VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET I
Series I of the Aetna GET Fund (GET I) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET I. Aeltus Investment Management, Inc. serves as
the investment adviser to GET I.
We will offer GET I shares only during its offering period, which is scheduled
to run from March 15, 2000 through the close of business on June 14, 2000. GET
I may not be available under your contract, your plan or in your state. Please
read the GET I prospectus for a more complete description of GET I, including
its charges and expenses.
INVESTMENT OBJECTIVE OF GET I
GET I seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET I's guarantee period runs from June 15, 2000 through June 14, 2005. During
the offering period, all GET I assets will be invested in short-term
instruments, and during the guarantee period will be invested in a combination
of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET I will end on June 14, 2005, which is GET I's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET I subaccount under the contract on the maturity date (as valued after
the close of business on June 14, 2005), will not be less than its value as
determined after the close of business on the last day of the offering period.
If the value on the maturity date is lower than it was on the last day of the
offering period, we will transfer funds from our general account to the GET I
subaccount to make up the difference. This means that if you remain invested in
GET I until the maturity date, at the maturity date you will receive no less
than the value of your separate account investment directed to GET I as of the
last day of the offering period, less any maintenance fees or any amounts you
transfer or withdraw from the GET I subaccount. The value of dividends and
distributions made by GET I throughout the guarantee period is taken into
account in determining whether, for purposes of the guarantee, the value of
your GET I investment on the maturity date is no less than its value as of the
last day of the offering period. The guarantee does not promise that you will
earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET I before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET I. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET I
amounts. If you do not make a choice, on the maturity date we will transfer
your GET I amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET I amounts to the fund or funds designated by the Company.
X.GETI75992-A May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under "Fee Table--Maximum Fees
Deducted from Investments in the Separate Account" in the prospectus, we will
make a daily deduction of a GET I guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET I investment
option:
<TABLE>
<S> <C>
GET I Guarantee Charge (deducted daily during the guarantee period) ..... 0.50%
Maximum Total Separate Account Expenses .................................. 2.00%
</TABLE>
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series I Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(1) Other Expenses(2) (after expense reimbursement)(3)
---------------- ----------------- -------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series I 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET I prospectus.
- -----------------------
(1) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(2) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET I and any additional direct fund expenses.
(3) The investment adviser is contractually obligated through GET I's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET I's other expenses
in order to ensure that GET I's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
I's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
Hypothetical Examples--Aetna GET Fund Series I
Account Fees Incurred Over Time. The following hypothetical examples shows the
fees and expenses paid over time if you invest $1,000 in the GET I investment
option under the contract (until GET I's maturity date), assuming a 5% annual
return on the investment.(4)
<TABLE>
<CAPTION>
- ---------------------------------
> THESE EXAMPLES ARE PURELY Example A Example B
HYPOTHETICAL. If you withdraw your entire If you leave your entire
account value at the end of account value invested or if
> THEY SHOULD NOT BE the periods shown, you would you select an income phase
CONSIDERED A REPRESENTATION pay the following expenses, payment option at the end of
OF PAST OR FUTURE EXPENSES including any applicable early the periods shown, you would
OR EXPECTED RETURNS. withdrawal charge assessed: pay the following expenses
> ACTUAL EXPENSES AND/OR (no early withdrawal charge
RETURNS MAY BE MORE OR LESS is assessed):
THAN THOSE SHOWN BELOW.
- --------------------------------
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series I $79 $140 $204 $28 $87 $148
</TABLE>
- -----------------------
(4) The examples shown reflect a maximum mortality and expense risk charge of
1.25%, on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET I guarantee charge of 0.50% on an annual basis,
an annual maintenance fee of $20 that has been converted to a percentage of
assets equal to 0.052% and all charges and expenses of the GET I Fund.
Example A reflects an early withdrawal charge of 5% of the account value at
the end of years 1, 3 and 5. (The expenses that you would pay under your
contract may be lower. Please refer to the "Fee Table" section of your
prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
Aetna GET Fund (Series I)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from June 15, 2000, through June 14,
2005, the maturity date.
POLICIES
Prior to June 15, 2000, assets are invested entirely in short-term instruments.
After that date, assets are allocated between equities and fixed income
securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series I are those generally attributable
to stock and bond investing. The success of Series I's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series I
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series I assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series I would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series I assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series I's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETI75992-A May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET J
Series J of the Aetna GET Fund (GET J) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET J. Aeltus Investment Management, Inc. serves as
the investment adviser to GET J.
