<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated June 21, 1996 to the Prospectus dated May 1, 1996
Group Variable Retirement Annuity Contracts for Tax-Deferred Annuity Plans
(Section 403(b)),
Qualified 401 Plans, and HR10 Plans
AT A JUNE 17, 1996 SPECIAL MEETING OF THE SHAREHOLDERS OF AETNA VARIABLE FUND,
AETNA INCOME SHARES AND AETNA INVESTMENT ADVISERS FUND, INC. ("FUNDS"),
SHAREHOLDERS OF THE RESPECTIVE FUNDS APPROVED A PROPOSAL TO INCREASE THE
ADVISORY FEES FOR EACH OF THE FUNDS EFFECTIVE AUGUST 1, 1996. THEREFORE, THIS
SUPPLEMENT AMENDS THE INFORMATION CONTAINED IN THE MAY 1, 1996 PROSPECTUS (THE
"PROSPECTUS"), AS DESCRIBED BELOW.
- - THE FOLLOWING TABLE MODIFIES THE INFORMATION CONTAINED UNDER "ANNUAL EXPENSES
OF THE FUNDS" ON PAGE 8 OF THE PROSPECTUS TO REFLECT INCREASES IN ADVISORY
FEES OF THE RESPECTIVE FUNDS EFFECTIVE AUGUST 1, 1996 AS IF THE INCREASES HAD
BEEN IN EFFECT FOR THE YEAR ENDED DECEMBER 31, 1996. THE OTHER INVESTMENT
OPTIONS ARE NOT AFFECTED BY THIS CHANGE.
<TABLE>
<CAPTION>
INVESTMENT TOTAL FUND
ADVISORY FEES OTHER EXPENSES* ANNUAL EXPENSES
------------- --------------- ---------------
<S> <C> <C> <C>
Aetna Variable Fund 0.50% 0.06% 0.56%
Aetna Income Shares 0.40% 0.08% 0.48%
Aetna Investment Advisers Fund, Inc. 0.50% 0.08% 0.58%
</TABLE>
* As of May 1, 1996, the Company provides administrative services to the Funds
and assumes the Funds' ordinary recurring direct costs under an Administrative
Services Agreement. The "Other Expenses" shown are not based on figures for
the year ended December 31, 1995, but reflect the fee payable under this
Agreement.
- - THE FOLLOWING ILLUSTRATIONS APPLY TO THE FUNDS EFFECTIVE AUGUST 1, 1996 TO
REFLECT THE INCREASES IN THE RESPECTIVE ADVISORY FEES AND MODIFIES THE
INFORMATION FOUND IN THE "HYPOTHETICAL ILLUSTRATION (EXAMPLE)" FOUND ON PAGES
8 AND 9 IN THE PROSPECTUS:
<TABLE>
<CAPTION>
403(B) PLANS
-----------------------------------------------------------------------------
IF YOU MAKE A COMPLETE WITHDRAWAL OF IF YOU DO NOT MAKE A COMPLETE
YOUR CONTRACT AT THE END OF THE WITHDRAWAL OF YOUR CONTRACT OR IF YOU
APPLICABLE TIME PERIOD: ANNUITIZE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $97 $134 $174 $260 $77 $114 $152 $260
Aetna Income Shares $96 $132 $170 $252 $77 $111 $148 $252
Aetna Investment Advisers
Fund, Inc. $97 $135 $175 $262 $77 $114 $153 $262
<CAPTION>
401 PLANS
-----------------------------------------------------------------------------
IF YOU MAKE A COMPLETE WITHDRAWAL OF IF YOU DO NOT MAKE A COMPLETE
YOUR CONTRACT AT THE END OF THE WITHDRAWAL OF YOUR CONTRACT OR IF YOU
APPLICABLE TIME PERIOD: ANNUITIZE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $135 $152 $169 $262 $87 $121 $158 $262
Aetna Income Shares $134 $150 $165 $254 $86 $119 $154 $254
Aetna Investment Advisers
Fund, Inc. $135 $153 $170 $264 $87 $122 $159 $264
<CAPTION>
HR10 PLANS
-----------------------------------------------------------------------------
IF YOU MAKE A COMPLETE WITHDRAWAL OF IF YOU DO NOT MAKE A COMPLETE
YOUR CONTRACT AT THE END OF THE WITHDRAWAL OF YOUR CONTRACT OR IF YOU
APPLICABLE TIME PERIOD: ANNUITIZE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Variable Fund $104 $141 $181 $266 $85 $121 $159 $266
Aetna Income Shares $103 $139 $177 $258 $84 $118 $155 $258
Aetna Investment Advisers
Fund, Inc. $104 $142 $182 $268 $85 $121 $160 $268
</TABLE>
Form No. X75974.1 June 1996
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- - THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER "INVESTMENT
OPTIONS -- THE FUNDS" WITH RESPECT TO THE INVESTMENT ADVISERS FOUND ON PAGE 13
IN THE PROSPECTUS:
Effective August 1, 1996, Aeltus Investment Management, Inc. ("Aeltus") will
become the subadviser for the following Funds:
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund(1)
Aetna Investment Advisers Fund, Inc.
(1) It is currently expected that the proposal relating to the approval of
Aeltus as a subadviser for the Aetna Variable Encore Fund will be
submitted to shareholders at a meeting to be held on July 19, 1996. If
approved, such proposal would be effective on August 6, 1996. (Refer to
your Fund prospectus for further information.)
Form No. X75974.1 June 1996
