to exceed
     the life expectancy of your spouse; or

                                  26 PROSPECTUS



iii. over the life of your spouse with a guaranteed number of payments from 5 to
     30 years but not to exceed the life expectancy of your spouse.

c.   If your spouse chooses to continue the Contract or does not elect one of
     these options, then the Contract will continue in the Accumulation Period
     as if the death had not occurred. If the Contract is continued in the
     Accumulation Period, the following conditions apply:

Unless otherwise instructed by the continuing spouse, the excess, if any, of the
Death Proceeds over the Contract Value will be allocated to the Subaccounts.
This excess will be allocated in proportion to your Contract Value in those
Subaccounts as of the end of the Valuation Period during which we receive the
complete request for settlement of the Death Proceeds, except that any portion
of this excess attributable to the fixed account options will be allocated to
the Money Market Subaccount. Within 30 days of the date the Contract is
continued, your surviving spouse may choose one of the following transfer
alternatives without incurring a transfer fee:

i.   transfer all or a portion of the excess among the Subaccounts;

ii.  transfer all or a portion of the excess into the Guaranteed Maturity Fixed
     Account and begin a new Guarantee Period; or

iii. transfer all or a portion of the excess into a combination of subaccounts
     and the Guaranteed Maturity Fixed Account.

Any such transfer does not count as the free transfer allowed each calendar
month and is subject to any minimum allocation amount specified in your
contract.

The surviving spouse may make a single withdrawal of any amount within one year
of the date of your death without incurring a Withdrawal Charge or Market Value
Adjustment.

Prior to the Annuity Date, the death benefit of the continued Contract will be
as defined in the Death Benefit provision.

Only one spousal continuation is allowed under this Contract.

If there is no Annuitant at that time, the new Annuitant will be the surviving
spouse.

2.   If the Beneficiary is not your spouse but is a living person:

a.   The Beneficiary may elect to receive the Death Proceeds in a lump sum; or

b.   The Beneficiary may elect to receive the Death Proceeds paid out under one
     of the annuity options, subject to the following conditions:

The Annuity Date must be within one year of your date of death.

                       Annuity payments must be payable:

i.   over the life of the Beneficiary; or

ii.  for a guaranteed number of payments from 5 to 30 years but not to exceed
     the life expectancy of the Beneficiary; or

iii. over the life of the Beneficiary with a guaranteed number of payments from
     5 to 30 years but not to exceed the life expectancy of the Beneficiary.

c.   If the Beneficiary does not elect one of the options above, then the
     Beneficiary must receive the Contract Value payable within 5 years of your
     date of death. We will determine the Death Proceeds as of the date we
     receive the complete request for settlement of the Death Proceeds. Unless
     otherwise instructed by the Beneficiary, the excess, if any, of the Death
     Proceeds over the Contract Value will be allocated to the Money Market
     Subaccount and the Contract Value will be adjusted accordingly. The
     Beneficiary may exercise all rights as set forth in "Transfer During the
     Accumulation Period" on page 15 and "Transfer Fee" on page 32 during this 5
     year period.

The Beneficiary may not pay additional purchase payments into the contract under
this election. Withdrawal charges will be waived for any withdrawals made during
this 5 year period.

We reserve the right to offer additional options upon Death of Owner.

If the Beneficiary dies before the complete liquidation of the Contract Value,
then the Beneficiary's named Beneficiary(ies) will receive the greater of the
Surrender Value or the remaining Contract Value. This amount must be liquidated
as a lump sum within 5 years of the date of the original Contract Owner's death.

3.   If the Beneficiary is a corporation or other type of non-living person:

a.   The Beneficiary may elect to receive the Death Proceeds in a lump sum; or

b.   If the Beneficiary does not elect to receive the option above, then the
     Beneficiary must receive the Contract Value payable within 5 years of your
     date of death. We will determine the Death Proceeds as of the date we
     receive the complete request for settlement of the Death Proceeds. Unless
     otherwise instructed by the Beneficiary, the excess, if any, of the Death
     Proceeds over the Contract Value will be allocated to the Money Market
     Subaccount and the Contract Value will be adjusted accordingly. The
     Beneficiary may exercise all rights as set forth in "Transfers During the
     Accumulation Period" on page 15 and "Transfer Fee" on page 32 during this
     5-year period.

The Beneficiary may not pay additional purchase payments into the contract under
this election. Withdrawal Charges will be waived during this 5 year period.

We reserve the right to offer additional options upon Death of Owner.

                                  27 PROSPECTUS



If any Beneficiary is a non-living person, all Beneficiaries will be considered
to be non-living persons for the above purposes.

Under any of these options, all contract rights, subject to any restrictions
previously placed upon the Beneficiary, are available to the Beneficiary from
the date of your death to the date on which the Death Proceeds are paid.

Different rules may apply to Contracts issued in connection with Qualified
Plans.

Death of Annuitant:

If the Annuitant who is not also the Owner dies prior to the Annuity Date, the
following apply:

1.   If the Owner is a living person, then the contract will continue with a new
     Annuitant as described in "Annuitant" on page 13.

2.   If the Owner is a non-living person:

a.   The Beneficiary may elect to receive the Death Proceeds in a lump sum; or

b.   If the Beneficiary does not elect the option above, then the Beneficiary
     must receive the Contract Value payable within 5 years of the Annuitant's
     date of death. On the date we receive the complete request for settlement
     of the Death Proceeds, the Contract Value under this option will be the
     Death Proceeds. Unless otherwise instructed by the Beneficiary, the excess,
     if any, of the Death Proceeds over the Contract Value will be allocated to
     the Money Market Subaccount. Henceforth, the Beneficiary may exercise all
     rights as set forth in the "Transfers During Accumulation Period" on page
     15 and "Transfer Fee" on page 32 during this 5 year period.

No additional Purchase Payments may be added to the contract under this
election. Withdrawal charges will be waived during this 5 year period.

We reserve the right to offer additional options under Death of Annuitant.

Under any of these options, all contract rights, subject to any restrictions
previously placed upon the Beneficiary, are available to the Beneficiary from
the date of the Annuitant's death to the date on which the Death Proceeds are
paid.

ENHANCED DEATH BENEFIT RIDER: When you purchase your Contract, you may select
the Enhanced Death Benefit Rider. In certain states, this benefit may be offered
as a benefit of the base contract, rather than as a separate rider. In those
states, the expense charge will remain the same for the benefit. If you are not
an individual, the Enhanced Death Benefit applies only to the Annuitant's death.
If you select this rider, the Death Benefit will be the greater of the value
provided in your Contract or the Enhanced Death Benefit. The Enhanced Death
Benefit will be the greater of the Enhanced Death Benefit A or Enhanced Death
Benefit B. As described below, we will charge a higher mortality and expense
risk charge if you select this Rider. We may discontinue offering the Rider at
any time.

ENHANCED DEATH BENEFIT A. At issue, Enhanced Death Benefit A is equal to the
initial Purchase Payment. After issue, Enhanced Death Benefit A is adjusted
whenever you pay a Purchase Payment or make a withdrawal and on each Contract
Anniversary as follows:

.    When you pay a Purchase Payment, we will increase Enhanced Death Benefit A
     by the amount of the Purchase Payment;

.    When you make a withdrawal, we will decrease Enhanced Death Benefit A by a
     withdrawal adjustment, as described below; and

.    On each Contract Anniversary, we will set Enhanced Death Benefit A equal to
     the greater of the Contract Value on that Contract Anniversary or the most
     recently calculated Enhanced Death Benefit A.

If you do not pay any additional purchase payments or make any withdrawals,
Enhanced Death Benefit A will equal the highest Contract Value on all Contract
Anniversaries prior to the date we calculate the Death Benefit.

We will continuously adjust Enhanced Death Benefit A as described above until
the oldest Contract Owner's 85/TH/ birthday or, if the Contract Owner is not a
living individual, the Annuitant's 85/TH/ birthday. Thereafter, we will adjust
Enhanced Death Benefit A only for Purchase Payments and withdrawals.

ENHANCED DEATH BENEFIT B. Enhanced Death Benefit B is equal to:

(a)  your total Purchase Payments,

(b)  reduced by any withdrawal adjustments and

(c)  accumulated daily at an effective annual rate of 5% per year, until the
     earlier of:

1)   the date we determine the death benefit;

2)   the first day of the month following the oldest Contract owner's 85/TH
     /birthday; or

3)   if the Contract Owner is a company or other legal entity, the first day of
     the month following the Annuitant's 85/TH/ birthday. Thereafter, we will
     only adjust Enhanced Death Benefit B to reflect additional Purchase
     Payments and withdrawals. Enhanced Death Benefit B will never be greater
     than the maximum death benefit allowed by any nonforfeiture laws which
     govern the Contract.

The withdrawal adjustment for both Enhanced Death Benefit A and Enhanced Death
Benefit B will equal (a) divided by (b), with the result multiplied by (c),
where:

(a) = the withdrawal amount;

(b) = the Contract Value immediately before the withdrawal; and

                                  28 PROSPECTUS



(c) = the most recently calculated Enhanced Death Benefit A or B, as
appropriate.

BENEFICIARY. You name the Beneficiary. You may name a Beneficiary in the
application. You may also name one or more contingent Beneficiaries who are
entitled to receive benefits under the contract if all primary Beneficiary(ies)
are deceased at the time a Contract Owner or any Annuitant if the Contract Owner
is not a living person, dies. You may change the Beneficiary or add additional
Beneficiaries at any time before the Annuity Date. We will provide a form to be
signed and filed with us.

Your changes in Beneficiary take effect when we accept them, effective as of the
date you signed the form. Until we accept your change instructions, we are
entitled to rely on your most recent instructions in our files. We are not
liable for making a payment to a Beneficiary shown in our files or treating that
person in any other respect as the Beneficiary, prior to accepting a change.
Accordingly, if you wish to change your beneficiary, you should deliver your
instructions to us promptly.

If you did not name a Beneficiary or if the named Beneficiary is no longer
living, the Beneficiary will be:

.    your spouse if he or she is still alive; or, if he or she is no longer
     alive,

.    your surviving children equally; or if you have no surviving children,

.    your estate.

Unless you have provided directions to the contrary, the Beneficiaries will take
equal shares. If there is more than one Beneficiary in a class and one of the
Beneficiaries predeceases the Contract Owner or Annuitant, as defined above, the
remaining Beneficiaries in that class will divide the deceased Beneficiary's
share in proportion to the original share of the remaining Beneficiaries.

If more than one Beneficiary shares in the Death Proceeds, each Beneficiary will
be treated as a separate and independent owner of his or her respective share.
Each Beneficiary will exercise all rights related to his or her share, including
the sole right to select a payout option, subject to any restrictions previously
placed upon the Beneficiary. Each Beneficiary may designate a Beneficiary(ies)
for his or her respective share, but that designated Beneficiary(ies) will be
restricted to the payout option chosen by the original Beneficiary.

If there is more than one Beneficiary and one of the Beneficiaries is a
corporation or other type of non-living person, all Beneficiaries will be
considered to be non-living persons for the above purposes.

You may specify that the Death Benefit be paid under a specific Income Plan by
submitting a written request to our Service Center. If you so request, your
Beneficiary may not change to a different Income Plan or lump sum. Once we
accept the written request, the change or restriction will take effect as of the
date you signed the request.

Different rules may apply to Contracts issued in connection with Qualified
Plans.

CONTRACT LOANS FOR 403(B) CONTRACTS. Subject to the restrictions described
below, we will make loans to the Owner of a Contract used in connection with a
Tax Sheltered Annuity Plan ("TSA Plan") under Section 403(b) of the Tax Code.
Loans are not available under Non-Qualified Contracts. We will only make loans
after the free look period and before annuitization. All loans are subject to
the terms of the Contract, the relevant Plan, and the Tax Code, which impose
restrictions on loans.

We will not make a loan to you if the total of the requested loan and your
unpaid outstanding loans will be greater than the Surrender Value of your
Contract on the date of the loan. In addition, we will not make a loan to you if
the total of the requested loan and all of the plan participant's Contract loans
under TSA plans is more than the lesser of (a) or (b) where:

(a)  equals $50,000 minus the excess of the highest outstanding loan balance
     during the prior 12 months over the current outstanding loan balance; and

(b)  equals the greater of $10,000 or 1/2 of the Surrender Value.

The minimum loan amount is $1,000.

To request a Contract loan write to us at the address given on the first page of
the prospectus. You alone are responsible for ensuring that your loan and
repayments comply with tax requirements. Loans made before the Annuity Date are
generally treated as distributions under the Contract, and may be subject to
withholding and tax penalties for early distributions. Some of these
requirements are stated in Section 72 of the Tax Code. Please seek advice from
your plan administrator or tax advisor.

When we make a loan, we will transfer an amount equal to the loan amount from
the Separate Account and/or the Fixed Account to the Loan Account as collateral
for the loan. We will transfer to the Loan Account amounts from the Separate
Account in proportion to the assets in each Subaccount. If your loan amount is
greater than your Contract Value in the Subaccounts, we will transfer the
remaining required collateral from the Guaranteed Maturity Fixed Account
Options. If your loan amount is greater than your contract value in the
Subaccounts and the Guaranteed Maturity Fixed Account Options, we will transfer
the remaining required collateral from the Dollar Cost Averaging Fixed Account
Option.

We will not charge a Withdrawal Charge on the loan or on the transfer from the
Subaccounts or the Fixed Account. We may, however, apply a Market Value
Adjustment to a transfer from the Fixed Account to the Loan Account. If we do,
we will increase or decrease the amount remaining in the Fixed Account by the
amount of the Market Value Adjustment, so that the net amount

                                  29 PROSPECTUS



transferred to the Loan Account will equal the desired loan amount. We will
charge a Withdrawal Charge and apply a Market Value Adjustment, if applicable,
on a distribution to repay the loan in full, in the event of loan default.

We will credit interest to the amounts in the Loan Account. The annual interest
rate credited to the Loan Account will be the greater of: (a) 3%; or (b) the
loan interest rate minus 2.25%. The value of the amounts in the Loan Account are
not affected by the changes in the value of the Subaccounts.

When you take out a loan, we will set the loan interest rate. That rate will
apply to your loan until it is repaid. From time to time, we may change the loan
interest rate applicable to new loans. We also reserve the right to change the
terms of new loans.

We will subtract the outstanding Contract loan balance, including accrued but
unpaid interest, from:

1)   the Death Proceeds;

2)   surrender proceeds;

3)   the amount available for partial withdrawal; and

4)   the amount applied on the Annuity Date to provide annuity payments.

Usually you must repay a Contract loan within five years of the date the loan is
made. Scheduled payments must be level, amortized over the repayment period, and
made at least quarterly. We may permit a repayment period of 15 or 30 years if
the loan proceeds are used to acquire your principal residence. We may also
permit other repayment periods.

You must mark your loan repayments as such. We will assume that any payment
received from you is a Purchase Payment, unless you tell us otherwise.
Generally, loan payments are allocated to the Subaccount(s) in the proportion
that you have selected for Purchase Payments. Allocations of loan payments are
not permitted to the Fixed Accounts (Guaranteed Maturity Fixed Account and
Dollar Cost Averaging Fixed Account Option). If your Purchase Payment allocation
includes any of the Fixed Accounts, the percentages allocated to the Fixed
Accounts will be allocated instead to the PIMCO Money Market Subaccount.

If you do not make a loan payment when due, we will continue to charge interest
on your loan. We also will declare the entire loan in default. We will subtract
the defaulted loan balance plus accrued interest from any future distribution
under the Contract and keep it in payment of your loan. Any defaulted amount
plus interest will be treated as a distribution for tax purposes (as permitted
by law). As a result, you may be required to pay taxes on the defaulted amount,
incur the early withdrawal tax penalty. We will capitalize interest on a loan in
default.

If the total loan balance exceeds the Surrender Value, we will mail written
notice to your last known address. The notice will state the amount needed to
maintain the Contract in force. If we do not receive payment of this amount
within 31 days after we mail this notice, we will terminate your Contract.

We may defer making any loan for 6 months after you ask us for a loan, unless
the loan is to pay a premium to us.

WITHDRAWALS (REDEMPTIONS). Except as explained below, you may redeem a Contract
for all or a portion of its Contract Value before the Annuity Date. We may
impose a Withdrawal Charge, which would reduce the amount paid to you upon
redemption. The Withdrawal Charges are described on page 32. Withdrawals from
the Fixed Account may be increased or decreased by a Market Value Adjustment, as
described in "Market Value Adjustment" on page 23.

In general, you must withdraw at least $50 at a time. You may also withdraw a
lesser amount if you are withdrawing your entire interest in a Subaccount. If
your request for a partial withdrawal would reduce the Contract Value to less
than $500, we may treat it as a request for a withdrawal of your entire Contract
Value, as described in "Minimum Contract Value" on page 31. Your Contract will
terminate if you withdraw all of your Contract Value.

Withdrawals taken prior to annuitization are generally considered to come from
the earnings in the Contract first. If the Contract is tax-qualified, generally
all withdrawals are treated as ordinary income and, if taken prior to age 59
1/2, may be subject to an additional 10% federal tax penalty.

We may be required to withhold 20% of withdrawals and distributions from
Contracts issued in connection with certain Qualified Plans, as described on
Page 39.

To make a withdrawal, you must send us a written withdrawal request or
systematic withdrawal program enrollment form. You may obtain the required forms
from us at the address and phone number given on the first page of this
prospectus.

For partial withdrawals, you may allocate the amount among the Subaccounts and
the Fixed Accounts. If we do not receive allocation instructions from you, we
usually will allocate the partial withdrawal proportionately among the
Subaccounts and the Guaranteed Maturity Fixed Account Options based upon the
balance of the Subaccounts and the Guaranteed Maturity Fixed Account Options,
with any remainder being distributed from the Dollar Cost Averaging Fixed
Account Option. You may not make a partial withdrawal from the Fixed Account in
an amount greater than the total amount of the partial withdrawal multiplied by
the ratio of the value of the Fixed Account to the Contract Value immediately
before the partial withdrawal.

If you request a total withdrawal, you must send us your Contract. The Surrender
value will equal the Contract Value minus any applicable Withdrawal Charge and
adjusted by any applicable Market Value Adjustment. We

                                  30 PROSPECTUS



also will deduct a contract maintenance charge of $35, unless we have waived the
contract maintenance charge on your Contract as described on page 32. We
determine the Surrender Value based on the Contract Value next computed after we
receive a properly completed surrender request. We will usually pay the
Surrender Value within seven days after the day we receive a completed request
form. However, we may suspend the right of withdrawal from the Separate Account
or delay payment for withdrawals for more than seven days in the following
circumstances:

1)   whenever the New York Stock Exchange ("NYSE") is closed (other than
     customary weekend and holiday closings);

2)   when trading on the NYSE is restricted or an emergency exists, as
     determined by the SEC, so that disposal of the Separate Account's
     investments or determination of Accumulation Unit Values is not reasonably
     practicable; or

3)   at any other time permitted by the SEC for your protection.