We will offer GET J shares only during its offering period, which is scheduled
to run from June 15, 2000 through the close of business on September 13, 2000.
GET J may not be available under your contract, your plan or in your state.
Please read the GET J prospectus for a more complete description of GET J,
including its charges and expenses.
INVESTMENT OBJECTIVE OF GET J
GET J seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET J's guarantee period runs from September 14, 2000 through September 13,
2005. During the offering period, all GET J assets will be invested in
short-term instruments, and during the guarantee period will be invested in a
combination of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET J will end on September 13, 2005, which is GET J's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET J subaccount under the contract on the maturity date (as valued after
the close of business on September 13, 2005), will not be less than its value
as determined after the close of business on the last day of the offering
period. If the value on the maturity date is lower than it was on the last day
of the offering period, we will transfer funds from our general account to the
GET J subaccount to make up the difference. This means that if you remain
invested in GET J until the maturity date, at the maturity date you will
receive no less than the value of your separate account investment directed to
GET J as of the last day of the offering period, less any maintenance fees or
any amounts you transfer or withdraw from the GET J subaccount. The value of
dividends and distributions made by GET J throughout the guarantee period is
taken into account in determining whether, for purposes of the guarantee, the
value of your GET J investment on the maturity date is no less than its value
as of the last day of the offering period. The guarantee does not promise that
you will earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET J before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET J. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET J
amounts. If you do not make a choice, on the maturity date we will transfer
your GET J amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET J amounts to the fund or funds designated by the Company.
X.GETJ75992-0 May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under "Fee Table--Maximum Fees
Deducted from Investments in the Separate Account" in the prospectus, we will
make a daily deduction of a GET J guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET J investment
option:
<TABLE>
<S> <C>
GET J Guarantee Charge (deducted daily during the guarantee period) ..... 0.50%
Maximum Total Separate Account Expenses .................................. 2.00%
</TABLE>
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series J Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(1) Other Expenses(2) (after expense reimbursement)(3)
---------------- ----------------- -------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series J 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET J prospectus.
- -----------------------
(1) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(2) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET J and any additional direct fund expenses.
(3) The investment adviser is contractually obligated through GET J's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET J's other expenses
in order to ensure that GET J's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
J's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
Hypothetical Examples--Aetna GET Fund Series J
Account Fees Incurred Over Time. The following hypothetical examples shows the
fees and expenses paid over time if you invest $1,000 in the GET J investment
option under the contract (until GET J's maturity date), assuming a 5% annual
return on the investment.(4)
<TABLE>
<CAPTION>
- -------------------------------
> THESE EXAMPLES ARE PUREL Example A Example B
HYPOTHETICAL. If you withdraw your entire If you leave your entire
account value at the end of account value invested or if
> THEY SHOULD NOT BE the periods shown, you would you select an income phase
CONSIDERED A REPRESENTATION pay the following expenses, payment option at the end of
OF PAST OR FUTURE EXPENSES including any applicable early the periods shown, you would
OR EXPECTED RETURNS. withdrawal charge assessed: pay the following expenses
> ACTUAL EXPENSES AND/OR (no early withdrawal charge is
RETURNS MAY BE MORE OR LESS assessed):
THAN THOSE SHOWN BELOW.
- ------------------------------- 1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series J $79 $140 $204 $28 $87 $148
</TABLE>
- -----------------------
(4) The examples shown reflect a maximum mortality and expense risk charge of
1.25%, on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET J guarantee charge of 0.50% on an annual basis, an
annual maintenance fee of $20 that has been converted to a percentage of
assets equal to 0.052% and all charges and expenses of the GET J Fund.
Example A reflects an early withdrawal charge of 5% of the account value at
the end of years 1, 3 and 5. (The expenses that you would pay under your
contract may be lower. Please refer to the "Fee Table" section of your
prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
Aetna GET Fund (Series J)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from September 14, 2000, through
September 13, 2005, the maturity date.
