<PAGE> 1
SENTINEL ADVANTAGE
Variable Annuity Contract
issued by
National Life Insurance Company
Supplement dated January 8, 1999 to Prospectus dated May 1, 1998
NATIONAL LIFE INSURANCE COMPANY
On January 1, 1999, National Life Insurance Company ("National Life")
converted from a mutual life insurance company to a stock life insurance
company, all of the outstanding stock of which is indirectly owned by a newly
formed mutual insurance holding company, National Life Holding Company. All
policyholders of National Life, including Owners of the Contracts, have become
voting members of National Life Holding Company. The contractual rights of
Owners of the Contracts have not changed.
Availability of New Fund Options.
On July 31, 1998, nine Subaccounts in the nine Funds of American
Century Variable Portfolios, Inc., Goldman Sachs Variable Insurance Trust, J. P.
Morgan Series Trust II, and Neuberger & Berman Advisers Management Trust,
described on pages 14-15 of the Prospectus, became available for allocation of
Contract Value under the Contracts.
Advertising
The total return tables on pages 37-39 of the Prospectus are amended
and supplemented as follows:
<PAGE> 2
ADJUSTED AVERAGE ANNUAL TOTAL RETURN
(assuming Enhanced Death Benefit Rider is not elected and the Contingent
Deferred Sales Charge is not deducted)
<TABLE>
<CAPTION>
1 Year to 5 Years to 10 Years to Life of Fund Date Fund
12/31/97 12/31/97 12/31/97 to 12/31/97 Effective
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alger American Small Capitalization 9.8% 11.0% N/A 17.5% 9/21/88
- --------------------------------------------------------------------------------------------------------------
Alger American Growth 24.0% 17.6% N/A 17.7% 1/9/89
- --------------------------------------------------------------------------------------------------------------
American Century VP Value 24.3% N/A N/A 21.4% 5/1/96
- --------------------------------------------------------------------------------------------------------------
American Century VP Income & Growth N/A N/A N/A 7.4% 10/30/97
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Equity Income 26.3% 18.4% 15.1% 13.0% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Growth 21.7% 16.3% 15.5% 13.9% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-High Income 16.0% 12.3% 11.2% 10.8% 9/19/85
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Overseas 10.0% 12.5% 8.0% 6.6% 1/28/87
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Index 500 30.9% 18.2% N/A 18.1% 8/27/92
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Contrafund 22.4% N/A N/A 26.4% 1/3/95
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT International Equity N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Global Income N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE Small Cap Equity N/A N/A N/A N/A 2/13/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Equity N/A N/A N/A N/A 5/1/98
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan International Opportunities 3.9% N/A N/A 8.6% 12/31/94
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan Small Company 20.8% N/A N/A 23.8% 12/31/94
- --------------------------------------------------------------------------------------------------------------
Market Street Growth 22.6% 15.3% 14.0% 12.8% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street Sentinel Growth 29.7% N/A N/A 22.0% 3/18/96
- --------------------------------------------------------------------------------------------------------------
Market Street Aggressive Growth 19.5% 10.2% N/A 12.8% 5/1/89
- --------------------------------------------------------------------------------------------------------------
Market Street Managed 19.5% 11.3% 9.4% 8.5% 12/12/85
- --------------------------------------------------------------------------------------------------------------
Market Street Bond 7.9% 5.3% 6.3% 7.2% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street International 8.1% 12.0% N/A 7.6% 11/1/91
- --------------------------------------------------------------------------------------------------------------
Market Street Money Market 3.8% 3.0% 4.0% 4.5% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Neuberger & Berman AMT Partners 29.4% N/A N/A 22.4% 3/22/94
- --------------------------------------------------------------------------------------------------------------
Strong Special Fund II, Inc. 23.7% 17.6% N/A 18.3% 5/8/92
- --------------------------------------------------------------------------------------------------------------
Strong Growth Fund II 27.9% N/A N/A 27.9% 1/1/97
- --------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Bond 0.9% 4.0% N/A 4.6% 9/1/89
- --------------------------------------------------------------------------------------------------------------
</TABLE>
ADJUSTED AVERAGE ANNUAL TOTAL RETURN
(assuming Enhanced Death Benefit Rider is not elected and the Contingent
Deferred Sales Charge is deducted)
<TABLE>
<CAPTION>
1 Year to 5 Years to 10 Years to Life of Fund Date Fund
12/31/97 12/31/97 12/31/97 to 12/31/97 Effective
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alger American Small Capitalization 2.8% 10.6% N/A 17.5% 9/21/88
- --------------------------------------------------------------------------------------------------------------
Alger American Growth 17.0% 17.3% N/A 17.7% 1/9/89
- --------------------------------------------------------------------------------------------------------------
American Century VP Value 17.3% N/A N/A 18.2% 5/1/96
- --------------------------------------------------------------------------------------------------------------
American Century VP Income & Growth N/A N/A N/A 0.4% 10/30/97
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Equity Income 19.3% 18.1% 15.1% 13.0% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Growth 14.7% 16.0% 15.5% 13.9% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-High Income 9.0% 11.9% 11.2% 10.8% 9/19/85