In addition, we may delay payment of the Surrender Value in the Fixed Account
for up to 6 months or a shorter period if required by law. If we delay payment
from the Fixed Account for more than 30 days, we will pay interest as required
by applicable law.

You may withdraw amounts attributable to contributions made pursuant to a salary
reduction agreement (in accordance with Section 403(b)(11) of the Tax Code) only
in the following circumstances:

1)   when you attain age 59 1/2;

2)   when you terminate your employment with the plan sponsor;

3)   upon your death;

4)   upon your disability as defined in Section 72(m)(7) of the Tax Code; or

5)   in the case of hardship.

If you seek a hardship withdrawal, you may only withdraw amounts attributable to
your Purchase Payments; you may not withdraw any earnings. These limitations on
withdrawals apply to:

1)   salary reduction contributions made after December 31, 1988;

2)   income attributable to such contributions; and

3)   income attributable to amounts held as of December 31, 1988.

The limitations on withdrawals do not affect transfers between certain Qualified
Plans. Additional restrictions and limitations may apply to distributions from
any Qualified Plan. Tax penalties may also apply. You should seek tax advice
regarding any withdrawals or distributions from Qualified Plans.

SYSTEMATIC WITHDRAWAL PROGRAM. If your Contract is a non-Qualified Contract or
IRA, you may participate in our Systematic Withdrawal Program. You must complete
an enrollment form and send it to us. You must complete the withholding election
section of the enrollment form before the systematic withdrawals will begin. You
may choose withdrawal payments of a flat dollar amount, earnings, or a
percentage of Purchase Payments. You may choose to receive systematic withdrawal
payments on a monthly, quarterly, semi-annual, or annual basis. Systematic
withdrawals will be deducted from your Subaccount and Fixed Account balances,
excluding the Dollar Cost Averaging Fixed Account, on a pro rata basis.

Depending on fluctuations in the net asset value of the Subaccounts and the
value of the Fixed Account, systematic withdrawals may reduce or even exhaust
the Contract Value. The minimum amount of each systematic withdrawal is $50.

We will make systematic withdrawal payments to you or your designated payee. We
may modify or suspend the Systematic Withdrawal Program and charge a processing
fee for the service. If we modify or suspend the Systematic Withdrawal Program,
existing systematic withdrawal payments will not be affected.

ERISA PLANS. A married participant may need spousal consent to receive a
distribution from a Contract issued in connection with a Qualified Plan or a
Non-Qualified Plan covered by to Title 1 of ERISA. You should consult an
advisor.

MINIMUM CONTRACT VALUE. If as a result of withdrawals your Contract Value would
be less than $500 and you have not made any Purchase Payments during the
previous three full calendar years, we may terminate your Contract and
distribute its Surrender Value to you. Before we do this, we will give you 60
days notice. We will not terminate your Contract on this ground if the Contract
Value has fallen below $500 due to either a decline in Accumulation Unit Value
or the imposition of fees and charges. In addition, in some states we are not
permitted to terminate Contracts on this ground. Different rules may apply to
Contracts issued in connection with Qualified Plans.

CONTRACT CHARGES

We assess charges under the Contract in three ways:

1)   as deductions from Contract Value for contract maintenance charges and for
     premium taxes, if applicable;

2)   as charges against the assets of the Separate Account for administrative
     expenses and for the assumption of mortality and expense risks; and

                                  31 PROSPECTUS



3)   as Withdrawal Charges (contingent deferred sales charges) subtracted from
     withdrawal and surrender payments.

In addition, certain deductions are made from the assets of the Portfolios for
investment management fees and expenses. Those fees and expenses are summarized
in the Fee Tables on page 6 and described more fully in the Prospectuses and
Statements of Additional Information for the Portfolios.

MORTALITY AND EXPENSE RISK CHARGE. We deduct a mortality and expense risk charge
from each Subaccount during each Valuation Period. The mortality and expense
risk charge is equal, on an annual basis, to 1.30% of the average net asset
value of each Subaccount. The mortality risks arise from our contractual
obligations:

1)   to make annuity payments after the Annuity Date for the life of the
     Annuitant(s);

2)   to waive the Withdrawal Charge upon your death; and

3)   to provide the Death Benefit prior to the Annuity Date. A detailed
     explanation of the Death Benefit may be found beginning on page 26.

The expense risk is that it may cost us more to administer the Contracts and the
Separate Account than we receive from the contract maintenance charge and the
administrative expense charge. We guarantee the mortality and expense risk
charge and we cannot increase it. We assess the mortality and expense risk
charge during both the Accumulation Period and the Annuity Period.

If you select the Enhanced Death Benefit Rider, your mortality and expense risk
charge will be 1.50% of average net asset value of each Subaccount. We charge a
higher mortality and expense risk charge for the Rider to compensate us for the
additional risk that we accept by providing the Rider. We will calculate a
separate Accumulation Unit Value for the base Contract, and for Contracts with
the Rider, in order to reflect the difference in the mortality and expense risk
charges.

ADMINISTRATIVE CHARGES

CONTRACT MAINTENANCE CHARGE. We charge an annual contract maintenance charge of
$35 on your Contract. The amount of this charge is guaranteed not to increase.
This charge reimburses us for our expenses incurred in maintaining your
Contract.

Before the Annuity Date, we assess the contract maintenance charge on each
Contract Anniversary. To obtain payment of this charge, on a pro rata basis we
will allocate this charge among the Subaccounts to which you have allocated your
Contract Value, and redeem Accumulation Units accordingly. We will waive this
charge if you pay $50,000 or more in Purchase Payments or if you allocate all of
your Contract Value to the Fixed Account. If you surrender your Contract, we
will deduct the full $35 charge as of the date of surrender, unless your
Contract qualifies for a waiver.

After the Annuity Date, if allowed in your state, we will subtract this charge
in equal parts from each of your annuity payments. We will waive this charge if
on the Annuity Date your Contract Value is $50,000 or more or if all of your
annuity payments are Fixed Annuity payments.

ADMINISTRATIVE EXPENSE CHARGE. We deduct an administrative expense charge from
each Subaccount during each Valuation Period. This charge is equal, on an annual
basis, to 0.10% of the average net asset value of the Subaccounts. This charge
is designed to compensate us for the cost of administering the Contracts and the
Separate Account. The administrative expense charge is assessed during both the
Accumulation Period and the Annuity Period.

TRANSFER FEE. We currently are waiving the transfer fee. The Contract, however,
depending on your state, either permits us to charge you up to $10 per transfer
for each transfer effected between Subaccount(s) and/or the Fixed Account after
the first transfer in each month, or for each transfer in excess of twelve
within a calendar year. The Contract also permits us to impose a minimum size on
transfer amounts although the minimum size may be limited to $25 in some states.
We will notify you if we begin to charge this fee or impose a minimum size on
transfer amounts. We will not charge a transfer fee on transfers that are part
of a Dollar Cost Averaging or Portfolio Rebalancing program.

The transfer fee will be deducted from Contract Value that remains in the
Subaccount(s) or Fixed Account from which the transfer was made. If that amount
is insufficient to pay the transfer fee, we will deduct the fee from the
transferred amount.

SALES CHARGES

WITHDRAWAL CHARGE. We may charge a Withdrawal Charge, which is a contingent
deferred sales charge, upon certain withdrawals. As a general rule, the
Withdrawal Charge equals a percentage of Purchase Payments withdrawn that are:
(a) less than eight years old; and (b) not eligible for a free withdrawal. The
applicable percentage depends on how many years ago you made the Purchase
Payment being withdrawn, as shown in this chart:

                    WITHDRAWAL
                      CHARGE
CONTRIBUTION YEAR   PERCENTAGE
-----------------   ----------
First                   8%
Second and Third        7%
Fourth and Fifth        6%
Sixth                   5%
Seventh                 4%
Eighth                  3%
Ninth and later         0%

When we calculate the Withdrawal Charge, we do not take any applicable Market
Value Adjustment into

                                  32 PROSPECTUS



consideration. If you make a withdrawal before the Annuity Date, we will apply
the withdrawal charge percentage in effect on the date of the withdrawal, or the
withdrawal charge percentage in effect on the following day, whichever is lower.

We subtract the Withdrawal Charge from the Contract Value remaining after your
withdrawal. As a result, the decrease in your Contract Value will be greater
than the withdrawal amount requested and paid.

For purposes of determining the Withdrawal Charge, the Contract Value is deemed
to be withdrawn in the following order:

First. Earnings - the current Contract Value minus all Purchase Payments that
have not previously been withdrawn; Credit Enhancements are treated as
"earnings" for this purpose;

Second. "Old Purchase Payments" - Purchase Payments received by us more than
eight years before the date of withdrawal that have not been previously
withdrawn;

Third. Any additional amounts available as a "Free Withdrawal," as described
below;

Fourth. "New Purchase Payments - Purchase Payments received by us less than
eight years before the date of withdrawal. These Payments are deemed to be
withdrawn on a first-in, first-out basis.

No Withdrawal Charge is applied in the following situations:

.    on annuitization;

.    the payment of a Death Benefit;

.    a free withdrawal amount, as described on page 33;

.    certain withdrawals for Contracts issued under 403(b) plans or 401 plans
     under our prototype as described on page 33;

.    withdrawals taken to satisfy IRS minimum distribution rules;

.    withdrawals that qualify for one of the waiver benefits described on page
     33 below; and

.    withdrawals under Contracts issued to employees of Lincoln Benefit Life
     Company, Surety Life Insurance Company, and Allstate Financial Services,
     L.L.C. or to their spouses or minor children, if these individuals reside
     in the State of Nebraska.

We will never waive or eliminate a Withdrawal Charge where such waiver or
elimination would be unfairly discriminatory to any person or where it is
prohibited by state law.

We use the amounts obtained from the Withdrawal Charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the Withdrawal Charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.

Withdrawals of earnings are taxed as ordinary income and, if taken prior to age
59 1/2, may be subject to an additional 10% federal tax penalty. The amount of
your withdrawal may be affected by a Market Value Adjustment. Additional
restrictions may apply to Contracts held in Qualified Plans. We outline the tax
requirements applicable to withdrawals on page 36. You should consult your own
tax counsel or other tax advisors regarding any withdrawals.

FREE WITHDRAWAL. Withdrawals of the following amounts are never subject to the
Withdrawal Charge:

.    In any Contract Year, the greater of: (a) earnings that have not previously
     been withdrawn; or (b) 15 percent of New Purchase Payments; and

.    Any Old Purchase Payments that have not been previously withdrawn.

Credit Enhancements are treated as earnings for purposes of determining the free
withdrawal amount. However, even if you do not owe a Withdrawal Charge on a
particular withdrawal, you may still owe taxes or penalty taxes, or be subject
to a Market Value Adjustment. The tax treatment of withdrawals is summarized on
page 36.

WAIVER BENEFITS

GENERAL. If approved in your state, we will offer the two waiver benefits
described below. In general, if you qualify for one of these benefits, we will
permit you to make one or more partial or full withdrawals without paying any
otherwise applicable Withdrawal Charge or Market Value Adjustment. While we have
summarized those benefits here, you should consult your Contract for the precise
terms of the waiver benefits.

Some Qualified Plans may not permit you to utilize these benefits. Also, even if
you do not need to pay our Withdrawal Charge because of these benefits, you
still may be required to pay taxes or tax penalties on the amount withdrawn. You
should consult your tax advisor to determine the effect of a withdrawal on your
taxes.

CONFINEMENT WAIVER BENEFIT. Under this benefit, we will waive the Withdrawal
Charge and Market Value Adjustment on all withdrawals under your Contract if the
following conditions are satisfied:

1)   Any Contract owner or the Annuitant, if the Contract is owned by a company
     or other legal entity, is confined to a long term care facility or a
     hospital for at least 90 consecutive days. The Owner or Annuitant must
     enter the long term care facility or hospital at least 30 days after the
     Issue Date;

2)   You request the withdrawal no later than 90 days following the end of the
     Owner or Annuitant's stay at the long term care facility or hospital. You
     must

                                  33 PROSPECTUS



     provide written proof of the stay with your withdrawal request; and

3)   A physician must have prescribed the stay and the stay must be medically
     necessary.

You may not claim this benefit if the physician prescribing the Owner or
Annuitant's stay in a long term care facility is the Owner or Annuitant or a
member of the Owner or Annuitant's immediate family.

TERMINAL ILLNESS WAIVER BENEFIT. Under this benefit, we will waive any
Withdrawal Charge and Market Value Adjustment on all withdrawals under your
Contract if, at least 30 days after the Issue Date, you or the Annuitant are
diagnosed with a terminal illness. Due proof of the diagnosis, as provided in
the Contract, must be given to us prior to, or at the time of, any withdrawal
request.

WAIVER OF WITHDRAWAL CHARGE FOR CERTAIN QUALIFIED PLAN WITHDRAWALS. For
Contracts issued under a Section 403(b) plan or a Section 401 plan under our
prototype, we will waive the Withdrawal Charge when:

1)   the Annuitant becomes disabled (as defined in Section 72(m)(7) of the Tax
     Code);

2)   the Annuitant reaches age 59 1/2 and at least 5 Contract Years have passed
     since the Contract was issued;

3)   at least 15 Contract Years have passed since the Contract was issued.

Our prototype is a Section 401 Defined Contribution Qualified Retirement plan.
This plan may be established as a Money Purchase plan, a Profit Sharing plan, or
a paired plan (Money Purchase and Profit Sharing). For more information about
our prototype plan, call us at 1-800-865-5237.

PREMIUM TAXES. We will charge premium taxes or other state or local taxes
against the Contract Value, including Contract Value that results from amounts
transferred from existing policies (Section 1035 exchange) issued by us or other
insurance companies. Some states assess premium taxes when Purchase Payments are
made; others assess premium taxes when annuity payments begin. We will deduct
any applicable premium taxes upon full surrender, death, or annuitization.
Premium taxes generally range from 0% to 3.5%.

DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES. We are not currently maintaining a
provision for taxes. In the future, however, we may establish a provision for
taxes if we determine, in our sole discretion, that we will incur a tax as a
result of the operation of the Separate Account. We will deduct for any taxes we
incur as a result of the operation of the Separate Account, whether or not we
previously made a provision for taxes and whether or not it was sufficient. Our
status under the Tax Code is briefly described in the Statement of Additional
Information.

OTHER EXPENSES. You indirectly bear the charges and expenses of the Portfolios
whose shares are held by the Subaccounts to which you allocate your Contract
Value. For a summary of current estimates of those charges and expenses, see
page 6. For more detailed information about those charges and expenses, please
refer to the prospectuses for the appropriate Portfolios. We may receive
compensation from the investment advisors or administrators of the Portfolios in
connection with administrative service and cost savings experienced by the
investment advisors or administrators.

                                  34 PROSPECTUS



TAXES

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. LINCOLN
BENEFIT MAKES NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR
TRANSACTION INVOLVING A CONTRACT.

Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.

TAXATION OF LINCOLN BENEFIT LIFE

COMPANY

Lincoln Benefit is taxed as a life insurance company under Part I of Subchapter
L of the Code. Since the Separate

Account is not an entity separate from Lincoln Benefit, and its operations form
a part of Lincoln Benefit, it will not be taxed separately. Investment income
and realized capital gains of the Separate Account are automatically applied to
increase reserves under the Contract. Under existing federal income tax law,
Lincoln Benefit believes that the Separate Account investment income and capital
gains will not be taxed to the extent that such income and gains are applied to
increase the reserves under the Contract. Accordingly, Lincoln Benefit does not
anticipate that it will incur any federal income tax liability attributable to
the Separate Account, and therefore Lincoln Benefit does not intend to make
provisions for any such taxes. If Lincoln Benefit is taxed on investment income
or capital gains of the Separate Account, then Lincoln Benefit may impose a
charge against the Separate

Account in order to make provision for such taxes.

TAXATION OF VARIABLE ANNUITIES IN GENERAL

TAX DEFERRAL. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:

.    the Contract Owner is a natural person,

.    the investments of the Separate Account are "adequately diversified"
     according to Treasury Department regulations, and

.    Lincoln Benefit is considered the owner of the Separate Account assets for
     federal income tax purposes.

NON-NATURAL OWNERS. Non-natural owners are also referred to as Non Living Owners
in this prospectus. As a general rule, annuity contracts owned by non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
does not enjoy tax deferral and is taxed as ordinary income received or accrued
by the non-natural owner during the taxable year.

EXCEPTIONS TO THE NON-NATURAL OWNER RULE. There are several exceptions to the
general rule that annuity contracts held by a non-natural owner are not treated
as annuity contracts for federal income tax purposes. Contracts will generally
be treated as held by a natural person if the nominal owner is a trust or other
entity which holds the contract as agent for a natural person. However, this
special exception will not apply in the case of an employer who is the nominal
owner of an annuity contract under a non-Qualified deferred compensation
arrangement for its employees. Other exceptions to the non-natural owner rule
are: (1) contracts acquired by an estate of a decedent by reason of the death of
the decedent; (2) certain qualified contracts; (3) contracts purchased by
employers upon the termination of certain qualified plans; (4) certain contracts
used in connection with structured settlement agreements; and (5) immediate
annuity contracts, purchased with a single premium, when the annuity starting
date is no later than a year from purchase of the annuity and substantially
equal periodic payments are made, not less frequently than annually, during the
annuity period.

GRANTOR TRUST OWNED ANNUITY. Contracts owned by a grantor trust are considered
owned by a non-natural owner. Grantor trust owned contracts receive tax deferral
as described in the Exceptions to the Non-Natural Owner Rule section. In
accordance with the Code, upon the death of the annuitant, the death benefit
must be paid. According to your Contract, the Death Benefit is paid to the
beneficiary. A trust named beneficiary, including a grantor trust, has two
options for receiving any death benefits: 1) a lump sum payment, or 2) payment
deferred up to five years from date of death.

DIVERSIFICATION REQUIREMENTS. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Separate Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Separate Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Lincoln Benefit does not have control over the Portfolios or
their investments, we expect the Portfolios to meet the diversification
requirements.