POLICIES
Prior to September 14, 2000, assets are invested entirely in short-term
instruments. After that date, assets are allocated between equities and fixed
income securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series J are those generally attributable
to stock and bond investing. The success of Series J's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series J
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series J assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series J would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series J assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series J's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETJ75992-0 May 2000
<PAGE>
VARIABLE ANNUITY ACCOUNT C
Aetna Life Insurance and Annuity Company
Supplement dated May 1, 2000 to the Prospectus dated May 1, 2000
GENERAL DESCRIPTION OF GET K
Series K of the Aetna GET Fund (GET K) is an investment option that may be
available during the accumulation phase of the contract. Aetna Life Insurance
and Annuity Company (the Company or we) makes a guarantee, as described below,
when you direct money into GET K. Aeltus Investment Management, Inc. serves as
the investment adviser to GET K.
We will offer GET K shares only during its offering period, which is scheduled
to run from September 14, 2000 through the close of business on December 13,
2000. GET K may not be available under your contract, your plan or in your
state. Please read the GET K prospectus for a more complete description of GET
K, including its charges and expenses.
INVESTMENT OBJECTIVE OF GET K
GET K seeks to achieve maximum total return without compromising a minimum
targeted return by participating in favorable equity market performance during
the guarantee period.
GET K's guarantee period runs from December 14, 2000 through December 13, 2005.
During the offering period, all GET K assets will be invested in short-term
instruments, and during the guarantee period will be invested in a combination
of fixed income and equity securities.
THE GET FUND GUARANTEE
The guarantee period for GET K will end on December 13, 2005, which is GET K's
maturity date. The Company guarantees that the value of an accumulation unit of
the GET K subaccount under the contract on the maturity date (as valued after
the close of business on December 13, 2005), will not be less than its value as
determined after the close of business on the last day of the offering period.
If the value on the maturity date is lower than it was on the last day of the
offering period, we will transfer funds from our general account to the GET K
subaccount to make up the difference. This means that if you remain invested in
GET K until the maturity date, at the maturity date you will receive no less
than the value of your separate account investment directed to GET K as of the
last day of the offering period, less any maintenance fees or any amounts you
transfer or withdraw from the GET K subaccount. The value of dividends and
distributions made by GET K throughout the guarantee period is taken into
account in determining whether, for purposes of the guarantee, the value of
your GET K investment on the maturity date is no less than its value as of the
last day of the offering period. The guarantee does not promise that you will
earn the fund's minimum targeted return referred to in the investment
objective.
If you withdraw or transfer funds from GET K before the maturity date, we will
process the transactions at the actual unit value next determined after we
receive your order. The guarantee will not apply to these amounts or to amounts
deducted as a maintenance fee, if applicable.
MATURITY DATE
Before the maturity date, we will send a notice to each contract holder who has
amounts in GET K. This notice will remind you that the maturity date is
approaching and that you must choose other investment options for your GET K
amounts. If you do not make a choice, on the maturity date we will transfer
your GET K amounts to another available series of the GET Fund that is
accepting deposits. If no GET Fund series is available, we will transfer your
GET K amounts to the fund or funds designated by the Company.
X.GETK75992-0 May 2000
<PAGE>
The following information supplements the "Fee Table" section contained in the
prospectus:
MAXIMUM FEES DEDUCTED FROM THE SUBACCOUNTS
In addition to the amounts currently listed under "Fee Table--Maximum Fees
Deducted from Investments in the Separate Account" in the prospectus, we will
make a daily deduction of a GET K guarantee charge, equal on an annual basis to
the percentage shown below, from the amounts allocated to the GET K investment
option:
<TABLE>
<S> <C>
GET K Guarantee Charge (deducted daily during the guarantee period) ... 0.50%
Maximum Total Separate Account Expenses .................................. 2.00%
</TABLE>
FEES DEDUCTED BY THE FUNDS
The following information supplements the "Fund Expense Table" contained in the
prospectus:
Aetna GET Fund Series K Annual Expenses
(As a percentage of the average net assets)
<TABLE>
<CAPTION>
Investment Total Fund Annual Expenses
Advisory Fees(1) Other Expenses(2) (after expense reimbursement)(3)
----------------- ------------------- ---------------------------------
<S> <C> <C> <C>
Aetna GET Fund Series K 0.60% 0.15% 0.75%
</TABLE>
For more information regarding expenses paid out of assets of the fund, see the
GET K prospectus.
- -----------------------
(1) The Investment Advisory Fee will be 0.25% during the offering period and
0.60% during the guarantee period.
(2) "Other Expenses" include an annual fund administrative fee of 0.075% of the
average daily net assets of GET K and any additional direct fund expenses.