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Overseas 3.0% 12.1% 8.0% 6.6% 1/28/87
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Index 500 23.9% 17.9% N/A 18.0% 8/27/92
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Contrafund 15.4% N/A N/A 25.3% 1/3/95
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT International Equity N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Global Income N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE Small Cap Equity N/A N/A N/A N/A 2/13/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Equity N/A N/A N/A N/A 5/1/98
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan International Opportunities (3.1%) N/A N/A 7.5% 12/31/94
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan Small Company 13.8% N/A N/A 22.9% 12/31/94
- --------------------------------------------------------------------------------------------------------------
Market Street Growth 15.6% 14.9% 14.0% 12.8% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street Sentinel Growth 22.7% N/A N/A 19.1% 3/18/96
- --------------------------------------------------------------------------------------------------------------
Market Street Aggressive Growth 12.5% 9.8% N/A 12.8% 5/1/89
- --------------------------------------------------------------------------------------------------------------
Market Street Managed 12.5% 10.9% 9.4% 8.5% 12/12/85
- --------------------------------------------------------------------------------------------------------------
Market Street Bond 0.9% 4.8% 6.3% 7.2% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street International 1.1% 11.6% N/A 7.5% 11/1/91
- --------------------------------------------------------------------------------------------------------------
Market Street Money Market (3.2%) 2.4% 4.0% 4.5% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Neuberger & Berman AMT Partners 22.4% N/A N/A 21.8% 3/22/94
- --------------------------------------------------------------------------------------------------------------
Strong Special Fund II, Inc. 16.7% 17.3% N/A 18.2% 5/8/92
- --------------------------------------------------------------------------------------------------------------
Strong Growth Fund II 20.9% N/A N/A 20.9% 1/1/97
- --------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Bond (6.1%) 3.5% N/A 4.6% 9/1/89
- --------------------------------------------------------------------------------------------------------------
</TABLE>
ADJUSTED AVERAGE ANNUAL TOTAL RETURN
(assuming Enhanced Death Benefit Rider is elected and the Contingent Deferred
Sales Charge is not deducted)
<TABLE>
<CAPTION>
1 Year to 5 Years to 10 Years to Life of Fund Date Fund
12/31/97 12/31/97 12/31/97 to 12/31/97 Effective
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alger American Small Capitalization 9.6% 10.8% N/A 17.3% 9/21/88
- --------------------------------------------------------------------------------------------------------------
Alger American Growth 23.7% 17.4% N/A 17.5% 1/9/89
- --------------------------------------------------------------------------------------------------------------
American Century VP Value 24.0% N/A N/A 21.2% 5/1/96
- --------------------------------------------------------------------------------------------------------------
American Century VP Income & Growth N/A N/A N/A 7.4% 10/30/97
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Equity Income 26.0% 18.2% 14.8% 12.8% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Growth 21.5% 16.1% 15.3% 13.7% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-High Income 15.7% 12.1% 11.0% 10.6% 9/19/85
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Overseas 9.7% 12.2% 7.8% 6.4% 1/28/87
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Index 500 30.7% 18.0% N/A 17.9% 8/27/92
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Contrafund 22.1% N/A N/A 26.1% 1/3/95
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT International Equity N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Global Income N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE Small Cap Equity N/A N/A N/A N/A 2/13/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Equity N/A N/A N/A N/A 5/1/98
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan International Opportunities 3.7% N/A N/A 8.4% 12/31/94
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan Small Company 20.5% N/A N/A 23.5% 12/31/94
- --------------------------------------------------------------------------------------------------------------
Market Street Growth 22.3% 15.1% 13.8% 12.5% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street Sentinel Growth 29.5% N/A N/A 21.8% 3/18/96
- --------------------------------------------------------------------------------------------------------------
Market Street Aggressive Growth 19.2% 10.0% N/A 12.6% 5/1/89
- --------------------------------------------------------------------------------------------------------------
Market Street Managed 19.3% 11.0% 9.2% 8.3% 12/12/85
- --------------------------------------------------------------------------------------------------------------
Market Street Bond 7.7% 5.1% 6.1% 7.0% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street International 7.9% 11.8% N/A 7.4% 11/1/91
- --------------------------------------------------------------------------------------------------------------
Market Street Money Market 3.5% 2.8% 3.8% 4.3% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Neuberger & Berman AMT Partners 29.1% N/A N/A 22.2% 3/22/94
- --------------------------------------------------------------------------------------------------------------
Strong Special Fund II, Inc. 23.4% 17.4% N/A 18.1% 5/8/92
- --------------------------------------------------------------------------------------------------------------