OWNERSHIP TREATMENT. The IRS has stated that a contract owner will be considered
the owner of separate account assets if he possesses incidents of ownership in
those assets, such as the ability to exercise investment control over the
assets. At the time the diversification regulations were issued, the Treasury
Department announced that the regulations do not provide guidance concerning
circumstances in which investor control of the separate account investments may
cause a Contract

                                  35 PROSPECTUS



owner to be treated as the owner of the separate account. The Treasury
Department also stated that future guidance would be issued regarding the extent
that owners could direct sub-account investments without being treated as owners
of the underlying assets of the separate account.

Your rights under the Contract are different than those described by the IRS in
private and published rulings in which it found that Contract owners were not
owners of separate account assets. For example, if your contract offers more
than twenty (20) investment alternatives you have the choice to allocate
premiums and contract values among a broader selection of investment
alternatives than described in such rulings. You may be able to transfer among
investment alternatives more frequently than in such rulings. These differences
could result in you being treated as the owner of the Separate Account. If this
occurs, income and gain from the Separate Account assets would be includible in
your gross income. Lincoln

Benefit does not know what standards will be set forth in any regulations or
rulings which the Treasury Department may issue. It is possible that future
standards announced by the Treasury Department could adversely affect the tax
treatment of your Contract. We reserve the right to modify the Contract as
necessary to attempt to prevent you from being considered the federal tax owner
of the assets of the Separate Account. However, we make no guarantee that such
modification to the Contract will be successful.

TAXATION OF PARTIAL AND FULL WITHDRAWALS. If you make a partial withdrawal under
a Non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a full withdrawal
under a Non-Qualified Contract, the amount received will be taxable only to the
extent it exceeds the investment in the Contract.

TAXATION OF ANNUITY PAYMENTS. Generally, the rule for income taxation of annuity
payments received from a Non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the Contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If any variable payment is less than the excludable amount you should
contact a competent tax advisor to determine how to report any unrecovered
investment. The federal tax treatment of annuity payments is unclear in some
respects. As a result, if the IRS should provide further guidance, it is
possible that the amount we calculate and report to the IRS as taxable could be
different. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.

TAXATION OF LEVEL MONTHLY VARIABLE ANNUITY PAYMENTS. You may have an option to
elect a variable income payment stream consisting of level monthly payments that
are recalculated annually. Although we will report your levelized payments to
the IRS in the year distributed, it is possible the IRS could determine that
receipt of the first monthly payout of each annual amount is constructive
receipt of the entire annual amount. If the IRS were to take this position, the
taxable amount of your levelized payments would be accelerated to the time of
the first monthly payout and reported in the tax year in which the first monthly
payout is received.

WITHDRAWALS AFTER THE PAYOUT START DATE. Federal tax law is unclear regarding
the taxation of any additional withdrawal received after the Payout Start Date.
It is possible that a greater or lesser portion of such a payment could be
taxable than the amount we determine.

DISTRIBUTION AT DEATH RULES. In order to be considered an annuity contract for
federal income tax purposes, the Contract must provide:

.    if any Contract Owner dies on or after the Payout Start Date but before the
     entire interest in the Contract has been distributed, the remaining portion
     of such interest must be distributed at least as rapidly as under the
     method of distribution being used as of the date of the Contract Owner's
     death;

.    if any Contract Owner dies prior to the Payout Start Date, the entire
     interest in the Contract will be distributed within 5 years after the date
     of the Contract Owner's death. These requirements are satisfied if any
     portion of the Contract Owner's interest that is payable to (or for the
     benefit of) a designated Beneficiary is distributed over the life of such
     Beneficiary (or over a period not extending beyond the life expectancy of
     the Beneficiary) and the distributions begin within 1 year of the Contract
     Owner's death. If the Contract Owner's designated Beneficiary is the
     surviving spouse of the Contract Owner, the Contract may be continued with
     the surviving spouse as the new Contract Owner.

.    if the Contract Owner is a non-natural person, then the Annuitant will be
     treated as the Contract Owner for purposes of applying the distribution at
     death rules. In addition, a change in the Annuitant on a Contract owned by
     a non-natural person will be treated as the death of the Contract Owner.

                                  36 PROSPECTUS



TAXATION OF ANNUITY DEATH BENEFITS. Death Benefit amounts are included in income
as follows:

.    if distributed in a lump sum, the amounts are taxed in the same manner as a
     full withdrawal, or

.    if distributed under an Income Plan, the amounts are taxed in the same
     manner as annuity payments.

PENALTY TAX ON PREMATURE DISTRIBUTIONS. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:

.    made on or after the date the Contract Owner attains age 59 1/2,

.    made as a result of the Contract Owner's death or becoming totally
     disabled,

.    made in substantially equal periodic payments over the Contract Owner's
     life or life expectancy, or over the joint lives or joint life expectancies
     of the Contract Owner and the Beneficiary,

.    made under an immediate annuity, or

.    attributable to investment in the Contract before August 14, 1982.

You should consult a competent tax advisor to determine how these exceptions may
apply to your situation.

SUBSTANTIALLY EQUAL PERIODIC PAYMENTS. With respect to non-Qualified Contracts
using substantially equal periodic payments or immediate annuity payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior to
the later of 5 years or the Contract Owner's attaining age 59 1/2 would be
subject to a 10% penalty tax unless another exception to the penalty tax
applied. The tax for the year of the modification is increased by the penalty
tax that would have been imposed without the exception, plus interest for the
years in which the exception was used. A material modification does not include
permitted changes described in published IRS rulings. You should consult a
competent tax advisor prior to creating or modifying a substantially equal
periodic payment stream.

TAX FREE EXCHANGES UNDER INTERNAL REVENUE CODE SECTION 1035. A 1035 exchange is
a tax-free exchange of a non-qualified life insurance contract, endowment
contract or annuity contract into a non-Qualified annuity contract. The contract
owner(s) must be the same on the old and new contract. Basis from the old
contract carries over to the new contract so long as we receive that information
from the relinquishing company. If basis information is never received, we will
assume that all exchanged funds represent earnings and will allocate no cost
basis to them.

PARTIAL EXCHANGES. The IRS has issued a ruling that permits partial exchanges of
annuity contracts. Under this ruling, if you take a withdrawal from a receiving
or relinquishing annuity contract within 24 months of the partial exchange, then
special aggregation rules apply for purposes of determining the taxable amount
of a distribution. The IRS has issued limited guidance on how to aggregate and
report these distributions. The IRS is expected to provide further guidance, as
a result, it is possible that the amount we calculate and report to the IRS as
taxable could be different.

TAXATION OF OWNERSHIP CHANGES. If you transfer a non-Qualified Contract without
full and adequate consideration to a person other than your spouse (or to a
former spouse incident to a divorce), you will be taxed on the difference
between the Contract Value and the investment in the Contract at the time of
transfer. Any assignment or pledge (or agreement to assign or pledge) of the
Contract Value is taxed as a withdrawal of such amount or portion and may also
incur the 10% penalty tax.

AGGREGATION OF ANNUITY CONTRACTS. The Code requires that all non-Qualified
deferred annuity contracts issued by Lincoln Benefit (or its affiliates) to the
same Contract Owner during any calendar year be aggregated and treated as one
annuity contract for purposes of determining the taxable amount of a
distribution.

INCOME TAX WITHHOLDING

Generally, Lincoln Benefit is required to withhold federal income tax at a rate
of 10% from all non-annuitized distributions. The customer may elect out of
withholding by completing and signing a withholding election form. If no
election is made, we will automatically withhold the required 10% of the taxable
amount. In certain states, if there is federal withholding, then state
withholding is also mandatory.

Lincoln Benefit is required to withhold federal income tax using the wage
withholding rates for all annuitized distributions. The customer may elect out
of withholding by completing and signing a withholding election form. If no
election is made, we will automatically withhold using married with three
exemptions as the default. If no U.S. taxpayer identification number is
provided, we will automatically withhold using single with zero exemptions as
the default. In certain states, if there is federal withholding, then state
withholding is also mandatory.

Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.

Generally, Section 1441 of the Code provides that Lincoln Benefit as a
withholding agent must withhold 30% of the taxable amounts paid to a
non-resident alien. A non-resident alien is someone other than a U.S. citizen or
resident alien. Withholding may be reduced or eliminated if covered by an income
tax treaty between the U.S. and the non-resident alien's country of residence if

                                  37 PROSPECTUS



the payee provides a U.S. taxpayer identification number on a completed Form
W-8BEN. A U.S. taxpayer identification number is a social security number or an
individual taxpayer identification number ("ITIN"). ITINs are issued by the IRS
to non-resident alien individuals who are not eligible to obtain a social
security number. The U.S. does not have a tax treaty with all countries nor do
all tax treaties provide an exclusion or lower withholding rate for annuities.

TAX QUALIFIED CONTRACTS

The income on tax sheltered annuity (TSA) and IRA investments is tax deferred,
and the income on variable annuities held by such plans does not receive any
additional tax deferral. You should review the annuity features, including all
benefits and expenses, prior to purchasing a variable annuity as a TSA or IRA.
Tax Qualified Contracts are contracts purchased as investments as:

.    Individual Retirement Annuities (IRAs) under Section 408(b) of the Code;

.    Roth IRAs under Section 408A of the Code;

.    Simplified Employee Pension (SEP IRA) under Section 408(k) of the Code;

.    Savings Incentive Match Plans for Employees (SIMPLE IRA) under Section
     408(p) of the Code; and

.    Tax Sheltered Annuities under Section 403(b) of the Code.

Lincoln Benefit reserves the right to limit the availability of the Contract for
use with any of the retirement plans listed above or to modify the Contract to
conform with tax requirements.

The tax rules applicable to participants with tax qualified annuities vary
according to the type of contract and the terms and conditions of the
endorsement. Adverse tax consequences may result from certain transactions such
as excess contributions, premature distributions, and, distributions that do not
conform to specified commencement and minimum distribution rules. Lincoln

Benefit can issue an individual retirement annuity on a rollover or transfer of
proceeds from a decedent's IRA, TSA, or employer sponsored retirement plan under
which the decedent's surviving spouse is the beneficiary. Lincoln Benefit does
not offer an individual retirement annuity that can accept a transfer of funds
for any other, non-spousal, beneficiary of a decedent's IRA, TSA, or employer
sponsored retirement plan.

In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract.

TAXATION OF WITHDRAWALS FROM AN INDIVIDUALLY OWNED TAX QUALIFIED CONTRACT. If
you make a partial withdrawal under a Tax Qualified Contract other than a Roth
IRA, the portion of the payment that bears the same ratio to the total payment
that the investment in the Contract (i.e., nondeductible IRA contributions)
bears to the Contract Value, is excluded from your income. We do not keep track
of nondeductible contributions, and all tax reporting of distributions from Tax
Qualified Contracts other than Roth IRAs will indicate that the distribution is
fully taxable.

"Qualified distributions" from Roth IRAs are not included in gross income.
"Qualified distributions" are any distributions made more than five taxable
years after the taxable year of the first contribution to any Roth IRA and which
are:

.    made on or after the date the Contract Owner attains age 59 1/2,

.    made to a beneficiary after the Contract Owner's death,

.    attributable to the Contract Owner being disabled, or

.    made for a first time home purchase (first time home purchases are subject
     to a lifetime limit of $10,000).

"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. All tax reporting of distributions from Roth
IRAs will indicate that the taxable amount is not determined.

REQUIRED MINIMUM DISTRIBUTIONS. Generally, IRAs (excluding Roth IRAs) and TSAs
require minimum distributions upon reaching age 70 1/2. Failure to withdraw the
required minimum distribution will result in a 50% tax penalty on the shortfall
not withdrawn from the Contract. Not all income plans offered under the Contract
satisfy the requirements for minimum distributions. Because these distributions
are required under the Code and the method of calculation is complex, please see
a competent tax advisor.

THE DEATH BENEFIT AND TAX QUALIFIED CONTRACTS. Pursuant to the Code and IRS
regulations, an IRA (e.g., traditional IRA, Roth IRA, SEP IRA and SIMPLE IRA)
may not invest in life insurance contracts. However, an IRA may provide a death
benefit that equals the greater of the purchase payments or the Contract Value.
The Contract offers a death benefit that in certain circumstances may exceed the
greater of the purchase payments or the Contract Value. We believe that the
Death Benefits offered by your Contract do not constitute life insurance under
these regulations.

It is also possible that certain death benefits that offer enhanced earnings
could be characterized as an incidental death benefit. If the death benefit were
so characterized, this could result in current taxable income to a Contract
Owner. In addition, there are limitations on the amount of incidental death
benefits that may be provided under qualified plans, such as in connection with
a 403(b) plan.

Lincoln Benefit reserves the right to limit the availability of the Contract for
use with any of the qualified plans listed above.

                                  38 PROSPECTUS



PENALTY TAX ON PREMATURE DISTRIBUTIONS FROM TAX QUALIFIED CONTRACTS. A 10%
penalty tax applies to the taxable amount of any premature distribution from a
Tax Qualified Contract. The penalty tax generally applies to any distribution
made prior to the date you attain age 59 1/2. However, no penalty tax is
incurred on distributions:

.    made on or after the date the Contract Owner attains age 59 1/2,

.    made as a result of the Contract Owner's death or total disability,

.    made in substantially equal periodic payments over the Contract Owner's
     life or life expectancy, or over the joint lives or joint life expectancies
     of the Contract Owner and the Beneficiary,

.    made after separation from service after age 55 (applies only for IRAs),

.    made pursuant to an IRS levy,

.    made for certain medical expenses,

.    made to pay for health insurance premiums while unemployed (applies only
     for IRAs),

.    made for qualified higher education expenses (applies only for IRAs), and

.    made for a first time home purchase (up to a $10,000 lifetime limit and
     applies only for IRAs).

During the first 2 years of the individual's participation in a SIMPLE IRA,
distributions that are otherwise subject to the premature distribution penalty,
will be subject to a 25% penalty tax.

You should consult a competent tax advisor to determine how these exceptions may
apply to your situation.

SUBSTANTIALLY EQUAL PERIODIC PAYMENTS ON TAX QUALIFIED CONTRACTS. With respect
to Tax Qualified Contracts using substantially equal periodic payments as an
exception to the penalty tax on premature distributions, any additional
withdrawal or other material modification of the payment stream would violate
the requirement that payments must be substantially equal. Failure to meet this
requirement would mean that the income portion of each payment received prior to
the later of 5 years or the taxpayer's attaining age 59 1/2 would be subject to
a 10% penalty tax unless another exception to the penalty tax applied. The tax
for the year of the modification is increased by the penalty tax that would have
been imposed without the exception, plus interest for the years in which the
exception was used. A material modification does not include permitted changes
described in published IRS rulings. You should consult a competent tax advisor
prior to creating or modifying a substantially equal periodic payment stream.

INCOME TAX WITHHOLDING ON TAX QUALIFIED CONTRACTS. Generally, Lincoln Benefit is
required to withhold federal income tax at a rate of 10% from all non-annuitized
distributions that are not considered "eligible rollover distributions." The
customer may elect out of withholding by completing and signing a withholding
election form. If no election is made, we will automatically withhold the
required 10% from the taxable amount. In certain states, if there is federal
withholding, then state withholding is also mandatory. Lincoln Benefit is
required to withhold federal income tax at a rate of 20% on all "eligible
rollover distributions" unless you elect to make a "direct rollover" of such
amounts to an IRA or eligible retirement plan. Eligible rollover distributions
generally include all distributions from employer sponsored retirement plans,
including TSAs but excluding IRAs, with the exception of:

.    required minimum distributions, or,

.    a series of substantially equal periodic payments made over a period of at
     least 10 years, or,

.    a series of substantially equal periodic payments made over the life (joint
     lives) of the participant (and beneficiary), or,

.    hardship distributions.

For all annuitized distributions that are not subject to the 20% withholding
requirement, Lincoln Benefit is required to withhold federal income tax using
the wage withholding rates. The customer may elect out of withholding by
completing and signing a withholding election form. If no election is made, we
will automatically withhold using married with three exemptions as the default.
If no U.S. taxpayer identification number is provided, we will automatically
withhold using single with zero exemptions as the default. In certain states, if
there is federal withholding, then state withholding is also mandatory.

Election out of withholding is valid only if the customer provides a U.S.
residence address and taxpayer identification number.

Generally, Section 1441 of the Code provides that Lincoln Benefit as a
withholding agent must withhold 30% of the taxable amounts paid to a
non-resident alien. A non-resident alien is someone other than a U.S. citizen or
resident alien. Withholding may be reduced or eliminated if covered by an income
tax treaty between the U.S. and the non-resident alien's country of residence if
the payee provides a U.S. taxpayer identification number on a completed Form
W-8BEN. A U.S. taxpayer identification number is a social security number or an
individual taxpayer identification number ("ITIN"). ITINs are issued by the IRS
to non-resident alien individuals who are not eligible to obtain a social
security number. The U.S. does not have a tax treaty with all countries nor do
all tax treaties provide an exclusion or lower withholding rate for annuities.

INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
Individual Retirement Annuity (IRA). Individual Retirement Annuities are subject
to limitations on the amount that

                                  39 PROSPECTUS



can be contributed and on the time when distributions may commence. Certain
distributions from other types of qualified plans may be "rolled over" on a
tax-deferred basis into an Individual Retirement Annuity.

ROTH INDIVIDUAL RETIREMENT ANNUITIES. Section 408A of the Code permits eligible
individuals to make nondeductible contributions to an individual retirement
program known as a Roth Individual Retirement Annuity. Roth Individual
Retirement Annuities are subject to limitations on the amount that can be
contributed and on the time when distributions may commence.

Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The income portion of a conversion or rollover distribution is taxable
currently, but is exempted from the 10% penalty tax on premature distributions.

ANNUITIES HELD BY INDIVIDUAL RETIREMENT ACCOUNTS (COMMONLY KNOWN AS CUSTODIAL
IRAS)

Internal Revenue Code Section 408 permits a custodian or trustee of an
Individual Retirement Account to purchase an annuity as an investment of the
Individual Retirement Account. If an annuity is purchased inside of an
Individual Retirement Account, then the Annuitant must be the same person as the
beneficial owner of the Individual Retirement Account.

