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RETIREMENT INCOME BUILDER VARIABLE ANNUITY
ISSUED BY
PFL LIFE INSURANCE COMPANY
Supplement Dated October 1, 1998
To The
Prospectus Dated May 1, 1998
An Amendatory Endorsement changing the way in which premium payments are
allocated during the applicable Right to Cancel Period has been added to the
Retirement Income Builder Variable Annuity. This change impacts not only the
allocation of Premium Payments, but also the amount of the refund received for
cancellations during the Right to Cancel Period and the transfer of the
investment risk. The rights and benefits under the Amendatory Endorsement are
summarized below; however, the description of the Amendatory Endorsement
contained in this prospectus supplement is qualified in its entirety by
reference to the Amendatory Endorsement itself, a copy of which is available
upon request from PFL.
All capitalized terms used herein, which are not defined herein, shall have
the same meanings as the same terms used in the accompanying prospectus.
Premium Payments allocated to subaccounts of the Mutual Fund Account will
no longer be allocated entirely to the Money Market Subaccount of the Mutual
Fund Account for the first 14 days after the Policy is issued or a longer Period
if the laws of the state where the Policy is issued require more than a 10 day
Right to Cancel Period. Instead, amounts allocated to subaccounts of the Mutual
Fund Account will be allocated directly into the designated subaccounts. YOU AS
THE OWNER OF THE POLICY, WILL NOW BEAR THE ENTIRE INVESTMENT RISK FOR ALL
AMOUNTS THAT YOU ALLOCATE TO ANY MUTUAL FUND SUBACCOUNT FROM THE DATE THE POLICY
IS ISSUED. This means that immediately after the Policy is issued, if the
mutual fund subaccount shares increase or decrease in value, then the value of
the Policy will also increase or decrease, respectively.
Also, during the Right to Cancel Period, the amount of the refund will now
be the Policy Value unless otherwise required by state law. The Policy Value
may be more or less than the money initially invested. Thus, the entire
investment risk is borne by you during the Right to Cancel Period.
For additional information regarding the Right to Cancel Period or
Allocation of Premium Payments, generally, please refer to pages 9 and 38 of
your Retirement Income Builder Variable Annuity Prospectus.
The direct allocation of premium payments and the change in the right-to-
cancel period refund may not currently be available in all states. Please
contact your financial representative or PFL Life Insurance Company at (800)
525-6205 for additional information regarding their availability in your state.
THIS PROSPECTUS SUPPLEMENT MUST BE ACCOMPANIED
BY THE PROSPECTUS FOR THE
RETIREMENT INCOME BUILDER VARIABLE ANNUITY DATED MAY 1, 1998
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The following provisions of the Retirement Income Builder Variable Annuity
Prospectus are modified as a result of this change:
1. THE FOLLOWING REPLACES THE SECTION ENTITLED "SUMMARY OF THE POLICY--PREMIUM
PAYMENTS":
A Nonqualified or Qualified Policy may be purchased with an initial
Premium Payment of at least $2,000, but there is no minimum initial Premium
Payment required for a Policy purchased and used in connection with a tax
deferred 403(b) Annuity. An Owner may make additional Premium Payments of
at least $50 each at any time before the Annuity Commencement Date. The
maximum total Premium Payments allowed without prior approval of PFL is
$1,000,000. At the time of each Premium Payment no charges or fees are
deducted, so the entire Premium Payment is invested immediately. (See
"CHARGES AND DEDUCTIONS--Surrender Charge," p. 51 and "CHARGES AND
DEDUCTIONS--Premium Taxes," p. 53.)
The Owner must allocate the initial Premium Payment among the Investment
Options (that is, among the options available under the Fixed Account
and/or the Subaccounts of the Mutual Fund Account) according to allocation
percentages in the Policy application or transmittal form. Any allocation
must be in whole percents, and the total allocation must equal 100%.
Allocations specified by the Owner will be used for Additional Premium
Payments unless the Owner requests a change in allocation. Allocations for
additional Premium Payments may be changed by sending Written Notice to
PFL's Administrative and Service Office. (See "THE POLICY--Policy
Application and Issuance of Policies--Premium Payments," p. 37.)
2. THE FOLLOWING REPLACES THE SECTION ENTITLED "SUMMARY OF THE POLICY--RIGHT
TO CANCEL PERIOD":
When the Owner receives the Policy, it should be reviewed carefully to
make sure it is what the Owner intended to purchase. The Owner may, until
the end of the period of time specified in the Policy ("RIGHT TO CANCEL
PERIOD"), examine the Policy and return it for a refund. The applicable
period will depend on the state in which the Policy is issued. In some
states the period is ten days after the Policy is delivered to the Owner.
Some states allow for a longer period to return the Policy. The amount of
the refund will also depend on the state in which the Policy is issued.
Ordinarily the amount of the refund will be the Policy Value. However, some
states may require a return of the Premium Payments, or the greater of the
Premium Payments or the Policy Value. PFL will pay the refund within seven
days after it receives Written Notice of cancellation and the returned
Policy within the applicable period. The Policy will then be deemed void.
3. THE FOLLOWING REPLACES THE EIGHTH PARAGRAPH UNDER THE SECTION ENTITLED
"POLICY APPLICATION AND ISSUANCE OF POLICIES--PREMIUM PAYMENTS":
ALLOCATION OF PREMIUM PAYMENTS. An Owner must allocate Premium Pay-
ments to one or more of the Investment Options. The Owner must specify the
initial allocation in the Policy application or transmittal form. This
allocation will be used for Additional Premium Payments unless the Owner
requests a change of allocation. All allocations must be made in whole
percentages and must total 100%. If Premium Payments are allocated to the
Dollar Cost Averaging Fixed Account, directions regarding the Subaccount(s)
to which transfers are to be made must be specified on the application or
other proper Written Request. If the Owner fails to specify how Premium
Payments are to be allocated, the Premium Payment(s) cannot be accepted.
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