(3) The investment adviser is contractually obligated through GET K's maturity
date to waive all or a portion of its investment advisory fee and/or its
administrative fee and/or to reimburse a portion of GET K's other expenses
in order to ensure that GET K's Total Fund Annual Expenses do not exceed
0.75% of the fund's average daily net assets. It is not expected that GET
K's actual expenses without this waiver or reimbursement will exceed this
amount.
<PAGE>
The following information supplements the "Hypothetical Examples" contained in
the prospectus:
Hypothetical Examples--Aetna GET Fund Series K
Account Fees Incurred Over Time. The following hypothetical examples shows the
fees and expenses paid over time if you invest $1,000 in the GET K investment
option under the contract (until GET K's maturity date), assuming a 5% annual
return on the investment.(4)
<TABLE>
<CAPTION>
- ------------------------------- Example A Example B
> THESE EXAMPLES ARE PURELY If you withdraw your entire If you leave your entire
HYPOTHETICAL. account value at the end of account value invested or if
> THEY SHOULD NOT BE the periods shown, you would you select an income phase
CONSIDERED A REPRESENTATION pay the following expenses, payment option at the end of
OF PAST OR FUTURE EXPENSES including any applicable early the periods shown, you would
OR EXPECTED RETURNS. withdrawal charge assessed: pay the following expenses
> ACTUAL EXPENSES AND/OR (no early withdrawal charge is
RETURNS MAY BE MORE OR LESS assessed):
THAN THOSE SHOWN BELOW.
- ------------------------------- 1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
-------- --------- --------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Aetna GET Fund Series K $79 $140 $204 $28 $87 $148
</TABLE>
- -----------------------
(4) The examples shown reflect a maximum mortality and expense risk charge of
1.25%, on an annual basis, a maximum administrative expense charge of 0.25%
on an annual basis, a GET K guarantee charge of 0.50% on an annual basis, an
annual maintenance fee of $20 that has been converted to a percentage of
assets equal to 0.052% and all charges and expenses of the GET K Fund.
Example A reflects an early withdrawal charge of 5% of the account value at
the end of years 1, 3 and 5. (The expenses that you would pay under your
contract may be lower. Please refer to the "Fee Table" section of your
prospectus.)
<PAGE>
The following information supplements "Appendix IV--Description of Underlying
Funds" contained in the prospectus:
Aetna GET Fund (Series K)
INVESTMENT OBJECTIVE
Seeks to achieve maximum total return without compromising a minimum targeted
return (Targeted Return) by participating in favorable equity market
performance during the guarantee period, from December 14, 2000, through
December 13, 2005, the maturity date.
POLICIES
Prior to December 14, 2000, assets are invested entirely in short-term
instruments. After that date, assets are allocated between equities and fixed
income securities. Equities consist primarily of common stocks. Fixed income
securities consist primarily of short- to intermediate-duration U.S. Government
securities and may also consist of mortgage backed securities and corporate
obligations. The investment adviser uses a proprietary computer model to
determine the percentage of assets to allocate between the fixed and the equity
components. As the value of the equity component declines, more assets are
allocated to the fixed component.
RISKS
The principal risks of investing in Series K are those generally attributable
to stock and bond investing. The success of Series K's strategy depends on the
investment adviser's skill in allocating assets between the equity and fixed
components and in selecting investments within each component. Because Series K
invests in both stocks and bonds, it may underperform stock funds when stocks
are in favor and underperform bond funds when bonds are in favor. The risks
associated with investing in stocks include sudden and unpredictable drops in
the value of the market as a whole and periods of lackluster or negative
performance. The principal risk associated with investing in bonds is that
interest rates may rise, which generally causes bond prices to fall. If at the
inception of, or any time during, the guarantee period interest rates are low,
Series K assets may be largely invested in the fixed component in order to
increase the likelihood of achieving the Targeted Return at the maturity date.
The effect of low interest rates on Series K would likely be more pronounced at
the beginning of the guarantee period as the initial allocation of assets would
include more fixed income securities. In addition, if during the guarantee
period the equity markets experienced a major decline, Series K assets may
become largely invested in the fixed component in order to increase the
likelihood of achieving the Targeted Return at the maturity date. Use of the
fixed component reduces Series K's ability to participate as fully in upward
equity market movements, and therefore represents some loss of opportunity, or
opportunity cost, compared to a portfolio that is fully invested in equities.
Investment Adviser: Aeltus Investment Management, Inc.
X.GETK75992-0 May 2000