Generally, the death benefit of an annuity held in an Individual Retirement
Account must be paid upon the death of the Annuitant. However, in most states,
the Contract permits the custodian or trustee of the Individual Retirement
Account to continue the Contract in the accumulation phase, with the Annuitant's
surviving spouse as the new Annuitant, if the following conditions are met:

1)   The custodian or trustee of the Individual Retirement Account is the owner
     of the annuity and has the right to the death proceeds otherwise payable
     under the annuity contract;

2)   The deceased Annuitant was the beneficial owner of the Individual
     Retirement Account;

3)   We receive a complete request for settlement for the death of the
     Annuitant; and

4)   The custodian or trustee of the Individual Retirement Account provides us
     with a signed certification of the following:

(a)  The Annuitant's surviving spouse is the sole beneficiary of the Individual
     Retirement Account;

(b)  The Annuitant's surviving spouse has elected to continue the Individual
     Retirement Account as his or her own Individual Retirement Account; and

(c)  The custodian or trustee of the Individual Retirement Account has continued
     the Individual Retirement Account pursuant to the surviving spouse's
     election.

SIMPLIFIED EMPLOYEE PENSION IRA. Section 408(k) of the Code allows eligible
employers to establish simplified employee pension plans for their employees
using individual retirement annuities. These employers may, within specified
limits, make deductible contributions on behalf of the employees to the
individual retirement annuities. Employers intending to use the Contract in
connection with such plans should seek competent tax advice.

SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE IRA). Section 408(p) of the
Code allow eligible employers with 100 or fewer employees to establish SIMPLE
retirement plans for their employees using individual retirement annuities. In
general, a SIMPLE IRA consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to purchase the Contract as a SIMPLE IRA should seek competent tax and
legal advice.

TO DETERMINE IF YOU ARE ELIGIBLE TO CONTRIBUTE TO ANY OF THE ABOVE LISTED IRAS
(TRADITIONAL, ROTH, SEP, OR SIMPLE), PLEASE REFER TO IRS PUBLICATION 590 AND
YOUR COMPETENT TAX ADVISOR.

TAX SHELTERED ANNUITIES. Section 403(b) of the Code provides tax-deferred
retirement savings plans for employees of certain non-profit and educational
organizations. Under Section 403(b), any contract used for a 403(b) plan must
provide that distributions attributable to salary reduction contributions made
after 12/31/88, and all earnings on salary reduction contributions, may be made
only on or after the date the employee:

.    attains age 59 1/2,

.    severs employment,

.    dies,

.    becomes disabled, or

.    incurs a hardship (earnings on salary reduction contributions may not be
     distributed on account of hardship).

These limitations do not apply to withdrawals where Lincoln Benefit is directed
to transfer some or all of the Contract Value to another 403(b) plan. Generally,
we do not accept Employee Retirement Income Security Act of 1974 (ERISA) funds
in 403(b) contracts.

                                  40 PROSPECTUS



DESCRIPTION OF LINCOLN BENEFIT LIFE COMPANY AND THE SEPARATE ACCOUNT

LINCOLN BENEFIT LIFE COMPANY. Lincoln Benefit Life Company is a stock life
insurance company organized under the laws of the state of Nebraska in 1938. Our
legal domicile and principal business address is 2940 South 84th Street,
Lincoln, Nebraska, 68506-4142. Lincoln Benefit is a wholly owned subsidiary of
Allstate Life Insurance Company ("Allstate Life"), a stock life insurance
company incorporated under the laws of the State of Illinois. Allstate Life is a
wholly owned subsidiary of Allstate Insurance Company ("AIC"), a stock
property-liability insurance company incorporated under the laws of Illinois.
All outstanding capital stock of AIC is owned by The Allstate Corporation
("Allstate").

We are authorized to conduct life insurance and annuity business in the District
of Columbia, Guam, U.S. Virgin Islands and all states except New York. We intend
to market the Contract everywhere we conduct variable annuity business. The
Contracts offered by this prospectus are issued by us and will be funded in the
Separate Account and/or the Fixed Account.

Under our reinsurance agreements with Allstate Life, substantially all contract
related transactions are transferred to Allstate Life and substantially all of
the assets backing our reinsured liabilities are owned by Allstate Life. These
assets represent our general account and are invested and managed by Allstate
Life. Accordingly, the results of operations with respect to applications
received and contracts issued by Lincoln Benefit are not reflected in our
financial statements. The amounts reflected in our financial statements relate
only to the investment of those assets of Lincoln Benefit that are not
transferred to Allstate Life under the reinsurance agreements. While the
reinsurance agreements provide us with financial backing from Allstate Life, it
does not create a direct contractual relationship between Allstate Life and you.

Under the Company's reinsurance agreements with Allstate Life, the Company
reinsures all reserve liabilities with Allstate Life except for variable
contracts. The Company's variable contract assets and liabilities are held in
legally-segregated, unitized Separate Accounts and are retained by the Company.
However, Lincoln Benefit's economic risks and returns related to such variable
contracts are transferred to Allstate Life.

SEPARATE ACCOUNT. Lincoln Benefit Life Variable Annuity Account was originally
established in 1992, as a segregated asset account of Lincoln Benefit. The
Separate Account meets the definition of a "separate account" under the federal
securities laws and is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940. The SEC does not supervise the management of
the Separate Account or Lincoln Benefit.

We own the assets of the Separate Account, but we hold them separate from our
other assets. To the extent that these assets are attributable to the Contract
Value of the Contracts offered by this prospectus, these assets are not
chargeable with liabilities arising out of any other business we may conduct.
Income, gains, and losses, whether or not realized, from assets allocated to the
Separate Account are credited to or charged against the Separate Account without
regard to our other income, gains, or losses. Our obligations arising under the
Contracts are general corporate obligations of Lincoln Benefit.

The Separate Account is divided into Subaccounts. The assets of each Subaccount
are invested in the shares of one of the Portfolios. We do not guarantee the
investment performance of the Separate Account, its Subaccounts or the
Portfolios. Values allocated to the Separate Account and the amount of Variable
Annuity payments will rise and fall with the values of shares of the Portfolios
and are also reduced by Contract charges. We may also use the Separate Account
to fund our other annuity contracts. We will account separately for each type of
annuity contract funded by the Separate Account.

We have included additional information about the Separate Account in the
Statement of Additional Information. You may obtain a copy of the Statement of
Additional Information by writing to us or calling us at 1-800-865-5237. We have
reproduced the Table of Contents of the Statement of Additional Information on
44.

STATE REGULATION OF LINCOLN BENEFIT. We are subject to the laws of Nebraska and
regulated by the Nebraska Department of Insurance. Every year we file an annual
statement with the Department of Insurance covering our operations for the
previous year and our financial condition as of the end of the year. We are
inspected periodically by the Department of Insurance to verify our contract
liabilities and reserves. Our books and records are subject to review by the
Department of Insurance at all times. We are also subject to regulation under
the insurance laws of every jurisdiction in which we operate.

ADMINISTRATION

We have primary responsibility for all administration of the Contracts and the
Separate Account. Our mailing address is P.O. Box 80469, Lincoln, Nebraska
68501-0469.

                                  41 PROSPECTUS



We provide the following administrative services, among others: issuance of the
Contracts; maintenance of Contract Owner records; Contract Owner services;
calculation of unit values; maintenance of the Separate Account; and preparation
of Contract Owner reports.

We will send you Contract statements and transaction confirmations at least
quarterly. You should notify us promptly in writing of any address change. You
should read your statements and confirmations carefully and verify their
accuracy. You should contact us promptly if you have a question about a periodic
statement. We will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.

We will also provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.

DISTRIBUTION OF CONTRACTS

The Contracts described in this prospectus are sold by registered
representatives of broker-dealers who are our licensed insurance agents, either
individually or through an incorporated insurance agency. Commissions paid to
broker-dealers may vary, but we estimate that the total commissions paid on all
Contract sales will not exceed 5.5% of all Purchase Payments (on a present value
basis). From time to time, we may offer additional sales incentives of up to 1%
of Purchase Payments and other cash bonuses to broker-dealers who maintain
certain sales volume levels. ALFS, Inc. ("ALFS") located at 3100 Sanders Road,
Northbrook, IL 60062-7154 serves as distributor of the Contracts. ALFS, an
affiliate of Lincoln Benefit, is a wholly owned subsidiary of Allstate Life
Insurance Company. ALFS is a registered broker dealer under the Securities and
Exchange Act of 1934, as amended, and is a member of the National Association of
Securities Dealers, Inc. Lincoln Benefit does not pay ALFS a commission for
distribution of the Contracts. The underwriting agreement with ALFS provides
that we will reimburse ALFS for expenses incurred in distributing the Contracts,
including liability arising out of services we provide on the Contracts.

LEGAL PROCEEDINGS

There are no pending legal proceedings affecting the Separate Account. Lincoln
Benefit is engaged in routine lawsuits which, in our management's judgment, are
not of material importance to their respective total assets or material with
respect to the Separate Account.

LEGAL MATTERS

All matters of Nebraska law pertaining to the Contract, including the validity
of the Contract and our right to issue the Contract under Nebraska law, have
been passed upon by William F. Emmons, Vice President, Assistant General
Counsel, and Assistant Secretary of Lincoln Benefit.

ANNUAL REPORTS AND OTHER DOCUMENTS

Lincoln Benefit's annual report on Form 10-K for the year ended December 31,
2003, is incorporated herein by reference, which means that it is legally a part
of this prospectus.

After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Exchange Act of 1934 are also incorporated herein by reference, which
means that they also legally become a part of this prospectus.

Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statement in other documents that are legally part of this prospectus.

We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's "EDGAR"
system using the identifying number CIK No. 0000910739. The SEC maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http:// www.sec.gov. You also can view these materials at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of SEC's Public Reference Room,
call 1-800-SEC-0330.

If you have received a copy of this prospectus, and would like a free copy of
any document incorporated herein by

                                  42 PROSPECTUS



APPENDIX A

                         ACCUMULATION UNIT VALUES /(1)/

                                  BASIC POLICY

                                       Year ending December 31,
                          ---------------------------------------------------
FUND                       1999      2000      2001       2002        2003
-----------------------------------------------------------------------------
AIM V.I. Basic Value
Fund (6)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
Alger American Growth
Portfolio (5)
 Accumulation Unit Value
 Beginning                     --        --        --          --  $    10.00
 Accumulation Unit Value
 Ending                        --        --        --          --  $   12.358
 Number of Units
 Outstanding at End of         --        --        --          --      54,381
 Year
Fidelity VIP Growth
Portfolio (5)
 Accumulation Unit Value
 Beginning                     --        --        --          --  $    10.00
 Accumulation Unit Value
 Ending                        --        --        --          --  $   12.458
 Number of Units
 Outstanding at End of         --        --        --          --     111,685
 Year
Fidelity VIP Investment
Grade Bond (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $   10.721
 Accumulation Unit Value
 Ending                        --        --        --  $   10.721  $   11.094
 Number of Units
 Outstanding at End of         --        --        --     178,620     645,218
 Year
Fidelity VIP Overseas
(4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.724
 Accumulation Unit Value
 Ending                        --        --        --  $    7.724  $   10.895
 Number of Units
 Outstanding at End of         --        --        --       3,650      40,658
 Year
Goldman Sachs VIT
International Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  12.29  $  10.52  $     8.07  $    6.495
 Accumulation Unit Value
 Ending                   $ 12.29  $  10.52  $   8.07  $    6.495  $    8.678
 Number of Units
 Outstanding at End of     22,152   159,917   114,948     254,616     287,318
 Year
Goldman Sachs VIT CORE
Small Cap Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  12.19  $  12.23  $    12.61  $   10.573
 Accumulation Unit Value
 Ending                   $ 12.19  $  12.23  $  12.61  $   10.573  $   15.223
 Number of Units
 Outstanding at End of     32,499    94,926   230,893     127,061     199,375
 Year
Janus Aspen Series
Capital Appreciation (7)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
Janus Aspen Series
Foreign Stock (4) (8)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.755
 Accumulation Unit Value
 Ending                        --        --        --  $    7.755  $   10.200
 Number of Units
 Outstanding at End of         --        --        --      10,251      32,987
 Year
Janus Aspen Series
Worldwide Growth (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.806
 Accumulation Unit Value
 Ending                        --        --        --  $    7.806  $    9.520
 Number of Units
 Outstanding at End of         --        --        --      13,094      51,204
 Year
JPMorgan Small Company
(2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  14.01  $  12.25  $    11.11  $    8.582
 Accumulation Unit Value
 Ending                   $ 14.01  $  12.25  $  11.11  $    8.582  $   11.508
 Number of Units
 Outstanding at End of     42,567   135,018   148,118     229,162     235,165
 Year
Lazard Emerging Markets
(2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  13.27  $   9.41  $     8.81  $    8.555
 Accumulation Unit Value
 Ending                   $ 13.27  $   9.41  $   8.81  $    8.555  $   12.903
 Number of Units
 Outstanding at End of     11,803    34,832    51,868      78,720     112,391
 Year
Lazard International
Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  11.25  $  10.02  $     7.50  $    6.607
 Accumulation Unit Value
 Ending                   $ 11.25  $  10.02  $   7.50  $    6.607  $    8.374
 Number of Units
 Outstanding at End of     27,207    79,805   118,331     162,113     148,319
 Year
LSA Aggressive Growth
(4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.299
 Accumulation Unit Value
 Ending                        --        --        --  $    7.299  $    9.982
 Number of Units
 Outstanding at End of         --        --        --      10,154      73,878
 Year
LSA Balanced (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.40  $  11.17  $    11.26  $    9.073
 Accumulation Unit Value
 Ending                   $ 10.40  $  11.17  $  11.26  $    9.073  $   11.561
 Number of Units
 Outstanding at End of        386   124,389   266,745     514,929     685,220
 Year
LSA Basic Value (6)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.638
 Accumulation Unit Value
 Ending                        --        --        --  $    7.638  $   10.049
 Number of Units
 Outstanding at End of         --        --        --      63,427     353,241
 Year
LSA Blue Chip (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.975
 Accumulation Unit Value
 Ending                        --        --        --  $    7.975  $    9.848
 Number of Units
 Outstanding at End of         --        --        --      24,337     260,606
 Year
LSA Capital Appreciation
(4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    8.163
 Accumulation Unit Value
 Ending                        --        --        --  $    8.163  $   10.491
 Number of Units
 Outstanding at End of         --        --        --      14,015      73,575
 Year
LSA Capital Growth (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  12.22  $  11.03  $     9.33  $    6.910
 Accumulation Unit Value
 Ending                   $ 12.22  $  11.03  $   9.33  $    6.910  $    8.472
 Number of Units
 Outstanding at End of      3,394   142,502   226,920     226,041     330,980
 Year
LSA Diversified Mid Cap
(4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.783
 Accumulation Unit Value
 Ending                        --        --        --  $    7.783  $   10.192
 Number of Units
 Outstanding at End of         --        --        --      26,268     172,288
 Year
LSA Emerging Growth
Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  17.48  $  12.04  $     9.75  $    5.589
 Accumulation Unit Value
 Ending                   $ 17.48  $  12.04  $   9.75  $    5.589  $    8.098
 Number of Units
 Outstanding at End of     16,191   131,445   150,128     161,610     207,970
 Year
LSA Equity Growth (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  12.49  $  10.86  $     9.05  $    6.224
 Accumulation Unit Value
 Ending                   $ 12.49  $  10.86  $   9.05  $    6.224  $    7.627
 Number of Units
 Outstanding at End of     34,228   160,257   240,525      85,390     619,195
 Year
LSA Mid Cap Value (10)
 Accumulation Unit Value
 Beginning                                                         $    8.437
 Accumulation Unit Value
 Ending                                                            $   11.629
 Number of Units
 Outstanding at End of                                                165,206
 Year
LSA Value Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  11.03  $  12.55  $    11.77  $    9.035
 Accumulation Unit Value
 Ending                   $ 11.03  $  12.55  $  11.77  $    9.035  $   11.622
 Number of Units
 Outstanding at End of         32   122,654   235,535     428,181     484,234
 Year
MFS New Discovery (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.473
 Accumulation Unit Value
 Ending                        --        --        --  $    7.473  $    9.833
 Number of Units
 Outstanding at End of         --        --        --      20,998     103,156
 Year
MFS Utilities (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    8.370
 Accumulation Unit Value
 Ending                        --        --        --  $    8.370  $   11.189
 Number of Units
 Outstanding at End of         --        --        --      13,969      71,175
 Year
Oppenheimer Main Street
Small Cap (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    7.839
 Accumulation Unit Value
 Ending                        --        --        --  $    7.839  $   11.151
 Number of Units
 Outstanding at End of         --        --        --      28,379     251,859
 Year
PAVIT OpCap Balanced (6)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
PAVIT OpCap Equity (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.62  $  11.51  $    10.56  $    8.180
 Accumulation Unit Value
 Ending                   $ 10.62  $  11.51  $  10.56  $    8.180  $   10.371
 Number of Units
 Outstanding at End of          0    58,987   110,288     195,029     295,226
 Year
PAVIT OpCap Small Cap
(2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.65  $  15.15  $    16.18  $   12.502
 Accumulation Unit Value
 Ending                   $ 10.65  $  15.15  $  16.18  $   12.502  $   17.586
 Number of Units
 Outstanding at End of          0    49,685    75,521     140,778     232,549
 Year
PAVIT PEA Science and
Technology (3)
 Accumulation Unit Value
 Beginning                     --        --  $  10.00  $     3.36  $    1.803
 Accumulation Unit Value
 Ending                        --        --  $   3.36  $    1.803  $    2.903
 Number of Units
 Outstanding at End of         --        --    59,395     160,966   1,167,164
 Year
PIMCO VIT Foreign Bond
(U.S. Dollar-Hedged) (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.29  $  10.99  $    11.66  $   12.443
 Accumulation Unit Value
 Ending                   $ 10.29  $  10.99  $  11.66  $   12.443  $   12.547
 Number of Units
 Outstanding at End of     17,747    30,068    49,293      93,732     218,507
 Year
PIMCO VIT Money Market
(2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.07  $  10.54  $    10.79  $   10.786
 Accumulation Unit Value
 Ending                   $ 10.07  $  10.54  $  10.79  $   10.786  $   10.713
 Number of Units
 Outstanding at End of     45,777   307,495   918,122   1,311,411   1,069,740
 Year
PIMCO VIT StocksPLUS
Growth and Income (4)
 Accumulation Unit Value
 Beginning                $ 10.00  $  11.64  $  10.39  $     9.07  $    7.139
 Accumulation Unit Value
 Ending                   $ 11.64  $  10.39  $   9.07  $    7.139  $    9.179
 Number of Units
 Outstanding at End of         21    97,992   171,296     335,810     444,281
 Year
PIMCO VIT Total Return
Bond (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.13  $  11.01  $    11.77  $   12.656
 Accumulation Unit Value
 Ending                   $ 10.13  $  11.01  $  11.77  $   12.656  $   13.109
 Number of Units
 Outstanding at End of     54,509   181,857   356,786     916,788   1,387,841
 Year
Putnam VT High Yield (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    9.568
 Accumulation Unit Value
 Ending                        --        --        --  $    9.568  $   11.939
 Number of Units
 Outstanding at End of         --        --        --      14,843     151,285
 Year
Rydex VT OTC (3)
 Accumulation Unit Value
 Beginning                     --        --  $  10.00  $     5.75  $    3.470
 Accumulation Unit Value
 Ending                        --        --  $   5.75  $    3.470  $    4.976
 Number of Units
 Outstanding at End of         --        --     7,617      73,139     169,077
 Year
Salomon Brothers
Variable All Cap (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  11.54  $  13.45  $    13.51  $    9.987
 Accumulation Unit Value
 Ending                   $ 11.54  $  13.45  $  13.51  $    9.987  $   13.693
 Number of Units
 Outstanding at End of     49,256   141,167   260,699     321,536     374,930
 Year
Salomon Brothers
Variable Investors (6)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
Van Kampen UIF Equity
Growth (2) (9)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
Van Kampen UIF High
Yield (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  10.37  $   9.14  $     8.61  $    7.872
 Accumulation Unit Value
 Ending                   $ 10.37  $   9.14  $   8.61  $    7.872  $    9.759
 Number of Units
 Outstanding at End of     17,868    68,958    94,964     148,434     259,819
 Year
Van Kampen UIF. Mid Cap
Growth (2)
 Accumulation Unit Value
 Beginning                $ 10.00  $  13.80  $  12.61  $     8.79  $    5.967
 Accumulation Unit Value
 Ending                   $ 13.80  $  12.61  $   8.79  $    5.967  $    8.341
 Number of Units
 Outstanding at End of        409   170,775   213,956     302,409     426,417
 Year
Van Kampen UIF U.S. Mid
Cap Value (10)
 Accumulation Unit Value
 Beginning                $ 10.00  $  12.06  $  13.17  $    12.57  $    8.924
 Accumulation Unit Value
 Ending                   $ 12.06  $  13.17  $  12.57  $    8.924  $   12.453
 Number of Units
 Outstanding at End of          0    85,226   189,874     301,924     324,553
 Year
Van Kampen LIT
Aggressive Growth (11)
 Accumulation Unit Value
 Beginning                     --        --        --          --          --
 Accumulation Unit Value
 Ending                        --        --        --          --          --
 Number of Units
 Outstanding at End of         --        --        --          --          --
 Year
Van Kampen LIT Growth
and Income (4)
 Accumulation Unit Value
 Beginning                     --        --        --  $    10.00  $    8.155
 Accumulation Unit Value
 Ending                        --        --        --  $    8.155  $   10.267
 Number of Units
 Outstanding at End of         --        --        --      58,636     266,307
 Year