Strong Growth Fund II 27.7% N/A N/A 27.7% 1/1/97
- --------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Bond 0.7% 3.8% N/A 4.4% 9/1/89
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
ADJUSTED AVERAGE ANNUAL TOTAL RETURN
(assuming Enhanced Death Benefit Rider is elected and the Contingent Deferred
Sales Charge is deducted)
<TABLE>
<CAPTION>
1 Year to 5 Years to 10 Years to Life of Fund Date Fund
12/31/97 12/31/97 12/31/97 to 12/31/97 Effective
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alger American Small Capitalization 2.6% 10.4% N/A 17.3% 9/21/88
- --------------------------------------------------------------------------------------------------------------
Alger American Growth 16.7% 17.0% N/A 17.5% 1/9/89
- --------------------------------------------------------------------------------------------------------------
American Century VP Value 17.0% N/A N/A 18.0% 5/1/96
- --------------------------------------------------------------------------------------------------------------
American Century VP Income & Growth N/A N/A N/A 0.4% 10/30/97
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Equity Income 19.0% 17.9% 14.8% 12.8% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Growth 14.5% 15.8% 15.3% 13.7% 10/9/86
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-High Income 8.7% 11.7% 11.0% 10.6% 9/19/85
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund-Overseas 2.7% 11.9% 7.8% 6.4% 1/28/87
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Index 500 23.7% 17.6% N/A 17.7% 8/27/92
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Fund II-Contrafund 15.1% N/A N/A 25.1% 1/3/95
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT International Equity N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Global Income N/A N/A N/A N/A 1/12/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT CORE Small Cap Equity N/A N/A N/A N/A 2/13/98
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs VIT Mid Cap Equity N/A N/A N/A N/A 5/1/98
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan International Opportunities (3.3%) N/A N/A 7.3% 12/31/94
- --------------------------------------------------------------------------------------------------------------
J.P. Morgan Small Company 13.5% N/A N/A 22.7% 12/31/94
- --------------------------------------------------------------------------------------------------------------
Market Street Growth 15.3% 14.7% 13.8% 12.5% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street Sentinel Growth 22.5% N/A N/A 18.9% 3/18/96
- --------------------------------------------------------------------------------------------------------------
Market Street Aggressive Growth 12.2% 9.6% N/A 12.6% 5/1/89
- --------------------------------------------------------------------------------------------------------------
Market Street Managed 12.3% 10.7% 9.2% 8.3% 12/12/85
- --------------------------------------------------------------------------------------------------------------
Market Street Bond 0.7% 4.6% 6.1% 7.0% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Market Street International 0.9% 11.4% N/A 7.3% 11/1/91
- --------------------------------------------------------------------------------------------------------------
Market Street Money Market (3.5%) 2.2% 3.8% 4.3% 2/24/84
- --------------------------------------------------------------------------------------------------------------
Neuberger & Berman AMT Partners 22.1% N/A N/A 21.5% 3/22/94
- --------------------------------------------------------------------------------------------------------------
Strong Special Fund II, Inc. 16.4% 17.1% N/A 18.0% 5/8/92
- --------------------------------------------------------------------------------------------------------------
Strong Growth Fund II 20.7% N/A N/A 20.7% 1/1/97
- --------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Bond (6.3%) 3.3% N/A 4.4% 9/1/89
- --------------------------------------------------------------------------------------------------------------
</TABLE>
GOLDMAN SACHS VARIABLE INSURANCE TRUST
The second sentence of the first paragraph under "Goldman
Sachs Variable Insurance Trust" on page 14 of the prospectus is amended to read
as follows: Goldman Sachs Variable Insurance Trust is a "series" type mutual
fund registered with the SEC as an open-end management investment company
issuing a number of series or classes, each of which represents an interest in
a Fund of Goldman Sachs Variable Insurance Trust. Each Fund, except the Global
Income Fund, is a diversified investment company. In addition, the investment
objective of the Midcap Equity Fund of the Trust is amended to read as follows:
Seeks long-term capital appreciation primarily through investments in equity
securities of companies with public stock market capitalizations within the
range of the market capitalization of companies constituting the Russell Midcap
Index at the time of investment (currently between $400 million and $16
billion).
It should also be noted that the expense ratios presented on page 6 of
the Prospectus for the four series of the Goldman Sachs Variable Insurance
Trust are estimates, since the Trust began operations on January 1, 1998. In
the absence of expense reimbursement programs, pursuant to which Goldman Sachs
Asset Management and Goldman Sachs Asset Management International have
respectively agreed to reduce or limit certain Fund expenses (excluding
management fees, taxes, interest and brokerage fees, and litigation,
indemnification and extraordinary expenses), it is estimated that the "Other
Expenses" and "Total Other Expenses" for the International Equity Fund, the
Global Income Fund, the CORE Small Cap Equity Fund and the Mid Cap Equity Fund
would have been 1.22% and 2.22%, 1.72% and 2.62%, 1.03% and 1.78%, and .53% and
1.33%, respectively.
