LIFE SERIES FUND - First Investors

enefit that We would pay in the event ofdeath of the Annuitant during theAccumulation Phase. In addition, Weassume the risk that the annual Contractcharge (discussed below) may not beadequate to cover Our administrativeexpenses. In consideration for assumingthese mortality and expense risks, Wededuct an amount equal on an annualbasis to 1.00% of the daily AccumulationUnit value of the Subaccounts.We guarantee that We will not increase themortality and expense risk charge after aContract is issued. If the charge isinsufficient to cover the actual cost of themortality and expense risks, the loss willfall on Us. Conversely, if the deductionsprove more than sufficient, the excess willbe a profit to Us. We can use any profitsresulting to Us for any business purpose,including the payment of expenses ofdistributing the Contract.OTHER CHARGESAnnual Contract ChargeWe currently deduct a $35.00 annualContract charge from the AccumulationValue on (a) the last Valuation Date ofeach Contract Year or (b) the date ofsurrender of the Contract, if earlier. Thesedeductions are made during theAccumulation Phase only. The amount ofthis charge is guaranteed for the first 10Contract Years, after which it may increaseto no more than $50.00. We make thecharge against the Accumulation Value byproportionally reducing the number ofAccumulation Units held in each of YourSubaccounts. We will not assess thischarge in any state that does not permit it.Premium Tax ChargeSome states and municipalities assesspremium taxes at the time You makePurchase Payments, surrender, or beginreceiving annuity payments.We currently pay any premium taxes thatare assessed. However, We reserve theright to deduct such premium taxes inaccordance with the terms of Your23Contract. These taxes currently range up to3.5% of Purchase Payments received byUs.Fund ExpensesThe Funds also take deductions from, andpay expenses out of, their own assets.Further information about these charges isavailable in the attached prospectus forthe Life Series Funds.FEDERAL TAX INFORMATIONThis section provides a general summaryof the federal tax law as it pertains to theContract. We believe that the Contract willqualify as a tax deferred annuity contractfor federal income tax purposes, and thefollowing summary assumes so. We do notdiscuss state or local taxes, except asnoted. The law described herein couldchange, possibly retroactively. We have theright to modify the Contract in response tochanges in the law that affect the favorabletax treatment for annuity owners. We donot offer this summary as tax advice, forwhich You should consult a qualified taxadviser.Taxation of a Contract will depend, in part,on whether the Contract is purchased aspart of a qualified retirement plan or anIRA. The following discussion does notapply to a Contract that has beenpurchased as part of an IRA or qualifiedretirement plan (a “qualified Contract”). Ifa qualified Contract is purchased, the taxtreatment of Purchase Payments, annuitypayments, surrenders and death benefitswill be governed by the tax law applicableto IRAs and qualified plans. However,generally, deductible or “before-tax”Purchase Payments for qualified Contractswill be taxed when distributed from theContract; the Contract is not forfeitable;and Contract ownership may not betransferred. Purchase Payments to aContract purchased outside of a qualifiedplan or IRA (a “non-qualified Contract”)are on an “after-tax” basis, so You onlypay federal income taxes on Your earningsand gains. Generally, these earnings and