(1)  Accumulation Unit Value: unit of measure used to calculate the value of a
     Contract Owner's interest in a Subaccount for any Valuation Period. An
     Accumulation Unit Value does not reflect deduction of certain charges under
     the Contract that are deducted from your Contract Value, such as the
     Administrative Expense Charge. The beginning value reflects the
     Accumulation Unit Value as of October 18, 1999, the date Lincoln Benefit
     started to offer the Contract.

(2)  First offered 10/18/1999.

(3)  First offered 1/17/2001.

(4)  First offered 5/1/2002.

(5)  First offered 5/1/03.(6) Effective 4/30/04, the LSA Balance Fund, LSA Basic
     Value Fund and LSA Value Equity Fund were merged into the PAVIT OpCap
     Balanced Portfolio, AIM V.I. Basic Value Fund - Series I and Salomon
     Brothers Variable Investors Fund - Class I, respectively. Accordingly, on
     4/30/04, we transferred the value of the LSA Balanced Variable Sub-Account
     and the LSA Value Equity Variable Sub-Account to the PAVIT OpCap Balanced
     Variable Sub-Account, AIM V.I. Basic Value Variable Sub-Account and the
     Salomon Brothers Variable Investors Variable Sub-Account, respectively.

(6)  Effective 4/30/04, the LSA Balance Fund, LSA Basic Value Fund and LSA Value
     Equity Fund were merged into the PAVIT OpCap Balanced Portfolio, AIM V.I.
     Basic Value Fund - Series I and Salomon Brothers Variable Investors Fund -
     Class I, respectively. Accordingly, on 4/30/04, we transferred the value of
     the LSA Balanced Variable Sub-Account and the LSA Value Equity Variable
     Sub-Account to the PAVIT OpCap Balanced Variable Sub-Account, AIM V.I.
     Basic Value Variable Sub-Account and the Salomon Brothers Variable
     Investors Variable Sub-Account, respectively.

(7)  Effective 4/30/04, the LSA Capital Appreciation Fund was merged into the
     Janus Aspen Series Capital Appreciation Portfolio - Institutional Shares.
     Accordingly, on 4/30/04, we transferred the value of the LSA Capital
     Appreciation Variable Sub-Account to the Janus Aspen Serioed Capital
     Appreciation Variable Sub-Account.

(8)  Effective 5/1/04 the Janus Aspen Series International Portfolio - Service
     Shares changed its name to the Janus Aspen Foreign Stock Portfolio -
     Service Shares. We have made a corresponding change in the name of the
     Variable Sub-Account that invests in this Portfolio.

(9)  Effective 4/30/04, the LSA Blue Chip Fund, LSA Equity Growth Fund and LSA
     Capital Growth Fund were merged into the Van Kampen UIF Equity Growth
     Portfolio, Class I. Accordingly, on 4/30/04, we transferred the value of
     the LSA Blue Chip Variable Sub-Account, LSA Equity Growth Variable
     Sub-Account and LSA Capital Growth Variable Sub-Account to the Van Kampen
     UIF Equity Growth Variable Sub-Account.

(10) Effective 4/30/04, the LSA Diversified Mid-Cap Growth Fund and LSA MidCap
     Value Fund were merged into the Van Kampen UIF U.S. Mid Cap Value
     Portfolio, Class I. Accordingly, on 4/30/04, we transferred the value of
     the LSA Diversified Mid-Cap Growth Variable Sub-Account and the LSA MidCap
     Value Variable Sub-Account to the Van Kampen UIF U.S. Mid Cap Value
     Variable Sub-Account.

(11) Effective 4/30/04, the LSA Aggressive Growth Fund and LSA Emerging Growth
     Fund were merged into the Van Kampen LIT Aggressive Growth Portfolio, Class
     II. Accordingly, on 4/30/04, we transferred the value of the LSA Aggressive
     Growth Variable Sub-Account and the LSA Emerging Growth Variable
     Sub-Account to the Van Kampen LIT Aggressive Growth Variable Sub-Account.

A brief explanation of how performance of the Subaccounts is calculated may be
found in the Statement of Additional Information.

                                  48 PROSPECTUS



                            ACCUMULATION UNIT VALUES

                 BASIC POLICY PLUS ENHANCED DEATH BENEFIT RIDER

                                                            Year ending December 31,
                                              ---------------------------------------------------
FUND                                           1999       2000       2001       2002       2003
------------------------------------------------------ ------------------------------------------
AIM Basic Value (6)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
Alger American Growth (5)
 Accumulation Unit Value Beginning                 --         --         --         --   $  10.00
 Accumulation Unit Value Ending                    --         --         --         --   $ 12.341
 Number of Units Outstanding at End of Year        --         --         --         --     30,627
Fidelity VIP Growth Portfolio (5)
 Accumulation Unit Value Beginning                 --         --         --         --   $  10.00
 Accumulation Unit Value Ending                    --         --         --         --   $ 12.441
 Number of Units Outstanding at End of Year        --         --         --         --     71,284
Fidelity VIP Investment Grade Bond (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $ 10.706
 Accumulation Unit Value Ending                    --         --         --   $ 10.706   $ 11.057
 Number of Units Outstanding at End of Year        --         --         --     84,421    275,877
Fidelity VIP Overseas (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.714
 Accumulation Unit Value Ending                    --         --         --   $  7.714   $ 10.858
 Number of Units Outstanding at End of Year        --         --         --      8,812     22,038
Goldman Sachs VIT International Equity (2)
 Accumulation Unit Value Beginning            $ 10.00   $  12.29   $  10.50   $   8.03   $  6.453
 Accumulation Unit Value Ending               $ 12.29   $  10.50   $   8.03   $  6.453   $  8.605
 Number of Units Outstanding at End of Year     5,621     78,931    112,245    114,893    135,685
Goldman Sachs VIT CORE Small Cap Equity (2)
 Accumulation Unit Value Beginning            $ 10.00   $  12.19   $  12.20   $  12.55   $ 10.505
 Accumulation Unit Value Ending               $ 12.19   $  12.20   $  12.55   $ 10.505   $ 15.095
 Number of Units Outstanding at End of Year     3,604     24,178     35,125     59,592    108,325
Janus Aspen Series Capital Appreciation (7)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
Janus Aspen Series Foreign Stock (4) (8)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.744
 Accumulation Unit Value Ending                    --         --         --   $  7.744   $ 10.166
 Number of Units Outstanding at End of Year        --         --         --      6,035     20,593
Janus Aspen Series Worldwide Growth (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.795
 Accumulation Unit Value Ending                    --         --         --   $  7.795   $  9.488
 Number of Units Outstanding at End of Year        --         --         --     13,160     39,364
JPMorgan Small Company (2)
 Accumulation Unit Value Beginning            $ 10.00   $  14.00   $  12.22   $  11.06   $  8.527
 Accumulation Unit Value Ending               $ 14.00   $  12.22   $  11.06   $  8.527   $ 11.412
 Number of Units Outstanding at End of Year         0     53,597     58,437     83,459    115,268
Lazard Emerging Markets (2)
 Accumulation Unit Value Beginning            $ 10.00   $  13.26   $   9.39   $   8.77   $  8.501
 Accumulation Unit Value Ending               $ 13.26   $   9.39   $   8.77   $  8.501   $ 12.795
 Number of Units Outstanding at End of Year     2,809     25,988     32,552     51,013     81,410
Lazard International Equity (2)
 Accumulation Unit Value Beginning            $ 10.00   $  11.24   $  10.00   $   7.47   $  6.565
 Accumulation Unit Value Ending               $ 11.24   $  10.00   $   7.47   $  6.565   $  8.304
 Number of Units Outstanding at End of Year     4,064     50,850     71,754     73,992     82,929
LSA Aggressive Growth (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.289
 Accumulation Unit Value Ending                    --         --         --   $  7.289   $  9.949
 Number of Units Outstanding at End of Year        --         --         --      5,753     41,947
LSA Balanced (2)
 Accumulation Unit Value Beginning            $ 10.00   $  10.40   $  11.14   $  11.21   $  9.015
 Accumulation Unit Value Ending               $ 10.40   $  11.14   $  11.21   $  9.015   $ 11.464
 Number of Units Outstanding at End of Year     7,126     69,393    144,623    221,913    419,279
LSA Basic Value (6)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.627
 Accumulation Unit Value Ending                    --         --         --   $  7.627   $ 10.015
 Number of Units Outstanding at End of Year        --         --         --     30,010    144,113
LSA Blue Chip (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.964
 Accumulation Unit Value Ending                    --         --         --   $  7.964   $  9.816
 Number of Units Outstanding at End of Year        --         --         --      9,727    122,223
LSA Capital Appreciation (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  8.152
 Accumulation Unit Value Ending                    --         --         --   $  8.152   $ 10.456
 Number of Units Outstanding at End of Year        --         --         --      4,462     52,459
LSA Diversified Mid Cap (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.772
 Accumulation Unit Value Ending                    --         --         --   $  7.772   $ 10.158
 Number of Units Outstanding at End of Year        --         --         --      7,362     76,253
LSA Emerging Growth Equity (2)
 Accumulation Unit Value Beginning            $ 10.00   $  17.47   $  12.01   $   9.71   $  5.553
 Accumulation Unit Value Ending               $ 17.47   $  12.01   $   9.71   $  5.553   $  8.030
 Number of Units Outstanding at End of Year     5,259     86,819     94,558     98,810    110,592
LSA Equity Growth (2)
 Accumulation Unit Value Beginning            $ 10.00   $  12.48   $  10.83   $   9.01   $  6.224
 Accumulation Unit Value Ending               $ 12.48   $  10.83   $   9.01   $  6.224   $  7.563
 Number of Units Outstanding at End of Year     8,359     54,291     90,631     85,390   $243,908
LSA Capital Growth(2)
 Accumulation Unit Value Beginning            $ 10.00   $  12.21   $  11.00   $   9.28   $  6.910
 Accumulation Unit Value Ending               $ 12.21   $  11.00   $   9.28   $  6.910   $  8.401
 Number of Units Outstanding at End of Year    24,902    123,406    172,729    226,041    268,165
LSA Mid Cap Value (10)
 Accumulation Unit Value Beginning                                                       $  8.246
 Accumulation Unit Value Ending                                                          $ 11.591
 Number of Units Outstanding at End of Year                                               107,129
LSA Value Equity (2)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  8.978
 Accumulation Unit Value Ending                    --         --         --   $  8.426   $ 11.525
 Number of Units Outstanding at End of Year        --         --         --     25,180    234,745
MFS New Discovery (4)
 Accumulation Unit Value Beginning            $ 10.00   $  11.03   $  12.52   $  11.72   $  8.978
 Accumulation Unit Value Ending               $ 11.03   $  12.52   $  11.72   $  8.978   $  9.800
 Number of Units Outstanding at End of Year    17,183     62,043    130,669    179,820     46,541
MFS Utilities (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.463
 Accumulation Unit Value Ending                    --         --         --   $  7.463   $ 11.152
 Number of Units Outstanding at End of Year        --         --         --     10,193     37,809
PAVIT OpCap Balanced (2) (6)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
PAVIT OpCap Equity (2)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  8.359
 Accumulation Unit Value Ending                    --         --         --   $  8.359   $ 10.284
 Number of Units Outstanding at End of Year        --         --         --      6,880    158,681
PAVIT PEA Science and Technology (3)
 Accumulation Unit Value Beginning            $ 10.00   $  10.62   $  11.49   $  10.51   $  8.128
 Accumulation Unit Value Ending               $ 10.62   $  11.49   $  10.51   $  8.128   $ 10.284
 Number of Units Outstanding at End of Year     5,784     61,655     97,863    115,950    158,681
PAVIT OpCap Small Cap (2)
 Accumulation Unit Value Beginning                 --         --   $  10.00   $   3.62   $  1.796
 Accumulation Unit Value Ending                    --         --   $   3.62   $  1.796   $ 17.439
 Number of Units Outstanding at End of Year        --         --     14,533     63,153    137,092
Oppenheimer Main Street Small Cap (4)
 Accumulation Unit Value Beginning            $ 10.00   $  10.65   $  15.11   $  16.11   $ 12.422
 Accumulation Unit Value Ending               $ 10.65   $  15.11   $  16.11   $ 12.422   $ 11.113
 Number of Units Outstanding at End of Year         0     16,703     43,783     74,972    108,430
PIMCO VIT Foreign Bond (U.S. Dollar-Hedged)
(2)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  7.829
 Accumulation Unit Value Ending                    --         --         --   $  7.829
 Number of Units Outstanding at End of Year        --         --         --     27,890
PIMCO VIT Money Market (2)
 Accumulation Unit Value Beginning            $ 10.00   $  10.28   $  10.97   $  11.61   $ 12.364
 Accumulation Unit Value Ending               $ 10.28   $  10.97   $  11.61   $ 12.364
 Number of Units Outstanding at End of Year         0      1,231      3,605     27,152
PIMCO VIT StocksPLUS Growth and Income (2)
 Accumulation Unit Value Beginning            $ 10.00   $  10.07   $  10.51   $  10.74   $ 10.717
 Accumulation Unit Value Ending               $ 10.07   $  10.51   $  10.74   $ 10.717
 Number of Units Outstanding at End of Year    10,350    104,093    239,107    467,548
PIMCO VIT Total Return Bond (2)
 Accumulation Unit Value Beginning            $ 10.00   $  11.64   $  10.37   $   9.03   $  7.094
 Accumulation Unit Value Ending               $ 11.64   $  10.37   $   9.03   $  7.094
 Number of Units Outstanding at End of Year    12,776     82,128    112,333    161,698
Putnam VT High Yield (4)
 Accumulation Unit Value Beginning            $ 10.00   $  10.13   $  10.98   $  11.71   $ 12.575
 Accumulation Unit Value Ending               $ 10.13   $  10.98   $  11.71   $ 12.575
 Number of Units Outstanding at End of Year       224     57,774    148,500    491,013
Rydex VT OTC (3)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  9.555
 Accumulation Unit Value Ending                    --         --         --   $  9.555
 Number of Units Outstanding at End of Year        --         --         --      6,438
Salomon Brothers Variable All Cap (2)
 Accumulation Unit Value Beginning                 --         --   $  10.00   $   5.74      3.457
 Accumulation Unit Value Ending                    --         --   $   5.74      3.457
 Number of Units Outstanding at End of Year        --         --     14,044     83,805
Salomon Brothers Variable Investors (6)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
Van Kampen UIF Equity Growth (2) (9)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
Van Kampen UIF High Yield (2)
 Accumulation Unit Value Beginning            $ 10.00   $  11.53   $  13.42   $  13.46   $  7.822
 Accumulation Unit Value Ending               $ 11.53   $  13.42   $  13.46   $  7.822
 Number of Units Outstanding at End of Year         0     64,958    121,931     60,785
Van Kampen UIF Mid Cap Growth (2)
 Accumulation Unit Value Beginning            $ 10.00   $  13.80   $  12.58   $   8.75   $  5.929
 Accumulation Unit Value Ending               $ 13.80   $  12.58   $   8.75   $  5.929
 Number of Units Outstanding at End of Year     6,216     87,781    123,258    135,098
Van Kampen UIF U.S. Mid Cap Value (2) (10)
 Accumulation Unit Value Beginning            $ 10.00   $  12.05   $  13.14   $  12.52   $  8.867
 Accumulation Unit Value Ending               $ 12.05   $  13.14   $  12.52   $  8.867
 Number of Units Outstanding at End of Year     6,021     44,148     95,312    151,383
Van Kampen LIT Aggressive Growth (11)
 Accumulation Unit Value Beginning                 --         --         --         --         --
 Accumulation Unit Value Ending                    --         --         --         --         --
 Number of Units Outstanding at End of Year        --         --         --         --         --
Van Kampen LIT Growth and Income (4)
 Accumulation Unit Value Beginning                 --         --         --   $  10.00   $  8.144
 Accumulation Unit Value Ending                    --         --         --   $  8.144
 Number of Units Outstanding at End of Year        --         --         --     26,840

(1)  Accumulation Unit Value: unit of measure used to calculate the value of a
     Contract Owner's interest in a Subaccount for any Valuation Period. An
     Accumulation Unit Value does not reflect deduction of certain charges under
     the Contract that are deducted from your Contract Value, such as the
     Administrative Expense Charge.

