PARTICIPATION AGREEMENT



                                  BY AND AMONG



                          AIM VARIABLE INSURANCE FUNDS,



                            A I M DISTRIBUTORS, INC.,



                     PEOPLES BENEFIT LIFE INSURANCE COMPANY,

                             ON BEHALF OF ITSELF AND

                             ITS SEPARATE ACCOUNTS,



                                       AND



                   AFSG SECURITIES CORPORATION, AS UNDERWRITER

                       OF VARIABLE CONTRACTS AND POLICIES

















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                                TABLE OF CONTENTS



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DESCRIPTION                                                                               PAGE

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

{S}         {C}                                                                            {C}

Section 1.  Available Funds..................................................................2

        1.1    Availability..................................................................2

        1.2    Addition, Deletion or Modification of Funds...................................2

        1.3    No Sales to the General Public................................................2



Section 2.  Processing Transactions..........................................................2

        2.1    Timely Pricing and Orders.....................................................2

        2.2    Timely Payments...............................................................3

        2.3    Applicable Price..............................................................3

        2.4    Dividends and Distributions...................................................4

        2.5    Book Entry....................................................................4



Section 3.  Costs and Expenses...............................................................4

        3.1    General.......................................................................4

        3.2    Parties To Cooperate..........................................................4



Section 4.  Legal Compliance.................................................................4

        4.1    Tax Laws......................................................................4

        4.2    Insurance and Certain Other Laws..............................................7

        4.3    Securities Laws...............................................................7

        4.4    Notice of Certain Proceedings and Other Circumstances.........................8

        4.5    LIFE COMPANY To Provide Documents; Information About AVIF.....................9

        4.6    AVIF To Provide Documents; Information About LIFE COMPANY....................10



Section 5.  Mixed and Shared Funding........................................................12

        5.1    General......................................................................12

        5.2    Disinterested Trustees.......................................................12

        5.3    Monitoring for Material Irreconcilable Conflicts.............................12

        5.4    Conflict Remedies............................................................13

        5.5    Notice to LIFE COMPANY.......................................................14

        5.6    Information Requested by Board of Trustees...................................14

        5.7    Compliance with SEC Rules....................................................15

        5.8    Other Requirements...........................................................15



Section 6.  Termination.....................................................................15

        6.1    Events of Termination........................................................15

        6.2    Notice Requirement for Termination...........................................16

        6.3    Funds To Remain Available....................................................17

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{TABLE}

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{S}                                                                                        {C}

        6.4    Survival of Warranties and Indemnifications..................................17

        6.5    Continuance of Agreement for Certain Purposes................................17



Section 7.  Parties To Cooperate Respecting Termination.....................................17



Section 8.  Assignment......................................................................17



Section 9.  Notices.........................................................................18



Section 10.  Voting Procedures..............................................................18



Section 11.  Foreign Tax Credits............................................................19



Section 12.  Indemnification................................................................19

        12.1   Of AVIF and AIM by LIFE COMPANY and UNDERWRITER..............................19

        12.2   Of LIFE COMPANY and UNDERWRITER by AVIF and AIM..............................21

        12.3   Effect of Notice.............................................................24

        12.4   Successors...................................................................24



Section 13.  Applicable Law.................................................................24



Section 14.  Execution in Counterparts......................................................24



Section 15.  Severability...................................................................24



Section 16.  Rights Cumulative..............................................................24



Section 17.  Headings.......................................................................25



Section 18.  Confidentiality................................................................25



Section 19.  Trademarks and Fund Names......................................................25



Section 20.  Parties to Cooperate...........................................................26

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                                        ii



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                             PARTICIPATION AGREEMENT





        THIS AGREEMENT, made and entered into as of the 1st day of February,

2001 ("Agreement"), by and among AIM Variable Insurance Funds, a Delaware trust

("AVIF"), A I M Distributors, Inc., a Delaware corporation ("AIM"), Peoples

Benefit Life Insurance Company, an Iowa life insurance company ("LIFE COMPANY"),

on behalf of itself and each of its segregated asset accounts listed in Schedule

A hereto, as the parties hereto may amend from time to time (each, an "Account,"

and collectively, the "Accounts"); and AFSG Securities Corporation, an affiliate

of LIFE COMPANY and the principal underwriter of the Contracts ("UNDERWRITER")

(collectively, the "Parties").





                                WITNESSETH THAT:



        WHEREAS, AVIF is registered with the Securities and Exchange Commission

("SEC") as an open-end management investment company under the Investment

Company Act of 1940, as amended (the "1940 Act"); and



        WHEREAS, AVIF currently consists of seventeen separate series

("Series"), shares ("Shares") of each of which are registered under the

Securities Act of 1933, as amended (the "1933 Act") and are currently sold to

one or more separate accounts of life insurance companies to fund benefits under

variable annuity contracts and variable life insurance contracts; and



        WHEREAS, AVIF will make Shares of each Series listed on Schedule A

hereto as the Parties hereto may amend from time to time (each a "Fund";

reference herein to "AVIF" includes reference to each Fund, to the extent the

context requires) available for purchase by the Accounts; and



        WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity

contracts and variable life insurance contracts ("Contracts") as set forth on

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