(2)  First offered 10/18/1999.

(3)  First offered 1/17/2001.

(4)  First offered 5/1/2002.

(5)  First offered 5/1/03.(6) Effective 4/30/04, the LSA Balance Fund, LSA Basic
     Value Fund and LSA Value Equity Fund were merged into the PAVIT OpCap
     Balanced Portfolio, AIM V.I. Basic Value Fund - Series I and Salomon
     Brothers Variable Investors Fund - Class I, respectively. Accordingly, on
     4/30/04, we transferred the value of the LSA Balanced Variable Sub-Account
     and the LSA Value Equity Variable Sub-Account to the PAVIT OpCap Balanced
     Variable Sub-Account, AIM V.I. Basic Value Variable Sub-Account and the
     Salomon Brothers Variable Investors Variable Sub-Account, respectively.

(6)  Effective 4/30/04, the LSA Balance Fund, LSA Basic Value Fund and LSA Value
     Equity Fund were merged into the PAVIT OpCap Balanced Portfolio, AIM V.I.
     Basic Value Fund - Series I and Salomon Brothers Variable Investors Fund -
     Class I, respectively. Accordingly, on 4/30/04, we transferred the value of
     the LSA Balanced Variable Sub-Account and the LSA Value Equity Variable
     Sub-Account to the PAVIT OpCap Balanced Variable Sub-Account, AIM V.I.
     Basic Value Variable Sub-Account and the Salomon Brothers Variable
     Investors Variable Sub-Account, respectively.

(7)  Effective 4/30/04, the LSA Capital Appreciation Fund was merged into the
     Janus Aspen Series Capital Appreciation Portfolio - Institutional Shares.
     Accordingly, on 4/30/04, we transferred the value of the LSA Capital
     Appreciation Variable Sub-Account to the Janus Aspen Serioed Capital
     Appreciation Variable Sub-Account.

(8)  Effective 5/1/04 the Janus Aspen Series International Portfolio - Service
     Shares changed its name to the Janus Aspen Foreign Stock Portfolio -
     Service Shares. We have made a corresponding change in the name of the
     Variable Sub-Account that invests in this Portfolio.

(9)  Effective 4/30/04, the LSA Blue Chip Fund, LSA Equity Growth Fund and LSA
     Capital Growth Fund were merged into the Van Kampen UIF Equity Growth
     Portfolio, Class I. Accordingly, on 4/30/04, we transferred the value of
     the LSA Blue Chip Variable Sub-Account, LSA Equity Growth Variable
     Sub-Account and LSA Capital Growth Variable Sub-Account to the Van Kampen
     UIF Equity Growth Variable Sub-Account.

(10) Effective 4/30/04, the LSA Diversified Mid-Cap Growth Fund and LSA MidCap
     Value Fund were merged into the Van Kampen UIF U.S. Mid Cap Value
     Portfolio, Class I. Accordingly, on 4/30/04, we transferred the value of
     the LSA Diversified Mid-Cap Growth Variable Sub-Account and the LSA MidCap
     Value Variable Sub-Account to the Van Kampen UIF U.S. Mid Cap Value
     Variable Sub-Account.

(11) Effective 4/30/04, the LSA Aggressive Growth Fund and LSA Emerging Growth
     Fund were merged into the Van Kampen LIT Aggressive Growth Portfolio, Class
     II. Accordingly, on 4/30/04, we transferred the value of the LSA Aggressive
     Growth Variable Sub-Account and the LSA Emerging Growth Variable
     Sub-Account to the Van Kampen LIT Aggressive Growth Variable Sub-Account.

A brief explanation of how performance of the Subaccounts is calculated may be
found in the Statement of Additional Information.

                                  52 PROSPECTUS



APPENDIX B

                    ILLUSTRATION OF A MARKET VALUE ADJUSTMENT

Purchase Payment:                          $ 40,000.00
Credit Enhancement:                        1,600.00
Guarantee Period:                          5 Years
Guaranteed Interest Rate:                  5% Annual Effective Rate
5-year Treasury Rate at Time of Purchase
Payment:                                   6%

The following examples illustrate how the Market Value Adjustment and the
Withdrawal Charge may affect the values of a Contract upon a withdrawal. The 5%
assumed Guaranteed Interest Rate is the rate required to be used in the "Summary
of Expenses." In these examples, the withdrawal occurs one year after (in the
second Contract Year) the Issue Date. The Market Value Adjustment operates in a
similar manner for transfers, except that there is no free amount for transfers.
No Withdrawal Charge applies to transfers.

Assuming that the entire $40,000.00 Purchase Payment and $1,600.00 Credit
Enhancement are allocated to the Guaranteed Maturity Fixed Account for the
Guarantee Period specified above, at the end of the five-year Guarantee Period
the Contract Value would be $53,093.31. After one year, when the withdrawals
occur in these examples, the Contract Value would be $43,680.00. We have assumed
that no prior partial withdrawals or transfers have occurred.

The Market Value Adjustment and the Withdrawal Charge only apply to the portion
of a withdrawal that is greater than the Free Withdrawal Amount. Accordingly,
the first step is to calculate the Free Withdrawal Amount.

The Free Withdrawal Amount is equal to:

(a)  the greater of:

.    earnings not previously withdrawn; or

.    15% of your total Purchase Payments in the most recent eight years; plus

(b)  an amount equal to your total Purchase Payments made more than eight years
     ago, to the extent not previously withdrawn.

Here, (a) equals $6,000.00, because 15% of the total Purchase Payments in the
most recent eight years ($6,000.00 = 15% x $40,000.00) is greater than the
earnings not previously withdrawn ($3,680.00). (B) equals $0, because all of the
Purchase Payments were made less than eight years age. Accordingly, the Free
Withdrawal Amount is $6,000.00.

The formula that we use to determine the amount of the Market Value Adjustment
is:

.9 x (I - J) x N,

where: I = the Treasury Rate for a maturity equal to the relevant Guarantee
Period for the week preceding the beginning of the Guarantee Period;

J = the Treasury Rate for a maturity equal to the relevant Guarantee Period for
the week preceding our receipt of your withdrawal request, death benefit
request, transfer request, or annuity option request; and

N = the number of whole and partial years from the date we receive your request
until the end of the relevant Guarantee Period.

We will base the Market Value Adjustment on the current Treasury Rate for a
maturity corresponding in length to the relevant Guarantee Period. These
examples also show the Withdrawal Charge (if any), which would be calculated
separately from the Market Value Adjustment.

EXAMPLE OF A DOWNWARD MARKET VALUE ADJUSTMENT

A downward Market Value Adjustment results from a full or partial withdrawal
that occurs when interest rates have increased. Assume interest rates have
increased one year after the Purchase Payment, such that the five-year Treasury
Rate is now 6.5%. Upon a withdrawal, the market value adjustment factor would
be:

.9 x (.06 - .065) x 4 = -.0180

The Market Value Adjustment is a reduction of $678.24 from the amount withdrawn:

$-678.24 = -.0180 x ($43,680 - $6,000.00)

A Withdrawal Charge of 7% (assuming the Withdrawal occurs at the start of the
second Contract year) would be assessed against the Purchase Payments withdrawn
that are less than eight years old and are not eligible for free withdrawal.
Under the Contract, earnings are deemed to be withdrawn before Purchase
Payments. Accordingly, in this example, the amount of the Purchase Payment
eligible for free withdrawal would equal the Free Withdrawal Amount less the
interest credited or $2,320.00 ($6,000.00 - $3,680.00).

Therefore, the Withdrawal Charge would be:

$2,637.60 = 7% x (40,000.00 - $2,320.00)

As a result, the net amount payable to you would be:

$40,364.16 = $43,680.00 - $678.24 - $2,637.60

EXAMPLE OF AN UPWARD MARKET VALUE ADJUSTMENT

An upward Market Value Adjustment results from a withdrawal that occurs when
interest rates have decreased. Assume interest rates have decreased one year

                                  53 PROSPECTUS



after the Purchase Payment, such that the five-year Treasury Rate is now 5.5%.
Upon a withdrawal, the market value adjustment factor would be:

.9 x (.06 - .055) x 4 = .0180

The Market Value Adjustment would increase the amount withdrawn by $648.00, as
follows:

$678.24 = .0180 x ($43,680 - $6,000.00)

As above, in this example, the amount of the Purchase Payment eligible for free
withdrawal would equal the Free Withdrawal Amount less the interest credited or
$2,320.00 ($6,000.00 - $3,680.00). Therefore, the Withdrawal Charge would be:

$2,637.60 = 7% x ($40,000.00 - $2,320.00)

As a result, the net amount payable to you would be:

$41,720.64 = $43,680.00 + $678.24 - $2,637.60

EXAMPLE OF A PARTIAL WITHDRAWAL

If you request a partial withdrawal from a Guarantee Period, we can either (1)
withdraw the specified amount of Contract Value and pay you that amount as
adjusted by any applicable Market Value Adjustment or (2) pay you the amount
requested, and subtract an amount from your Contract Value that equals the
requested amount after application of the Market Value Adjustment and Withdrawal
Charge. Unless you instruct us otherwise, when you request a partial withdrawal
we will assume that you wish to receive the amount requested. We will make the
necessary calculations and on your request provide you with a statement showing
our calculations.

For example, if in the first example you wished to receive $20,000.00 as a
partial withdrawal, the Market Value Adjustment and Withdrawal Charge would be
calculated as follows:

let: AW = the total amount to be withdrawn from your Contract Value

                          MVA = Market Value Adjustment

                             WC = Withdrawal Charge

AW' = amount subject to Market Value Adjustment and Withdrawal Charge

                         Then AW - $20,000.00 = WC - MVA

Since neither the Market Value Adjustment nor the Withdrawal Charge apply to the
free withdrawal amount, we can solve directly for the amount subject to the
Market Value Adjustment and the Withdrawal Charge (i.e., AW'), which equals AW ?
$6,000.00. Then, AW = AW' + $6,000, and AW' + $6,000.00 - $20,000.00 = WC - MVA.

MVA = -.018 x AW'

WC = .07 x AW'

WC - MVA = .088AW'

AW' - $14,000.00 = .088AW'

AW' = $14,000.00 / (1 - .088) = $15,350.88

MVA = -.018 x $15,350.88 = - $276.32

WC = .07 x $15,350.88 = $1,074.56

AW = Total amount withdrawn = $15,350.88 + $6,000.00 = $21,350.88

You receive $20,000.00; the total amount subtracted from your contract is
$21,350.88; the Market Value Adjustment is $276.32; and the Withdrawal Charge is
$1,074.56. Your remaining Contract Value is $20,649.12.

If, however, in the same example, you wished to withdraw $20,000.00 from your
Contract Value and receive the adjusted amount, the calculations would be as
follows:

By definition, AW = total amount withdrawn from your Contract Value = $20,000.00

AW' = amount that MVA & WC are applied to

= amount withdrawn in excess of Free Amount = $20,000.00 - $6,000.00 =
$14,000.00

MVA = -.018 x $14,000.00 = $-252.00

WC = .07 x $14,000.00 = $980.00

You would receive $20,000.00 - $252.00 - $980.00 = $18,768.00; the total amount
subtracted from your Contract Value is $20,000.00. Your remaining Contract Value
would be $22,000.00.

EXAMPLE OF FREE WITHDRAWAL AMOUNT

Assume that in the foregoing example, after four years $10,565.06 in earnings;
including the Credit Enhancement had been credited and that the Contract Value
in the Fixed Account equaled $50,565.06. In this example, if no prior
withdrawals have been made, you could withdraw up to $10,565.06 without
incurring a Market Value Adjustment or a Withdrawal Charge. The Free Withdrawal
Amount would be $10,565.06, because the interest credited ($10,565.06) is
greater than 15% of the Total Purchase Payments in the most recent eight years
($40,000.00 x .15 = $6,000.00).

                 (THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.)

                                  54 PROSPECTUS



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Registrant anticipates that it will incur the following approximate expenses in
connection with the issuance and distribution of the securities to be
registered:

Registration fees.................  $0
Cost of printing and engraving....  $1,740.00
Legal fees........................  $0
Accounting fees...................  $6,600.00
Mailing fees......................  $2,375.00

Item 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Articles of Incorporation of Lincoln Benefit Life Company (Registrant)
provide for the indemnification of its directors and officers against expenses,
judgments, fines and amounts paid in settlement as incurred by such person, so
long as such person shall not have been adjudged to be liable for negligence or
misconduct in the performance of a duty to the Company. This right of indemnity
is not exclusive of other rights to which a director or officer may otherwise be
entitled.

In connection with its acquisition of Lincoln Benefit Life Company, Resolution
Life Inc. may acquire directors and officers insurance, which may include
indemnification for liability arising under the Securities Act of 1933.

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the even that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by final adjudication of
such issue.

Item 15. RECENT SALES OF UNREGISTERED SECURITIES

Not Applicable

Item 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

16(a)

Exh. No. Description

1        Form of Principal Underwriting Agreement. Incorporated herein by
         reference to Post-Effective Amendment to Form N-4 for Lincoln Benefit
         Life Variable Annuity Account (File No. 333-50545, 811-07924) filed
         January 28, 1999

1(a)     Amended and Restated Principal Underwriting Agreement by and between
         Lincoln Benefit Life Company and Allstate Distributors, LLC, effective
         April 1, 2014.  Filed herewith.

3(i)     Amended and Restated Articles of Incorporation of Lincoln Benefit Life
         Company dated September 26, 2000. Incorporated herein by reference to
         Exhibit 3(i) to Lincoln Benefit Life Company's Quarterly Report on
         Form 10-Q for quarter ended March 31, 2002. (SEC File No. 333-111553)

3(ii)    Amended and Restated By-Laws of Lincoln Benefit Life Company effective
         March 10, 2006. Incorporated herein by reference to Exhibit 3.2 to
         Lincoln Benefit Life Company's Quarterly Report on Form 10-Q for the
         quarter ended March 31, 2006. (SEC File No. 333-111553)

4(a)     Form of Variable Annuity Contract. Incorporated herein by reference to
         Registration Statement on Form N-4 for Lincoln Benefit Life Variable
         Annuity Account (File No. 333-82427, 811-07924) filed July 8, 1999

4(b)     Form of Application. Incorporated herein by reference to Registration
         Statement on Form N-4 for Lincoln Benefit Life Variable Annuity Account
         (File No. 333-82427, 811-07924) filed July 8, 1999

5(a)     Opinion and Consent of Counsel regarding legality. Incorporated herein
         by reference to Post-Effective Amendment to Form S-3 on Form S-1 for
         Lincoln Benefit Life Variable Annuity Account (File No. 333-88045)
         filed April 6,2000.

5(b)     Opinion and Consent of Counsel regarding legality. Incorporated herein
         by reference to Registrant's Form S-3 Registration Statement (File No.
         333-158181) dated March 24, 2009.

5(c)     Opinion and Consent of Counsel regarding legality. (Incorporated by
         reference to Registrant's Form S-1 Registration Statement (File No.
         333-180371) dated March 27, 2012)

8        None

9        None

10       Material Contracts

10.1     Form of Investment Management Agreement among Allstate Investments,
         LLC, Allstate Insurance Company, The Allstate Corporation and certain
         affiliates effective January 1, 2007. Incorporated herein by reference
         to Exhibit 10.12 to Allstate Life Insurance Company's Annual Report on
         Form 10-K for 2007. (SEC File No. 000-31248)

10.2     Form of Tax Sharing Agreement by and among The Allstate Corporation and
         certain affiliates dated as of November 12, 1996. Incorporated herein
         by reference to Exhibit 10.24 to Allstate Life Insurance Company's
         Annual Report on Form 10-K for 2007. (SEC File No. 000-31248)

10.3     Supplemental Intercompany Tax Sharing Agreement between Allstate Life
         Insurance Company and Lincoln Benefit Life Company effective
         December 21, 2000. Incorporated herein by reference to Exhibit 10.3 to
         Lincoln Benefit Life Company's Annual Report on Form 10-K for the year
         ended December 31, 2008. (SEC File No. 333-111553)

10.4     Form of Amended and Restated Service and Expense Agreement between
         Allstate Insurance Company, The Allstate Corporation and certain
         affiliates effective January 1, 2004. Incorporated herein by reference
         to Exhibit 10.1 to Allstate Life Insurance Company's Annual Report on
         Form 10-K for 2007. (SEC File No. 000-31248)

10.5     Form of Amendment No. 1 effective January 1, 2009 to Amended and
         Restated Service and Expense Agreement between Allstate Insurance
         Company, The Allstate Corporation and certain affiliates dated as of
         January 1, 2004. Incorporated herein by reference to Exhibit 10.1 to
         Allstate Life Insurance Company's Current Report on Form 8-K filed
         February 17, 2010. (SEC File No. 000-31248)

10.6     Letter Agreement among Allstate Insurance Company, The Allstate
         Corporation and certain affiliates, including Lincoln Benefit Life
         Company, effective December 1, 2007. Incorporated herein by reference
         to Exhibit 10.1 to Allstate Life Insurance Company's Current Report on
         Form 8-K filed May 23, 2008. (SEC File No. 000-31248)

10.7     Administrative Services Agreement between Lincoln Benefit Life Company
         and Allstate Life Insurance Company effective June 1, 2006.
         Incorporated herein by reference to Exhibit 10.1 to Lincoln Benefit
         Life Company's Quarterly Report on Form 10-Q for the quarter ended
         June 30, 2006. (SEC File No. 333-111553)

10.8     Principal Underwriting Agreement by and among Lincoln Benefit Life
         Company and Allstate Distributors, LLC (ALFS, Inc., merged with and
         into Allstate Distributors, LLC effective September 1, 2011) effective
         November 25, 1998. (Variable Universal Life Account). Incorporated
         herein by reference to Exhibit 10.6 to Lincoln Benefit Life Company's
         Quarterly Report on Form 10-Q for quarter ended June 30, 2002. (SEC
         File No. 333-66452)

10.9     Amended and Restated Principal Underwriting Agreement between Lincoln
         Benefit Life Company and Allstate Distributors, LLC (ALFS, Inc.
         merged with and into Allstate Distributors, LLC effective September 1,
         2011) effective June 1, 2006. Incorporated herein by reference to
         Exhibit 10.1 to Lincoln Benefit Life Company's Current Report on
         Form 8-K filed December 20, 2007. (SEC File No. 333-111553)

10.10    Selling Agreement between Lincoln Benefit Life Company, Allstate
         Distributors, LLC (ALFS, Inc., f/k/a Allstate Financial Services,Inc.,
         merged with and into Allstate Distributors, LLC effective September 1,
         2011) and Allstate Financial Services, LLC (f/k/a LSA Securities, Inc.)
         effective August 2, 1999. Incorporated herein by reference to Exhibit
         10.8 to Allstate Life Insurance Company's Annual Report on Form 10-K
         for 2003. (SEC File No. 000-31248)

10.11    Coinsurance Agreement between Allstate Life Insurance Company and
         Lincoln Benefit Life Company, effective December 31, 2001. Incorporated
         herein by reference to Exhibit 10.11 to Lincoln Benefit Life Company's
         Quarterly Report on Form 10-Q for quarter ended June 30, 2002. (SEC
         File No. 333-66452)

10.12    Modified Coinsurance Agreement between Allstate Life Insurance Company
         and Lincoln Benefit Life Company, effective December 31, 2001.
         Incorporated herein by reference to Exhibit 10.12 to Lincoln Benefit
         Life Company's Quarterly Report on Form 10-Q for quarter ended June 30,
         2002. (SEC File No. 333-111553)

10.13    Modified Coinsurance Agreement between Allstate Life Insurance Company
         and Lincoln Benefit Life Company, effective December 31, 2001.
         Incorporated herein by reference to Exhibit 10.13 to Lincoln Benefit
         Life Company's Quarterly Report on Form 10-Q for quarter ended June 30,
         2002. (SEC File No. 333-66452)

10.14    Intercompany Loan Agreement between The Allstate Corporation, Allstate
         Life Insurance Company, Lincoln Benefit Life Company and other certain
         subsidiaries of The Allstate Corporation dated February 1, 1996.
         Incorporated herein by reference to Exhibit 10.24 of Allstate Life
         Insurance Company's Annual Report on Form 10-K for 2006.
         (SEC File No. 000-31248)

10.15    Form of Service Agreement between Lincoln Benefit Life Company and
         Allstate Assignment Company effective June 25, 2001. Incorporated
         herein byreference to Exhibit 10.22 of Lincoln Benefit Life Company's
         Annual Report on Form 10-K for 2007. (SEC File No. 333-111553)

10.16    First Amendment dated December 1, 2007 to Service Agreement between
         Lincoln Benefit Life Company and Allstate Assignment Company dated as
         of June 25, 2001.Incorporated herein by reference to Exhibit 10.23 of
         Lincoln Benefit Life Company's Annual Report on Form 10-K for 2007.
         (SEC File No.333-111553)

10.17    Agreement for the Settlement of State and Local Tax Credits among
         Allstate Insurance Company and certain affiliates effective January 1,
         2007. Incorporated herein by reference to Exhibit 10.1 to Lincoln
         Benefit Life Company's Current Report on Form 8-K filed February 21,
         2008. (SEC File No. 333-111553)

10.18    Administrative Services Agreement between Allstate Distributors, LLC,
         (ALFS, Inc., merged with and into Allstate Distributors, LLC effective
         September 1, 2011) Allstate Life Insurance Company, Lincoln Benefit
         Life Company and Charter National Life Insurance Company effective
         January 1, 2000. Incorporated herein by reference to Exhibit 10.22 to
         Lincoln Benefit Life Company's Annual Report on Form 10-K for the year
         ended December 31, 2008. (SEC File No. 333-111553)

10.19    Assignment & Delegation of Administrative Services Agreements,
         Underwriting Agreements, and Selling Agreements entered into as of
         September 1, 2011 between ALFS, Inc., Allstate Life Insurance Company,
         Allstate Life Insurance Company of New York, Allstate Distributors,
         LLC, Charter National Life Insurance Company, Intramerica Life
         Insurance Company, Allstate Financial Services, LLC, and Lincoln
         Benefit Life Company. Incorporated herein by reference to Exhibit 10.1
         to Allstate Life Insurance Company's Current Report on Form 8-K filed
         September 1, 2011. (SEC File No. 000-31248)

10.20    Reinsurance Agreement between Lincoln Benefit Life Company and Lincoln
         Benefit Reinsurance Company effective September 30, 2012, Incorporated
         herein by reference to Exhibit 10.1 to Allstate Life Insurance
         Company's Current Report on Form 8-K filed October 3, 2012. (SEC File
         No. 000-31248)

10.21    Recapture Agreement between Allstate Life Insurance Company ("ALIC")
         and Lincoln Benefit Life Company ("LBL"), effective September 30, 2012.
         Incorporated herein by reference to Lincoln Benefit Life Company's Form
         S-1 Post-Effective Amendment No. 1 to Registration Statement filed on
         April 3, 2013. (SEC File No. 333-180371)

10.22    Voluntary Separation Agreement and Release by and between Allstate
         Insurance Company and Anurag Chandra, dated October 17, 2013. Filed
         herewith.

10.23    Voluntary Separation Agreement and Release by and between Allstate
         Insurance Company and Lawrence W. Dahl, dated August 1, 2013. Filed
         herewith.

10.24    Administrative Services Agreement by and between Lincoln Benefit Life
         Company and Allstate Life Insurance Company, effective April 1, 2014.
         Filed herewith.

10.25    Amended and Restated Reinsurance Agreement by and between Lincoln
         Benefit Life Company and Allstate Life Insurance Company, effective
         April 1, 2014.  Filed herewith.

10.26    Partial Commutation Agreement by and between Allstate Life Insurance
         Company and Lincoln Benefit Life Company, effective April 1, 2014.
         Filed herewith.

11       None

12       None

15       Not applicable.

16       Letter re: change in certifying accountant. Not applicable.

21       Subsidiaries of the registrant. Not applicable.

23       Consent of Independent Registered Public Accounting Firm. Filed
         herewith.

24       Powers of Attorney for Richard Carbone, Clive Cowdery, Ann Frohman,
         Jon Hack, Robert Stein and Grace Vandecruze. Filed herewith.

25       None

26       None

99       Experts. Filed herewith.

Exhibit List for XBRL Docs:

101.INS  XBRL Instance Document

101.SCH  XBRL Taxonomy Extension Schema

101.CAL  XBRL Taxonomy Extension Calculation Linkbase

101.DEF  XBRL Taxonomy Extension Definition Linkbase

101.LAB  XBRL Taxonomy Extension Label Linkbase

101.PRE  XBRL Taxonomy Extension Presentation Linkbase



16(b)

Financial statement schedules required by Regulation S-X (17 CFR Part 210) and
Item 11(e) of Form S-1 are included in Part I.

Item 17. Undertakings.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;

(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.

(2) That, for the determining of any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

(4) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.

(5) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:

The undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such
purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;

(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted in directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.


	Year Ended December 31,
($ in thousands)	2013			2012		2011
Revenues
Net investment income	$	10,935		$	11,590	$	11,836
Realized capital gains and losses		—			626		2,075

Income from operations before income tax expense		10,935			12,216		13,911
Income tax expense		3,825			4,273		4,861

Net income		7,110			7,943		9,050

Other comprehensive (loss) income, after-tax
Change in unrealized net capital gains and losses		(9,933	)		247		3,411

Comprehensive (loss) income	$	(2,823	)	$	8,190	$	12,461


	December 31,
($ in thousands, except par value data)	2013		2012
Assets
Investments
Fixed income securities, at fair value (amortized cost $284,928 and $309,324)	$	290,882	$	330,559
Short-term, at fair value (amortized cost $55,959 and $24,202)		55,959		24,203

Total investments		346,841		354,762
Cash		5,100		13,073
Reinsurance recoverable from Allstate Life Insurance Company and affiliate		14,518,174		15,553,945
Reinsurance recoverable from non-affiliates		2,190,417		2,147,496
Receivable from affiliates, net		66		—
Other assets		83,669		87,044
Separate Accounts		1,700,566		1,625,669

Total assets	$	18,844,833	$	19,781,989

Liabilities
Contractholder funds	$	13,124,115	$	14,255,844
Reserve for life-contingent contract benefits		3,557,411		3,424,679
Unearned premiums		11,916		13,410
Deferred income taxes		2,564		7,990
Payable to affiliates, net		—		17,189
Current income taxes payable		3,906		4,158
Other liabilities and accrued expenses		100,660		86,532
Separate Accounts		1,700,566		1,625,669

Total liabilities		18,501,138		19,435,471

Commitments and Contingent Liabilities (Note 9)

Shareholder’s Equity
Common stock, $100 par value, 30 thousand shares authorized, 25 thousand shares issued and outstanding		2,500		2,500
Additional capital paid-in		180,000		180,000
Retained income		157,325		150,215
Accumulated other comprehensive income:
Unrealized net capital gains and losses		3,870		13,803

Total accumulated other comprehensive income		3,870		13,803

Total shareholder’s equity		343,695		346,518

Total liabilities and shareholder’s equity	$	18,844,833	$	19,781,989


	Year Ended December 31,
($ in thousands)	2013			2012		2011
Common stock	$	2,500		$	2,500	$	2,500

Additional capital paid-in		180,000			180,000		180,000

Retained income
Balance, beginning of year		150,215			142,272		133,222
Net income		7,110			7,943		9,050

Balance, end of year		157,325			150,215		142,272

Accumulated other comprehensive income
Balance, beginning of year		13,803			13,556		10,145
Change in unrealized net capital gains and losses		(9,933	)		247		3,411

Balance, end of year		3,870			13,803		13,556

Total shareholder’s equity	$	343,695		$	346,518	$	338,328


	Year Ended December 31,
($ in thousands)	2013			2012			2011
Cash flows from operating activities
Net income	$	7,110		$	7,943		$	9,050
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and other non-cash items		630			781			1,175
Realized capital gains and losses		—			(626	)		(2,075	)
Changes in:
Policy benefits and other insurance reserves		(6,147	)		14,398			(22,072	)
Income taxes		(329	)		(516	)		476
Receivable from/payable to affiliates, net		(17,255	)		25,752			(13,494	)
Other operating assets and liabilities		16,007			(32,761	)		37,802

Net cash provided by operating activities		16			14,971			10,862

Cash flows from investing activities
Proceeds from sales of fixed income securities		9,170			25,367			44,880
Collections on fixed income securities		53,475			29,154			25,268
Purchases of fixed income securities		(38,896	)		(51,209	)		(77,175	)
Change in short-term investments, net		(31,738	)		(11,216	)		(1,379	)

Net cash used in investing activities		(7,989	)		(7,904	)		(8,406	)

Net (decrease) increase in cash		(7,973	)		7,067			2,456
Cash at beginning of year		13,073			6,006			3,550

Cash at end of year	$	5,100		$	13,073		$	6,006


($ in thousands)	2013		2012		2011
Premiums and contract charges	$	962,576	$	908,459	$	833,149
Interest credited to contractholder funds, contract benefits and expenses		1,505,010		1,369,305		1,408,953


		Page

Item 3(c)	Risk Factors		1
Item 11(a)	Description of Business		9
Item 11(b)	Description of Property		10
Item 11(c)	Legal Proceedings		10
Item 11(e)	Financial Statements and Notes to Financial Statements		10
Item 11(f)	Selected Financial Data		43
Item 11(h)	Management’s Discussion and Analysis of Financial Condition and Results of Operations		44
Item 11(i)	Changes in or Disagreements with Accountants		57
Item 11(j)	Quantitative and Qualitative Disclosures About Market Risk		57
Item 11(k)	Directors and Executive Officers		57
Item 11(l)	Executive Compensation		58
Item 11(m)	Security Ownership of Certain Beneficial Owners and Management		87
Item 11(n)	Transactions with Related Persons, Promoters and Certain Control Persons		89
Other Information			92


	Amortized cost		Gross unrealized					Fair value
($ in thousands)	Amortized cost		Gains		Losses			Fair value
December 31, 2013
U.S. government and agencies	$	70,790	$	3,113	$	(57	)	$	73,846
Municipal		2,499		270		—			2,769
Corporate		190,186		5,784		(3,993	)		191,977
Foreign government		4,999		165		—			5,164
RMBS		13,866		584		—			14,450
CMBS		2,588		88		—			2,676

Total fixed income securities	$	284,928	$	10,004	$	(4,050	)	$	290,882

December 31, 2012
U.S. government and agencies	$	86,428	$	5,659	$	—		$	92,087
Municipal		2,499		401		—			2,900
Corporate		178,824		13,173		(29	)		191,968
Foreign government		4,999		265		—			5,264
RMBS		28,239		1,498		—			29,737
CMBS		8,335		268		—			8,603

Total fixed income securities	$	309,324	$	21,264	$	(29	)	$	330,559


($ in thousands)	Amortized cost		Fair value
Due in one year or less	$	35,518	$	35,883
Due after one year through five years		110,661		116,264
Due after five years through ten years		111,316		111,036
Due after ten years		10,979		10,573

		268,474		273,756
RMBS and CMBS		16,454		17,126

Total	$	284,928	$	290,882


	Fair Value		Gross unrealized					Unrealized net gains
($ in thousands)	Fair Value		Gains		Losses			Unrealized net gains
December 31, 2013
Fixed income securities	$	290,882	$	10,004	$	(4,050	)	$	5,954
Short-term investments		55,959		1		(1	)		—

Unrealized net capital gains and losses, pre-tax									5,954
Deferred income taxes									(2,084	)

Unrealized net capital gains and losses, after-tax								$	3,870


	Fair value		Gross unrealized					Unrealized net gains
December 31, 2012	Fair value		Gains		Losses			Unrealized net gains
Fixed income securities	$	330,559	$	21,264	$	(29	)	$	21,235
Short-term investments		24,203		1		—			1

Unrealized net capital gains and losses, pre-tax									21,236
Deferred income taxes									(7,433	)

Unrealized net capital gains and losses, after-tax								$	13,803


	Less than 12 months							12 months or more							Total unrealized losses
($ in thousands)	Number of issues		Fair value		Unrealized losses			Number of issues		Fair value		Unrealized losses			Total unrealized losses
December 31, 2013
U.S. government and agencies		1	$	4,942	$	(57	)		—	$	—	$	—		$	(57	)
Corporate		23		75,754		(3,795	)		1		1,770		(198	)		(3,993	)

Total		24	$	80,696	$	(3,852	)		1	$	1,770	$	(198	)	$	(4,050	)

December 31, 2012
Corporate		1	$	1,936	$	(29	)		—	$	—	$	—		$	(29	)

Total		1	$	1,936	$	(29	)		—	$	—	$	—		$	(29	)


($ in thousands)	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Balance as of December 31, 2013
Assets:
Fixed income securities:
U.S. government and agencies	$	27,520		$	46,326		$	—		$	73,846
Municipal		—			2,769			—			2,769
Corporate		—			191,977			—			191,977
Foreign government		—			5,164			—			5,164
RMBS		—			14,450			—			14,450
CMBS		—			2,676			—			2,676

Total fixed income securities		27,520			263,362			—			290,882
Short-term investments		20,764			35,195			—			55,959
Separate account assets		1,700,566			—			—			1,700,566

Total assets at fair value	$	1,748,850		$	298,557		$	—		$	2,047,407

% of total assets at fair value		85.4	%		14.6	%		—	%		100.0	%

Liabilities:
Contractholder funds: Derivatives embedded in life and annuity contracts	$	—		$	—		$	(267,859	)	$	(267,859	)

Total liabilities at fair value	$	—		$	—		$	(267,859	)	$	(267,859	)

% of total liabilities at fair value		—	%		—	%		100.0	%		100.0	%


($ in thousands)	Fair value			Valuation technique	Unobservable input	Range			Weighted average
December 31, 2013
Derivatives embedded in life and annuity contracts—Equity-indexed and forward starting options	$	(258,415	)	Stochastic cash flow model	Projected option cost		1.0 – 2.0	%		1.91	%

December 31, 2012
Derivatives embedded in life and annuity contracts—Equity-indexed and forward starting options	$	(295,305	)	Stochastic cash flow model	Projected option cost		1.0 – 2.0	%		1.96	%


($ in thousands)				Total gains (losses) included in:
($ in thousands)	Balance as of December 31, 2012			Net income⁽¹⁾		OCI			Transfers into Level 3			Transfers out of Level 3
Assets
Fixed income securities:
Corporate	$	312		$	—	$	—		$	—		$	—

Total recurring Level 3 assets	$	312		$	—	$	—		$	—		$	—


Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	(314,926	)	$	43,244	$	—		$	—		$	—

Total recurring Level 3 liabilities	$	(314,926	)	$	43,244	$	—		$	—		$	—


	Purchases			Sales		Issues			Settlements			Balance as of December 31, 2013
Assets
Fixed income securities:
Corporate	$	—		$	—	$	—		$	(312	)	$	—

Total recurring Level 3 assets	$	—		$	—	$	—		$	(312	)	$	—


Liabilities
Contractholder funds: Derivatives embedded in life and annuity contracts	$	—		$	—	$	(6,621	)	$	10,444		$	(267,859	)

Total recurring Level 3 liabilities	$	—		$	—	$	(6,621	)	$	10,444		$	(267,859	)


Product	Mortality	Interest rate	Estimation method
Traditional life insurance	Actual company experience plus loading	Interest rate assumptions range from 2.5% to 8.0%	Net level premium reserve method using the Company’s withdrawal experience rates; includes reserves for unpaid claims

Immediate fixed annuities	1983 individual annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications	Interest rate assumptions range from 0% to 8.8%	Present value of expected future benefits based on historical experience

Accident and health insurance	Actual company experience plus loading	Interest rate assumptions range from 4.0% to 5.3%	Unearned premium; additional contract reserves for mortality risk and unpaid claims

Other: Variable annuity guaranteed minimum death benefits	Annuity 2000 mortality table with internal modifications	Interest rate assumptions range from 4.0% to 5.8%	Projected benefit ratio applied to cumulative assessments


Product	Interest rate	Withdrawal/surrender charges

Interest-sensitive life insurance	Interest rates credited range from 0% to 10.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 2.6% to 6.0% for all other products	Either a percentage of account balance or dollar amount grading off generally over 20 years

Fixed annuities	Interest rates credited range from 0% to 8.8% for immediate annuities; 0% to 7.0% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 1.0% to 6.0% for all other products	Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 18.7% of fixed annuities are subject to market value adjustment for discretionary withdrawals.

Other investment contracts: Guaranteed minimum income, accumulation and withdrawal benefits on variable and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities	Interest rates used in establishing reserves range from 1.7% to 10.3%	Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract


	December 31,
($ in millions)	2013		2012
In the event of death
Separate account value	$	877.0	$	926.1
Net amount at risk⁽¹⁾	$	63.2	$	101.6
Average attained age of contractholders		59 years		59 years

At annuitization (includes income benefit guarantees)
Separate account value	$	170.5	$	168.1
Net amount at risk⁽²⁾	$	16.6	$	29.6
Weighted average waiting period until annuitization options available		None		1 year

For cumulative periodic withdrawals
Separate account value	$	21.8	$	24.8
Net amount at risk⁽³⁾	$	0.1	$	0.2

Accumulation at specified dates
Separate account value	$	151.1	$	172.0
Net amount at risk⁽⁴⁾	$	7.3	$	13.7
Weighted average waiting period until guarantee date		6 years		7 years


	2013
($ in thousands)	Pre-tax			Tax			After-tax
Unrealized net holding losses arising during the period	$	(15,281	)	$	5,349		$	(9,932	)
Less: reclassification adjustment of realized capital gains and losses		1			—			1

Unrealized net capital gains and losses		(15,282	)		5,349			(9,933	)

Other comprehensive loss	$	(15,282	)	$	5,349		$	(9,933	)


	2012
	Pre-tax			Tax			After-tax
Unrealized net holding gains arising during the period	$	977		$	(343	)	$	634
Less: reclassification adjustment of realized capital gains and losses		596			(209	)		387

Unrealized net capital gains and losses		381			(134	)		247

Other comprehensive income	$	381		$	(134	)	$	247


	2011
	Pre-tax			Tax			After-tax
Unrealized net holding gains arising during the period	$	7,322		$	(2,562	)	$	4,760
Less: reclassification adjustment of realized capital gains and losses		2,075			(726	)		1,349

Unrealized net capital gains and losses		5,247			(1,836	)		3,411

Other comprehensive income	$	5,247		$	(1,836	)	$	3,411


($ in thousands)	Gross amount		Ceded to other companies⁽¹⁾		Assumed from other companies		Net amount		Percentage of amount assumed to net
Year ended December 31, 2013
Life insurance in force	$	389,941,404	$	395,421,202	$	5,479,798	$	—		—	%

Premiums and contract charges:
Life and annuities	$	1,250,623	$	1,257,453	$	6,830	$	—		—	%
Accident and health insurance		80,974		80,974		—		—		—	%

	$	1,331,597	$	1,338,427	$	6,830	$	—		—	%

Year ended December 31, 2012
Life insurance in force	$	378,467,115	$	384,205,939	$	5,738,824	$	—		—	%

Premiums and contract charges:
Life and annuities	$	1,201,592	$	1,208,376	$	6,784	$	—		—	%
Accident and health insurance		97,272		97,272		—		—		—	%

	$	1,298,864	$	1,305,648	$	6,784	$	—		—	%

Year ended December 31, 2011
Life insurance in force	$	364,469,564	$	370,439,179	$	5,969,615	$	—		—	%

Premiums and contract charges:
Life and annuities	$	1,156,434	$	1,163,491	$	7,057	$	—		—	%
Accident and health insurance		109,830		109,830		—		—		—	%

	$	1,266,264	$	1,273,321	$	7,057	$	—		—	%


($ in thousands)	Fair value		Percent to total
Fair value based on internal sources	$	12,570		3.6	%
Fair value based on external sources⁽¹⁾		334,271		96.4

Total	$	346,841		100.0	%


($ in thousands)	Fair value as of December 31, 2013		Percent to total investments			Fair value as of December 31, 2012		Percent to total investments
U.S. government and agencies	$	73,846		21.3	%	$	92,087		26.0	%
Municipal		2,769		0.8			2,900		0.8
Corporate		191,977		55.3			191,968		54.1
Foreign government		5,164		1.5			5,264		1.5
Residential mortgage-backed securities (“RMBS”)		14,450		4.2			29,737		8.4
Commercial mortgage-backed securities (“CMBS”)		2,676		0.8			8,603		2.4

Total fixed income securities	$	290,882		83.9	%	$	330,559		93.2	%


	Aaa					Aa				A
($ in thousands)	Fair value		Unrealized gain/(loss)			Fair value		Unrealized gain/(loss)		Fair value		Unrealized gain/(loss)
U.S. government and agencies	$	73,846	$	3,056		$	—	$	—	$	—	$	—
Municipal		—		—			2,769		270		—		—
Corporate
Public		1,527		30			25,324		403		84,637		2,378
Privately placed		14,866		(132	)		2,015		16		—		—
Foreign government		—		—			5,164		165		—		—
RMBS
U.S. government sponsored entities (“U.S. Agency”)		10,644		510			—		—		—		—
Prime residential mortgage-backed securities (“Prime”)		827		11			—		—		345		6
Alt-A residential mortgage-backed securities (“Alt-A”)		—		—			—		—		—		—
CMBS		590		4			—		—		—		—

Total fixed income securities	$	102,300	$	3,479		$	35,272	$	854	$	84,982	$	2,384


	Baa					Total
	Fair value		Unrealized gain/(loss)			Fair value		Unrealized gain/(loss)
U.S. government and agencies	$	—	$	—		$	73,846	$	3,056
Municipal		—		—			2,769		270
Corporate
Public		57,830		(653	)		169,318		2,158
Privately placed		5,778		(251	)		22,659		(367	)
Foreign government		—		—			5,164		165
RMBS
U.S. Agency		—		—			10,644		510
Prime		1,165		18			2,337		35
Alt-A		1,469		39			1,469		39
CMBS		2,086		84			2,676		88

Total fixed income securities	$	68,328	$	(763	)	$	290,882	$	5,954


	Element	Key Characteristics	Why Allstate Pays This Element	How Allstate Determines Amount

Fixed	Base salary	Fixed compensation component payable in cash. Reviewed annually and adjusted when appropriate.	Provide a base level of competitive cash compensation for executive talent.	Experience, job scope, market data, and individual performance.



Variable	Annual incentive awards	Variable compensation component payable in cash based on performance against annually established goals and assessment of individual performance.	Motivate and reward executives for performance on key strategic, operational, and financial measures during the year.	A corporate-wide funding pool is based on performance on three measures: • Adjusted Operating Income • Total Premiums • Net Investment Income Individual awards are based on job scope, market data, and individual performance.
	Restricted stock units	RSUs vest over four years; 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates.	Align the interests of executives with long-term shareholder value and serve to retain executive talent.	Job scope, market data, and individual performance.
	Performance stock awards	PSAs vest on the third anniversary of the grant date.	Align the interests of senior executives with long-term stockholder value and serve to retain executive talent.	Target awards based on job scope, market data, and individual performance. Earned awards based on Allstate performance on Annual Adjusted Operating Income Return on Equity with a requirement of positive Net Income for any payout above target.
	Stock options	Nonqualified stock options that expire in ten years and become exercisable over four years; 50% on the second anniversary of the grant date and 25% on each of the third and fourth anniversary dates.	Align the interests of executives with long-term stockholder value and serve to retain executive talent.	Job scope, market data, and individual performance.


Company Name	Revenue ($ in billions)	Market Cap ($ in billions)	Assets ($ in billions)	Premiums ($ in billions)	Property and Casualty Insurance Products	Life Insurance and Financial Products
ACE Ltd.	19.2	35.2	94.5	16.6	ü
AFLAC Inc.	23.9	30.7	121.3	20.1		ü
The Chubb Corporation	13.9	24.0	50.4	12.1	ü
The Hartford Financial Services Group, Inc.	26.2	16.4	277.9	15.4	ü	ü
Lincoln National Corporation	12.0	13.6	236.9	6.8		ü
Manulife Financial Corporation	16.0	34.3	454.2	16.0		ü
MetLife Inc.	68.2	60.5	885.3	47.1	ü	ü
The Progressive Corporation	18.2	16.2	24.4	17.1	ü
Prudential Financial, Inc.	41.5	42.7	731.8	31.7		ü
The Travelers Companies, Inc.	26.2	32.0	103.8	22.6	ü
Allstate	34.5	24.5	123.5	30.0	ü	ü
Allstate Ranking Relative to Peers:
—Property and Casualty Insurance	2 of 7	4 of 7	3 of 7	2 of 7
—Life Insurance and Financial Products	3 of 7	5 of 7	6 of 7	3 of 7
—All Peer Insurance Companies	3 of 11	7 of 11	6 of 11	3 of 11


2013 Annual Cash Incentive Award Performance Measures
Measure	Threshold			Target		Maximum		Actual Results
Adjusted Operating Income (in millions)	$	1,500		$	1,900	$	2,300	$2,315
Total Premiums (in millions)	$	29,600		$	30,000	$	30,400	$30,510
Net Investment Income (in millions)	$	3,400		$	3,600	$	3,750	$3,941
Payout Percentages
CEO		50%	*		100%		200%	200% payout
Other Named Executives		50%	*		100%		250%	250% payout


Performance Stock Awards Ranges of Performance
Annual Adjusted Operating Income Return on Equity	Threshold	Target		Maximum	Actual Results
2012-2014 PSA Performance Cycle
Measurement Period 2012	4.0%	10.0%		11.5%	12.3%
Measurement Period 2013	4.5%	10.5%		12.25%	13.1%
Measurement Period 2014	5.0%	11.0%		13.0%	To be determined in 2015
2013-2015 PSA Performance Cycle
Measurement Period 2013	6.0%	11.0%		12.5%	13.4%
Measurement Period 2014	6.0%	12.0%		13.5%	To be determined in 2015
Measurement Period 2015	6.0%	13.0%		14.5%	To be determined in 2016
Payout	0%	100%		200%


			Subject to positive net income hurdle


Name	Guideline	Status
Mr. Civgin	3x salary	ü Meets guideline
Mr. Merten	2x salary	Must hold 75% of net after-tax shares until guideline is met
Mr. Chandra	2x salary	Must hold 75% of net after-tax shares until guideline is met⁽¹⁾
Mr. Dahl	—	—
Mr. Kavanaugh	2x salary	Must hold 75% of net after-tax shares until guideline is met
Mr. Miller	2x salary	üMeets guideline


What Counts Toward the Guideline		What Does Not Count Toward the Guideline
• Allstate shares owned personally		• Unexercised stock options

• Shares held in the Allstate 401(k) Savings Plan		• Performance stock awards

• Restricted stock units


NAME AND PRINCIPAL POSITION⁽¹⁾	YEAR		SALARY ($)		BONUS ($)			STOCK AWARDS ($)⁽²⁾		OPTION AWARDS ($)⁽³⁾		NON-EQUITY INCENTIVE PLAN COMPENSATION ($)		CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($)⁽⁴⁾			ALL OTHER COMPENSATION ($)⁽⁵⁾		TOTAL ($)
Don Civgin
(Chairman of the
Board and Chief		2013		186,200		—			279,316		279,296		532,000		18,466	⁽⁷⁾		7,422		1,302,700
Executive Officer)		2012		143,520		—			197,594		197,598		416,000		10,105			5,887		970,704
Jesse E. Merten
(Senior Vice President
and Chief Financial		2013		138,303		—			62,577		62,555		338,800		7,926	⁽⁸⁾		9,358		619,519
Officer)		2012		77,526		—			35,032		35,018		96,695		0			14,188		258,459
Anurag Chandra		2013		174,798		149,408			179,110		179,095		0		11,317	⁽¹⁰⁾		17,602		711,330
(Former Executive Vice		2012		206,140		55,875	⁽⁶⁾		201,159		201,153		402,300		11,798			11,965		1,034,515
President)		2011		178,615		53,750	⁽⁶⁾		135,435		251,552		161,250		0			13,740		794,342
Lawrence W. Dahl		2013		188,462					48,985		49,005		0		0	⁽¹¹⁾		720,050		1,006,502
(Former President and		2012		280,000					45,005		44,997		195,888		362,610			19,450		947,950
Chief Operating Officer)		2011		280,000					47,991		47,996		100,000		258,501			15,100		749,588
Wilford J. Kavanaugh		2013		117,128		—			82,911		30,228		146,410		2,352	⁽¹²⁾		9,970		388,999
(Senior Vice President)		2012		47,535		—			16,436		0		43,918		0			14,916		122,805
Harry Miller
(Senior Vice President and Chief Risk Officer)		2013		174,152		—			118,586		39,525		266,200		10,586	⁽⁹⁾		12,643		621,692


Name	401(k) Match⁽¹⁾		Other⁽²⁾		Total All Other Compensation
Mr. Civgin		1,899		5,523		7,422
Mr. Merten		3,456		5,902		9,358
Mr. Chandra		2,628		14,975		17,603
Mr. Dahl		0		720,050		720,050
Mr. Kavanaugh		3,456		6,515		9,971
Mr. Miller		3,456		9,187		12,643


				Estimated Future Payouts Under Non-Equity Incentive Plan Awards⁽²⁾						Estimated Future Payouts Under Equity Incentive Plan Awards⁽³⁾						All Other Stock Awards: Number of Shares of Stock Options (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards ($/Shr)⁽⁴⁾		Grant Date Fair Value ($)⁽⁵⁾
Name	Grant Date		Plan Name	Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)						Exercise or Base Price of Option Awards ($/Shr)⁽⁴⁾		Stock Awards		Option Awards
Mr. Civgin		—	Annual cash incentive		116,375		232,750		1,451,961
		2/12/2013	Performance stock awards								0		6,124		12,248								279,316
		2/12/2013	Stock options																23,333		45.61				279,296
Mr. Merten		—	Annual cash incentive		34,576		69,151		172,879
		2/12/2013	Restricted Stock Units														1,372						62,577
		2/12/2013	Stock options																5,226		45.61				62,555
Mr. Chandra		—	Annual cash incentive		57,059		114,117		285,293
		2/12/2013	Performance stock awards⁽⁶⁾								0		3,927		7,854								179,110
		2/12/2013	Stock options⁽⁷⁾																14,962		45.61				179,095
Mr. Dahl			Annual cash incentive		0		0		0
		2/12/2013	Restricted Stock Units														1,074						48,985
		2/12/2013	Stock options																4,094		45.61				49,005
Mr. Kavanaugh		—	Annual cash incentive		29,282		58,564		146,410
		1/2/2013	Restricted Stock Units														94						3,869
		2/12/2013	Restricted Stock Units														1,733						79,042
		1/2/2013	Stock options																326		41.16				3,870
		2/12/2013	Stock options																2,202		45.61				26,358
Mr. Miller		—	Annual cash incentive		43,538		87,076		217,691
		2/12/2013	Restricted Stock Units														2,600						118,586
		2/12/2013	Stock options																3,302		45.61				39,525


Option Awards⁽¹⁾											Stock Awards
Name	Option Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable⁽²⁾		Number of Securities Underlying Unexercised Options (#) Unexercisable⁽³⁾		Option Exercise Price ($)		Option Expiration Date		Stock Award Grant Date		Number of Shares or Units of Stock That Have Not Vested (#)⁽⁴⁾		Market Value of Shares or Units of Stock That Have Not Vested ($)⁽⁵⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#)⁽⁶⁾		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights that Have Not Vested ($)⁽⁵⁾
Mr. Civgin		Sep. 08, 2008		17,290		0		46.48		Sep. 08. 2018
		Feb. 22, 2010		22,333		7,444		31.41		Feb. 22, 2020		Feb. 22, 2010		1,264		68,939
		Feb. 22, 2011		15,341		15,341		31.74		Feb. 22, 2021		Feb. 22, 2011		2,493		135,968
		Feb. 21, 2012				29,146		31.56		Feb. 21, 2022		Mar. 06, 2012		10,869		592,795		2,717		148,185
		Feb. 12, 2013				23,333		45.61		Feb. 12, 2023		Feb. 12, 2013		4,082		222,632		4,083		222,687
																			Aggregate Market Value
																				1,391,206
Mr. Merten		Feb. 21, 2012		0		6,908		31.56		Feb. 21, 2022		Feb. 21, 2012		1,898		103,517
		Feb. 12, 2013		0		5,226		45.61		Feb. 12, 2023		Feb. 12, 2013		1,372		74,829
																			Aggregate Market Value
																				178,346
Mr. Chandra		Feb. 22, 2011		7,556		11,236		31.74		Feb. 22, 2021		Feb. 22, 2011		1,826		99,590
		Feb. 21, 2012		0		19,100		31.56		Feb. 21, 2022		Mar. 06, 2012		7,122		388,434		1,781		97,136
		Feb. 12, 2013		0		14,962		45.61		Feb. 12, 2023		Feb. 12, 2013		2,617		142,731		2,618		142,786
																			Aggregate Market Value
																				870,677
Mr. Dahl		—		—		—		—		—		—		—		—		—		—
Mr. Kavanaugh												Jun. 01, 2012		805		43,905
		Jan. 02, 2013		0		326		41.16		Jan. 02, 2023		Jan. 02, 2013		94		5,127
		Feb. 12, 2013		0		2,202		45.61		Feb. 12, 2023		Feb. 12, 2013		1,733		94,518
																			Aggregate Market Value
																				143,550
Mr. Miller		May 02, 2011		1,195		1,196		33.88		May 02, 2021		May 02, 2011		1,072		58,467
		Feb. 21, 2012		0		4,271		31.56		Feb. 21, 2022		Feb. 21, 2012		3,520		191,981
		Feb. 12, 2013		0		3,302		45.61		Feb. 12, 2023		Feb. 12, 2013		2,600		141,804
																			Aggregate Market Value
																				392,252


Name	Plan Name	Number of Years Credited Service (#)		Present Value of Accumulated Benefit⁽¹⁾⁽²⁾($)		Payments During Last Fiscal Year ($)
Mr. Civgin	ARP		5.3		7,234		0
	SRIP		5.3		39,197		0
Mr. Merten	ARP		2.0		3,237		0
	SRIP		2.0		4,689		0
Mr. Chandra	ARP		3.0		4,781		0
	SRIP		3.0		16,249		0
Mr. Dahl	ARP		26.6		858,831		0
	SRIP		26.6		675,296		0
Mr. Kavanaugh	ARP		1.8		665		0
	SRIP		1.8		1,687		0
Mr. Miller	ARP		2.8		3,767		0
	SRIP		2.8		10,303		0


Name	Plan Name	Lump Sum Amount ($)
Mr. Civgin	SRIP		40,371
Mr. Merten	SRIP		4,983
Mr. Chandra	SRIP		17,402
Mr. Dahl	SRIP		918,021
Mr. Kavanaugh	SRIP		1,776
Mr. Miller	SRIP		10,498